Compliance Certification Report

3.10.4
The institution exercises appropriate control over all its financial resources. (Control of Finances)
√ Compliant
Partially Compliant
Non-Compliant
Narrative:
The University of Texas Medical Branch at Galveston (UTMB) exercises appropriate control over all of its financial and physical resources through the Office of the Vice President for Finance and Administration. This office has primary responsibility for control over the university’s financial resources and is responsible for establishing and communicating policies and procedures to ensure proper and efficient use of university resources, for receiving and depositing funds, for developing and monitoring the university’s operating budget, and for maintaining the university’s financial systems. The School of Medicine, Hospital and Clinics, and Correctional Managed Care program are represented by chief financial officers who are accountable for the financial operations of their entity. The School of Nursing, School of Allied Health Sciences, and Graduate School of Biomedical Sciences have senior financial leadership accountable for their financial operations (1).

Internally, the university segregates and manages the business enterprise in multiple reporting entities. Each school, including the School of Medicine, the School of Nursing, the School of Allied Health Sciences, and the Graduate School of Biomedical Sciences is considered an entity in and of itself. Each of these entities has an individual who works with the Finance Office and is accountable for financial information of the entity. Budget to actual information comparing current month and year-to-date activity is provided monthly along with a comparison of current year to prior year for both monthly and year-to-date activity. Each entity has access to the university’s consolidated financial statements as well as that of each entity. Entity personnel are required to sign off on their financial statements monthly as well as provide a year end forecast. Once each entity and the vice president for finance sign off, the Vice President for Finance presents the information to the Strategic Executive Council. The SEC is the university’s executive leadership and includes the president of the university.

The university follows guidelines promulgated in federal, state, The University of Texas (UT) System, and locally generated pronouncements though the UT System Policy Library (2). Other policies that are distributed on the web include budget instructions, budget calendar and training, and support for the use of the various financial tools used by the UTMB community at large (3).

UTMB has an internal audit department that reports independently from finance (4). The internal audit department provides regular testing and reports of those findings to the audit committee. Individuals who manage and sustain financial stability of UTMB are qualified and competent to fulfill the expectations of their position (5).

The university utilizes the following PeopleSoft modules: Accounts Payable, Purchasing, Asset Management, Grants Management, General Ledger, Travel, ePro, and HCM. The applications support the accounts payable functions, purchasing, payroll functions, human resource functions, and financial general ledger applications at the university. Financial reporting is supported by the Hyperion Essbase applications. Financial analysis is supported by Essbase and Data Mart. Budgeting and forecasting is supported by the Hyperion Budget and Planning application. The patient accounting functions are supported by Signature and Invision, both Siemens products. Student accounting is supported by the SIS system, an American Management System product. The Office of University Advancement maintains the gift-accounting system on Razors Edge.

Financial activity is captured and tracked in cost centers. Each cost center is assigned personnel who review and authorize transactions. Cost centers are assigned to a department which supports departmental reporting. Departments are in turn assigned to an internal reporting entity which is utilized to report and manage financial information and provides accountability at the executive level of the organization. Financial review occurs at multiple levels in the organization.

The university’s Office of Facilities and Operations Management or “FOAM,” is responsible for the management of all capital additions and major facilities maintenance or addition projects (6) (7). The Office of Accounting and FOAM monitor appropriations, capital, and major facility projects. The Office of Accounting (with University Advancement) monitors endowment and gift accounts. The Office of Accounting monitors cash balances and provides cash forecasts. The Office of Sponsored Programs monitors sponsored program accounts. The Office of Asset Management is responsible for monitoring all capital assets as well as those identified as controlled items, i.e. higher risk items not meeting the capitalization threshold such as laptop computers. The Office of Financial Reporting in conjunction with the Office of Accounting, the Office of Budget and Planning, and entity financial personnel perform monthly analyses of the university’s financial results.

