Cornwallis Research Labs were established at State University in 1967 to study the ecological effect of man’s intrusion into primitive areas, especially desert regions. In addition to administrative offices and three large laboratories, the facilities include a five-acre controlled environment built and developed by the labs to simulate desertland. The following is an organization chart for the Cornwallis labs. Notice the link between the director and the university’s vice president in charge of research.

Financial management and accounting policies and procedures are dictated by the State University Controller’s Office, and also to some extent by state and federal funding agencies.
Notice the separation of the financial management function and the accounting function under the assistant director position shown in the organization chart. The accounting function includes:
1. Recording all financial transactions.
2. Preparation of monthly project cost reports.
3. Preparation of quarterly and annual statements of receipts and disbursements.
4. Preparation and mailing of financial reports required by the various funding sources.

The financial management function includes:
1. Coordination of funding.

a. Budget preparation.

b. Solicitation of private funds from individuals and industry.

c. Preparation of project fund proposals for state and federal funding agencies.

d. Collection and receipt of all funds.
2. Disbursement of funds.

a. Payroll.

b. General and administrative costs.

c. Project costs.

d. Facilities.
3. Preparation of original documentation for all financial transactions.
The internal auditors for State University are conducting an audit to review, test, and evaluate the financial control system for Cornwallis labs. The scope of the audit is to include the reliability and integrity of the financial reporting system; compliance with policies, approved plans, procedures, laws, and regulations; and the safeguarding of assets used by the labs.
Required:
Write the preliminary survey program steps for the audit of the Cornwallis labs. Indicate the sources of information for the different procedures included in the preliminary survey.

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Senior Project Researchers (5) University V-P Research Director Assistant Director Assistant Project Researchers (5) Accountant Funding Coordinator Secretary/Office Administrator Lab Facility Manager Graduate Student Assistants (17) Assistant Funding Coordinator/Secretary There are four sources for funds used by the research facility: Endowed gift to the university for ecological research. Funding from state government. 10% 15% 65% 10% Private industry. 100% Funding from federal government.