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Internal Auditing

Case in Point:
Lessons for the pro-active manager

February 2010
Vol. 3 No. 2
Quotable...
“You can observe a lot just by watching.”

-- Lawrence Peter ''Yogi'' Berra

Often the best solutions and internal controls are the most basic. Sometimes I believe we, as auditors, overly complicate things with internal control models and complicated terms when really just the basic and simple is the best control. For example, in my opinion the single best internal control any department or organization can implement is this: having managers and staff trained to pay attention to detail and follow-up on things that appear unusual.

This month's listing of events across higher education has one particular event that points out the importance of this control very well. At La Salle University a multi-million dollar fraud case occurred over more than 10 years. In this case the former director of food services set up a bogus company and began invoicing the university. The fraud was discovered when the perpetrator used the same invoice number twice. A conscientious and alert clerk noticed the duplicate number when processing the payment request and began asking questions. Noticing this discrepancy and then following up with questions ultimately lead to an investigation and conviction.

So often over the years we have been involved in compliance failures of some kind where employees or managers did not pay attention, or if they did, failed to follow-up with questions. This is really your first line of defense in managing risk proactively. Ensure that you and your employees pay attention and follow-up on those unusual things you observe. Simple can sometimes be the most effective. As you peruse the events across higher education this month, consider where you may have similar risks and what simple things you might be able to do to reduce the likelihood of a problem here at Auburn University.


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


Information Security Related Events

Feb. 22, 2011: A document containing sensitive information on 13,000 students of Chapman University and its affiliate, Brandman University, was accidentally accessible to students last week, the university said. (link)

Feb. 21, 2011: A hacker hasn't hit another computer server at Ohio State University. But the school has sent 226,000 letters, mostly to alumni, in the past couple of weeks about free credit-monitoring services. (link)

Feb. 16, 2011: A hacker (or group of hackers) recently attempted to tamper with the financial aid programs offered through the Solano Community College website. (link)

Feb. 14, 2011: An extensive case of identity theft is plaguing East Carolina University. Hackers broke into the computers of the University Book Exchange in January, now hundreds of students have fraudulent charges piling up on their debit cards. (link)

Feb. 14, 2011: Saginaw Valley State University’s website was hacked between Feb. 4 and Feb. 6. Although limited information has been released about the hacking, sources have said that someone attempted to use the site as a spam bot, a hijacked system often used to distribute large quantities of spam email.(link)

Feb. 2, 2011: The University of Washington says they are reviewing policies and procedures after 19 DVDs and one paper record containing mostly X-ray and MRI images was found by an individual purchasing surplus furniture. (link)


Misappropriation/Fraud/Ethics Events

Feb. 24, 2011: A lawsuit against TCU slated for trial this spring accuses the school of turning a blind eye toward the criminal records, unsavory behavior and academic failings of two of three athletes who were charged with sexually assaulting a coed in 2006. (link)

Feb. 24, 2011: Ben Kirtland once led one of the most successful fundraising programs in the state of Kansas.But on Thursday he became the most recent, and probably the last, defendant to plead guilty in a University of Kansas ticket scandal that looted at least $2 million in basketball and football tickets from the school from 2005 to 2010. (link)

Feb. 23, 2011: Laronda Marie O’Neal, 33 years old, was sentenced to 12 months in prison. Her charges stem from her employment at Paine College where evidence presented showed she used the computerized payroll system to change bank account information for some employees’ payroll deposits. This access allowed her to steal thousands of dollars from the college. (link)

Feb. 22, 2011: Stephen C. Greb was sentenced to 55 to 111 months in prison Tuesday after pleading guilty to stealing some $5.6 million from his former employer, La Salle University.(link)

Feb. 16, 2011: A man told Lehigh University police Tuesday that he removed religious statues from a chapel and put them out for trash because he didn't feel the items belonged in a church and were "evil," according to police and court records. (link)

Feb. 3, 2011: A Jersey City woman pleaded guilty in federal court today to conspiring to steal cash from New Jersey City University’s student government association. (link)

 


Compliance/Regulatory Events

Feb. 25, 2011: A 20-year-old Saudi college student who was arrested Wednesday night on bomb charges in Texas wrote in his journal that he sought a student visa three years ago so he could carry out terrorist attacks inside the United States, according to an F.B.I. document released Thursday. (link)

Feb. 23, 2011: University of Iowa assistant professor Toshiki Itoh resigned from his post after a two-and-a-half year stint on paid leave -- which was prompted by accusations of attacking a laboratory assistant, reports the Daily Iowan. (link)

