Internal Auditing

Case in Point:
Lessons for the pro-active manager

April 2010
Vol. 2 No. 4
Quotable...

"Setting an example is not the main means of influencing another, it is the only means."

Albert Einstein

Tone at the Top -- it's a phrase everyone has heard in the post-Enron world, but due to its importance, it's a topic that deserves discussion and reminders from time to time. In our decentralized environment in higher education, we have numerous levels of ''tone setters.'' The tone is certainly set in a general level by the President and Board; however, every Vice President, Dean, Director, Department Head, and manager also sets a tone for their area of responsibility.

Tone is set in several ways. First, verbal communications make an impact in determining the tone for your area. Simply communicating to your staff that you expect compliance with University policies and legal requirements has a positive impact. Telling your staff they are expected to report any noted areas of non-compliance, unmitigated risks, or issues up the chain of command is a positive thing. Even more important for every leader is ensuring they conduct all their business in an ethical manner which certainly means compliance with policies, laws, and regulations and oftentimes even beyond those standards.

As a leader, what you do matters substantially more than what you say. In fact, all of your employees' eyes are on you and your actions. When the eyes are on you, you can be certain that the mouths communicate what they see throughout your unit and across the campus. All of us are affected on various levels by what we see other people doing. Sometimes this is referred to as ''social proof.'' Social proof involves looking at other people's behaviors to determine what is socially or culturally acceptable. Social proof is a key part of the psychology of influence as noted by numerous researchers such as the noted Robert Caldini of the University of Arizona. When we see ethical behavior or proactive risk management by our peers, it tends to influence us to behave in the same manner.

Our goal in this communication is to help create a more proactive risk management environment at our institution. As you scan this month's news stories across our industry, ask yourself if there are things you can do to help prevent similar events at Auburn University. We also suggest you share this with those in your unit. In doing so, you are sending a message about the tone you want to have with respect to managing risk. In other words you are strengthening your respective tone at the top.

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


Information Security Related Events

Apr. 21, 2010: McAfee's popular antivirus software failed spectacularly on Wednesday, causing tens of thousands of Windows XP computers to crash or repeatedly reboot. (link)

Apr. 20, 2010: Apple Inc.'s iPad isn't having an easy time during college admissions season. The tablet, lauded by many as the next wave in education technology, is having difficulty being accepted at George Washington University and Princeton University because of network stability issues. Cornell University also says it is seeing connectivity problems with the device and is concerned about bandwidth overload. (link)

Apr. 15, 2010: At a warehouse in New Jersey, 6,000 used copy machines sit ready to be sold. CBS News chief investigative correspondent Armen Keteyian reports almost every one of them holds a secret. (link)

Apr. 5, 2010: A new report by Forrester Research, commissioned by Microsoft and RSA, the security division of EMC, found that even though corporate intellectual property comprises 62 percent of a given company's data assets, security programs are focused on compliance rather than data protection. (link)


Misappropriation/Fraud/Ethics Events

Apr. 29, 2010: An internal audit identified $11 million in missing patient charges in areas of University of Iowa Health Care, officials told the state Board of Regents on Wednesday. The audit report deemed the missing billings — which one regent said he thinks were caused by human error — to be a high priority. (link)

Apr. 24, 2010: A high-ranking administrator at the University of Connecticut earning more than $160,000 a year was placed on paid leave this week as school officials finished an investigation into whether he lived at the on-campus Nathan Hale Inn in Storrs and charged the tab to the state. (link)

Apr. 20, 2010: An administrative assistant in University of Florida's oral history program submitted receipts for books for a ''WWII project.'' But the books weren't about a world war. They were from Weight Watchers. (link)

Apr. 5, 2010: The administrator accused of sexual harassment by three other women at Alabama State University apparently was consulting for a company that had a contract with the school while she was an employee, according to documents obtained by the Montgomery Advertiser. (link)


Compliance/Regulatory Events

Apr. 24, 2010: Lafayette College will pay $1 million to settle a sexual harassment lawsuit filed against a campus police officer accused of groping female employees and subjecting them to other lewd behavior. (link)

Apr. 20, 2010: The N.C.A.A. praised a decision by the Department of Education on Tuesday to rescind a controversial rule allowing universities to use student surveys to comply with the federal gender-equity law known as Title IX. (link)

Apr. 20, 2010: Prairie View A&M University has suspended a fraternity chapter until 2013 after determining its hazing of a 20-year-old pledge led to his death. (link)

Apr. 20, 2010: The University of Maine is investigating whether a fraternity initiation prank that ended with a student lost in the woods violated university rules. (link)

