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Internal Auditing

Case in Point:
Lessons for the pro-active manager

April 2011
Vol. 3 No. 4
Quotable...
“Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.”

-- Douglas Adams

When I speak about managing risks, I frequently tell the story of something that happened on a family trip that really made an impression on me as to the intuitive nature of managing risk. My family was at a hotel on the Alabama gulf coast and my youngest daughter and I went to pick up some things at a local grocery store. When we returned to the hotel, there were two parking places open side by side. I pulled into one spot and directly in front of me was a sign that said, ''Hotel is not responsible for losses or damage to vehicles.'' Immediately my 10 year old daughter said, ''Daddy does that mean just this parking space?'' Intuitively she already knew that it would make much more sense risk wise to move over a spot if the disclaimer only meant this one parking space. Smiling, I explained to her how it meant the whole parking lot, but was immediately reminded of how intuitive managing risk really is and it is something we do every day.

In case you are wondering, no, my daughter doesn't read Case in Point, I've never discussed the COSO model with her nor even risk management in general; yet, somehow even as a child, she knew at least a little about the topic. You already know how to manage risks every day personally. Whether you choose to buckle up as you drive to work each day is a risk management decision. Our goal is to raise the awareness of what is happening in our industry so that we can be pro-active in protecting our institution rather than reactive because of a crisis. Looking back over prior issues of this publication, one thing you will see is that frequently the same things happen over and over again. Perhaps a more effective, less costly approach would be to learn from these events and then actively seek to prevent them at our institution.

Hopefully this publication reminds you a little bit about the vast risks we face so you can manage those risks before you get the headline. Our industry has a reputation of being reactive to issues rather than being pro-active. This can only change one dean, director, department head, faculty member, or employee at a time. So this month, review these cases and think about how you are managing these risks. Share these stories with your staff and colleagues.

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


Information Security Related Events

April 28, 2011: Computers were allegedly stolen from the Pasadena City College Faculty Association office as well as from the office of its President, Roger Marheine over spring break. (link)

April 23, 2011: Universities, when maintaining their networks and services, struggle to maintain a balance of allowing the free flow of information with the safe protection of sensitive personal information. Cyber-intrusions that exploit flaws in the network could provide unauthorized people with access to records including Social Security and credit card numbers. (link)

April 18, 2011: Coarsely shredded documents containing names and Social Security numbers of people who were employed at Eastern Illinois University in 2002 have been inadvertently released through improper disposal of the records. A student worker in EIU's Records Management told a supervisor that he had taken that bag, as well as an additional bag, for use in a prank. (link)

April 18, 2011: Central Ohio Technical College is offering free credit monitoring to more than 600 students after a filing cabinet of course-registration cards was accidentally sent to a storage facility. The cards, which contain the names and Social Security numbers of 617 students who registered for fall 2010 classes. (link)

April 16, 2011: A prominent UNC-Chapel Hill researcher has settled a dispute with the university, regaining her credentials and full salary while agreeing to retire at the end of the year. Bonnie Yankaskas, a noted epidemiologist, had been demoted, her pay cut essentially in half, after a hacker infiltrated a computer server that she, as the principal investigator for a major breast cancer study, oversaw.(link)

April 13, 2011: Albright College in Reading is putting its current, prospective, and former students on alert about a possible breach of their confidential information following a theft of several computers. (link)

April 12, 2011: Personal pay stub information of some UMass Memorial Healthcare employees was subject to unauthorized access for five months.(link)

April 4, 2011: Top banks, retailers and service companies have begun warning consumers to be on high alert for spoofed e-mails that may attempt to coax them into clicking on viral attachments or harmful Web links. (link)

March 31, 2011: Wenatchee Valley College accidentally released Social Security numbers of students who attended classes there 10 years ago.Wenatchee Valley College accidentally released Social Security numbers of students who attended classes there 10 years ago. (link)

March 29, 2011: NYU Langone Medical Center notified patients recently that a desktop computer was discovered stolen from an NYU School of Medicine Faculty Group Practice physician's office on January 27, 2011. The computer contained correspondence with patients regarding their office visits but contained no financial information. A suspect has been arrested, although the computer has not been recovered. (link)


Misappropriation/Fraud/Ethics Events

April 18, 2011: Michigan State University professor Sharif Shakrani is ''guilty of research misconduct'' for plagiarizing paragraphs in his 2010 school-consolidation study commissioned by The Grand Rapids Press and Booth Michigan newspapers, a university research integrity committee says. (link)

April 15, 2011: Former Brookdale Community College President Peter Burnham, who resigned last month, was accused of charging thousands of dollars for unauthorized meals, alcohol, hotel stays, golf rounds and clothing in an audit released Thursday by the school's board of trustees. The board voted to file a breach of contract and fraud lawsuit against the former president to force him to pay back the money. (link)

April 15, 2011: Des Moines police said today an investigation into an embezzlement case at Drake University has topped $470,000. (link)

April 14, 2011: The president of Gloucester County College resigned as the school turned over records to the county prosecutor involving the former school official's "alleged financial actions," officials said Thursday. (link)

April 14, 2011: A former associate director in charge of the University of Kansas ticket office and "gatekeeper" for stolen tickets was sentenced Thursday to 57 months in prison for her role in the $2 million conspiracy. (link)

April 13, 2011: A former Georgia Institute of Technology employee has been sentenced to 10 years of probation after pleading guilty to charges that she stole more than $15,000 from the university. (link)

April 12, 2011: A Westlake woman has admitted stealing $173,000 from Cleveland State University by creating and processing requests for cash from traveling athletic teams. (link)

