This project concerns the study payment problems associated with Clemson's new accounting system and reduce these problems by developing a monitoring system and recommending training for departments at the University. Adjustments may need to be made to the monitoring system if problems are found during its implementation

Wilson, Rick

South Carolina State Documents Depository

Development of a monitoring system for vouchers processed by departments at Clemson University

Digitized by South Carolina State Library
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Development of A Monitoring System for Vouchers Processed by Departments at
Clemson University
Rick Wilson
Administrative Services Building
Clemson University
Clemson, SC 29634
Phone (864) 656-5579
Fax (864)656-2394
E-Mail: rickpwCZiJ,clemson.edu
f)m~
Jim Boleman
Director of Procurement Services
s. C. STATE LIBRARY
STATE DOCUMENTS
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PROJECT GOAL
Study payment problems associated with Clemson's new accounting system and
reduce these problems by developing a monitoring system and recommending
training for departments at the University. Adjustments may need to be made to
the monitoring system if problems are found during its implementation.
PROBLEM STATEMENT
Clemson University is built on what was once the Fort Hill plantation of Thomas
Green Clemson. In his will, Clemson stipulated that his home and its surrounding
farmland be used to establish a college for agricultural and scientific education.
As a result of his bequest, Clemson Agricultural College of South Carolina was
founded in 1889 and began full-time operation in 1893 as a military institution.
By the mid-1950s, the first female students emolled on campus, and the cadet
corps ended. In 1964, Clemson College became Clemson University and has since
evolved into one of the nation's leading land-grant institutions. It is one of the
major research universities in the United States. Clemson University is a public
land-grant institution offering 75 undergraduate degree programs and more than
74 areas of graduate study through five academic colleges and the Graduate
School. Long known for excellence in the agricultural and engineering sciences,
Clemson is a nationally recognized, comprehensive university with strong
programs in architecture, business, the liberal arts and a number of other
disciplines.
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Approximately 16,500 students study at Clemson University. About 45 percent
are women and 55 percent are men. Of the 12,700 plus undergraduates, 71 percent
are South Carolinians. African American students are the largest minority group
on campus, representing 8 percent ofthe student body. The international student
population fluctuates between 700 and 900 students each year. Clemson students
represent 50 states and 71 foreign countries.
Many of the employees at Clemson have been with the University for 20 or more
years and are very loyal to the University. In 1974, a new accounting system was
developed for the University by two outside consultants and a team of
programmers within the University. Having used this system for over 25 years the
employees and faculty were extremely comfortable with this system. However, as
the need for information from sources outside as well as within the University
increased, this system could not keep up with the demands.
Therefore, in 1997 the decision was made to purchase a canned accounting and
human resources system from an outside vendor (Peoplesoft). The decision was
also made to obtain technical help from outside the University to adapt this
package to the needs facing the University. A team of University employees was
selected to help with this implementation which was to occur by July 1, 1999.
This new system provides a dramatic change for University personnel as it takes
Clemson into a paperless world. Paper entries and vouchers, giving the users of
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the system a comfort zone where they could physically see the entries as they
were paid drove the previous system. With this comfort zone removed and with
previous monitoring of departments on campus identifying problem areas, it was
determined that a monitoring system should be developed to track problems
arising from the use of this paperless system.
CAUSE ANALYSIS
Until July 1999, the Accounts Payables section at Clemson University was
charged with the responsibility of processing all payments of invoices for all
departments on campus. This policy had been in place since the system was
developed in 1975. This system was a comfortable vehicle to most employees at
Clemson. There was a paper flow in this system that allowed the users to have "in
hand" the documents they processed, providing a comfort factor to them.
Departments had the assurance that when their vouchers were delivered to
Accounts Payable they would be reviewed for accuracy and any errors detected
would be corrected before payment was made. This practice was advantageous in
that it assured correctness of the vouchers, but it slowed down the timeliness of
payments. It also allowed the departments on campus to become complacent in
their knowledge of the rules and regulations applying to payment of vouchers
since the mentality was that Accounts Payables would catch all my errors for me.
When the old system was developed it met all the requirements needed by the
University, however no one realized the volumes of paper this system was going
to generate. As Clemson moved toward the new millennium it was obvious that
