Internal Controls
We will ensure that internal controls are established, properly documented, and maintained for activities within our jurisdictions-
This means that each member of the campus community to whom this standard applies
- Ensures adequate controls are in place over the use and accountability of funds
Perspective: A Real World Illustration
A July 2005 Associated Press newspaper article reported that some donations made to a public university located in Iowa could be spent on alcoholic drinks for faculty and their guests.
The issue arose when faculty in the university's Department of Economics were told they had exceeded this year's seminar budget by more than $2,000, including $500 on alcohol.
The purchase of alcohol is allowed under the Economic Excellence Fund, which is comprised mostly of small private donations raised by the university's foundation, said the economics department chair.
The money can be used at the discretion of the chair. "It's not any funds that are appropriated from the federal government or Legislature," he said.
A state senator, who is an associate professor of economics at the university, said he's troubled by the situation. "In these days of tight budgets, it's not wise to spend any money on alcohol," he said. "I kind of question the judgment of anybody who would authorize the expenditures."
The university's vice president of business and finance said state money cannot be used for alcohol, but that colleges and departments can buy alcohol with unrestricted money, such as the Economic Excellence Fund.
"It's up to the department to make decisions about the best use of those funds," he said. "We leave that up to the department. I don't believe there's any policy violation in the case of what the economics department is doing."
He went on to say that a large number of university departments have some sort of fund for things like alcohol, flowers for funerals, conference travel, scholarships, teaching awards and retirement receptions.
Records show that over the past year, the economics department spent nearly $500 to buy alcohol for speakers who were taken out to dinner. The economics department chair said such hosting is important. "If you take them to McDonald's, you'd be laughed at," he said.
The economics department limits the cost of a drink to $5 for lunch and $10 for dinner, with the department paying for dinner and a drink for both the speaker and the host faculty.
The chair said the $500 spent on drinks was just a small part of the $13,000 the department spent from the fund this year. Most of the money was spent on scholarships and sending graduate students to meetings, he said. "This is not an alcohol fund," he said.
The state senator said money raised by the university foundation is the public's money and should not be spent on alcohol.
Last Revised 5/23/2006