Compliance Status

Louisiana State University and A&M College is in compliance with this principle.

Narrative

Louisiana State University and A&M College (LSU) appropriately controls and manages its financial resources. The Office of Finance and Administrative Services (FAS) is charged with the responsibility of stewardship and enhancement of the university’s financial, physical, and human resources. The division exists to serve and support the university’s mission of instruction, research, and public service. FAS strives to be a model in higher education on effective and efficient utilization of financial resources across the campus and to provide outstanding stewardship to the campus community in matters of finance and administration. FAS strives also to deliver unparalleled services and outcomes to LSU students, faculty, staff, and visitors.  FAS maintains control over LSU’s financial resources through the use of a unified accounting system, through separation of duties across financial units, and through development and enforcement of relevant operating policies and procedures to ensure compliance with university rules and regulations.  The university’s physical resources are monitored by FAS through annual audits of fixed assets and proper facility construction and maintenance planning.  The division manages the university’s human capital by employing qualified staff and providing appropriate training, especially for employees responsible for financial transactions.

Finance and Administrative Services Operating Procedures (FASOP) are established and enforced to ensure compliance with university rules and regulations.  Below are FASOP statements that control the university’s finances: 

The LSU System also develops policies and procedures, referred to as Permanent Memoranda (PM), which are followed by all LSU campuses.  The following PM statements place controls over LSU’s finances.

As part of the university’s program review process, FAS recently completed a self-evaluation report that included an internal panel of reviewers and an external reviewer from a peer institution [27][28][29].  The division reviewed these evaluations and submitted an action plan to address the recommendations of the reviewers [30].  FAS is currently using these evaluations to make improvements to the programs and services it provides to the university community.  The overall evaluations were positive for FAS and indicate that the division is staffed with experienced and capable employees who provide excellent program and services to the campus.    

Financial and Human Resources Departments

The financial and human resource departments reporting directly to the Vice Chancellor for Finance and Administrative Services and CFO are the following:

• Accounting Services
• Budget and Planning
• Human Resource Management
• Procurement Services 

Unit Heads of the Departments

Vice Chancellor: L. Robert (Bob) Kuhn serves as the Interim Vice Chancellor for Finance and Administrative Services and CFO. Kuhn previously held the position of Vice-Provost for Fiscal Management and Associate Vice Chancellor for Finance and Administrative Services.  His responsibilities include the business services and auxiliary enterprises that provide the financial, administrative and operational services to the university. Kuhn serves as the chief financial officer and is the principal advisor to the chancellor on fiscal and administrative matters.  He is a member of the Chancellor’s Executive Council, the University Budget Committee, the University Planning Council and the Council of Vice Chancellors. Kuhn has held leadership roles in the Louisiana Association for Institutional Research, the Southern Association for Institutional Research, the National Study of Instructional Cost and Productivity Advisory Committee, and the National Association of College and University Business Officers (Institutional Advisory Board for Higher Education Benchmarking Program).  He has 39 years of fiscal and administrative experience at LSU. Kuhn holds a Bachelor of Science degree in Industrial Management and a Masters in Business Administration, both from LSU. 

Accounting Services: Donna K. Torres serves as Associate Vice Chancellor for Finance and Administrative Services.  Her area of responsibility is Accounting Services, which performs the day-to-day financial activities, that is, the accounting, reporting and record-keeping functions for the university.  The divisions included in Accounting Services are Payroll, Accounts Payable and Travel, Bursar Operations, Sponsored Program Accounting, and Financial Accounting and Reporting. Torres holds Bachelor of Science in Accounting and Master of Accounting degrees from LSU.  She is a licensed Certified Public Accountant, a member of Louisiana Certified Public Accountants and American Institute of Certified Public Accountants.  She has previously held the position of Payroll Director for the University.  Prior to her employment with the university, Torres was vice president and controller for an insurance administrator and worked in public accounting.

Budget & Planning: Thomas M. Smith serves as the Acting Executive Director for Budget and Planning.   Smith previously held the position of budget director at the university.  His area of responsibility includes the budget and institutional research functions for the institution.  Smith has been employed by LSU for 19 years in the Office of Budget & Planning.  He holds a Bachelor of Science degree in the College of Business and a Master’s in Business Administration, both from LSU.

