In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of Holyoke Community College Foundation for the period July 1, 2017 through March 31, 2019.
We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.
Below is our audit objective, indicating the question we intended our audit to answer and the conclusion we reached regarding the objective.
To achieve our audit objective, we gained an understanding of the foundation’s internal control environment related to the objective by conducting inquiries with the foundation’s executive director and contracted bookkeeper. In addition, we reviewed testing performed by the foundation’s independent auditing firm. We also reviewed the foundation’s bylaws, articles of incorporation, expenditure approval process, and board-approved budgets.
To determine whether expenditures made by the foundation were budgeted, authorized, and made for the exclusive benefit of the college, in accordance with Section 37 of Chapter 15A of the General Laws, we requested and received a list of all payments made by the foundation during the audit period. We reviewed this list of 360 payments, totaling $8,082,229, noting that 97 (27%) of the payments, totaling approximately $6.2 million (77%) of the amount paid, were related to a capital project, the Culinary Arts Institute (CAI). We divided the 360 transactions in our population to separate the 97 CAI payments from the 263 other payments. From the 97 CAI payments, we judgmentally selected 15. From the 263 other payments, we randomly selected a nonstatistical sample of 30. For the payments selected, we reviewed supporting documentation (invoices, contracts, proof of receipt, and copies of checks) to determine whether all payments were budgeted and authorized and whether they all supported the foundation’s purpose.
Because we used a nonstatistical approach for our audit sample, we did not project our results to the entire population of payments reviewed.
To assess the reliability of the list of payments by the foundation, we interviewed knowledgeable personnel at the foundation who were responsible for maintaining the payment records, and we tested the list of payments for missing or invalid records or fields, duplicate records, report dates outside our audit period, and gaps in the payment numbers. We traced a sample of expenditures from the list of payments back to the source documents, which included invoices, copies of checks, and receipts.
Additionally, we randomly selected a sample of invoices to compare to the list of payments. We also tested the controls over the foundation’s accounting system, which included user password protection, assurance that only authorized personnel had access, and notification of invalid entries, and verified that the system had backup and restoration capabilities.
As a result of our data reliability analysis and control testing, we found that the data were reliable for the purpose of our audit objective.
|Date published:||September 18, 2020|