3

3.10.4

The institution exercises appropriate control over all its financial and physical resources.

X	Compliance
	Conditional Compliance
	Non-Compliance

RATIONALE FOR COMPLIANCE JUDGMENT

The Finance and Administrative Services Division is responsible for the management of, and controls over, college fiscal and physical resources. The Human Resources Office is responsible for the management and controls over college human resources. All offices within the division comply with the policies and guidelines established by the state and Tennessee Board of Regents (TBR) [1], as well as policies and guidelines [2] of the college. The offices within the division primarily responsible for control over financial and physical resources are the Bursar’s Office, Controllers Office, Purchasing and Property Management Office, Budget Office, Facilities Office and Security.

Control of Fiscal Resources

The Bursar’s Office, which reports to the Vice-President of Finance and Administrative Services, consists of the Accounts Receivable Office, Cashier’s Office, and Cash Accounting Office. The Bursar’s Office is responsible for the controls over cash including collection, deposit, investment, student refunds and accounting for funds collected. Collection and accounting for funds is governed by TBR policy 4-01-01-10 Deposit and Investment of Funds [3], TBR policy 4-01-03-00 Payment of Student Fees and Enrollment of Students [4], TBR guideline B-010 Collection of Accounts Receivable [5], TBR guideline B-060 Fees, Charges and Refunds [6], TBR guideline B-070 Deferred Payment [7], and TBR guideline B-080 Reporting Fiscal Misconduct [8]. The Bursar’s Office web site [9] provides registration-related information to students. The Bursar’s Office is responsible for the Billing and Receivables module of SCT Plus, and is migrating to SCT Banner effective fall semester 2007.

The Controller’s Office, which reports to the Vice-President of Finance and Administrative Services, consists of the Accounts Payable Office, Financial Records Management Office, and the Grant/Accounting and Financial Reporting Office. The function of the Controller's office is to provide necessary financial and reporting services to grant and contract agencies, technology centers, and the campus community in support of the college mission of instruction and workforce development. Accounting reports are distributed to college departments electronically on a monthly basis. In addition, all departments have electronic access to both detailed and summary information on-line. College policy requires departments to reconcile [10] the monthly accounting statements to department records. Annual financial statements as required by TBR Policy 01:02:10:00 Annual Reports [11] are prepared in accordance with GASB standards. Detailed financial statement instructions [12] are provided by the governing board annually, as well as a web site [13]containing governing board position papers on accounting issues.

Prior to July 2006, Nashville State Technical Community College used Systems and Computer Technology Corporation's (SCT) Plus financial records system (FRS) accounting software. This accounting system conforms to TBR's guidelines and follows generally accepted principles of institutional accounting as required by the National Association of College and University Business Officers (NACUBO). The FRS accounting system interfaces with all SCT software modules, including the student information system and the human resource system. These systems are monitored continuously to ensure that information is accurate and consistent. Effective July 1, 2006 the college migrated from SCT Plus to SCT Banner. Banner uses a relational data-base system that is an enterprise application suite. This system provides up-to-date technology to better service the needs of students, faculty, administrators and alumni. The ability to access more accurate and comprehensive information on a daily basis in real-time allows for better and more efficient management of College resources.

The Controller's Office periodically administers workshops that aid departments in interpreting and reconciling their monthly financial statements, and how to use on-line screens. It is also the responsibility of the Controller's Office to provide institutional administrators, TBR officials, and the public with complete, accurate, and timely financial information in order to ensure the effective allocation and use of resources by the college.

The Purchasing and Property Management Office, which reports to the Vice-President of Finance and Administrative Services, consists of the Purchasing Office, Shipping and Receiving, Copier Services and Property Management. The purchasing office is responsible for insuring that all purchases made by the college are properly authorized, efficient, and comply with Tennessee Board of Regents Purchasing Policy 04:02:10:00 [14] and TBR guideline G-030 [15] (Contracts and Agreements). The purchasing office is responsible for the purchasing module of SCT Banner. The Shipping and Receiving office is responsible for logging and delivering all received goods and mail to the college. The Property Management Office is responsible for maintaining control over capital equipment and sensitive minor equipment, and insuring that proper surplus and disposal methods are used as prescribed by TBR policy 04:02:20:00 Disposal of Surplus Personal Property [16]. The Property Management Office is responsible for the fixed asset accounting system and asset valuation on financial statements. These duties include maintaining accounts for all of the capital projects on campus, renewal and replacement accounts for service centers and any related debt existing on capital projects.

