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Internal Auditing

Case in Point:
Lessons for the pro-active manager

November 2012
Vol. 4 No. 11
Quotable...
''This was not a mistake, an oversight, or a misjudgment.  This was a conspiracy of silence by top officials...''

-- Linda Kelly
Pennsylvania Attorney General

In the approximately one year period since the incident involving child molestation by a former coach at Penn State University (PSU) came to light, the lessons for those of us in higher education have been many. In this month's newsletter we link a story detailing the indictment of PSU's former President which serves as a stark reminder of the responsibilities that come with leadership. Someone recently made the comment that because of this and other visible scandals in recent years that ''higher education has lost the benefit of the doubt.'' While that statement can certainly be debated, there is little doubt that the pressures for institutional- transparency, ethics, and accountability have never been greater in our industry.

One way that you can strengthen your leadership culture is to ensure that you routinely communicate the need for everyone to report potential regulatory, policy, or ethical concerns to their supervisor or through the anonymous reporting system that allows for confidential reporting. The benefits of proactively addressing a situation far outweigh the costs of ignoring them or remaining silent. As you survey this month's events in our industry, we again suggest that you proactively think of high risks in your area of responsibility that may need proactive management.

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


Information Security & Technology Events

Nov. 29, 2012: Western Connecticut State University is notifying students, their families and others that their personal information may have been exposed to unauthorized access by a computer system vulnerability that has since been corrected. (link)

Nov. 21, 2012: The personal information of nearly 1,000 Scripps College students was stolen from a staff member's vehicle in Anaheim this past weekend, students learned Wednesday through an email from the Dean of Students office. (link)

Nov. 5, 2012: Colleges share many things on Twitter, but one topic can be risky to broach: the reading habits of library patrons. Harvard librarians learned that lesson when they set up Twitter feeds broadcasting titles of books being checked out from campus libraries. It seemed harmless enough--a typical tweet read, "Reconstructing American Law by Bruce A. Ackerman," with a link to the book's library catalog entry--but the social-media experiment turned out to be more provocative than library staffers imagined. (link)

Nov. 2, 2012: The personal information of up to 2,000 people was exposed to the public for five days on a computer in Cornell's athletics department, a University administrator confirmed Thursday. Donald Sevey, director of information systems, said that the University discovered that a file server containing ''confidential data'' about thousands of people was accessible by the public for a period of time. He said that he does not know if anyone maliciously used the data while it was exposed. (link)


Fraud & Ethics Related Events

Nov. 30, 2012: A former Oklahoma State University employee who used her school-issued credit card to buy $80,000 worth of sex toys, electronics and other personal items will serve two years in state prison, court records show. (link)

Nov. 29, 2012: Santa Rosa police arrested a Santa Rosa Junior College Police Department officer Wednesday on suspicion of grand theft and embezzlement, a police sergeant said. (link)

Nov. 26, 2012: Just days after celebrating one of the biggest homecomings in the university's 145-year history, Alabama State University has placed its new president on administrative leave with pay and temporarily replaced him with Rep. John Knight. (link) (link)

Nov. 27, 2012: Baylor University Medical Center in Dallas has agreed to pay the federal government more than $900,000 to settle allegations that it submitted false Medicare claims for radiation oncology services, the Justice Department said Tuesday. (link)

Nov. 27, 2012: Tulsa athletic director Ross Parmley was placed on paid leave Tuesday as the university investigates allegations that he may have been involved with an alleged bookie in Oklahoma City. (link)

Nov. 25, 2012: Southern Utah University has placed an instructor in its English as a Second Language program on probation and is investigating allegations that the program tolerates widespread plagiarism by students. (link)

Nov. 21, 2012: North Carolina's top auditor said Tuesday that the country's third-largest community college system should stop tipping off campus administrators weeks before a record check is coming. A report by state auditor Beth Wood's office found records at Durham Technical Community College were altered or forged, and missing forms created, ahead of a double-check into how many students were enrolled in 2010. (link)

