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 the Massachusetts State College Building Authority (MSCBA) for the period July 1, 2016 through March 31, 2018.
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 a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.
No; see Finding 1
To achieve our audit objectives, we gained an understanding of MSCBA’s internal control environment related to our objectives by reviewing applicable laws and agency policies and procedures and conducting inquiries with MSCBA management. We evaluated the controls over the administration of MSCBA’s design and construction contracts. While evaluating the internal control environment, we identified an issue with MSCBA’s Summary of Internal Control Plan document (Finding 2).
MSCBA uses the Sage 300 Construction and Real Estate (CRE) software as its accounting system. We obtained a full copy of MSCBA’s project-related financial activity from Sage 300 CRE to assess the reliability of the data. We evaluated the design of the controls for access to programs and data, program changes, and computer operations. We also analyzed data in Sage 300 CRE by performing additional validity and integrity tests, including testing for missing financial activity and scanning for duplicate records. To verify completeness, we traced 30 invoices from a list provided by the chief financial officer to the 2017 Capital Asset Report4 generated by Sage 300 CRE, which we reconciled to the 2017 financial statements audited by an independent firm. We traced 100 invoices from the Sage 300 CRE Committed Cost Status Report5 for one entire project to verify its completeness. We determined that the data were sufficiently reliable for the purposes of this report.
We also performed the following procedures.
- We reviewed a judgmentally selected sample of 10 of the 48 projects MSCBA started during the audit period, representing a total project cost for the sample of $25,926,492 out of the total costs of $49,364,420. We chose our sample of projects by selecting projects that had the highest associated contract costs and were procured in accordance with four different procurement laws for different goods and/or services. The laws were Chapters 30, 149, 149A, and 193 of the General Laws. For each project in the sample, we reviewed the following:
- use of the proper procurement method
- approval to go to bid and the signed agreements awarding the contracts
- the central registry,6 to determine whether the project specifications were accurate
- the bid tabulations, to ensure that the required bid bonds were submitted with all the bids and that the 41 contractors selected for the 10 projects were the lowest qualified bidders
- the 11 change orders for the projects, to ensure that they were properly authorized and within the limits prescribed by MSCBA’s bylaws
- We reviewed the Department of Higher Education’s database of undergraduate students at Massachusetts state universities to determine whether MSCBA met its strategic-plan goal of providing housing for 50% of full-time undergraduate students.
- We visually verified that the presidents of Massachusetts state universities had signed their schools’ 2017 and 2018 Occupancy Certificates,7 which are used to prepare MSCBA’s Occupancy Report8 and annual Rent Certificate.9
- We verified that the design occupancy and actual occupancy of residential housing for each college campus were properly reflected in MSCBA’s Occupancy Report.
- We reviewed the projects started during the audit period to determine whether they were included in MSCBA’s strategic plan.
- We interviewed officials at three state universities and documented their assessments of MSCBA’s ability to respond to their universities’ needs, as well as the competitiveness of the room rates with those of other schools and nearby rental units.
- The audit team reviewed the Rent Certificate process established by MSCBA to determine whether the numbers of beds listed in schools’ Occupancy Reports were accurate (i.e., whether they reconciled to the bed count totals in the Rent Certificates issued during the audit period).
- To evaluate the accuracy of MSCBA’s financial activity posted to CTHRU, we reconciled expenses from the Sage 300 CRE Committed Cost Status Reports to CTHRU for a sample of 8 out of the 48 projects started during the audit period.
- We reconciled the payroll data on CTHRU to the Form W-3s10 and Form W-2s of all 18 employees for calendar year 2016 and all 17 employees for calendar year 2017 whose payroll data MSCBA submitted to the Social Security Administration.
Our samples were judgmentally selected; therefore, we did not project our results to the entire population.
|Date published:||March 12, 2019|