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3.2.2.2 Board - Fiscal Stability of the Institution PDF Print E-mail
Monday, 31 August 2009 14:39

3.2.2.2     Board - Fiscal Stability of the Institution

The legal authority and operating control of the institution are clearly defined for the following areas within the institution's governance structure: fiscal stability of the institution.

Responsible Unit: Division of Business and Finance

Compliance Judgment

Compliance

Narrative

The legal authority and operating control that govern the fiscal stability of North Carolina Agricultural and Technical State University (A&T) are clearly defined in A&T's governance structure as outlined by state laws, the University of North Carolina System (UNC System) policies, and local A&T policies and procedures. The legal authority of A&T to operate as an institution of higher education is codified in 100.1: Chapter I: Sections 100, 101, 102, 103 and Chapter II: Section 203 [1] of the University of North Carolina Policy Manual: The Code of the Board of Governors, wherein the Board of Governors of the University of North Carolina is the policy-making body legally charged with "the general determination, control, supervision, management, and governance of all affairs of the constituent institutions."  As to fiscal control, the statutory responsibilities of the North Carolina Office of the State Controller and the state controller are defined in a series of articles, which include: North Carolina General Statutes 143B-426-40G and 143B-426.39(5); 143C-1-3; 143C-4-2; 143C-4-3; 143C-6-3;143B-426.39(7); 143B-426.39(12); 143B-426.39; 143B-426.40H; 143D-6-8; 143-86.10 and 147-86.11; 147-86.20 through147-86.27 [2].  The mission of the Office of the State Controller is:

  • Ensure proper financial reporting and accounting for all state agencies and institutions by providing leadership, guidance, and consulting in all accounting matters.
  • Maximize the cash availability and ensure compliance with all applicable state and federal requirements by providing an effective statewide cash management system.
  • Ensure that all state employees are accurately paid on a timely basis by providing an effective central payroll system and leadership, guidance and support to all payroll functions in state government.
  • Encourage an enterprise approach to the business systems of state government, including the use of electronic commerce, where practical.
  • Promote best business practices in the management of state resources [3].

Additionally, during the 2007 Session of the General Assembly, House Bill 1551 (State Government Accountability and Internal Control Act) [4] was passed.  The purpose of this act is to increase fiscal accountability within state government by requiring each agency to perform an annual assessment of internal control over financial reporting.

Chapter VII; Sections 700 A, B, C; and 701 of The University of North Carolina Policy Manual: The Code of the Board of Governors sets forth the authority for budget recommendations for the UNC System; the appropriations and allocations of funds; and transfers of appropriated funds [5].  The UNC president receives general instructions from the governor via the State Budget Office, and conducts workshops for budget preparation [6].  The process by which the university budget is developed and administered has its legal basis in the State's Executive Budget Act and Higher Education Reorganization Act of 1971 [7].  The chancellor is responsible for the preparation of budget requests for the institution and the assignment of any applicable institutional priorities.  The process of campus involvement is determined by the chancellor, who appoints delegates to work with UNC General Administration.  The vice chancellor for business & finance is the chancellor's delegate to UNC General Administration and is responsible for the institution's internal funding controls [8]. A&T's Division of Business and Finance's Policies and Procedures provides the policies and procedures regarding fund accounting, contracts and grants accounting, reconciliation, cost accounting, and financial reporting [9].

At A&T, the Accounting Office, under the direction of the assistant vice chancellor for finance and comptroller, is responsible for managing the overall accounting, treasury, financial services, and financial reporting operations of the university. The assistant vice chancellor for budget and planning is responsible for the budget development and fiscal budgetary controls. Both assistant vice chancellors report to the vice chancellor for business & finance [10]. A&T's Division of Human Resources Personnel Policies details processes and procedures with regards to personnel [11].

The A&T Office of Internal Auditing is responsible for performing internal audits that further ensure the fiscal stability of the university, and provide management with information needed to promote accountability, integrity and efficiency. The director of internal auditing reports to the chancellor and the Board of Trustees Audit Committee and has additional reporting responsibilities to the UNC-GA and to the State of North Carolina Council of Internal Auditing. Each year, the director prepares an annual audit plan based on a risk assessment process. The annual plan is approved by the chancellor, the chairperson of the Board of Trustees Audit Committee, and the University of North Carolina Board of Governors Audit Committee.

In August 2007, the North Carolina General Assembly passed the North Carolina Internal Audit Act. General Statute 143-746 [12] requires state agencies to establish a program of internal auditing that implements an effective system of internal controls that safeguards public resources, reviews the effectiveness and efficiency of agency and program operations, and periodically audits the agency's major systems and controls. This statute also requires the agency head to appoint a director of internal auditing who shall report to the agency head and shall not report to any employee subordinate to the agency head.

General Statute 116-40.7 [13] requires internal auditors within the University of North Carolina and its constituent institutions to provide independent reviews and analyses of various functions and programs with the University of North Carolina that will provide management information to promote accountability, integrity, and efficiency within the University of North Carolina.

General Statute 143-747 [14] established the Council of Internal Auditing which shall among other duties promulgate guidelines for the uniformity and quality of State agency internal audit activities, develop internal audit guides, technical manuals, and suggested best internal audit practices, and administer an independent peer review system for each State agency internal audit activity.

The Council of Internal Auditing [15] is also responsible for providing central training sessions, professional development opportunities, and recognition programs for internal auditors. The Council of Internal Auditing maintains a central database of all annual internal audit plans; topics for review proposed by internal audit plans; internal audit reports issued and individual findings and recommendations from those reports.

Supporting Documents

 

[1]   UNC-GA, Code, 100.1, Constitutional Establishment

[2]   State Controller, Statutory Responsibilities

[3]   State Controller, Mission Statement

[4]   UNC-GA, Accountability and Internal Control Act

[5]   UNC-GA, Code, Section 400, Chapter VII, Finances, Property and Obligations

[6]   NC System, Budget Process

[7  NC General Assembly, Chapter 143C, State Budget Act

[8  Job Description, Vice Chancellor for Business and Finance

[9]   Policies, Procedures, Business and Finances,

[10 ]Organizational Chart, Division of Business and Finance

[11] Human Resources, Personnel Policies and Procedure

[12] NC General Statute, 143-746, Internal Auditing Required

[13] NC General Statute, 116-40.7 Internal Auditors

[14] NC General Statute, 143-747 Council of Internal Auditing

[15] Organizational Chart, Council of Internal Auditing

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Last Updated ( Friday, 12 February 2010 10:43 )
 

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