The Budget Office, which reports to the Vice-President of Finance and Administrative Services, is responsible for appropriations requests, capital planning, budgeting, monitoring expenditures and the processing of travel [17]. Tennessee Board of Regents policy 04:01:00:00 Budget Control [18] governs the budget process. In addition the TBR provides detailed budget instructions [19] for both the operational and capital [20] budgets. The budget office is responsible for compiling the institutional budget and preparing the budget in accordance with the governing board policy and instructions. The college budget process [21] requires chain of command approval on all budget requests, and relates the request to the strategic plan. This process insures that college resources are aligned to established goals. Approved budget requests are then submitted to the Budget Office which is responsible for coordinating annual budget preparation of the July Original Budget and October Revised Budget submitted to the TBR for approval. The Budget Office also coordinates the annual preparation of the appropriations [22] request submitted to the Tennessee Higher Education Commission (THEC).

Control of Physical Resources

Responsibility for the College's physical resources resides primarily with Property Management, Office of Facilities. Inventory of equipment and movable property is recorded in the fixed assets system at the time of purchase and disposal. Property Management is responsible for assigning the inventory control number and maintaining inventory records in accordance with NSCC equipment policy (F-7) [23]. Property management performs a physical inventory on an annual basis. Inventory listings are verified by property management personnel and reconciled to the fixed asset system.

The College's physical plant resources are controlled, operated, monitored, and maintained by the Operations and Maintenance Office, whose mission is to foster academic success by creating and maintaining a supportive collegiate environment conducive to learning and classroom instruction. The primary function of the Operations and Maintenance Office is to provide quality cost effective services to ensure optimum performance from all building facilities through preventive, routine, emergency, and regulatory and compliance maintenance, as well as to improve and modify existing space to meet the changing needs of the College. Requests for routine maintenance are transmitted via the maintenance work-order email box. Space modification requests that are performed in-house are approved by the chain of command after cost estimates are prepared. The TBR facilities development manual [24] provides clear direction for maintenance projects and specifies approvals required for major maintenance and capital outlay items.

The campus updates a facilities master plan in accordance with TBR policy 04:01:02:30 Facilities Planning and Design [25] minimally every five years. An ad hoc committee is formed with representatives from all branches of the campus community to insure that adequate input is obtained. The master plan is approved by the Tennessee Board of Regents, Tennessee Higher Education Commission, and the State Building Commission.

Responsibility for formulating the annual capital budget requests in support of the facilities master plan is the joint responsibility of the Operations and Maintenance Office, which obtains pricing information, and the Budget Office. Operations and Maintenance coordinates and manages all approved capital projects for new and renovated physical facilities. In accordance with TBR policy 04:01:02:30 [25], this process includes development of a comprehensive program statement setting forth the scope of the proposed project with justification, cost proposals and budgeting, and planning necessary to meet the functional requirements of the College. Capital projects that require state funding must be recommended by the TBR and the THEC, included in the Governor's recommended budget, and approved by the state legislature. Semi-annually, Property Management in conjunction with Operations and Maintenance management reviews and submits the value of all college buildings and their contents to the State of Tennessee, Division of Risk Management, to ensure adequate insurance is maintained [20, code 366] [26].

Additional control over college financial and physical resources is provided by internal and external audit processes. NSCC has an Internal Auditor who reports directly to the President and the Director of System-wide Internal Auditing at the TBR and is an integral part of the management control system. In accordance with TBR audit guidelines(B-050) [27], the Internal Audit Department develops and executes an annual audit program that has been approved by the President who in turn, submits the program and subsequent audit reports for review to the TBR Director of System-wide Internal Auditing. Also, the college's records are audited semi-annually by the State of Tennessee Comptroller's Office, Division of State Audit as part of the state's comprehensive annual financial report covering all state funds and account groups. The audit includes the appropriate tests for compliance with applicable federal and state laws, TBR and college policies and guidelines, contracts, and grant agreements and the required consideration of the college's internal control structure. The audit is conducted in accordance with generally accepted government auditing standards.

Nashville State Community College received one internal control audit finding for the audit periods ending June 30, 2004, and June 30, 2005. The audit finding resulted from employment contracts that were not fully approved prior to the effective date. The audit report states that the audit team did not feel that this reportable condition was a material weakness. The college has since implemented controls to ensure compliance when practical, and to document circumstances when exceptions occur.