Nov. 15, 2012: The Kalamazoo County Prosecutor's Office has dismissed an embezzlement charge against a Western Michigan University faculty member, but has left the door open for the charge to be reinstated pending further investigation, said Carrie Klein, chief assistant prosecutor. Joseph M. Pellerito, who was chairman of the university's Occupational Therapy Department, has been accused of submitting bogus mileage reports and using WMU endowment money to purchase more than $7,000 in electronics that he kept at home for his personal use. (link)

Nov. 14, 2012: A former Topeka lawyer pleaded guilty Wednesday to federal charges of money laundering and wire fraud for stealing funds established to benefit the Kansas University School of Business. (link)

Nov. 14, 2012: U.S. News & World Report has revoked George Washington University's numerical ranking after the institution admitted last week that it had been inflating class-rank data for incoming students for more than a decade. In a blog post on Wednesday, Robert J. Morse, the magazine's director of data research, said George Washington had been moved to the ''unranked'' category of the listings.(link)

Nov. 13, 2012: The process Larry Sager, the University of Texas School of Law's former dean, used to secure a $500,000 forgivable loan for himself was not transparent, created "an impression of self-dealing that cannot be condoned," and should be permanently suspended, according to a University of Texas System report released Tuesday. (link)

Nov. 13, 2012: A former Edison Community College official who conducted business illegally by granting media contracts to the school that benefited his private business for personal gain avoided a prison sentence Tuesday in common pleas court and will instead serve a two-year probation sentence and pay $9,300 in restitution. (link)

Nov. 12, 2012: Three employees and a hot dog vendor were found guilty Thursday of a month-long scheme in which they stole more than $150,000 worth of books from the GW Bookstore. The scheme lasted from December 2010 to January 2011, with bookstore employees handing off the stolen textbooks to the hot dog vendor at least nine times. (link)

Nov. 10, 2012: University of Iowa officials declined to comment Saturday about a report that revealed allegations of sexual harassment against an athletic department employee who resigned last week. Peter Gray, a senior academic adviser, worked for the athletic department from 1993-95 and again from 2002 until last week. A University of Iowa investigative report obtained by the Press-Citizen documented that Gray attempted to trade athletic tickets and money for sexual favors and indicated he previously had been confronted about conduct concerns. (link) (link)

Nov. 8, 2012: A former secretary at Luzerne County Community College pocketed thousands of dollars in cash tuition payments to the school over several years, according to charges filed Wednesday. (link)

Nov. 6, 2012: The executive director of a community college foundation embroiled in a financial scandal resigned after 10 months on administrative leave. Rhea Chung, executive director of the Los Angeles Trade Technical College foundation, was placed on paid leave in January after an audit by the college district raised questions about the propriety of some bonuses and perks she received on top of her $113,000 annual salary. (link)

Nov. 6, 2012: A former dean at St. John's University in New York who was charged with stealing more than $1-million from the institution was found dead on Tuesday morning in an apparent suicide, only a day after she took the witness stand in her own defense. The New York Times reports that Cecilia Chang, who had been dean of the Institute of Asian Studies, was found at her home, in Queens, N.Y. Prosecutors had also accused her of making scholarship students whom she had recruited from overseas do chores for her. Ms. Chang admitted that she had used the university's money to pay for her son's graduate-school education and acknowledged that she had made the students hand-wash her underwear. (link) (link)


Compliance/Regulatory & Legal Events

Nov. 29, 2012: One of North Carolina's top officials for NCAA rules compliance has resigned effective Friday – the latest Tar Heels official to step down amid the controversy that has engulfed the department the last two years. (link)

Nov. 25, 2012: Larry and Kristina Dodge, a southern California couple living (for now) in a mansion on the Pacific Ocean, are facing hard times and can no longer honor the $5 million pledge they made to the Kansas City Art Institute. Or, in the art institute's view, they're a couple of deadbeats. (link)

