|
“We appreciate all the work that went into this report,” said Don Leuenberger, vice chancellor for business and finance. “It highlighted some things we need to work on, and we don’t take it lightly.”
Leuenberger indicated that many of the concerns in the report are based on a difference in interpretation of UNMC policy between the auditor’s office and UNMC in the use of purchasing cards (or P-cards).
“It’s important to note that there was absolutely no evidence of any fraud,” he said, “and that the P-card program has produced significant savings for the state and the university.”
Leuenberger was pleased that most P-card issues raised by the audit could be easily rectified by adopting more clear processes of approval, delegation and documentation.
“The P-card system is used by all University of Nebraska campuses as well as many businesses,” he said. “It has effectively eliminated expensive purchase orders for small, routine purchases.”
In its 2005 study of P-cards, RPMG Research Corporation estimated that using P-cards instead of purchase orders saves $67 in paperwork for every transaction.
“With thousands of transactions being made, it doesn’t take much to generate considerable savings in addition to the rebates awarded to the university through the use of the cards,” he said.
By using P-cards in lieu of purchase orders, Leuenberger said UNMC saved more than $1.8 million in 2008 plus received an additional $139,000 in bank rebates.
The University of Nebraska received a total of $570,000 in bank rebates in 2008 for making P-card purchases, he said.
“We agree wholeheartedly with Mr. Foley that we need to strengthen our oversight of the P-card program,” Leuenberger said. “We have assured the auditor that we will make every effort to more clearly define our policies and enhance our training program for P-card holders and their reconcilers.”
Among the concerns raised in the audit were purchases of:
- A first-class airfare for a UNMC faculty member traveling to China;
- A fountain pen;
- A digital picture frame; and
- Two Nintendo Wii game systems.
The audit also raised several questions pertaining to the UNMC Thank ‘U’ Rewards program, including the use of P-cards to purchase gift cards for the program and inadequate tracking control of the gifts being awarded to employees.
Leuenberger defended the transactions as such:
- The airfare to and from China was business-class and was approved per UNMC policy. As noted in the state auditor’s report, the travel was authorized by Leuenberger as the appropriate UNMC official. The money used to purchase the airfare was not state tax funds but rather came from private funds made available to the person for professional purposes.
- The pen was purchased with private funds as part of an honorarium for a guest lecturer.
- The digital picture frame is part of a Sorrell Center art display about the UNMC residency program that contains historical pictures that date back to 1900.
- The Wii systems are used in clinical applications. One Wii system is actively in use and the other is a backup.
Concerning the questions surrounding the Thank ‘U’ Rewards program, use of P-cards was the most efficient way to purchase gift cards. The auditor suggested that UNMC track serial numbers on the various gift rewards purchased for employees.
However, Leuenberger said this was not always a viable solution, since some of the companies that provide rewards to UNMC employees did not use serial numbers on their gift cards.
Leuenberger praised UNMC employees involved in the audit.
“This was a major undertaking,” he said. “Countless hours were spent by our employees in gathering data and working closely with the state auditor’s staff.
“It was a major commitment, and I’m proud of our employees for giving their time and full cooperation to assist in the audit.”