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changes would need to be made or a new building would be needed to handle
record retention requirements.
In 1997, the decision was made to purchase a new accounting system for the
University. This system was to be a paperless system (all vouchers and reports
would be online) and one that would require vouchers to be entered directly into
the system by each department. This would eliminate the duplicate auditing of the
vouchers (first by the department, then by Accounts Payable) and place the
responsibility of voucher correctness with the departments. The departments
comfort zone had been removed. It was realized that there would not only be the
need for training in the new system but also the need for a way to monitor a
sample of the vouchers being processed to see if compliance of laws, rules and
regulations were being followed. When auditors review Clemson's financial
statements at year end, they want to see evidence that vouchers have been tested
for accuracy and compliance, therefore the need to develop this monitoring
system was realized and the responsibility given to develop it.
IMPLEMENTATION AND RESULTS
The only things we are assured of are taxes and death, so goes an old saying.
Everything else will change and so it is with the accounting system at Clemson
University. When developed in 1975 the Accounting Information System (AIS)
was a "state of the art" system, meeting University as well as State and Federal
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guidelines for reporting. The University looked like it was ready to reach into the
21st century. However, as times and laws and regulations have changed, so has
the need to adapt existing systems to these changes. As a result, the "state of the
art" AIS system now resembled a tired old system plodding and squeaking along.
Therefore as mentioned earlier, in 1997 the University President Dino Curris
directed that a new Accounting and Human Resources system for the University
be up and running by July 1, 1999. A team of University employees, which cut
across the broad diversities on campus, was selected to decide which system to
purchase and then oversee its implementation. Outside consultants from KPMG
(Peat Marwick) were hired to assist in this implementation.
As stated in the booklet entitled Managing Change, "changes occur so rapidly and
in such varying magnitude that it is not always easy to get a handle on how they
affect us and how we tend to react. i All employees at Clemson used the old
system and each was comfortable with using it. With the announcement of the
new system, the stress levels rose at Clemson. The employees comfort zone was
being eroded. Change was on the horizon and moving like a speeding locomotive.
But handling change is nothing new. We must often communicate various
organizational changes - in policies, regulations, equipment, schedules, work
force - to employees who see nothing wrong with "the way we've always done
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The change corning at Clemson was the movement to a paperless system. A
mechanism that would allow the accuracy of the vouchers entering the system to
be tested had to be developed. Gone was the pre-audit performed by Accounts
Payables. Gone was the comfort cushioning that Accounts Payables would catch
departments' errors before checks were written. Therefore the charge was given to
develop a monitoring system which would test vouchers, after the fact, for
adherence to University policies as well as State and Federal laws and regulations.
This monitoring system needed to be developed and in place when the Peoplesoft
system went live in July 1999. The first thing that needed to be decided was what
items would the team performing the monitoring look for. In order to decide this
issue a team consisting of members from Accounts Payable, the tax unit, Internal
Auditing and the Comptroller's Office at the University met to discuss what these
items should be. The list had to be exact enough to test items such as sales and use
tax, yet broad enough to insure compliance with issues auditors might want to
check for compliance. After several meetings and discussions a list of these items
was agreed upon. (EXHIBIT 1) Every voucher sampled would be checked for
these items.
Next, carne the issue of what level would the monitoring take place. Should it be
at the college level or at a more microscopic level? It was decided that the system
had to be flexible enough to address all levels from wide range issues to
individual compliance issues. Flexibility was the key.
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With these guidelines in hand the monitoring system began to take shape. It was
decided to develop the system using the query function found in the Peoplesoft
system and then transfer this information to an Excel spreadsheet. Once in the
spreadsheet a sample to be tested would be identified from the population pulled
by the query. The Excel spreadsheet possessed a sampling tool that randomly
selected the vouchers to be tested. This eliminated the possibility of human
preference playing a part in voucher selection. The scope of the monitoring can
vary. Samples from one year's activity can be tested just as easily as one week's
activity. Once the vouchers to be tested are determined, the list is sent to the
Business Officer in charge of the unit from which the query was pulled. (At
Clemson every college and Vice Presidential area has a Business Officer whose
