Narrative:  

Troy University is in compliance with this Comprehensive Standard.

The financial affairs of Troy University are the responsibility of the Board of Trustees who delegate the administrative responsibilities to the Senior Vice Chancellor for Finance and Business Affairs, with approval and guidance of the Chancellor and the Board of Trustees

As the chief financial officer of Troy University, the Senior Vice Chancellor for Finance and Business Affairs is responsible for the financial administration of the University and has custody and control of all its funds and securities. The Senior Vice Chancellor for Finance and Business Affairs is also responsible for establishing polices and procedures to safeguard the financial resources of the University. Because of Troy University’s commitment to the effective and efficient allocation of financial resources, the official policies and procedures to manage its funds are provided in the Troy University ePolicy Manual. The Troy University ePolicy Manual details the policies and procedures to manage all of the university’s financial resources. Section 5.2.1 provides details on the annual operating budget process and approval by the Board of Trustees.

Troy University’s procurement policies

A significant function at Troy University is the procurement of goods and services to serve its student population by assisting the students, faculty and staff in the purchases of goods and services needed to meet both academic and non-academic goals, expediting payment to vendors on behalf of Troy University, and maintaining accurate documentation of assets for accounting and financial resources.

Section 701 of the Troy University ePolicy Manual mandates the policies regarding who has the fiscal authority to engage in transactions for the University. Pursuant to the general fiscal authority guidelines, the Troy University Purchasing Policies & Procedures document states that the Troy University Purchasing Department is responsible for the development of policies and procedures designed to create an efficient and effective decentralized procurement environment. The Purchasing Department has the final review and approval for all purchases with University funds subject to the direction of the Senior Vice Chancellor for Finance and Business Affairs. The policies and procedures delineated in the Troy University Purchasing Policies & Procedures document include the following:

• Different types of purchasing alternatives
  
  • Orders requiring a purchase order
    
  • Orders not requiring a purchase order
    
  • Troy University Purchasing Card
    
• Steps in processing payments for goods and services ordered
  
• Policies for the use of a Troy Purchasing Card, and
  
• Purchasing policies requiring the Alabama Competitive Bid process.

Managing petty cash / working cash funds

Petty cash funds are available at the cashiers' windows to cover purchases of small emergency items and small non-recurring items costing less than $100 per day, per account. The department chair/director's authorization, the sales slip, and the account number to be charged should be presented to the cashier, with the items purchased clearly identified on the invoice. Troy University departments that conduct sales and/or rental activities which require the collections and/or exchange of cash funds may be assigned working cash funds. A department may request a working cash fund by submitting a Check Request Memorandum to the Senior Vice Chancellor for Finance and Business Affairs, giving justification for the fund and the length of time needed. Petty cash and/or working cash funds must be available upon request for immediate audit by the Controller’s Department or the State Department of Alabama Examiners of Public Accounts. Section 705 of the ePolicy Manual explain that all collections including cash, checks and money orders must be deposited with Student Financial Services no later than the next business day.

Travel policies - spending and reimbursement

Troy University travel policies as described in Section 706 of the ePolicy Manual are developed in accordance with laws of the State of Alabama and Internal Revenue Service regulations. These policies cover Troy University employees, students and any others who travel on approved, official University business. All official travel must be prudently planned so that the best interests of Troy University are served at the most reasonable cost. The policies cover the required documentation and reimbursements rates for in-state, out-of-state and foreign travel. The travel policies also provide guidelines regarding the mode of travel: air travel, travel by private vehicle and/or rental vehicles. The policy also discusses the guidelines regarding insurance for rental/personal vehicles. If a cost is deemed inappropriate, unjustifiable or excessive, it is not considered acceptable and is not reimbursed.

Troy University entertainment policies

Troy University business sometimes requires expenditures for entertainment. In all cases, however, there must be a clear, documented, business purpose for the expenditure that indicates its benefit to the University. This policy is intended to be neither all inclusive nor to address every situation which may arise. However, the items delineated in the policy cover items from employee and guest meals to receptions, coffee breaks and refreshment supplies. The policy as described in Section 706.9 of the ePolicy Manual, however, does adhere to state laws and regulations, federal cost principles as explained in OMB Circular A-21, and IRS business expense guidelines. Troy University imposes strict documentation requirements on expenditures which include:

• Amount of the expenditure
  
• Date, time, and place
  
• Business purpose served by the expenditure
  
• Business relationship to Troy University of each person in attendance

Section 706.9 of the ePolicy Manual also covers guidelines regarding gifts, donations, flowers, invitations and greeting cards, and plaques and framing.

Accounts payable policies

Accounts payable policies and procedures have been developed to assure authorization and documentation of all expenditure checks. The guidelines identify who is responsible for paying all invoices for Troy University. These items include but are not limited to:

• Invoices attached to approved purchase orders for materials or services received
  
• Student refunds
  
• Utility bills
  
• Invoices attached to approved check requests
  
• Approved travel reimbursement reports
  
• Memos requesting payment with proper documentation
  
• Payments to individuals through consulting agreements for services rendered, and
  
• Payments to contractors and other vendors for construction projects paid through plant and reserve funds.

The approval levels for various payments can be found in Section 701 of the Troy University ePolicy Manual. Section 707 of the manual explains that to expedite the processing of check requests, the Accounts Payable Check Request form for amounts less than $500 has been developed for use when requesting checks not related to travel reimbursements or purchase order payments. Payment procedures for purchase orders issued to vendors are described in the Purchasing Policy section. Payments for other check requests including travel reimbursements, consultant professional service agreements, petty cash replenishments and refunds must be approved by the department chair, dean, vice chancellor, and/or Vice Chancellor for Finance and Business Affairs prior to processing. The check requests are only to be used for purchases less than $500, All other purchases should be on a purchase order or on an approved credit card. Therefore, vendor payments over $500 should have prior approval which will expedite the payment process and eliminate invoices from being held for approval. All checks will be mailed from the Accounts Payable area unless extenuating circumstances occur. The purchase order needs to be approved prior to vendor payment. The departments will create their own requisition online: however, accounts payable needs a copy of the approved purchase order to attach to the invoice.

