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Internal Auditing

Case in Point:
Lessons for the pro-active manager

cMay 2013
Vol. 5 No. 5
''Action is the foundational key to all success.''

-- Pablo Picasso

Internal controls are a common topic each month in Case-in-Point. I would make the argument that internal controls have been around for just about as long as society. You can see elements of internal control being practiced in many ancient societies (e.g., tally sticks) and even see its use in some biblical texts (e.g., Book of Ezra).

Since 1992, the most common framework for discussing internal control has been what auditors and accountants call the ''COSO Model.'' According to their web site, ''The Committee of Sponsoring Organizations' (COSO) mission is to provide thought leadership through the development of comprehensive frameworks and guidance on enterprise risk management, internal control and fraud deterrence designed to improve organizational performance and governance and to reduce the extent of fraud in organizations.'' Earlier thcis month COSO released a revision to their internal control framework and if you are interested you can read about that at this link: www.coso.org.

While the COSO model is a useful tool, it is important not to lose sight of the fact that controls are really risk management tools we use to help ensure we achieve our objectives. Controls are really about each individual doing the right things, paying attention, evaluating risks, and making compliant decisions.

As you evaluate the most recent news articles in higher education, think about where internal controls might need some improvement in your area of influence. Ultimately, well-educated, pro-active employees are any institution's best internal control.

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

Information Security & Technology Events

May 28, 2013: Michael E. Mills, associate provost for enrollment at Northwestern University, created a fake classification system in an internal admissions database to put complaining parents and counselors in different categories. Someone who saw the database didn't find it humorous and sent screenshots out to a number of people, one of them the parent of a rejected applicant, who sent copies to Inside Higher Ed, and posted a copy on College Confidential (a website popular with applicants). (link)

May 24, 2013: Idaho State University is paying a $400,000 to the federal government to settle allegations it improperly exposed confidential medical records. (link)

May 13, 2013: Colleges and universities are being encouraged to scrutinize their systems to keep them from being hijacked in DDoS (distributed denial-of-service) attacks. The Research and Education Networking Information Sharing and Analysis Center (REN-ISAC) advised academic institutions this week to review their DNS (Domain Name System) and network configurations in order to prevent their systems from being abused to amplify DDoS attacks. (link)

May 7, 2013: The names, Social Security numbers and driver's license numbers of more than 12,000 online student applicants at York Technical College might have been exposed, school officials said Tuesday. (link)

May 3, 2013: The University of Rochester Medical Center has sent letters to a group of former orthopaedic patients, alerting them to the loss of protected health information. Earlier this week, URMC notified 537 patients that a resident physician misplaced a USB computer flash drive that carried protected health information. The flash drive was used to transport information used to study and continuously improve surgical results. The information was copied from other files and so its loss will not affect follow-up care for any patients. (link)

Apr. 29, 2013: University of Georgia officials thought they might have been under attack from hackers when the identities of thousands of employees and students went missing last fall. It turned out, however, to be the work of a single person, a former UGA student, who used a proxy server that disguised the Internet Protocol address of his computer. He later committed suicide. (link)

Fraud & Ethics Related Events

May 21, 2013: Northern Illinois University officials announced Monday that a longtime campus vice president who has been part of a federal law enforcement investigation plans to retire at the end of the month. He had returned to work Friday after a two-month leave of absence which began the day FBI agents executed a search warrant that indicated they were investigating whether he used campus law enforcement to respond to reported crimes at a low-income housing development he owns near the school, and to perform background checks on prospective renters. (link)

May 20, 2013: The FBI announced the filing of charges against three researchers who worked on improving MRI technology at a university in New York, New York, but who also had undisclosed affiliations with a Chinese company performing the same type of research. The research at the university was funded by a multi-million dollar federal grant from the National Institutes of Health. The defendants are each charged with one count of commercial bribery in connection with a conspiracy to receive payments from the Chinese company and a Chinese government-supported research institution in exchange for providing non-public information about research they conducted at the university. (link)

May 14, 2013: The University of Tennessee has fired the director of the Office of Student Judicial Affairs and hired a local lawyer to investigate whether she had improper relationships with student-athletes. (link)

