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Internal Auditing

Case in Point:
Lessons for the pro-active manager

November 2010
Vol. 2 No. 11

Quotable...
"The cat, having sat upon a hot stove lid, will not sit upon a hot stove lid again. But he won't sit upon a cold stove lid, either."

-- Mark Twain

Managing risk is part of everyday life for all of us. We evaluate the odds, the probability that something will or will not occur, almost all the time at least on some subconscious level. For example, whether to wear a seat belt, whether to speed, or whether to go through a yellow traffic light are all decisions that involve risk and whether or not we believe the odds are favorable to us in some way.

According to the Book of Odds (www.bookofodds.com):

  • The odds a person will visit an emergency room due to an accident
    involving pens or pencils in a year are 1 in 13,300 (US, 2007).
  • The odds a person will visit an emergency room due to an accident
    involving a light bulb in a year are 1 in 22,500 (US, 2007).
  • The odds a person will visit an emergency room due to an accident
    involving a toothbrush in a year are 1 in 99,340 (US, 2007).

Odds are important in our evaluation of risks, but we need to remember as we manage our risks and consider the odds that our risk decisions can sometimes have unintended consequences. For example, in the last item above, we could completely eliminate our risk of an accident involving a toothbrush by simply not using one, but as you know, our risk of dental and gum disease would increase dramatically. Risk must be viewed in terms of your total operations and not in complete isolation.

For the most part, our subconscious daily risk evaluation works fairly well for us; however, the purpose of this monthly newsletter is to create intentional and proactive risk assessment for our institution. Organizations need managers who specifically think about the risks their organization faces and takes action to bring these risks to reasonable levels. As you review this month’s events in our industry, think about the risks and odds you can influence in a positive manner here at Auburn University.

M. Kevin Robinson, CIA, CFE, CCEP
Executive Director, Internal Auditing


Information Security Related Events

Nov. 22, 2010: Two former University of Central Missouri students have been charged with stealing the identities of thousands of their classmates and faculty with the goal of selling the information. (link)

Nov. 18, 2010: The University of Hawaii is now the target of a class-action lawsuit filed today, as a result of recent data breaches. (link)

Nov. 15, 2010: A computer hard drive containing personal information about tens of thousands of current, former and prospective Messiah College students disappeared about two weeks ago (and was later found). (link) (link)

Nov. 15, 2010: The University of Nebraska has asked the state treasurer to remove thousands of students' classified financial aid and loan information that was published on a state spending website. (link)

Nov. 4, 2010: There’s been a growing clamor both here and abroad to have entities who have had data breaches fined. And while the ICO has been promising that such fines are ''imminent'' and will be announced before the end of this month, I find myself wondering why we, the public, are becoming increasingly strident in our call for fines. (link)


Misappropriation/Fraud/Ethics Events

Nov. 30, 2010: After months of allegations about university researchers who allowed companies to ghostwrite their articles in scientific journals, there's now evidence that the practice extended to books as well. The Project on Government Oversight, a nonprofit advocacy group, has produced documents showing that Charles B. Nemeroff, chairman of psychiatry at the University of Miami, and Alan F. Schatzberg, who served until last year as chairman of psychiatry at Stanford University, allowed the drug manufacturer SmithKline Beecham to participate in their drafting of a 269-page textbook on psychiatric disorders. (link)

Nov. 29, 2010: A Bronx man was indicted Monday on charges that he stole $5 million from Columbia University. The man, George Castro, was the beneficiary of an unauthorized bank account into which millions of dollars from the university were transferred in October and November, according to a criminal court complaint in Manhattan. (link) (link)

Nov. 28, 2010: A little over a month ago, a group of University of Massachusetts Medical School executives made their way to Cape Cod early on a Thursday afternoon for an overnight management retreat at a ritzy golf resort in Brewster. The bill for the meeting at The Mansion at Ocean Edge Resort and Golf Club came to $14,936, including more than $6,000 for hotel rooms and $7,500 for food and beverages. (link)

Nov. 23, 2010: Monterey Institute officials said Hillar, who has taught workshops twice yearly at the school since 2005, had claimed to hold a doctorate from the University of Oregon, but a check showed that he had only attended classes there. (link)

Nov. 18, 2010: Federal prosecutors charged five former University of Kansas employees Thursday with conspiring to steal more than $2 million in tickets to athletic events in a scandal that embarrassed the school and likely led to the early departure of athletic director Lew Perkins. (link)

Nov. 12, 2010: About 200 students at the University of Central Florida have come forward to admit their involvement in a cheating scandal that has drawn national attention, college officials announced Friday evening. (link) (link)

Oct. 29, 2010: The University of Illinois could lose millions of dollars in federal grant money for a single researcher because a California company is balking at the paperwork and guarantees required by a state law designed to fight corruption. (link)


Compliance/Regulatory Events

Nov. 30, 2010: The laid-off Ohio University staff member accused of threatening to shoot up offices on the Athens campus will do community service instead of jail time. Mark Hopton, 48, pleaded guilty to making a terroristic threat last week as part of an agreement with prosecutors. (link)

Nov. 30, 2010: Nuclear Regulatory Commission investigators concluded safety procedures were insufficient at Kansas State University to prevent an accident exposing a reactor employee to radiation, university officials said Tuesday. (link)

Nov. 26, 2010: The University of Alabama in Huntsville is facing a fine of almost $30,000 for more than a dozen environmental violations. (link)

Nov. 22, 2010: A lawsuit against Virginia Tech officials filed by the families of two students slain in the 2007 mass shootings at the school can move forward, a judge ruled Monday. (link)