responsibility is to see that all budget activity is coordinated through them). The
Business Officer is then responsible for gathering the vouchers to be tested and
informing the employee from the Monitoring Section of Procurement Services
who is doing the testing when they are ready.
When the vouchers arrive in Procurement Services, each voucher is checked for
adherence to those items appearing on the monitoring checklist. When all
vouchers have been checked, the monitoring officer sends the Business Officer an
e-mail outlining any errors that were found. The errors are explained and the
Business Officer is instructed to inform those who prepared the voucher of the
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error. In each letter training is offered in the areas where the errors occurred. It is
the Business Officer's decision on whether training is needed.
The result of each test sample is then entered into a spreadsheet (EXHIBIT 2) that
tracks the number of errors of each item on the monitoring list. By doing this, we
are able to see trends of areas where policies may need to be explained or where
training is needed. Training is offered not only to individual areas, but also
campus wide. In our campus wide training we plan on offering one session to
those who have been trained before but wish to have a refresher on any new
issues and one session to those employees who are new to Clemson and as such
have never attended training before. As we get more into our monitoring system
we hope to develop a schedule for periodic monitoring of all areas on campus.
From the results of this monitoring we will adjust our training issues and the
frequency of the training to meet the results revealed.
As of this date, the new system has presented quite a challenge to Clemson. We
are still going through an adjustment period where employees are struggling to
understand the ins and outs of the new system. Those administering the system
are also beginning to better understand the end users needs. Only time will tell
how successful we are, but this monitoring system should aid us in seeing how
rapidly our people adjust to change. As they become more familiar with it, we
hope to see our error rate decline. However, with turnover always being a
constant in any business, we see our job as trainer always being there.
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i Managing Change, International Training Consultants, Richmond, Virginia pg. 16-1.
ii Managing Change, International Training Consultants, Richmond, Virginia pg. 16-1.
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EXHIBIT 1
TAX COMPLIANCE-STATE
Voucher ID Sales &Use 1099 Moving Exp Prizes & Awards R&D Appropriate Conflict of Discretionary Restaurants State Contributions!
Number Tax Compliance to Payroll to Payroll Tax Funds Used Interest Policy 10 mile limit Contract # Memberships
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EXHIBIT 1
COMPLIANCE-UNIVERSITY
Voucher 10 Supporting Authorized Appro P.O.Limits Cellular Payments DPVvs All Invoices Discounts Bill To Advance Payment Petty Cash
Number Documentation Signature Acct Code & Exemptions Phones to Hotels IDOvs lOT Listed Taken Address·CU Required Reimbursement
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EXHIBIT 1
--- ---"-
e----"
SPECIAL
Voucher ID Entertainment Utilities Excise Is Item to be
Number Contracts Late Charges Tax Prepaid?
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EXHIBIT 2
TAX COMPLIANCE-STATE
Business Sales &Use 1099 Moving Exp Prizes & Awards R&D Appropriate Conflict of Discretionary Restaurants State Contributions!
Area Tax Compliance to Payroll to Payroll Tax Funds Used Interest Policy 10 mile limit Contract # Memberships
ABBS0698 1 1
UADM1198 1 1
ARHM0598 1
ARHM0299 6 2
ASAB0698 1
ATHL0598
ATHL0998
ATHL1198 1 2
BUSN0598
CF00998 2
CF00199
DCIT0598
DEV0698 3
ENST0399
ENST0598 1
FM00698 1
HEHD0598 1 1
HEHD1098 3 1
NATR0698
PSES0698
PRAA0998 1
PRAA0499
RSCH0598 1 1
RSCH0399 5 1
STAF0598 1
STAF0399 1
AFLS0598 2 1
REGS0698 3
VPPSA698 2
HEHD0499
TOTAL 18 16 0 0 0 0 0 0 1 14 0
ERROR % 2% 2% 0% 0% 0% 0% 0% 0% 0% 1% 0%
Population
960
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I
EXHIBIT 2
COMPLIANCE-UNIVERSITY
Business Supporting Authorized Appro Purchase Cellular Payments DPVvs All Invoices Discounts Bill To Advance Payment Petty Cash
Area Documentation Signature Acct Code Order Limits Phones to Hotels IDOvs lOT Listed Not Taken Address-CU Required Reimbursement
ABBS0698 1 1
UADM1198
ARHM0598 1
ARHM0299 6
ASAB0698 1
ATHL0598
ATHL0998 1
ATHL1198
BUSN0598 1 1 2 1
CF00998
CF00199
DCIT0598 8 1
DEV0698 2
ENST0399 2
ENST0598 1 1
FM00698 1 1
HEHD0598 3 2
HEHD1098 3
NATR0698 1
PSES0698
PRAA0998
PRAA0499
RSCH0598 3
RSCH0399 1
STAF0598 1 1 1 2
STAF0399 1 1
AFLS0598 3
REGS0698
VPPSA698 2
HEHD0499
4 8 29 3 0 0 0 2 12 0 0 0
0% 1% 3% 0% 0% 0% 0% 0% 1% 0% 0% 0%
Population
960
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EXHIBIT 2
f----
SPECIAL
Business Entertainment Utilities Excise
Area Contracts Late Charges Tax
ABBS0698
UADM1198
ARHM0598
ARHM0299
ASAB0698
ATHL0598
ATHL0998
ATHL1198
BUSN0598
CF00998
CF00199
DCIT0598
DEV0698
ENST0399
ENST0598
FM00698
HEHD0598
HEHD1098
NATR0698
PSES0698
PRAA0998
PRAA0499
RSCH0598
RSCH0399
STAF0598
STAF0399
AFLS0598
REGS0698
VPPSA698
HEHD0499
TOTAL 0
0% 0%
Population
960


https://dc.statelibrary.sc.gov/bitstream/10827/6374/1/CPM_Development_of_Monitoring_System_2004.pdf

Development of a monitoring system for vouchers processed by departments at Clemson University

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