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Internal Auditing

Case in Point:
Lessons for the pro-active manager

January 2012
Vol. 4 No. 1
''Part of being a leader at that level is to be a risk manager and to think through what might happen''

-- Penn State Trustee Chair
Karen B. Peetz

Since its inception, Case in Point has sought to help administrators become more aware of both current and newly emerging risks facing higher education and to proactively manage high risk activities before a problem occurs. We believe prevention is superior to remediation in numerous ways and hope this survey of current events has helped you proactively manage risks in your unique area of influence.

Even though prevention is our goal, sometimes a risk management or compliance failure will occur and action is required by the institution. We call your attention to a specific New York Times article which chronicles the recent Penn State University sexual abuse scandal from the view of the institution's trustees. The article provides some unique insights into how this institution dealt with the fallout from such a high profile crisis.

All universities are re-evaluating the policies, procedures and processes involving minors on campus. A consensus of best practices will certainly develop over the next few months and we will attempt to communicate those to you. According to a January 22, 2012 report in the Chronicle of Higher Education, Penn State has been implementing at least five interim recommendations from the panel evaluating their scandal. The five interim recommendations include strengthened policies involving minors on campus, prompt reporting of incidents of sexual misconduct, training on Clery Act compliance, hiring of a chief compliance and ethics officer, and improved security over athletics facilities.

As you scan the events of our industry from the past month, we again suggest that you consider your unique area of responsibility and evaluate what risks might need special attention to proactively prevent a problem. If you have any suggestions or comments, as always, we welcome them.

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

Information Security & Technology Events

Jan 27, 2012: The University System of Maryland until recently had been storing information, including Social Security and some credit card numbers, of thousands of prospective students on a server that the public can access, according to a state audit this week. (link)

Jan 27, 2012: Last semester the President's Challenge website tracked IU employees' nutrition and exercise progress throughout their participation in the Healthy IU fitness competition. On Jan. 19, those same IU employees received an email from President's Challenge officials delivering some alarming news. ''We are writing to inform you about a security issue involving the President's Challenge website,'' the email began. ''Hackers recently accessed our database.'' (link)

Jan. 26, 2012: The University of Hawaii has settled a class action data breach lawsuit involving five data breaches between 2009 through 2011, according to a press release by Grande Law Offices. (link)

Jan 20, 2012: Stolen information affecting the bank accounts of thousands of people would never have ended up in the hands of thieves if an existing policy was followed at the University of Victoria. Before assigning blame, the school wants to wait for two reviews looking into whether an employee failed to follow policy by backing up confidential employee information to a device stolen 10 days ago.(link)

Jan 19, 2012: Arizona State University students and employees were told in a security text alert that the university's ASURITE computer system may have been compromised and that all online services had been suspended. This is the university's main online system, where students and employees put in their passwords to log in and access classes and other services. More than 300,000 people have accounts through the system. ASU officials said an encrypted file containing user names and passwords was downloaded Wednesday by an unknown person outside the university. (link)

Jan 13, 2012: Personal banking information and other data from perhaps tens of thousands of students, faculty and administrators at City College of San Francisco have been stolen in what is being called "an infestation" of computer viruses with origins in criminal networks in Russia, China and other countries. (link)

Jan 11, 2012: An investigation by B.C.'s Office of the Information and Privacy Commissioner will determine whether the University of Victoria contravened accepted standards by keeping sensitive, unencrypted information about more than 11,700 employees on a mobile device. A weekend break-in at the administration services building saw the theft of laptops, handheld electronics, storage devices, cheques and a small amount of cash. The data stolen included names, payroll information and social insurance numbers of UVic employees dating back to Jan. 1, 2010. (link) (interesting development)

Jan. 2, 2012: California has amended its security breach notification law to expand the notification requirements for security breaches relating to consumer personal information. The changes, which take effect January 1, 2012, require businesses that suffer a data breach affecting more than 500 California residents to provide notice to the California Attorney General's office. (link)

Fraud & Ethics Related Events

Jan 30, 2012: Claremont McKenna College, a small, prestigious California school, said Monday that for the past six years, it has submitted false SAT scores to publications like U.S. News & World Report that use the data in widely followed college rankings. (link)