May 14, 2013: Two schools -- University of Mary Hardin-Baylor and York College of Pennsylvania -- recently advised U.S. News that they submitted inflated data that were used in the 2013 Best Colleges rankings, resulting in their numerical ranks being higher than they otherwise might have been. In both cases, the same incorrect data were also reported to many other parties including the U.S. Department of Education. (link)

May 3, 2013: The president of St. John's University, Father Donald Harrington, will announce his retirement this afternoon. The news comes in the midst of an investigation into the conduct of both Harrington and his chief of staff, Rob Wile, after allegations of corruption and misuse of university finances. Wile will resign effective June 30, according to sources.(link)

May 2, 2013: A University of New Hampshire associate professor is being terminated for intentionally lowering the student evaluations of another faculty member. (link)

Compliance/Regulatory & Legal Events

May 28, 2013: Bethune-Cookman University failed to stop fraternity hazing which led to the death of a Marching Wildcat band member, according to a lawsuit filed in Volusia County. (link)

May 24, 2013: A longtime University of Alabama booster said today he is filing an ethics complaint against state public officials for purchasing Crimson Tide football tickets without paying extra as Tide Pride members. The Alabama Ethics Commission, without confirming or denying the complaint, says the issue is out of its hands. (link)

May 24, 2013: The University of Wisconsin-Green Bay will retain men's basketball coach Brian Wardle but made several stipulations following a six-week investigation into allegations of player mistreatment. (link)

May 23, 2013: After years of contention including accusations and countercharges of sexual harassment, the University of Minnesota Duluth has terminated wellness director Rod Raymond, according to statements from the university and Raymond's lawyer released Wednesday. (link)

May 23, 2013: The University of Wisconsin-Madison is seeking to limit the state's open records law — potentially through language slipped into the state budget — to keep from the public information about research until it is published or patented. No specific incidents of harmful disclosures were cited in language for a possible motion that is being passed among Republican lawmakers and was obtained by the Journal Sentinel. (link)

May 23, 2013: Idaho State University is paying a $400,000 to the federal government to settle allegations it improperly exposed confidential medical records. (link)

May 23, 2013: Students at Dartmouth College, Swarthmore College, the University of California at Berkeley, and the University of Southern California announced on Wednesday that they had filed complaints with the U.S. Department of Education over the institutions' alleged mishandling of sexual-misconduct cases. (link)

May 17, 2013: Elizabeth City State University Chancellor Willie Gilchrist announced his resignation Friday amid a state investigation into allegations of witness intimidation and obstruction of justice by campus police. City police had found that campus police failed to investigate more than 120 crime complaints, including 17 claims of sexual assaults, going back to at least 2007. (link)

May 17, 2013: A UCF instructor who was placed on administrative leave last month while the university investigated a comment he made to students about a "killing spree" has been cleared to teach again. (link)

May 16, 2013: Columbia University is seeking to alter the 1920 charter of one of its graduate school fellowships which is still limited "to persons of the Caucasian race," though the fellowship has not been granted in years. (link)

May 16, 2013: In one of the most severe penalties ever assessed to a university for violations of a federal campus-crime law, the U.S. Department of Education has fined Yale University $165,000 for failing to disclose four forcible sex offenses that occurred on its campus more than a decade ago. (link)

May 9, 2013: College students with disabilities across the United States are likely to benefit from a settlement signed this week by the University of California at Berkeley. The university will do more to make homework and research material accessible to students with visual and learning disabilities, an effort that may provide a model for disability rights advocates and university officials elsewhere. (link)

May 8, 2013: The University of California at Berkeley has reached a settlement with Disability Rights Advocates in what the group is calling a ''landmark agreement'' to improve access to textbooks, course readers, and library materials for students with print-related disabilities. (link)

May 7, 2013: For misclassifying crimes and underreporting disciplinary actions, the U.S. Department of Education has fined the University of Texas at Arlington $82,500, a penalty the institution is appealing. (link)

May 5, 2013: School officials have spent more than $280,000 on repairs and renovations at the Georgia Regents University president's home since 2010 without seeking approval from the state Board of Regents, according to documents obtained by The Augusta Chronicle. (link)