Feb. 21, 2011: Texas is preparing to give college students and professors the right to carry guns on campus, adding momentum to a national campaign to open that part of society to firearms. (link)

Feb. 17, 2011: A man calling himself "Al from Dadeville" phoned a radio show late last month, claiming he poured herbicide around the 130-year-old oaks that are the scene of celebrations after Auburn's sports victories. The caller signed off by saying, "Roll damn Tide." (link)

Feb. 17, 2011: The University of Iowa has started proceedings that could lead to the firing of a radiology professor who sent dozens of "prejudiced, insulting and inflammatory" e-mails to colleagues accusing them of being anti-Arab and threatening to sue and embarrass them, according to a letter obtained by The Associated Press. (link)

Feb. 16, 2011: University of Missouri student Benjamin Elliott, 18, was temporarily suspended from the school this week following his arrest on Saturday for allegedly spray-painting racist graffiti on a campus fixture (link)

Feb. 16, 2011: Western Washington University has again suspended a professor who has been accused in the past of berating and demeaning students and colleagues.(link)

Feb. 15, 2011: Illegal immigrants would no longer be able to attend any Georgia public college under a bill the House Higher Education Committee passed Tuesday. Rep. Tom Rice, R-Norcross, who wrote the bill, said it would guarantee illegal immigrants don't take seats away from students who are legally in the country. If it becomes a law, and there are several more steps before that would happen, students’ names would be run through a federal database -- Systematic Alien Verification for Entitlement (SAVE) -- to make sure they have a legal presence in this country. (link)

Feb. 14, 2011: A 20-year-old student pulled out a revolver and shot another man in the thumb during an argument on the campus of Middle Tennessee State University, authorities said Monday. The campus of 24,660 about 30 miles southeast of Nashville was on alert for about 45 minutes. (link)

Feb. 9, 2011: Spurred by a tough economy, the House of Delegates on Tuesday approved nearly a dozen bills intended to block Virginia's estimated 200,000 illegal immigrants from taking scarce jobs, filling precious college seats and tapping into the strained budgets of public assistance. (link)

Feb. 8, 2011: Racist words were found chalked on three sidewalks near the University of Alabama campus quad Wednesday morning, according to university officials. The graffiti was found a few days after a black graduate student, Justin Zimmerman, lodged a complaint against a white student whom he said shouted racial comments to him from his fraternity house. (link)

Feb. 8, 2011: A retired University of Maryland, Baltimore County chemistry professor, who was cleared last year of charges that he sexually assaulted a graduate student, is suing the university and the state for more than $30 million, saying that he was forced to retire on false pretenses and that his reputation was damaged. (link)

Feb. 2, 2011: A former Harford Community College professor has filed a multi-million dollar lawsuit against the school because she said she was wrongfully terminated and defamed. (link)

Jan. 16, 2011: "Bike Baiting," a new and affordable initiative at Winthrop University, is staving off campus bike thefts and leading to arrests. So far, the program has led to five arrests. (link)


Other News & Events

Feb. 23, 2011: About a dozen people from the People for the Ethical Treatment of Animals – including three dressed in pig and cat costumes – stood outside the Westin Book Cadillac in downtown Detroit today, protesting an event in which University of Michigan President Mary Sue Coleman was to receive a social justice award from a chapter of the Federal Bar Association. (link) (link)

Feb. 20, 2011: In addition to teaching classes, advising students and doing research, Kean University professors have a new task this semester: Filling out time cards. (link)

Feb 11, 2011: Yale University announced Friday that it will send back to Peru thousands of Incan artifacts removed from the famed Machu Picchu citadel nearly a century ago. (link)

Feb. 9, 2011: In Academically Adrift: Limited Learning on College Campuses, two authors present a study that followed 2,300 students at 24 universities over the course of four years. The study measured both the amount that students improved in terms of critical thinking and writing skills, in addition to how much they studied and how many papers they wrote for their courses. (link)

Feb. 4, 2011: Despite a draft of a resolution raising concerns about "blackface costumes" at sporting events, University of Colorado faculty leaders are now saying the issue is not about students painting their bodies and faces black for home football games. (link)

Feb. 4. 2011: Boulder city officials say they will be removing five emergency phone stations from University Hill because over the past two years the devices have only been used to prank call police. (link)

Feb. 3, 2011: Northern Michigan University leaders say they’ve decided classes will resume Thursday after the FBI and other agencies determined that the blog post that prompted the lockdown was no longer a threat. (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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