In our prior audit, we found that MBCC had not immediately reported to the Office of the State Auditor (OSA) 10 missing or stolen items, totaling $12,720. We recommended that MBCC develop and implement policies, procedures, and monitoring controls to ensure that all unaccounted-for variances, losses, shortages, or thefts of funds or property were immediately reported to OSA.
During our current audit period, although the chief of police had been given the responsibility of filing reports with OSA under Chapter 647 of the Acts of 1989, MBCC had still not established college-wide policies, procedures, and monitoring controls to ensure compliance with Chapter 647. MBCC reported to its campus police $120 worth of missing or stolen medical equipment on October 3, 2018, but did not file a report with OSA pursuant to Chapter 647. MBCC notified OSA of this previously unreported loss during our fieldwork in August 2020.
Because MBCC did not immediately report this loss, OSA did not have the opportunity to identify the internal control weakness that might have contributed to, or caused, this incident. OSA also did not have the opportunity to make a recommendation to MBCC about addressing the weakness to reduce the risk of future theft or losses.
Chapter 647 of the Acts of 1989 states, “All unaccounted for variances, losses, shortages or theft of funds or property shall be immediately reported to the state auditor’s office.”
Reasons for Noncompliance
MBCC officials told us that there had been significant changes in the college’s management staff since the prior audit. They also told us that the college had drafted procedures for filing a report with the campus police whenever an item is reported as lost or stolen, as well as reporting all unaccounted-for variances to OSA; however, this process has yet to be formally implemented.
The university’s chief of police, who is responsible for filing reports of losses under Chapter 647, told us it was his understanding that MBCC was only required to report losses of $1,000 or more.
- MBCC should develop and implement policies, procedures, and monitoring controls to ensure that all unaccounted-for variances, losses, shortages, and/or thefts of funds or property are immediately reported to OSA.
- MBCC should ensure that the party responsible for overseeing compliance with Chapter 647 of the Acts of 1989 understands the law’s requirements.
In response to this finding, MassBay will implement training and reporting procedures to ensure ongoing compliance with Chapter 647 of the Acts of 1989. The MassBay Campus Police Policy Manual will be updated to include the reporting procedure noted below, and all department staff will be aware of the policy. The Director of Public Safety / Chief of Police will send the campus community a monthly reminder via email describing the procedure to report missing/lost or stolen items.
MassBay will implement the following procedure to report missing/lost or stolen items to the State Auditor’s Office:
- Campus police will notify the Vice President of Finance and Administration and the employee responsible for inventory of a reported loss. The Director of Public Safety / Chief of Police or his/her designee will submit the required Chapter 647 report to the State Auditor’s Office as the result of receiving a report of missing/lost or stolen assets. Copies of the documentation submitted to the Office of the State Auditor will remain on file in the Public Safety office, be submitted to the Vice President of Finance and Administration and the employee responsible for inventory.
- The initial reporting party will be advised by the Director of Public Safety / Chief of Police that an investigation has been completed. The Vice President of Finance and Administration will provide any internal control changes that arise out of the recommendations to the Controller and the employee responsible for inventory, for incorporation into the College Internal Control Manual and for dissemination to the campus community as appropriate. MassBay has since reported the missing or stolen medical equipment from October 3, 2018 and is satisfied that future instances of missing/stolen or lost assets will be reported in accordance with Chapter 647.
Based on its response, MBCC is taking measures to address our concerns in this area.
|Date published:||May 11, 2021|