May 4, 2013: The Boston Marathon bombing has yielded its first change in US security policy, with the government ordering border agents to check the validity of visas for every international student entering the United States for study. (link)

May 1, 2013: Two former instructors last year attempted to rally the faculty at Young Harris College to stamp out hazing. Three weeks after they spoke up, they say, their contracts were terminated. Theresa Crapanzano and Joseph Terry, a visiting instructor and tenure-track instructor, respectively, in the communication studies department, said they lost their jobs because they spoke out about hazing at the private liberal arts college in the North Georgia mountains. They filed a lawsuit in March claiming the college violated Title IX of the Education Amendments of 1972 and state negligence laws. (link)

May 1, 2013: Today, the City University of New York (CUNY) agreed to settle a pregnancy discrimination complaint that the National Women's Law Center (NWLC) recently filed against it on behalf of 27-year-old CUNY student Stephanie Stewart and to uphold the legal rights of students who are pregnant or are already raising children. The settlement will protect the rights of tens of thousands of parents and pregnant students in this sprawling New York City college system. (link)

May 1, 2013: Two Kazakh men associated with the alleged Boston Marathon bombers went before a federal immigration judge this morning on allegations they violated their student visas. The men were detained for civil immigration violations after authorities questioned them about their possible connection to Tamerlan and Dzhokhar Tsarnaev, who allegedly detonated two bombs at the Boston Marathon last month, killing three people and injuring more than 200. The brothers also allegedly murdered MIT Police Officer Sean Collier. (link)

Campus Life & Safety Events

May 27, 2013: A Detroit-area university is defending the suspension of a 57-year-old student, saying his lustful writings about a teacher violated the school's policy against harassment and don't deserve First Amendment protection. (link)

May 25, 2013: Some faculty members are calling for major changes within Marshall University's athletic department, starting with a budget they say is too heavily supported by university dollars. (link)

May 25, 2013: A two-year study by the University System of Georgia shows classrooms are empty during most of the week. Of the 440 classrooms at the University of Georgia, the average is used just 18.5 hours per 40-hour work week, and when used, just two-thirds of the seats are full, according to the study. That is a 31 percent utilization rate. (link)

May 23, 2013: The state health department has officially declared a meningitis outbreak at Princeton University after the fourth case of the disease since March was linked to the school. (link)

May 23, 2013: After reading a post this week about safety concerns on a charter flight taken by Stanford University's softball team, the NCAA's executive vice president for championships and alliances, Mark Lewis, took it upon himself to look into the matter, and he was disturbed by what he found—but not because of the airplane's safety record. (link)

May 22, 2013: Four men pleaded guilty Tuesday to charges stemming from a 2011 hazing incident involving a Jacksonville State University fraternity. (link)

May 21, 2013: A Stony Brook University student has been charged with criminal possession of a controlled substance and other crimes after university police responding to a fire alarm discovered drugs, paraphernalia and cash in her room, according to a press release from the Suffolk County district attorney's office. (link)

May 20, 2013: Betsy Palmer, an associate professor of education at Montana State University, passed away Monday as a result of injuries sustained in a landslide while traveling in Nepal, university officials announced Monday. Palmer was in Nepal leading a group of 16 students on a course offered through the University Honors Program at MSU. None of the students were injured in the landslide. The university is working with the U.S. Embassy, Senator Max Baucus' office and emergency transport services in Nepal to expedite the students' return to the United States. (link)

May 19, 2013: The Boston Marathon bombings last month hit the home of some of the world's greatest universities. As the terror and violence played out in America's education and research hub, each twist and turn seemed to touch on the very campuses that draw the best and brightest from across the globe. (link)

May 21, 2013: A college student in suburban Atlanta, 19-year-old Aftab Aslam, is accused of faking his own kidnapping so he could avoid telling his parents he was failing a class.(link)

May 17, 2013: Some of 40 chaperones and students visiting Penn State's main campus say they came home with bedbug bites. The school says bedbugs were reported in the Curtin Hall dormitory. Three rooms were treated, and all of the residence hall's rooms are being checked. (link)