Nov. 21, 2010: A pair of University of Maine researchers knew hazing ran far deeper than most people realized, far beyond fraternities and football teams. They proved it with the most ambitious survey to date of hazing on college campuses (link)

Nov. 19, 2010: The national Pi Kappa Alpha fraternity has suspended its University of Utah chapter in the wake of an alleged hazing incident, according to University officials. (link)

Nov. 18, 2010: A federal grand jury may soon begin to sort out the FBI's investigation of the Research Institute at Alabama A&M University. (link)

Nov. 17, 2010: Prosecutors plan to drop drug charges against two former Boston College students because the state's highest court ruled Wednesday that drugs seized during a search of their dorm room cannot be used as evidence. (link)

Nov. 16, 2010: Chicago State University, which has struggled to overcome poor graduation rates and tumultuous leadership and finances, has been sued by its former senior legal counsel, who alleges the school fired him after he complied with Freedom of Information Act requests. (link)

Nov. 16, 2010: A philosophy professor at Florida Atlantic University is suing the school, alleging discrimination while on the job. The lawsuit, filed in federal court last month, says that Carol S. Gould faced ageism and anti-Semitism and that the university violated her rights to equal pay, equal protection and freedom of speech. (link)

Nov. 15, 2010: The California Supreme Court decided unanimously Monday that illegal immigrants may continue to be eligible for in-state tuition rates at the state's colleges and universities rather than pay the higher rates charged to those who live out of state. (link)

Nov. 11, 2010: Keiser University claimed that administrators of Florida State College at Jacksonville conspired to ruin Keiser's reputation by spreading misleading student horror stories through various media outlets. (link)

Nov. 5, 2010: The president of the University of Notre Dame sent an e-mail to students, faculty, staff and alumni Friday saying that the school is responsible for a student videographer's death because it failed to protect him. (link)

Nov. 4, 2010: Nearly two months after Palm Beach State College was thrust into the limelight for kicking a student off campus who was promoting a conservative organization, the school is being sued. (link)

Oct. 29, 2010: A Texas A&M University student who walked through the heart of the College Station campus on Thursday carrying a replica of an assault rifle is not expected to face any criminal charges, but officials are reviewing student rules to determine whether he violated the code of conduct. (link)


Other News & Events

Nov. 29, 2010: Just one week after the Food and Drug Administration demanded major brands of caffeinated alcoholic drinks be off store shelves by December due to the threat of high intoxication, colleges have a new alcohol induced product posing safety threats to students. It's called Whipped Lightning ''Whipahol''. (link)

Nov. 24, 2010: Some Brigham Young University students will return from Thanksgiving break on Monday to soggy dorms. On Wednesday afternoon, construction workers punctured a 20-inch water line while working on a housing expansion north of Heritage Halls. (link)

Nov. 20, 2010: Charles Whittington thought he would confront the anxieties that had tormented him since he returned from war. Two weeks later, the former infantryman was called to a meeting with high-ranking college officials, who told him he would be barred from campus until he obtained a psychological evaluation. (link)

Nov. 18, 2010: California State University, Sacramento, police have doubled nighttime patrols and increased escort services in the wake of five sexual assaults reported on campus since the school year began. (link)

Nov. 18, 2010: A comedy news show run by Harvard students has come under fire for a parody video that, in its effort to poke fun at its Ivy League rival, refers to the 2009 murder of a Yale student. (link)

Nov. 16, 2010: The manufacturer of popular caffeinated alcohol drink Four Loko said Tuesday it will remove the caffeine from its products, pulling the blend off the market just as the Food and Drug Administration is poised to ban it. (link)

Nov. 16, 2010: Grand Rapids Community College officials say they will allow debate over whether they should continue funding programs one trustee says includes performances of ''evil things.'' (link)

Nov. 10, 2010: Online education is best known for serving older, nontraditional students who can not travel to colleges because of jobs and family. But the same technologies of ''distance learning'' are now finding their way onto brick-and-mortar campuses, especially public institutions hit hard by declining state funds. (link)

Nov. 7, 2010: A 2002 inventory by the curator of Harvard University's portrait collection found that of about 750 oil portraits in libraries, dining commons and undergraduate residences, about 690 were of white men. (link)

Nov. 4, 2010: Utah's attorney general met with Justice Department officials this week to discuss a possible federal investigation into college football's Bowl Championship Series. (link)

Nov. 4, 2010: A deer jumped into and crashed through a classroom window on DeSales University's campus in Center Valley Wednesday morning just as a 9 a.m. class was about to begin. (link)

Nov. 2, 2010: Does an online degree pack the same punch as a traditional degree obtained through classroom attendance? According to a recent Society for Human Resource Management survey: Probably not. (link)

Nov. 1, 2010 : Twelve people were injured, two of them critically, after high-temperature steam released unexpectedly from a utility pipe Monday at the University of Utah campus. (link)


If you have any suggestions, questions or feedback, please e-mail me at robinmk@auburn.edu. We hope you find this information useful and would appreciate hearing your thoughts. Feel free to forward this email to your direct reports, colleagues, employees or others who might find it of value. Back issues of this newsletter are available on our web site at http://www.auburn.edu/audit.

If you have any suggestions for items to include in future newsletters, please e-mail Robert Gottesman at gotterw@auburn.edu.

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Department of Internal Auditing
Auburn University
304 Samford Hall
M. Kevin Robinson, Exec. Director
robinmk@auburn.edu
334.844.4389

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