April 8, 2011: Southern University's former director of information technology, along with another man are alleged to have set up shell companies -- Exterra Technologies and Nova Systems -- to defraud Southern in a scheme that began in early 2008 and continued through December 2009 (link)

April 7, 2011: Earlier this week in Stroudsburg, Pennsylvania fans received a shock when they found out their tickets to a supposed Drake show at Sherman Theater were fake. (link)

April 6, 2011: A former construction project manager at prestigious Vassar College and his wife have been charged with stealing $1.9million from the Poughkeepsie , New York institution over five years, according to local police. (link)

April 2, 2011: The former president and CEO of Kansas City University of Medicine and Biosciences (KCUMB) has been indicted by a federal grand jury for embezzling more than $1.5 million from the university. The alleged fraud scheme included unauthorized compensation payments as well as reimbursements from the university for personal expenses and fraudulent charitable contributions. The indictment also charges her with tax violations and money laundering. (link)

April 1, 2011: The state Supreme Court accepted Lu Hardin's voluntary surrender of his law license, just weeks after the former University of Central Arkansas president pleaded guilty to felony charges. (link)

March 25, 2011: The police report shows that Florida State University Miller St. Hilaire submitted 34 known fraudulent drop permits, six known forged add permits and one forged TCC COOP form to the registrar's office. The report shows received a tuition refund of almost $3,563.63 from nine of the courses. (link)


Compliance/Regulatory Events

April 29, 2011: The University of Iowa athletics department will enhance its oversight of recruiting trips taken by coaches to decrease the risk of NCAA rules violations after an internal audit found some shortcomings, an official said Friday. (link)

April 25, 2011: Harvard Law School is under federal investigation after a Boston lawyer filed a discrimination complaint regarding the school's response to rape and harassment of women. (link)

April 22, 2011: Notre Dame's president, Rev. John Jenkins,stated that while he was ultimately responsible for the tragic and unnecessary death of student photographer Declan Sullivan, he does not expect any action to be taken against him. In fact, after an internal investigation by the university, officials concluded that no one was to blame despite the acknowledgment that procedures and safeguards weren't adequate. (link)

April 21, 2011: David G. Carter, the former head of the Connecticut state university system, has paid a $2,000 fine for failing to alert system trustees or state ethics officials in 2009 when faced with a conflict of interest involving the temporary hiring of his wife, the Office of State Ethics announced Thursday. (link)

April 20, 2011: Under heavy pressure from distance-education providers, the Education Department has agreed to give colleges three years to come into compliance with its controversial "state authorization" rule. (link)

April 19, 2011: Arizona Gov. Jan Brewer has vetoed a bill that would have allowed guns on public rights of way on public university and community college campuses. (link)

April 19, 2011: Former Southern University Athletic Director Greg LaFleur, who was fired three days after his April 3 arrest on a misdemeanor prostitution count in Houston, is suing the school for breach of contract. (link)

April 9, 2011: A former Webster University administrator is suing the school over allegations that he was fired for complaining about the way the school was doing business -- including its handling of a financial aid scam involving prison inmates. (link)

April 1, 2011: U.S. civil rights officials are investigating complaints by Yale University students that the Ivy League university has a sexually hostile environment and has failed to adequately respond to sexual harassment concerns. (link)

March 30, 2011: A company sued by Virginia Tech for using the word "Hokie" in its name without the university's consent has countersued and is claiming that Tech has perpetrated a fraud on the U.S. Patent and Trademark Office. (link)


Other News & Events

April 29, 2011: Videos posted by the conservative blogger Andrew Breitbart appear to have ended the teaching career of an adjunct at the University of Missouri -- even as university officials issued a statement backing the contention of the two instructors of the labor studies course that their comments in the class had been edited to present an "inaccurate and distorted" picture of what was said. (link)

April 28, 2011: A doctor who worked for UC Berkeley's health center for more than 20 years has been charged with sexually assaulting patients, authorities said today. (link)

April 27, 2011: State Police said Thursday that they have obtained an arrest warrant for a suspect wanted in connection with an arson fire at a Kentucky State University dormitory last weekend.(link)

April 27, 2011: Campus police arrested a 17-year-old boy suspected of spying on at least two women in showers at UC Berkeley residence halls last week, a police spokesman said.
The teenager was arrested after a woman reported the fifth peeping case since February to campus police on April 18, Lt. Alex Yao said. (link)

April 25, 2011: An 18-year-old Chicago man faces up to 10 years in prison after pleading guilty on Monday to making bomb threats to dormitories at Western Illinois University last fall. (link)

April 24, 2011: Some MIT professors are urging college leaders across the country to free students from their tether to technology. Over the past decade, schools raced to connect students to the Internet -- in dorms, classrooms, even under the old oak tree. But now, what once would have been considered heresy is an active point of discussion: pulling the virtual plug to encourage students to pay more attention in class and become more adept at real-life social networking. (link)

April 22, 2011: A vicious campaign to end the unblemished 10-year career of a popular but often politically incorrect Princeton teacher left him so despondent that he took his own life, brokenhearted pals said yesterday (link)

April 21, 2011: A community college district in Texas is reclassifying newly hired academic librarians from faculty to professional staff, a move that has raised larger questions about how the nature of library work is valued and categorized in academe.(link)

April 21, 2011: Underage drinkers seeking medical help in an emergency would receive immunity from minor-in-possession and consumption of alcohol charges under a bill passed Wednesday by the Texas Senate.(link)

April 21, 2011: A former Rutgers University student was indicted Wednesday on charges of bias intimidation and invasion of privacy for secretly recording and webcam-streaming his roommate's having a sexual encounter with another man. (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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