May 9, 2013: Students at Cal State San Marcos, joined by a few staff and faculty, staged a sit-in outside the university president's off Thursday. The protesters are unhappy about the university's response to sorority members who posed as ‘cholas' or Latina gang members in photos, then posted those photos on social media during a sorority retreat. (link)

May 13, 2013: For Kelsey Hough, a tiny peanut is a big problem. So big, in fact, that the 26-year-old student says her life-threatening peanut allergy forced her to abandon her college program. (link)

May 7, 2013: The publicizing of a fraternity's private Facebook group that students are calling sexist and vulgar has caused an uproar at Willamette University, sparking an official investigation, a protest and vandalism on Monday. (link)

May 6, 2013: Occidental College faculty on Monday passed a vote of "no confidence" in two high-level administrators based on their handling of sexual assaults on campus. (link)

May 6, 2013: Ninos Danny Jando, a Chicago-area podiatrist, has pleaded guilty as charged to secretly videotaping Muskegon Community College wrestlers while they showered at the college. (link)

May 3, 2013: A University at Buffalo student has been arrested after authorities say he dropped the butane torch he was using to smoke marijuana and started a dorm room on fire. (link)

May 2, 2013: A successful football season causes a 17.7 percent boost in applications to an institution, but the increase is more apparent among lower-achieving students (as mesured by SAT scores), according to a new paper published in the journal Marketing Science. (link)

May 1, 2013: Students at the University of New Mexico are furious that, once again, the regents ignored their formal and solicited recommendation to not increase the fee that students pay to support athletics. (link)

May 1, 2013: As civil unrest swept Egypt in early 2011, officials at the University of Minnesota believed they had plucked all their students from the country -- until a call came in to Stacey Tsantir, the university's director of international health, safety and compliance. (link)

May 1, 2013: Fresno State is one of dozens of colleges tightening the rules on the diagnosis of A.D.H.D. and the subsequent prescription of amphetamine-based medications like Vyvanse and Adderall. Some schools are reconsidering how their student health offices handle A.D.H.D., and even if they should at all. (link)

May 1, 2013: By the time student newspaper editors learned that a student had died in a fire just off the Boston University campus over the weekend, they knew the drill. Over the next few days, they confirmed the student's name with officials, confirmed what had happened with campus police and started talking to the victim's friends to compile an obituary. (link)

Apr. 30, 2013: A small party for about 100 seniors at Livingstone College got out of control this weekend. Salisbury police were called to the college early Sunday morning. Campus police called for backup from Salisbury Police. More than a dozen officers arrived to find between 200 and 300 people on campus. A police report said about 100 students were "fighting and it was spreading throughout the whole campus and becoming a riot." (link)

Other News & Events

May 27, 2013: Rutgers President Robert Barchi released a statement today backing the university's new athletic director as she faces allegations she verbally and mentally abused players while she was a volleyball coach in the 1990s. (link)

May 9, 2013: Only 15 percent of this year's crop of college graduates expect to earn less than $25,000, but 32 percent of grads from the previous two years are earning those modest salaries. Nearly two-thirds expect to find jobs in their field of study, yet in reality only about half of recent college grads succeeded in doing this. (link)

May 7, 2013: Preliminary results from the latest NCAA study of college student-athlete gambling behaviors and attitudes reflect hopeful news in overall rates of gambling within the student-athlete population but raise concerns in the ever-changing technology that influences gambling behaviors among young people. (link)

May 7, 2013: Community colleges' academic expectations are "shockingly low," but students still struggle to meet them, in part because high-school graduation standards are too lax in English and too rigid in mathematics, according to a study released on Tuesday by the National Center on Education and the Economy. (link)

May 5, 2013: A change in federal education loan policies has left many students at some of the nation's historically black colleges and universities struggling to fill a gap in their financial aid and forcing hundreds to leave school. A more rigorous system of credit checks has denied certain loans to parents to help with their children's undergraduate expenses. The loans are available to all students at all schools. But the changes have had a particularly severe impact on thousands of students at historically black colleges, advocates for those schools say. (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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