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Internal Auditing

Case in Point:
Lessons for the pro-active manager

December 2012
Vol. 4 No. 12
Quotable...
“Learn from the past, set vivid, detailed goals for the future, and live in the only moment of time over which you have any control: now.”

-- Denis Waitley

As we move toward the end of another year, we hope you've found Case-in-Point useful in raising awareness of the risks facing higher education and your role in proactively protecting our institution. Next month we will share some greater analysis of the specific items we observed during 2012, but this month we wanted to speculate on what the future might hold with respect to general trends.

Three predictions for trends in the coming years:

  1. Accountability and scrutiny regarding the use of funds will continue to increase in the coming years. Much of this will be driven by budget constraints and the accompanying regulatory and public pressure to ensure funds are used in a prudent and appropriate manner.
  2. Social media will continue to evolve and raise new and greater risks with respect to privacy and how we protect data. Traditional controls will have to be reexamined in the new environment as new ways of conducting business emerge.
  3. Greater emphasis will be placed on improving campus ethical cultures and along with greater responsibility on all employees to report issues to management or through anonymous reporting systems. It is also likely that reporting hotlines will grow in scope of items accepted for reporting beyond fraud and compliance issues to include many nontraditional items.

These are three areas that we think will deserve some attention by each of us who want to proactively manage risk. Once again, we invite you to consider your responsibilities in light of the events you see linked below. Think about how you can prevent similar problems within your sphere of influence.

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


Information Security & Technology Events

Dec. 17, 2012: University of North Alabama President William Cale condemned the use of a racial slur tweeted by one of its football players, saying today the school was "deeply embarrassed" by the incident. "We can't trample on his First Amendment rights, but at the same time, we're trying to turn episodes like this into educational moments," he said. (link)

Dec. 11, 2012: A former computer science and math major at the University of Nebraska-Lincoln now faces a federal computer hacking charge from last spring's breach of a key computer system serving both NU and the state college system. (link)

Dec. 11, 2012: A former Rutgers University instructor has pleaded guilty to using a computer in his university office to share videos of child pornography over the Internet, Attorney General Jeffrey S. Chiesa said on Tuesday. (link)

Dec. 10, 2012: University of California officials said they were trying to project a "forward-looking spirit" when they replaced the university system's ornate, tradition-clad logo with a sleek, modern one. What they got was an online revolt complete with mocking memes, Twitter insults and a petition to restore the old logo. (link) (link)

Dec. 7, 2012: Pepperdine University sent an email today informing the university community that a laptop computer belonging to an authorized university employee was stolen from that individual's car. This laptop had been used extensively in work related to the IRS, “and it contained data dating back to 2008 involving as many as 8300 Pepperdine campus community members.” Approximately 75 percent of these names belong to students. (link)

Dec. 5, 2012: An online hacker claims he or she compromised Michigan State University's server and obtained 1,500 names, email addresses, passwords, usernames and mailing addresses. (link)

Dec. 5, 2012: The University of Georgia's Enterprise Information Technology Services has partnered with University Police to continue an investigation into the University's Identity Management System breach in October. The two groups are investigating who hacked the system, how the system was hacked and whether more than the reported 7,847 accessed identities could have been compromised. (link) (link)

Dec. 3, 2012: The University of Virginia Medical Center is warning patients that an electronic device containing their medical and personal information is missing. The hospital began notifying patients on Friday about the potential security breach. (link)

 


Fraud & Ethics Related Events

Dec. 13, 2012: A Baltimore City Community College employee has been indicted on allegations that she directed student tuition payments into her personal bank account, the city prosecutor's office announced Thursday. Michelle Campbell of Waldorf was indicted by a city grand jury on 13 counts charging her in a scheme that prosecutors say netted about $8,000. State's Attorney Gregg L. Bernstein will personally prosecute the case, his office said in a news release. (link)

Dec. 12, 2012: The University of Michigan at Ann Arbor's first social-media director quit her post on Monday after it was alleged that she had lied about graduating from college on her résumé—an assertion that, ironically, first bubbled up on social media. (link)

Dec. 12, 2012: A former math instructor and grant administrator at Fort Peck Community College has pleaded guilty to using nearly $20,000 in grant money to fund personal travel during times he claimed to be traveling to work-related training and meetings. (link)