Jan 24, 2012: Researchers at major universities, including Brown, Emory, Harvard, Stanford, Tufts, and Yale, have been accused in recent years of signing their names to medical-journal articles that were written by others, articles that promoted the benefits of various medications and were produced under the auspices of pharmaceutical companies trying to boost their products. Condemnation by ethicists and loss of grant money are not the only penalties facing academics who put their names on medical-journal articles they didn't write. Personal-injury lawyers have them in their sights now, too. (link)

Jan 22, 2012: While the governing board at Kean University has launched an investigation about false claims on his resume, university president Dawood Farahi has acknowledged for the first time that some mistakes were made. In a recent interview, Farahi said even though there were some errors listed on past resumes, he was not responsible. (link)

Jan 21, 2012: For years, the Los Angeles Community College District has relied on Gateway Science & Engineering to supervise the $450-million rebuilding of Mission College in Sylmar. Gateway is paid to police construction quality, keep contractors on schedule and review all bills and payments. For at least a year, however, Gateway collected consulting fees from one of the main contractors it was overseeing on the campus, FTR International of Irvine. (link)

Jan 11, 2012: The University of Connecticut Health Center has sent out letters to 11 scientific journals, notifying them that a UConn researcher whose work they published has been found guilty of 145 counts of fabrication and falsifying data. (link)

Jan 8, 2012: University of Illinois President Michael Hogan's chief of staff resigned Friday amid an investigation into whether she sent anonymous emails posing as a faculty leader to try to influence a faculty decision, the Tribune has learned. (link)

Jan 7, 2012: Trustees at Kean University, one of the largest public colleges in New Jersey, are investigating allegations that the school's president falsified his credentials on several résumés before he was hired in 2003. (link)

Dec. 20, 2011: Western Washington University has fired its longtime admissions director for what the university describes as a pattern of lack of professional judgment. University officials said Karen Copetas retaliated against an employee, awarded scholarship money in exchange for work and influenced the award of scholarships to relatives. (link)

Dec. 19, 2011: When Americans give a gift to charity for a specific purpose, and the charity accepts the donation for that purpose, that's how the gift should be used. It shouldn't matter if the gift is $138 or 138 acres. It's the principle that counts. Donations are not just given; they are entrusted to the receiver. This trust should never be broken. Regrettably, donor intent abuses by colleges and universities are all too familiar. (link)

Dec. 18, 2011: A foundation that endows athletic scholarships at the University of Houston may have lost more than 40 percent of its listed assets because of investments in an alleged Ponzi scheme orchestrated by a financial adviser for college basketball coaches who committed suicide last summer. (link)

Compliance/Regulatory & Legal Events

Jan 25, 2012: John Chadima (former senior associate athletic director) made unwanted sexual advances to a University of Wisconsin Athletic Department student employee and threatened to fire him after he spurned the early-morning overture at a Rose Bowl party. (link)

Jan 23, 2012: Following a preliminary ruling from a federal judge, state education officials have decided to make a payment to end a gender discrimination lawsuit against Central Connecticut State University, and school President Jack Miller. (link)

Jan 11, 2012: A Muslim woman is suing the University of Bridgeport, alleging that the school failed to investigate her claims that a fellow student sexually harassed her and instead retaliated by reporting her to the FBI based on a false claim that she was a terrorist. (link)

Jan 9, 2012: The attorney for Todd Bozeman said Monday that university administrators violated the Morgan State men's basketball coach's contract and school policy regarding disciplining senior staff members when they placed the 48-year-old coach on paid administrative leave Sunday night. Bozeman was suspended a day after an incident at the end of his team's road victory at South Carolina State in which he made some sort of physical contact with senior guard Larry Bastfield during a timeout late in the game. (link)

Jan 5, 2012: Twenty-one Haitian men are suing Fairfield University and affiliated religious and charitable organizations for sexual abuse they suffered as children in a residential school in Haiti founded and operated by a university alumnus who later was prosecuted as a pedophile. (link)

Jan 2, 2012: Three men were arrested and a fourth is being sought by the FBI in what investigators said was a scheme to market stem cells as miracle cures to desperate people suffering from terminal diseases. One of the four men charged, Vincent Dammai, 40, of Mount Pleasant, South Carolina, was identified as a researcher at the Medical University of South Carolina. The FBI said he used university facilities to create stem cells without obtaining permission from the FDA or university officials. (link)

