A final report of an audit of KSU’s K-Cash program processes and internal controls verified the amount, officials said. The audit’s findings, which cited a lack of adequate internal controls before 2011, have led President Dan Papp to order a comprehensive audit of all university auxiliary enterprises, which is now underway.
The losses occurred when the money was collected from the machines, spokeswoman Arlethia Perry-Johnson said.
“So it has to be someone who is in that stream of activity, between the collection of the funds and them being turned over to the entities of the university that collect the funds,” Perry-Johnson said.
Participants of the K-Cash program did not lose any of their funds or balance credits as a result of the incident, according to officials.
KSU Police are conducting an investigation, and disciplinary actions have been taken to address the lack of appropriate fiscal oversight in the impacted operating unit. However, no arrests have been made, Perry-Johnson said.
KSU’s Auxiliary Services and Programs unit comprises vending services, copy and print services, culinary and hospitality services, the parking and transportation department, and the KSU Bookstore. Before December 2010, the unit was a department within the university’s Financial Services Office.
Dr. Randy Hinds, vice president for operations, asked the university’s auditor to look into K-Cash because of concerns regarding loose protocols when he began supervising Auxiliary Services last December, officials said.
The audit reviewed records from February to October 2010, examining the internal operations of the K-Cash program and its level of compliance with policies, procedures and regulations.
In particular, it focused on internal weaknesses that needed improvement, according to the university. Two examples were multiple workers having keys to the terminals and the practice of not counting collected money in front of appropriate personnel, Perry-Johnson said.
“I was extremely disturbed by the initial concerns which led to this audit and I commend the auditors for the thorough review that they conducted of the K-Cash operations,” Hinds said in a statement. “The improved processes and tightened controls that have been and will be implemented are giant steps in the right direction. Meanwhile, I look forward to the results of the comprehensive audit to determine if additional improvements are needed. We must and will ensure that all auxiliary enterprises are functioning appropriately with effective internal controls.”
According to the university, the K-Cash program allows KSU students, staff and faculty to access nine terminals located around campus, where they can deposit money into machines to create fund balances on their KSU ID cards. Eight machines accept cash only, and one machine accepts both cash and credit card deposits. The funds can be applied to either a general balance account or a food-only account.
In August, the director of KSU’s bookstore, Jamie Burns, resigned amid reports about questionable bookkeeping, which led to an audit of the bookstore.