Dec. 11, 2012: A Jefferson Community College bookstore employee is accused of embezzling over $50,000 between April 1 and Nov. 28, according to the Watertown Police Department. (link)

Dec. 6, 2012: A professor from N.C. State University used grant funds to go on family vacations at top-dollar beach resorts, according to a report by the Office of the State Auditor. The report accuses Stacy Nelson, an associate professor in the Department of Forestry and Environmental Resources, of taking two personal trips under the guise of doing research in 2011. (link)

Nov. 30, 2012: A North Carolina man accused of scamming the University of Hawaii out of $200,000 for a Stevie Wonder concert pleaded not guilty Friday to federal charges. Prosecutors allege Hubbard defrauded the school out of money that was intended as a deposit for a concert that never happened. The club and concert promoter from Waxhaw, N.C., faces up to 20 years in prison if convicted. (link)

Nov. 30, 2012: Former Brookdale Community College president Peter Burnham was sentenced to five years in prison today for official misconduct and theft, completing the dramatic fall of one of the state's top higher education leaders. (link)

Nov. 29, 2012: A New Mexico college graduate, apparently feeling guilty over a student prank years ago, has sent a box of toilet paper to repay a university for loot taken from a dormitory, according to school officials. (link)


Compliance/Regulatory & Legal Events

Dec. 18, 2012: At Ohio State, one slice of an ambitious universitywide compliance department overhaul fostered something of a national debate last week on oversight in college sports. It did not involve study habits, training habits or dietary habits. (link)

Dec. 17, 2012: Over 20 members of a Northern Illinois University fraternity are facing criminal charges after a freshman student was found dead at their house following a night of alleged heavy drinking.  (link)

Dec. 17, 2012: A federal appeals court has upheld the University of Toledo's decision to fire a high-level human-resources administrator who wrote a newspaper opinion column challenging the idea that gay people deserve the same civil-rights protections as members of racial minority groups. (link)

Dec. 14, 2012: Two University of Delaware students are charging in a federal lawsuit that the school violated their right to free speech because officials would not let them sell T-shirts at homecoming imprinted with a slang phrase commonly used to heckle opposing teams. “This is a civil rights case. My clients' freedom of expression under the First Amendment is being repressed by the threat of academic disciplinary proceedings,” said attorney David Finger. (link)

Dec. 13, 2012: Oklahoma State University President Burns Hargis called for an investigation Thursday into the way the school handled sexual assault complaints involving a student accused of groping male students. (link)

Dec. 11, 2012: Florida Gulf Coast University faculty members aren't arguing over whether the institution is entitled to know if they have a criminal background; laws and statutes protect an employer's right to know. But a new fingerprinting proposal has stirred debate over just how much it needs to know about whom, and at what expense. (link)

Dec. 10, 2012: Eastern Michigan University announced this afternoon it has settled a lawsuit filed by a former student who was dismissed from the master's degree counseling program after she refused to counsel a gay client because of her religious beliefs. (link)

Dec. 8, 2012: In a scathing review of three experimental surgeries at the UC Davis Medical Center, federal regulators found that deficiencies were so severe the 619-bed hospital "lacks the capacity to render adequate care to patients." The 92-page report from investigators for the Centers for Medicare and Medicaid Services concluded that hospital administrators repeatedly failed to rein in the activities of two UC Davis neurosurgeons, who performed untested treatments on three critically ill brain cancer patients. (link)

Dec. 7, 2012: With about a year left before major portions of the federal health reform law take effect, colleges around the country are looking for more guidance about how new regulations will affect adjunct instructors. Specifically, the concern is over a provision in the act treating employees working 30 or more hours a week as full-time, thus requiring employer-assisted health care. (link)

Dec. 7, 2012: University System of Maryland chancellor Brit Kirwan acknowledged Friday that the Board of Regents violated Maryland's open meetings act by secretly convening to discuss the University of Maryland's move to the Big Ten, but said the group was merely “confused” and “overlooked” its responsibility to inform the public of its plans. (link)

Dec. 6, 2012: Rutgers University will not be leaving the Big East quietly. On the same day last month the state university announced it was joining the Big Ten Conference, Rutgers' lawyers were filing a lawsuit accusing the Big East of breach of contract. (link)