DOCUMENTATION	SOURCE LOCATION
[1] TBR Policies and Guidelines	http://www.tbr.state.tn.us/policies_guidelines/index.htm
[2] Faculty and Staff Handbook	http://www.nscc.edu/hr/hand.html
[3] Deposit and Investment of Funds	docs\TBR_Bus_and_Fin_Policy_4_01_01_10_Deposit_and_Invest_Funds.htm
[4] Payment of Student Fees and Enrollment of Students	docs\TBR_Bus_and_Fin_Policy_4_01_03_00_Student_Fee_Pay_and_Enroll.htm
[5] Collection of Accounts Receivable	docs\TBR_Bus_and_Fin_Guide_B_010_Collection_of_Accts_Receivable.htm
[6] Fees, Charges and Refunds	docs\TBR_Bus_and_Fin_Guide_B_060_Fees_Charges_and_Refunds.htm
[7] Deferred Payment	docs\TBR_Bus_and_Fin_Guide_B_070_Deferred_Payment_Plan.htm
[8] Reporting Fiscal Misconduct	docs\TBR_Bus_and_Fin_Guide_B_080_Report_Resolve_Fiscal_Misconduct.htm
[9] Fee Information on Web Site	http://www.nscc.edu/business/index.html
[10] Monthly Expenditure Reconciliation	docs\NSCC_Policy_Reconcile_Requisitions_to_Monthly_Expenditure.pdf
[11] TBR Policy on Annual Reports	docs\TBR_Governance_Policy_1_02_10_00_Annual_Reports.htm
[12] TBR Financial Statement Instructions	docs\TBR_Financial_statement_guidelines_2006.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_A.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_B.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_C.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_D.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_D1.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_E1.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_E2.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_F.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_G.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_H.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_I.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_J.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_K.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_L.pdf docs\TBR_Financial_statement_guidelines_2006_Attachment_M.pdf docs\TBR_Fin_Statement_Guide_2006_FinStatetFormat_CF_Comp_Unit.pdf docs\TBR_Fin_Statement_Guide_2006_FinStateFormat_CF_Institution.pdf docs\TBR_Fin_Statement_Guide_2006_FinStatementFormat_CheckSheet.pdf docs\TBR_Fin_Statement_Guide_2006_FinStatementFormat_Eliminations.pdf docs\TBR_Fin_Statement_Guide_2006_FinStatementFormat_SNA.pdf docs\TBR_Fin_Statement_Guide_2006_FinStatementFormat_SRECNA.pdf docs\TBR_Financial_statement_guidelines_2006_Note Format.xls docs\TBR_Fin_Statement_Guide_2006_supplemental schedules.xls
[13] TBR GASB Position Papers	http://www.tbr.state.tn.us/business_finance/GASB/GASB%20Homepage.htm
[14] Tennessee Board of Regents Purchasing Policy	docs\TBR_Bus_and_Fin_Policy_4_02_10_00_Purchasing_Policy_and_Proc.htm
[15] TBR Guildeline for Contracts and Agreements	docs\TBR_General_Guideline_G_030_Contracts_and_Agreements.htm
[16] Disposal of Surplus Personal Property	docs\TBR_Bus_and_Fin_Policy_4_02_20_00_Disposal_Surplus_Property.htm
[17] Travel Policy	docs\TBR_Business_and_Finance_Policy_4_03_03_00_General_Travel.htm
[18] Budget Policy	docs\TBR_Business_and_Finance_Policy_4_01_00_00_Budget_Control.htm
[19] Operating Budget Instructions	docs\TBR_October_Budget_Guidelines.pdf docs\TBR_October_Budget_Guidelines_ANALYSIS_FORMS.xls docs\TBR_October_Budget_Guidelines_Attachments_A_thru_K.xls docs\TBR_October_Budget_Guidelines_Attachment_L.pdf
[20] Capital Budget Instructions	docs\TBR_Capital_Budget_Instructions_2007_2008.pdf
[21] Institutional Budget Request Process	docs\NSCC_October_Budget_Instructions_2006_2007.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Banner_FOAPAL.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Equipment_Request.pdf docs\NSCC_October_Budget_Instructions_2006_2007_FRS_Objects.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Operating_Request.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Personnel_Request.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Transfer_Funds.pdf docs\NSCC_October_Budget_Instructions_2006_2007_Travel_Request.pdf
[22] Appropriations Request Instructions	docs\NSCC_Appropriations_Request_COE_Annual_Report_2005_2006.pdf docs\NSCC_Appropriations_Request_List2006NSCC.xls docs\NSCC_Appropriations_Request_NSCC 2006SCHEDULED.xls docs\NSCC_Appropriations_Request_NSCCpartii.xls docs\NSCC_Appropriations_Request_NSCCpartvii.xls docs\NSCC_Appropriations_Request_NSCCPartviii.xls
[23] College Equipment Policy	docs\NSCC_Policy_On_Equipment.pdf
[24] TBR Facilities Development Manual	http://www.tbr.state.tn.us/facilities/fm/flow_charts.htm
[25] TBR Facilities Planning and Design Policy	http://www.tbr.edu/policies_guidelines/business_policies/4-01-02-30.htm
[26] State of Tennessee Risk Management Division	http://www.treasury.state.tn.us/risk/prop-search.htm
[27] Internal Audit Policy	docs\TBR_Business_and_Finance_Guideline_B_050_Internal_Auditing.htm