Nov. 21, 2012: An animal rights activist who targeted a Wayne State University professor with blog posts calling for him to be tortured pleaded guilty Tuesday to two criminal charges. (link)

Nov. 20, 2012: Administrators of intensive English programs are concerned about guidance from the U.S. Department of Homeland Security that could change the way colleges make conditional admission offers to international students. (link)

Nov. 12, 2012: Dan Markingson's mother has waited nearly a decade for researchers in a University of Minnesota drug study to be held accountable for the suicide of her son. A small piece of that accountability came when state regulators and former U of M social worker Jean Kenney reached an agreement about actions she must take as a result of errors she made in Markingson's care during the study. (link)

Nov. 10, 2012: Northern Illinois University's police chief was put on paid leave today and banned indefinitely from the police department because of allegations of misconduct by the department. It's the latest disruption for a school that has faced a series of troubling events in recent months. (link)

Nov. 9, 2012: A professor whose research focuses on Internet censorship and the use of children in advertising has been charged with having child pornography on his Central Michigan University computer, the school announced Thursday. (link)

Nov. 7, 2012: Among the smaller but still important casualties of Hurricane Sandy were thousands of laboratory rodents, genetically altered for use in the study of heart disease, cancer and mental disorders like autism and schizophrenia, that drowned in basement rooms at a New York University research center in Kips Bay. Critics are asking whether the laboratories did everything they could - and whether they followed government guidelines - to protect the research animals.(link) (link)

Nov. 1, 2012: Former Penn State president Graham Spanier was indicted by a grand jury on eight counts of perjury, obstruction and endangering welfare of children after escaping charges a year ago. Additional charges of felony obstruction, conspiracy and endangerment were also filed against both Curley and Schultz, who are still awaiting trial on perjury and failure to report a crime. (link) (link)

Nov. 1, 2012: A dispute over the administration of a multi-million dollar grant by Alabama A&M University is under investigation by a federal agency. The dispute centers around $1.4 million that Alabama A&M said it is withholding because of questions regarding the grant, which is designed to provide textbooks to children in Ethiopia. (link)


Campus Life & Safety Events

Nov. 30, 2012: Students are satisfied overall with the role academic libraries play in their lives, but more than a third of them do not see the libraries as crucial to their academic success, according to a new survey. (link)

Nov. 29, 2012: University officials are looking for solutions in response to a series of falls from campus buildings in Idaho and Washington, mostly at fraternities and involving alcohol. The falls -- five since September -- at Washington State University (WSU) and the University of Idaho campuses have alarmed officials, who acknowledge the challenge they face in changing student attitudes on alcohol and minimizing dangerous behavior. (link)

Nov. 24, 2012: Since the University of Colorado's Boulder and Colorado Springs campuses began segregating dorms for students with valid concealed-carry permits this year, not a single student has asked to live where guns are allowed. (link)

Nov. 17, 2012: A year after a plane carrying two Oklahoma State University coaches, a former state senator and his wife crashed in the mountains of central Arkansas, OSU officials say they plan to propose an updated travel policy later this month. (link)

Nov. 16, 2012: Authorities have charged a student with arson stemming from a fire in a New Jersey college dormitory. Firefighters found two toilet paper rolls had burned in a fourth floor bathroom in O'Connor Hall on the College of Saint Elizabeth's Florham Park campus late Wednesday night. (link)

Nov. 15, 2012: During a 45-minute meeting with about 250 campus Greeks today, Chico State University President Paul Zingg suspended all sorority and fraternity activities due to the alcohol-overdose death of a fraternity pledge and other matters. (link)

Nov. 12, 2012: Fraternity and sorority members at the University of Iowa find themselves in legal trouble more often than other students, and though their citation and arrest rates improved during the 2011-12 academic year, they remain above average at the university. (link)