Dec. 5, 2012: Officials at the University of Central Arkansas may have played favorites — including renewing a scholarship worth thousands for a student who might not be qualified — and turned a blind eye to questioning then Chief of Staff Jack Gillean about his missing key. That key was used to break into buildings and steal exams to cheat on tests, according to a draft internal audit report dated Monday. (link)

Dec. 4, 2012: Two Tarrant County residents have filed a wrongful-death suit against the University of Texas at Arlington after their son died a week after he was treated at the school's clinic.(link)

Dec. 3, 2012: The parents of an intoxicated college student who died after a New Year's Eve party at the University of Pennsylvania have settled a wrongful death lawsuit for more than $3 million. (link)

Dec. 3, 2012: The parents of a University of South Alabama freshman shot and killed by a campus police officer have filed a wrongful death lawsuit over their son's death. (link)

Dec. 1, 2012: A year after a 1960s-era, single-engine airplane crashed, killing four including its 82-year-old pilot, Oklahoma State University will require all private planes and their pilots to undergo a review before being used for university-related travel. (link)

 


Campus Life & Safety Events

Dec. 19, 2012: A new study finds that female undergraduates experience a significantly increased risk of rape and other forms of sexual assault while studying abroad in non-English-speaking countries. The study, published in the journal Psychological Trauma: Theory, Research, Practice, and Policy, is based on a survey of 218 female undergraduate students at a single institution. (link)

Dec. 18, 2012: Officials at the University of Maryland Baltimore County have a sent a letter to students and faculty confirming that someone on campus has been diagnosed with tuberculosis. (link)

Dec. 10, 2012: The University of Miami's Emergency Notification Network exists to alert students and faculty of a safety threat — an oncoming hurricane, for example, or maybe an armed gunman. But the text message that went out to the UM community Wednesday night contained a different sort of warning: “Black male on campus,” UM proclaimed. (link)

Dec. 9, 2012: Two University of Colorado at Boulder students are facing multiple felony charges after they allegedly fed marijuana-laced brownies to their unsuspecting history class — leading to the hospitalization of three people. (link)

Dec. 7, 2012: Growing numbers of college-age women in Amherst are requiring medical attention for consuming too much alcohol, paramedics say. (link)

Dec. 6, 2012: A New York Times piece about bedbugs and other crawly creatures showing up in library books says the problem is occurring across the country — including at the University of Washington. The article quotes Stephanie Lamson, head of preservation services at the University of Washington Libraries, saying she has put bug-infested books in plastic bags and then into freezers to kill the critters. (link)

Dec. 4, 2012: A suspended University of Alabama doctoral student has been behind bars since Friday after UA officials said he sent disturbing e-mails to them last month. The physics student sent “erratic” e-mails including video clips of a movie depicting violent acts toward university officials, according to a deposition filed in Tuscaloosa County District Court. (link)

Dec. 4, 2012: Helena police arrested the man they say stole various items from the women's locker room at the Physical Education Center at Carroll College. Helena police arrested the man they say stole various items from the women's locker room at the Physical Education Center at Carroll College. (link)

Dec. 2, 2012: Chris Krumm stepped into the classroom and drew back the bowstring. His father, Casper College professor Jim Krumm, was close; maybe only four feet away. Chris fired a single arrow. It struck his father in the side of the head, and traveled through to the other side. The impact knocked the older man to the floor. (link)


Other News & Events

Dec. 14, 2012: A new dress code for some University of Toledo student employees has prompted an unexpected backlash from some unhappy students who say the required uniform will be inconvenient and take away students' ability to express their “individuality.” The new dress code, which goes into effect in January, will require students to wear khaki pants and a navy blue polo shirt with the school emblem. (link)

Dec. 7, 2012: Two former senior staff members to former University of Alabama President Guy Bailey continue to be paid despite no longer working at the university. The same is true for Bailey. Last week the Associated Press reported that the university is still paying Bailey's $535,000 a year salary, even though Bailey resigned in late October, just a little over two months into the job. (link)

Dec. 4, 2012: A photo that surfaced on social media is causing an uproar on Penn State's University Park campus. Chi Omega sorority posted a racially insensitive picture taken at a Mexican-themed Halloween party. (link)

Nov. 30, 2012: Drake University faculty members are considering adding pluses and minuses to grades, a policy change that would put the institution in step with its peers but has drawn impassioned opposition from students. The current system allows for whole letter grades — an A or B, for example — but prohibits grades like an A-minus or B-plus. (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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