Human Resource Management:  A.G. Monaco serves as the Associate Vice Chancellor for Human Resource Management and acts as the chief human resources officer for the university.    Monaco provides advice and counsel on the full range of personnel matters to university executives and administrators and serves as a member of the senior leadership team of the Division of Finance and Administrative Services.  He directs the Office of Human Resource Management and develops the strategic and tactical objectives for the office.  Monaco possesses over 30 years of Human Resource Management experience, including 23 years within higher education.  He holds a bachelor’s degree in Economics, master’s degrees in Sociology and Industrial Relations and Personnel, and a PhD in Business Administration.

Procurement Services:  Marie Frank serves as Executive Director for Procurement Services and acts as the chief procurement officer for the university. Frank ensures that all state laws, administrative codes, revised statutes, and department policies and procedures pertaining to procurement and property management are adequately explained, interpreted, and followed by university employees.  She previously held the position of associate director for purchasing with the university and statewide assistant grants/contracts administrator for the Louisiana Division of Administration. Frank holds a Bachelor of Science degree in the College of Business and a Master’s of Public Administration degree, both from LSU.  She is a UPPCC Certified Professional Public Buyer and was a past president and board member of the Louisiana Chapter of the National Institute for Governmental Purchasing (NIGP).     

Accounting Services

Accounting Services performs the accounting, reporting and record-keeping functions for the University in accordance with applicable state and federal laws, as well as university regulations, policies, and procedures, including FASOPs.  The unit’s employees hold numerous certifications as listed below:

• 9 Certified Public Accountants
• 5 Certified Research Administrators
• 12 master’s degrees
• 1 notary public

The following divisions comprise the office:

• Accounts Payable & Travel is the division which processes all disbursement requests other than payroll and is responsible for paying invoices for goods and services furnished to the university by companies and organizations.  The division also manages the university’s travel function by issuing travel advances, reimbursing authorized travel expenses, and auditing travel of university faculty, staff, and students.

• Bursar Operations is the primary service unit for managing students’ financial records and assisting the university’s colleges, departments, faculty, and staff; the general public; and businesses and federal and state agencies in performing their financial responsibilities.  The division is responsible for billing, collection, and reconciliation of student and non-student accounts receivable; preparation and distribution of student registration fee bills; coordination of student registration; distribution of sponsorships, scholarships, financial aid, and student and emergency loan funds; and collection of student organizational deposits and distribution of those funds to the appropriate student organizations.  In addition, Bursar Operations has the overall responsibility for maintaining and updating the Advanced Billing System which houses exemptions and awards for students and validates student eligibility; the Treasury Information System which houses the accounting information for each accounts receivable transaction, stores fee and award information for students, produces fee bills, and feeds information into the university’s General Ledger System (GLS); and the Perkins Student Loan Management System, which houses loan and account status data for all Perkins Loan borrowers and generates bills monthly.

• Financial Accounting & Reporting (FAR) is primarily responsible for the maintenance of the university’s General Ledger System (GLS), in which all of the university’s financial data is processed and stored, and management of the fiscal yearend closeout process, including the preparation of all financial statements and coordination of the legislative audit.  The division also manages the LSU Investment Program, the issuance of bonds for university projects financed with self-generated funds, and the accounting for capital construction and long-term debt.  FAR also prepares all tax returns, calculates the Fringe Benefit Rate, and prepares the Facilities and Administrative Cost study for the university.

• Payroll processes salary and wage payments for all employees and accounts for the salary and wage expenditures by budgetary units.  The division administers payroll deductions required by law—federal and state income tax withholding, Medicare and social security taxes and retirement contributions, federal and state tax levies, garnishments, and child support—as well as employee-authorized deductions, such as those for health and life insurance premiums and supplemental retirement account contributions.  Payroll ensures compliance with United States citizenship and Immigration Services (USCIS) regulations and income tax treaties between the United States and foreign countries.  Payroll’s insurance section maintains tax sheltered premium amounts for the LSU Flexible Benefits Plan, as well as the records for employee and retiree group insurance coverage and premium deductions.  The disbursements section of Payroll processes all federal and state tax deposits and payroll tax returns, submits retirement contributions and the employer match with monthly reports of earning to all retirement systems, and processes payment for all other payroll deductions.