Nov. 11, 2012: Florida A&M University ended its football season last Saturday, its first without the famous Marching 100 wowing crowds at half time. The question is: Now what? (link)

Nov. 10, 2012: Marquess Wilson, Washington State's career-leading receiver suspended by the football program last week, issued a letter Saturday afternoon saying he's done at the school and alleging "physical, emotional and verbal abuse" by Mike Leach's first-year coaching staff. (link)

Nov. 7, 2012: Officials of Colorado and Washington's flagship universities say new laws legalizing the recreational use of marijuana for adults in those states are unlikely to change campus policies. Both laws, adopted through ballot measures on Tuesday, allow people over the age of 21 to possess small amounts of pot for personal use. They are the nation's first laws legalizing marijuana for recreational use. (link)

Nov. 7, 2012: The University of Montevallo today announced that authorities on Tuesday arrested the suspect in the investigation concerning three dead cats found on campus in October that had been killed in a potentially disturbing manner. (link)

Nov. 1, 2012: Twenty-seven Air Force Academy cadets were injured last week after a traditional hazing event left some with concussions, broken collar bones and cuts and bruises. One cadet suffered a human bite on the arm, according to an email sent to academy staff by Brig. Gen. Dana Born, dean of cadets. The hazing, known as First Shirt/First Snow, is an unofficial tradition that occurs every year on the first snow. Freshmen cadets try to throw their stripped-down cadet first sergeant in the snow, while the upperclassmen try to defend the sergeant. (link)


Other News & Events

Nov. 27, 2012: The University of Washington has severed a sports-apparel contract with Adidas after a nearly yearlong campaign by students, who say the company has violated the labor rights of overseas workers. (link)

Nov. 19, 2012: To Community College of Allegheny County's president, Alex Johnson, cutting hours for some 400 temporary part-time workers to avoid providing health insurance coverage for them under the impending Affordable Health Care Act is purely a cost-saving measure at a time the college faces a funding reduction. (link)

Nov. 15, 2012: New and improved data show that America is doing better on college completion than had previously been revealed, according to a major report from the National Student Clearinghouse Research Center. But plenty of work remains on degree production, and it's unclear how the more reliable numbers will affect the ''completion agenda'' and a related push for more accountability in higher education. (link)

Nov. 14, 2012: Disaster plans used to seem like ''kind of a bother'' to Lance D. Query, Tulane University's director of libraries. Then, in 2005, Hurricane Katrina hit New Orleans, flooding Tulane's Howard-Tilton Memorial Library with more than eight feet of water. ''I look at them much more carefully now,'' says Mr. Query. (link)

Nov. 13, 2012: The Duke athletic department issued an apology Monday and removed a photo from its official website showing a women's lacrosse player dressed in blackface at a team Halloween party.
The team held the party and costume contest at head coach Kerstin Kimel's house. The junior class dressed as characters from ''The Little Rascals'' movie, and Taylor Virden painted her face black as part of her Buckwheat costume. (link)

Nov. 13, 2012: The American Council on Education, a non-profit organization that represents most of the nation's college and university presidents, is preparing to weigh in on massive open online courses -- MOOCs, for short -- a new way of teaching and learning that has taken higher education by storm in recent months. A stamp of approval from the organization could enhance the value of MOOCs to universities and lead to lower tuition costs for students, who could earn credit toward a college degree for passing a particular course. At issue is whether the quality of the courses offered through MOOCs are equivalent to similar courses offered in traditional classrooms. (link)

Nov. 11, 2012: A Vermont college euthanized one its farm oxen Sunday that have been at the center of an uproar over the college's decision to process the animals into meat. (link)

Nov. 2, 2012: When professor Henry Kim noticed a student this week paying more attention to his laptop than the class discussion, he asked another student to check out the suspect's screen. Twitter. Busted. The business professor at York University's Schulich School of Business quietly asked the tweeter to leave for the rest of the 90-minute class for breaking the pledge his students must take not to use laptops for anything but class work. (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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