Dec. 29, 2011: A former Tacoma Community College music instructor will be in court next month to answer charges that he convinced one of his voice students she could reach lower octaves if she took off her clothes or did sex acts while singing. (link)

Dec. 29, 2011: A federal appeals court has reinstated a lawsuit filed by a conservative, former anti-abortion activist who claims she was passed over for a job at the University of Iowa's College of Law because of opposition from liberal faculty members. (link)


Campus Life & Safety Events

Jan 31, 2012: A new report by criminal investigators studying the 2008 laboratory fire at the University of California at Los Angeles that killed a 23-year-old staff research assistant, Sheri Sangji, has faulted UCLA much more directly than a previous criminal inquiry. (link) (link)

Jan 30, 2012: A federal appeals court on Friday revived a student's lawsuit against Eastern Michigan University, which had expelled her from its graduate program in counseling after she asked to be excused from counseling a gay patient because her Christian faith prevented her from affirming the patient's homosexuality. (link)

Jan 30, 2012: Florida A&M University released new details Monday about the investigation that Tallahassee police recently launched into another possible hazing involving music students. (link)

Jan 28, 2012: The Pennsylvania University Undergraduate Assembly has been found to have violated the University's Antihazing and Alcohol and Drug policies, the Undergraduate Assembly's executive board announced in a statement Saturday evening. (link)

Jan 27, 2012: A new web reality series puts the University of Southern Californina in a bad light.
The James Franco-produced 'Undergrads' depicts students drinking, partying and having run-ins with police. Administrators and students say the show doesn't accurately portray the campus. (link)

Jan 25, 2012: Many Muslim students at Ohio State University have been outraged by an ad in the student newspaper that ties former Muslim student leaders in the U.S. to terrorist groups. The advertisement, which ran on the second page of The Lantern on Monday, lists 10 terror suspects under the headline: Former Leaders of the Muslim Student Association (MSA): Where Are They Now? (link)

Jan 18, 2012: A Syracuse University graduate student who had been prohibited from student-teaching because of a Facebook posting will be allowed to finish his degree this spring, the university said on Wednesday. The decision came just a few hours after a free-speech group publicly denounced Syracuse's handling of the matter. (link)

Jan 18, 2012: A group of 13 Penn State trustees spoke to The New York Times in detail about the somewhat frantic, certainly exhausting week that led to the firings of Paterno and Spanier and to the disturbances on campus that those dismissals set off. (link)

Jan 15, 2012: A boy in a blue plaid shirt and glasses sat on the witness stand in a wood-paneled courtroom, explaining why he had to seek counseling after spending four days at Clemson University's Camp Bob Cooper in 2008. His family and another camper's family together won a $1 million verdict in a civil case against the federal program, Operation: Military Kids, Clemson and its Youth Learning Institute and Camp Bob Cooper.(link)

Jan 6, 2012: Xavier has backtracked on the mandatory reflection sessions for students who were at the Crosstown Shootout and invited the student body to a Jan. 10 discussion. The point of the session is to discuss what happened at the end of the Crosstown Shootout. The focus will be on students being representatives of Xavier, how fan behavior affects the game atmosphere and how to avoid similar situations in the future. (link) (background)

Jan 5, 2012: East Carolina University's director of student media has been fired, the university said today, nearly two months after the campus newspaper he advised published a photo of a streaker at an ECU football game. (link)

Jan 4, 2012: Despite the promise that digital textbooks can lead to huge cost savings for students, a new study at Daytona State College has found that many who tried e-textbooks saved only one dollar, compared with their counterparts who purchased traditional printed material. (link)

Other News & Events

Jan 30, 2012: President Obama chose a spiffy new indoor football field at the University of Michigan here on Friday to kick off a broad campaign for college affordability, calling higher education "an economic imperative that every family in America should be able to afford." (link)

Jan 3, 2012: A prominent Belfast loyalist has demanded that Boston College return interviews he gave as part of its oral history project on the Northern Ireland conflict. (link)

Jan 2, 2012: The University of Colorado is considering offering discounted health insurance premiums to employees who work out. Supporters say that providing incentives to employees to be healthy pays off because they are likely to have fewer health problems. (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 https://www.auburn.edu/administration/oacp.

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

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