Auditor faults cash controls at UT Health Science Center

The Associated Press State
October 15, 2004

HOUSTON: A state auditor has criticized the University of Texas Health Science Center at Houston for "significant weaknesses" in how it controls the flow of millions of dollars in cash.

The audit found no indications of criminal activity. However, it warned that numerous problems in the handling of and accounting for cash transactions with students, patients and vendors increased "the risk of financial reporting errors, fraud and theft."

The health center said in written responses that it generally agreed with the findings. "We certainly agree that they (auditors) raised important concerns," center spokesman Scott Merville told the Houston Chronicle for a story in Friday's editions.

The audit of records and transactions from Sept. 1, 2003, through March 31, 2004, centered on areas involving staffers who handle checks and currency. At least 90 percent of the money that flows through the center was not included in the audit because "those revenues are typically subject to significant external controls." Those included state appropriations, Medicare payments and research grants.

While only five clinics and 13 departments were included in the audit, it found "control weaknesses and errors at each one, which appears to indicate institution-wide problems."

The audit concluded: "The health science center does not have accurate and complete record keeping for cash collection, revenues, receipts or disbursements."

The center's management responded: "The auditors have raised important concerns about cash controls and related matters, and we either have addressed, or are in the process of addressing, these concerns."