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Audit of University of Massachusetts Boston Objectives, Scope, and Methodology

An overview of the purpose and process of auditing University of Massachusetts Boston.

Table of Contents

Overview

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 the University of Massachusetts (UMass) Boston 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.

The purpose of our audit was to determine whether UMass Boston had taken measures to address certain management items in the areas of budget and hiring processes that were identified by an external auditor. The specific questions we intended our audit to answer are shown in the table below. The table lists the conclusion we reached regarding each objective and, if applicable, where each objective is discussed in the audit findings.

Objective

Conclusion

  1. Has UMass Boston added variance reports3 to its budget process?

Yes

  1. Does UMass Boston conduct background checks for newly hired employees who receive benefits, in accordance with its internal policy dated September 16, 2015?

Yes

  1. Does UMass Boston pay newly hired employees in accordance with the timeframes of Section 148 of Chapter 149 of the General Laws?

No; see Finding 1

 

To achieve our audit objectives, we gained an understanding of the internal control environment related to our audit objectives by reviewing applicable UMass Boston policies and procedures and making inquiries and observations with UMass Boston’s staff and management. In addition, we performed the following procedures to obtain sufficient, appropriate evidence to address our audit objectives.

Budgeting

According to UMass Boston officials, the variance report process is a new process started in fiscal year 2019. We extended our audit period through June 30, 2019 for this audit objective only. To gain an understanding of UMass Boston’s variance report process, we compared the prior process to the new process started in fiscal year 2019. To determine whether UMass Boston had added variance reports to its new budget process, we obtained and reviewed all of the 38 emails, and the 25 variance reports in these emails that contained documented explanations for variances, that were provided by UMass Boston’s budget director. We also reviewed the variance reporting procedures and guidelines in these emails.

Additionally, we reviewed all 38 emails for evidence of communication about budget instructions and variance reports. For the first quarter of fiscal year 2019, there were a total of 13 email communications, of which 5 contained budget instructions and 8 contained visible email communication trails concerning the variance reports’ actual expenses and reasons for adjustments. Of the latter 8 emails, 5 contained a total of 8 variance reports with documented variance explanations. For the third quarter of fiscal year 2019, there were a total of 25 email communications, of which 12 had budget instructions and 13 had visible email communication trails concerning the variance reports’ actual expenses and reasons for adjustments. Of the latter 13 emails, 11 contained a total of 17 variance reports with documented variance explanations. According to UMass Boston officials, there were no specific communications about the second quarter of fiscal year 2019, because the budget reflected actual expenses through the second quarter and required departments to project their expenses for the remainder of fiscal year 2019.

Background Checks

From a population of 176 newly hired employees who received benefits and had user access to UMass Boston’s human resources and finance systems, we used Audit Command Language software to select a random nonstatistical sample of 35 employee identification numbers (IDs) to determine whether UMass Boston conducted background checks during the audit period. Because our sampling method was nonstatistical, we cannot project the results of our testing to the entire population. We obtained and analyzed supporting documentation for the sample, such as summaries for background checks conducted by Creative Services Inc., the company UMass Boston contracts with to conduct background checks; background status definitions; and UMass Boston explanations for non-background-checked employees.

Delayed Hiring

To be paid on time, individuals being hired by UMass Boston must complete the hiring process and be added to the UMass Boston payroll system before they begin working. According to UMass Boston officials, allowing individuals to begin working without completing these steps is called delayed hiring, which is not allowed by university policy. To determine whether delayed hiring occurred during the audit period, from a list of all 11,814 UMass Boston new hires and rehires during the audit period, we calculated the number of days delayed by subtracting the effective date (the date the employee began earning compensation) from the action date (the date the employee was added to UMass Boston’s payroll) and then subtracting 20, which is the maximum number of days allowed by Section 148 of Chapter 149 of the General Laws. We then filtered the list by the number of days delayed exceeding 20 to determine whether the newly hired employees had been added to the university’s payroll and could therefore have been compensated within the timeframes required by the law, as well as to identify the five departments with the most occurrences of delayed hires during the audit period.

Data Reliability

We reviewed certain general information system controls, including access controls, security management, and segregation of duties, over UMass Boston’s human resources and finance systems to determine the reliability of the data therein.

From a list of employees with user access to UMass Boston’s human resources and finance systems, provided by UMass Boston management, we selected a random sample of 20 employees and traced the sample to hardcopy Human Resources Department (HR) employee files and electronic personnel action forms to verify the accuracy of the data. To test completeness, we would need to randomly select hardcopy HR employee files for employees who were active, and had access to UMass Boston’s human resources and finance systems, during the audit period, and trace them back to the list. However, because of the way the hardcopy HR employee files are maintained, there is no way to isolate those employees’ files. Therefore, we could not test the completeness of the list. However, the list is relevant and is the best way to identify the population of employees who had access to the human resources and finance systems during the audit period to conduct our audit.

Additionally, for the delayed hire list, we compared all the employee IDs, action dates, and effective dates to the list of newly hired and rehired employees to verify the completeness and accuracy of the data.

We determined that the data were sufficiently reliable for the purposes of our audit work.

3.     A variance report is a quarterly report that compares actual expenditures to the budget and allows departments to document reasons for adjustments.

Date published: January 19, 2021
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