• Sponsored Program Accounting (SPA) is responsible for the post-award administration of sponsored programs (federal, state, local and private grants, contracts, and cooperative agreements).  SPA establishes and maintains sponsored program accounts on the Chart of Accounts (COA); budgets funds upon receipt of sponsored agreements; prepares billings and requests for reimbursement; receives and records payments; records gifts made to LSU; monitors collection of payments from sponsors; prepares financial, property, and patent reports; and processes sponsored program budget adjustments and expenditure transfers.  SPA also administers Personnel Activity Reports (PARs) for the documentation of effort and salary cost sharing on sponsored projects.

Budget and Planning

The mission of the Office of Budget and Planning is to provide timely, accurate, and useful information to decision makers to assist them in making decisions that are congruent with the vision, mission, and goals of LSU.  The office is responsible for the budget and the institutional research functions of the university.  All of the staff members in the Office of Budget & Planning have master’s degrees and have a cumulative 143 years of experience in higher education administration.       

LSU annually prepares a balanced operating budget based on sound planning and development processes.  The budget development process takes a comprehensive approach, includes a broad spectrum of university participation, and considers several projections and potential impacts.  The Office of Budget and Planning assists in the preparation of the budget projections and potential impacts that are presented to the University Budget Committee, which provides budget recommendations to the campus’ chief executive officer [31].  Using the budgetary information that has been recommended by the University Budget Committee, vice chancellors, and academic deans, the campus chief executive officer and the executive vice chancellor & provost approve the operating budget allocations.  Following these final allocation approvals, the LSU Office of Budget and Planning distributes instructions for developing individual unit budgets and assists unit heads and business offices in executing the approved budget [32].  Once the final operating budget development process is complete for the campus,  the office prepares the annual operating budget documents for consideration and approval by the LSU Board of Supervisors and the Louisiana Board of Regents [33][34].  During the state legislative stages of the budget development process, Budget and Planning staff provide information to the executive and legislative fiscal offices, including justifications for budget requests, through the completion of information reports as requested.  Once the operating budget development process is completed, the office insures that the university operates within its operating budget appropriation established by the legislature, the Board of Regents, and the LSU Board of Supervisors.

The institutional research function of the office provides information to administrative units for decision making relative to planning, implementation, and assessment.   The office provides annual and census date information to executive administration and campus departments for items such as graduation and retention rates; entering student profiles; enrollment and grade distribution reports; and faculty, staff, and student data.  The institutional staff is also responsible for the submittal of most of the external reporting requirements for the institution for items such as the Integrated Postsecondary Educational Data System (IPEDS) surveys, Louisiana Granting Resources & Autonomy for Diplomas (LA GRAD) Act reports, U.S. News, Princeton Review, the voluntary system of accountability, enrollment reports, and peer data exchanges.    

Human Resource Management

The mission of LSU’s Office of Human Resource Management is to provide leading human resource services for the flagship university that attract, sustain, and inspire excellence in LSU faculty and staff.  Human Resource Management (HRM) provides guidance support and resources that are needed to recruit and retain the highly qualified and diverse employees of LSU. HRM’s Training and Development unit provides professional development, consulting, and assessment services to support continual improvement of effectiveness, both for the individual employee and the organization, in alignment with the university’s strategic objectives.  HRM administers the Business Manager and Human Resource Certification Programs, designed specifically for employees responsible for financial transactions and/or human resource responsibilities, to ensure that the most current principles and core practices are utilized appropriately and consistently [35].  The Office of Human Resource Management administers their responsibilities and programs with qualified staff members [36].   