Student Financial Services

Student financial transactions are directed by Student Financial Services. Because Troy University does not operate on a strict cash basis, Student Financial Services is responsible for implementing the policies and guidelines for managing all student payments, collections, disbursements and all other related financial transactions. To promote the accuracy of the department’s and Troy University's cash receipting and accounts receivable records and to discourage fraudulent manipulation of the accounting records, the following internal control measures are in effect:

• An aging of all accounts and a review of past due accounts is performed periodically.
  
• An employee other than the cashier handles items disputed by account holders.
  
• A reconcilement of individual account balances to the control balance is performed periodically.
  
• Receipts and invoices are pre-numbered and all numbers accounted for periodically.
  
• Payment of credit balances and adjustments from the student’s account balance are processed by an employee who does not handle cash receipts.
  
• A diligent effort is made to collect all outstanding accounts.
  
• Billings are made to all account holders on a systematic basis.
  
• Accounts receivable write-offs are approved by the Attorney General’s office.
  
• Routine collection procedures are documented.
  
• Student Financial Services records are audited annually.

Section 711 of the Troy University ePolicy Manual describes the policies and procedures regarding Student Financial Services in the following areas:

• Billing and collections
  
• Allowance for doubtful accounts
  
• Payments
  
  • Responsibilities
    
  • Payment methods
    
• Billing
  
  • Late payment
    
  • Returned check
    
  • Delinquent accounts
    
  • Offset of Funds
    
• Financial aid refunds
  
  • Charging privileges at the bookstore (for financial aid recipients only)
    
  • Use of Federal Financial Aid to Pay Prior Year Charges
    
  • Student bank loans
    
  • Funds held
    
  • Tuition assistance
    
  • Veterans’ benefits
    
• Enrollment cancellation due to nonpayment of fees

Asset management

Troy University’s asset management program is designed to safeguard the current assets and to assure liquidity and asset growth. Section 709 of the Troy University ePolicy Manual indicates that the Chancellor (or his or her designee) is responsible for all investments as defined by the criteria approved by the Board of Trustees. The policies and practices are separated into Operational Fund Investments of relatively short duration and Permanent Fund Investments for long term investments. The objective for Operational Fund Investments is to maximize earnings given need for liquidity and consistent with capital preservation. Permanent Fund Investments (e.g., endowment, life income, and annuity funds) emphasize income growth with safety and consistency, as well as principal growth at a rate at least equal to inflation. Unless otherwise restricted by the donor, all investments are limited to certain marketable securities, as delineated in the policy. Troy University also has established criteria that all depositories of University funds must be approved by the Board of Trustees and transacted by the Senior Vice Chancellor for Finance and Business Affairs.

Gifts, donations, endowments, and trusts are normally deposited into the Troy University Foundation as described in Section 705 of the ePolicy Manual. The Foundation was created to attract private support for Troy University to assist in supporting the mission of the University. The Foundation is governed by bylaws approved by its Board of Directors and administered by the Chancellor. Endowment Management Policies are provided. The Troy University Foundation Endowment Summary as of March 31, 2008 is also provided. For years 2006-2007, the independent auditor’s stated:

Internal Reviews

Troy University ensures that policies and procedures regarding financial resources are followed at all campuses and sites. Troy University assesses its adherence to policies and procedures through reviews and external audits. Section 710 of the Troy University ePolicy Manual explains that the internal review process requires the Senior Vice Chancellor for Finance and Business Affairs to identify units needing a financial, operational or compliance review. The internal review is conducted by the Controller’s staff with results reported to the Senior Vice Chancellor for Finance and Business Affairs. If review findings indicate misuse of Troy resources, the Chancellor, Senior Vice Chancellor for Finance and Business Affairs and appropriate senior administrators review the nature and severity of the finding and determine the appropriate action(s).

External audits

All external audit functions are coordinated by the Senior Vice Chancellor for Finance and Business Affairs with the audit reports being submitted to the Chancellor, who subsequently reports this information to the Troy University Board of Trustees. Based upon the findings of the audit, Troy University acts on the audit recommendations, and if requested, follows with the appropriate audit response. The State of Alabama Department of Examiners of Public Accounts conducts an annual audit of Troy University in accordance with generally accepted auditing standard and government auditing standards, issued by the Comptroller General of the United States. The two most recent audits, 2005-2006 and 2006-2007 are provided as evidence.

These standards require that all audits be planned and performed to assure that the financial statements are free of material misstatement. Section 710 of the Troy University ePolicy Manual explains that external audits may be conducted by the Examiners of Public Accounts, federal agency auditors, the U.S. General Accounting Office, the U.S. Internal Revenue Service, and state and local government agencies.

Employee bonding

Although the Troy University has extensive policies and procedures and monitoring occurs to protect the University from financial misconduct by those who manage its financial resources, the University also maintains public official bonds for the following:

Senior Vice Chancellor

$100,000

Vice Chancellor

$100,000

Controller

$50,000

Director, Purchasing

$50,000

Senior Director, Human Resources

$50,000

Senior Director, Student Financial Services

$50,000

Director of Financial Affairs, Global Campus

$50,000

Accounting Coordinator

$50,000

Troy University also maintains a commercial crime policy for employees who handle money on a daily basis with $l00,000 limit of insurance.

Conclusion

Based upon this evidence, Troy University is in compliance with this Comprehensive Standard.