University of Iowa Recreation Services is better monitoring its membership payments, sales, and use — and requiring IDs for walk-ins and updating cash-handling and reporting procedures — after an internal audit discovered the department could be losing thousands in potential revenue.
The audit, which was conducted in September but made public this week, found 209 faculty, staff, retiree, alumni, or community perpetual memberships were not being billed, “causing a loss in revenue.” Auditors sampled 22 of those memberships, and found 18 accessed recreational services buildings on campus.
Auditors also discovered workers were activating memberships for free — five of 27 adult community memberships reviewed for appropriate billing were not charged. And staff members were not verifying the identity of those who bought daily walk-in passes, meaning people could buy the daily passes and give them to another person “to use for free entry.”
“A new protocol will be implemented expecting facility desk staff to require a form of identification at the time of walk-in purchase,” according to the university’s response to the audit findings made public through the Board of Regents Office this week. “The protocol will also expect identification to be verified with each re-entry to the facilities.”
The university’s Recreational Services department oversees four “workout facilities,” including the Campus Recreation and Wellness Center and Field House, along with several others aimed at promoting health and hosting activities. To fund the operation, full-time students are assessed a $138.50 mandatory fee and part-time students have to pay a fee of between $69.25 and $104, according to the internal audit.
Faculty and staff can pay for a membership via payroll deductions — they’re the only ones who can have a perpetual membership without an end date, as all community members must prepay on a monthly or yearly basis.
In the last budget year, memberships accounted for nearly $12 million in revenue — about $7 million of which came from the mandatory student fees. Another $2 million came from locker rentals, personal training, and leisure activities.
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But internal auditors also noted concerns with coin-locker cash handling. Procedures for emptying those lockers have not been approved by the Accounting and Financial Reporting department, and four of five employees responsible for pulling coins from the lockers have not taken cash-handling training, “which increases the risk of inappropriate cash handling.”
Annual revenue from coin lockers is about $10,000.
“Currently two employees enter the locker rooms to empty coin lockers, but they are not always working alongside one another to verify appropriate cash handling procedures,” according to the audit.
The university vowed to update its cash-handling procedures, get them approved by Accounting and Financial Reporting, and ensure employees work together to “mitigate theft.” Department heads also are going back through and deactivating building access for terminated employees after auditors found 12 percent of the 632 employees with building access no longer work there.
A system analyst manually provides building access to Recreational Services staff, which means the analyst must terminate the access as well, according to auditors.
“The system analyst believed that building access was automatically terminated for department Recreation Services staff,” auditors reported. “Additionally, 14 non-university affiliates were identified as having access to Recreational Services building without a business need.”