Apr. 19, 2010: The Supreme Court seemed to split sharply Monday on whether a law school can deny recognition to a Christian student group that won't let gays join, a case that could determine whether nondiscrimination policies trump the rights of private organizations to determine who can -- and cannot -- belong. (link)

Apr. 16, 2010: The Justice Department filed a lawsuit on Friday against John Jay College of Criminal Justice, alleging that the school engaged in a pattern of job discrimination against noncitizens who were authorized to work. (link)

Apr. 13, 2010: LSU faculty and a national professors association are upset about LSU removing a professor from teaching a class in the middle of the semester for allegedly grading too harshly. (link)

Apr. 13, 2010: An invitation to former Alaska Gov. Sarah Palin to speak at Cal State Stanislaus' 50th anniversary gala is generating controversy and raising questions about the foundation that is paying her. The nonprofit is refusing to divulge her speaking fees. (link)

Apr. 12, 2010: A former Brown University student says in a lawsuit that he was expelled more than three years ago after being falsely accused of rape by the daughter of a major donor and fundraiser for the Ivy League school. (link)

Apr. 7, 2010: The NAACP claims Georgia continues to have a two-track system of higher education, one for white students and a lesser one for blacks. The plaintiffs, which include students at Savannah State and Fort Valley State, say Georgia's highest-ranking officials ''have never dismantled the dual system of public higher education and have taken affirmative action to perpetuate racial dualism in public higher education.'' (link)

Apr. 6, 2010: Yale University has adopted a policy banning sexual relationships between faculty and undergraduates. (link)

Apr. 2, 2010: With job openings scarce for young people, the number of unpaid internships has climbed in recent years, leading federal and state regulators to worry that more employers are illegally using such internships for free labor. (link)

Apr. 2, 2010: Calling for more professional programming at the state's three public historically black colleges, the NAACP has joined in a lawsuit that would force Georgia to fund the schools at an equal level with its other universities. (link)


Other News & Events

Apr. 29, 2010: Recent research shows that eating disorders on college campuses are increasing in prevalence across the U.S., students are unwilling to seek treatment, and many campuses lack the resources to assist students with these diseases. (link)

Apr. 24, 2010: A Virginia-based college fraternity inspired by Confederate Gen. Robert E. Lee has banned members around the country from wearing Confederate uniforms to ''Old South'' parties and parades after years of complaints that the tradition was racially insensitive. (link)

Apr. 24, 2010: The University of Texas System has recalled all students, faculty and staff from northern Mexico due to escalating violence in the region and may suspend university- sponsored travel to any part of the globe with a U.S. Department of State travel warning, including Haiti. (link)

Apr. 24, 2010: San Francisco State University student protesters arrested after they took over the business school in December thought they had an agreement with the assistant dean of students to pay no more than $50 apiece for damages to the building as long as they agreed to accept school sanctions. But after signing off on the deal, the students learned they would have to pay $744 apiece - $8,100 total - or leave school. (link)

Apr. 15, 2010: Indiana University officials are looking into how a student might have been dead in his residence hall room for a week or more without anyone reporting him missing. (link)

Apr. 13, 2010: UC Santa Cruz is charging 36 students $944 each in restitution for their involvement in November's occupation of the main campus administration building, officials confirmed Monday. Of the 45 students investigated, 36 were found to have played some role in the protest over student fee hikes, an incident that caused nearly $34,000 in damage, spokesman Jim Burns said. The cost of the repairs was split evenly among the students. (link)

Apr. 10, 2010: Pittsburgh threatened to tax college tuition. Providence sought to tax out-of-state students. And Philadelphia is pressing its colleges and universities to resume voluntary payments in lieu of taxes. As Boston seeks new revenue, cities around the country are grappling with how to squeeze more money from the colleges and other tax-exempt institutions, as recession and lower property tax revenues prompt municipalities to seek alternate ways to pay their bills. (link)

Mar. 31, 2010: Following a string of racist acts on campuses, the University of California is considering changing its policy on bias incidents, UC president Mark Yudof said. He said the new language under consideration would prohibit ''hanging a noose, burning a cross, or placing a symbol, such as a swastika, without authorization, on university property or at official university functions.'' (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.

Department of Internal Auditing
Auburn University
304 Samford Hall
M. Kevin Robinson, Exec. Director
robinmk@auburn.edu
334.844.4389
© Redistribution of this newsletter, with or without modification, is permitted provided Auburn University Internal Auditing is listed as the source.