Financial information is provided to entity personnel on a monthly basis. Departmental personnel have online access to their financial information allowing them to monitor their department’s financial position daily and monthly via PeopleSoft and Data Mart tools.

Risks associated with physical assets are minimized by policies concerning tagging physical assets (8), the maintenance of appropriate loan documentation if equipment is removed from campus, the sale of assets, and the disposal or transfer of equipment. Additionally, there are institutional policies and procedures concerning the safeguarding of these physical assets, including their acquisition, maintenance, and final disposal (9). The institution is governed by federal and state regulations regarding the handling and recording of physical assets.

The university capitalizes and records all assets costing $5,000 or more with a useful life in excess of one year in the Asset Management System. The Office of Asset Management is responsible for entering and maintaining information in the Asset Management System regarding assets purchased, assets donated to UTMB, and recording the disposal of surplus property. The Office of Asset Management, in cooperation with entity leadership and individual departments, conducts an annual campus-wide physical inventory (10). The Office of Asset Management monitors the Assets Management System to ensure that all assets are recorded and that depreciation is recorded properly into the general ledger.

Safekeeping of cash is maintained through policies and procedures regulating the handling, depositing and recording of cash receipts along with mandatory training of individuals performing the cashiering function (11). Bank lock boxes, zero balance accounts, and positive pay files provide additional cash safeguards. Access to university bank accounts is limited to a few authorized individuals. Segregation of duties is strictly adhered to when completing cash transactions. Bank reconciliations are performed and monitored monthly.

Endowments are managed centrally at The University of Texas System through UTIMCO (University Of Texas Investment Management Company) (12). Endowment income is provided to the University of Texas Medical Branch at Galveston to be spent in accordance with the donor’s requirements. Expenditures from endowments are monitored for compliance by the Office of University Advancement.
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Source
1
UTMB Management Responsibilities Handbook Fiscal Oversight
http://www.utmb.edu/compliance/internal_control_tools/mgmtresphand/mgmtrespfiscover.htm
2
The University of Texas System Policy Library, Financial Policies Related to Finances, Accounts, Accounting, Purchasing, and Billing
http://www.utsystem.edu/policy/lib_subj_fin.html
3
The University of Texas System, Comptroller’s Office
http://www.utsystem.edu/cont/
4
UTMB Internal Audit Program, FY Ending August 31, 2004
http://www.utmb.edu/utmbreports/audit/Audit05.pdf
5
Table Listing Responsibilities and Qualifications of Primary Financial Personnel
Hard copy located in the Office of Institutional Effectiveness
6
UTMB Facilities Inventory: Buildings, 2007
http://www.thecb.state.tx.us/InteractiveTools/FacInv/FacSearchBldgResults.cfm
7
UTMB Facilities Campus Master Plan Executive Summary
http://www.utsystem.edu/fpc/docs/CampusMasterPlan/UTMEDGAL.PDF
8
UTMB Institutional Handbook of Operating Procedures, Section 4, Fiscal Policies, Policy 4.7.3, Inventory Tags
http://intranet.utmb.edu/Policies_And_Procedures/Fiscal_Related/PNP_004908
9
UTMB Institutional Handbook of Operating Procedures, Section 4, Fiscal Policies, Policy 4.7.6, Transfer of Surplus Property
http://intranet.utmb.edu/Policies_And_Procedures/Fiscal_Related/PNP_004910
10
UTMB Institutional Handbook of Operating Procedures, Section 4, Fiscal Policies, Policy 4.7.4, Annual Inventory
http://intranet.utmb.edu/Policies_And_Procedures/Fiscal_Related/PNP_0054120
11
UTMB Institutional Handbook of Operating Procedures, Section 4, Fiscal Policies, Policy 4.4.13, Cash Handling and Reporting
http://intranet.utmb.edu/Policies_And_Procedures/Fiscal_Related/PNP_004917
12
Regents' Rules and Regulations, Series 70201, Investment Policies
http://www.utsystem.edu/bor/rules/70000Series/70201%202004%2012%2010%2001.pdf