Procurement Services 

The role of the Office of Procurement Services is to procure goods and services to sustain, foster, and support the administrative, educational, and research mission of the university by adhering to the requirements of state and federal laws and regulations, as well as to university policy, in the most timely, economical, and transparent means possible.  The office is responsible for the Procurement and Movable Property Management function for the university.  The Office of Procurement Services staff consists of highly qualified personnel, with several members holding the Certified Professional Public Buyer (CPPB) designation and with most being members of both the National Institute for Governmental Purchasing (NIGP) and the Louisiana chapter of that organization.  The evidence of the staff’s qualifications and capabilities are further displayed by LSU currently being designated by the State of Louisiana as the only public higher education institute that can seek to create its own pilot procurement code through the high-level autonomies granted by the LA GRAD Act.  LSU’s current purchasing policy is based on procedures established by the State of Louisiana and on rules and regulations promulgated by the Louisiana Commissioner of Administration. 

Also within Procurement Services, the Office of Property Management monitors and facilitates the management of the university’s moveable equipment inventory and fleet management programs in accordance with regulations established by Louisiana state statutes and with various federal government regulations when applicable.  The office manages the university’s movable equipment in accordance with the university’s property management procedures [37].   This office develops and maintains inventory records for university movable equipment and requires the submission of annual departmental inventory audits of movable equipment [38].  To ensure compliance with university and with state regulations, the Office of Property Management requires equipment inventory action request forms to be completed by departments for actions such as the surplus, departmental transfer, or disposal of equipment [39].    

Internal Audit

The Louisiana State University System Internal Audit function is an objective assurance and consulting activity that is independently managed within the LSU System and guided by a value-driven philosophy of partnering with other units to continuously improve the operations of the LSU System.  Internal Audit’s role is to measure and evaluate the effectiveness of internal controls within the accounting, financial, and operating systems of the LSU System.  Internal Audit furnishes impartial, independent analyses, appraisals, recommendations, and pertinent comments on the business activities of the institution.

The LSU System Director of Internal Audit reports to the LSU Board of Supervisors, through the Audit Committee, and to the president.  Campus internal audit directors report to the system director with concurrent informational disclosure to the campus head, unless directed to the contrary by the system director and chair of the Audit Committee.  Internal Audit staff meet or exceed the “Standards for the Professional Practice of Internal Auditing” promulgated by the Institute of Internal Auditors.  Government auditing standards promulgated by the Comptroller General of the United States are followed when required by law, regulation, agreement, contract, or policy. Internal Audit staff members act with integrity, objectivity, confidentiality, and competency consistent with the Institute of Internal Auditors Code of Ethics.

Internal Audit develops a flexible annual audit plan [40] using an appropriate risk-based methodology, including any risks or control concerns identified by management, and submits that plan to the Audit Committee and the LSU Board of Supervisors for review and approval.  In addition, audits can be conducted upon the request of management if risks or misappropriation of funds are identified.  Financial transaction audits performed by Internal Audit include management’s response to the findings and recommendations [41].

Legislative Auditor

Additional control over LSU’s financial resources lies with the Louisiana Legislative Auditor.  The legislative auditor is one of the largest public accounting practices in the State of Louisiana, serving as the watchdog of public spending and overseeing more than 3,500 audits of state and local governments and their related quasi-public enterprises.  Staff members are located in a permanent office on the LSU campus.  The staff conducts annual independent financial and performance audits, identifying critical issues to protect public resources and tighten control systems.  Each year, the auditors conduct a financial and compliance audit and an audit of federal award programs.  LSU management provides a representation letter for both audits [42] [43].  Legislative auditors schedule an entrance and exit conference with management to discuss the financial and compliance audit.  The conferences provide an overview of the audit process and discussion on any noted risks or material weaknesses in the financial statements.  Annually, LSU management provides a response to questions related to the Statement of Auditing Standards Number 99, “Considerations of Fraud in a Financial Statement Audit” [44].  When necessary, the legislative auditors follow up on allegations of fraud, waste, or abuse [45].

Summary

Louisiana State University and A&M College is in compliance with the requirements of principle 3.10.3, based on the internal controls, policies, and procedures implemented by the Office of Finance and Administrative Services; reviews by Internal Audit; and audits annually conducted by the Louisiana Legislative Auditor.  Additional information related to financial controls and stability at LSU is included in Core Requirement 2.11.1 and Comprehensive Standards 3.10.1 and 3.10.2.