WHO AUDITS WHAT ?
CSU campuses are subject to audits by auditors from many different organizations on a multitude of subjects. These auditors are grouped by their location in relation to the campus:
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External auditors,
1. EXTERNAL AUDITS
External audits are conducted by auditors from outside the CSU. These include:
A. KPMG
Annual audits of campus and systemwide financial statements are conducted by a Certified Public Accounting or CPA firm. The CSU has contracted with one of the Big Four auditing firms, KPMG, formerly known as Peat Marwick. After the fiscal year ends each June 30, the campus Accounting Office prepares financial reports which KPMG then audits to see if the reports were prepared in accordance with Generally Accepted Accounting Principles, or GAAP, which is why you’ll hear this referred to as the GAAP audit.
As part of the same systemwide contract, KPMG also conducts two other audits:
- Dormitory Revenue Fund Bond audit, which has to be provided to the investors who hold the bonds that financed the building of dormitories, student unions, and parking garages.
- Federal A-133 Single Audit, which is required under the Office of Management and Budget (OMB) Circular A-133; this is a compliance audit since KPMG has to certify that the campus administered all Federal funds it received in accordance with Federal regulations. This covers student financial aid funds on all campuses, research contracts and grants on some campuses, and disaster recovery funds from the Federal Emergency Management Agency or FEMA on a few campuses. The systemwide audited financial statements and the Federal A-133 Single Audit are available on-line at: http://www.calstate.edu/sfr/GAAP/financial_statements.shtml
B. FEDERAL AUDITS
Federal agencies could also audit our administration of any grants or other funds that they provide to the campus. We could be visited by auditors from the Department of Education regarding student financial aid funds, the National Science Foundation (NSF) about a research grant, FEMA concerning earthquake damage repair funding, etc.
The Internal Revenue Service (IRS) could examine a number of tax related issues, including whether a campus was properly withholding taxes from payments to non-resident aliens, properly administering tax sheltered benefit plans, and paying taxes on any unrelated business income we had - even though we are a non-profit organization, we could have income that is not tax exempt.
C. STATE AUDITS
SFSU is also subject to audits by a number of State agencies:
1. The State Controller's Office periodically reviews our internal controls over the payroll process and whether Accounts Payable is following all the rules for making payments to vendors and travel reimbursements to employees.
2. The Department of Finance has an Office of State Audits and Evaluations that could audit most any financial subject.
3. The Bureau of State Audits conducts audits requested by the State Legislature. An example of this is the recent audit of the CSU's Common Management System or CMS that is bringing PeopleSoft financial, human resources, and student administration systems to all CSU campuses. At the request of the faculty union, the Legislature asked the State Auditor to find out how much CMS is costing the CSU.
The Bureau of State Audits also investigates allegations of wrongdoing by state employees as reported to them by whistleblowers. See Whistleblowing Information here or go to the link located on the left-side of this page.
4. The State Board of Equalization conducts sales and use tax audits to verify that the campus:
- Collects and remits sales tax on any taxable products it sells,
- Pays sales tax on purchases from vendors; and
- Assesses itself use tax on purchases from out-of-state vendors who don't collect California sales tax.
5. The California Student Aid Commission will audit our administration of Cal Grants every 6 or 7 years.
