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Mr. Mike Vandervort, Director Office of Internal Audits

New Academic Administrators W orkshop

August 2013

Internal Audit Committee (IAC) Members: Mr. Frank Maresh, External Member, Chair Mr. William Powers Jr., President Dr. Steven Leslie, Executive Vice President and Provost Mr. Kevin Hegarty, Vice President and Chief Financial Officer Ms. Patricia Ohlendorf, Vice President for Legal Affairs Dr. Juan Sanchez, Vice President for Research Dr. Gage Paine, Vice President for Student Affairs Dr. Patricia Clubb, Vice President for University Operations Dr. Charles Roeckle, Deputy to the President Ms. Mary Knight, Associate Vice President and Budget Director Mr. Cam Beasley, University Information Security Officer Mr. Paul Liebman, Director and Chief Compliance Officer, University Compliance Services Mr. William O’Hara, External Member Mr. Tom Carter, External Member Ms. Lynn Utter, External Member Mr. J. Michael Peppers, Chief Audit Executive, UT System Audit Office Mr. Michael Vandervort, Director, Office of Internal Audits

Internal Audit Department Staffing

Mr. Mike Vandervort, DirectorMr. Chris Taylor, Assistant DirectorMs. Angela McCarter, Assistant DirectorMr. Tod Maxwell, Sr. IT AuditorMr. Brandon Morales, IT Auditor Ms. Brenda Guerrero, Auditor III Ms. Ashley Foster, Auditor III Ms. Cameosha Jones, Auditor II Ms. Miranda Pruett, Auditor IMr. Derek Stuart, Auditor IMr. Cameron Fletcher, Student InternMr. Ryan Kothlow, Student Intern

Internal Audit Reporting Structure

• Reports to the president and meets with him monthly

• Meets quarterly with the Internal Audit Committee

High Risk Areas Audited in FY 2013

•  Research and Developm ent •  Financial M anagem ent •  Information Technology

Components of Internal Control

•  Separation of Duties •  Account Review and Reconcilia tion

Separation of Duties

Functions are divided so that NO ONE PERSON has contro l over all parts of a transaction :

In itia ting a transaction Approving it R ecord ing it in the offic ia l records R econciling

Acquiring custody of the goods, check, or cash

What happens if you can’t separate these duties?

A detailed supervisory review is needed.

Remember: Trust doesn’t matter. This protects the good employee.

Account Review/Reconciliation

•  Compare official transactions to departm enta l records

•  Unit/Department Head should certify all accounts w ith payroll activ ity

•  Unit/Department Head or designee should review each reconcilia tion

Top 5 Audit Findings

1. Inadequate segregation of duties

2. Inadequate or untimely review of monthly

financial reports

3. Inappropriate access/lack of security

4. Inadequate authorization of expenditures

5. Time records not appropriately authorized

Case Examples

Fake Invoices, Fake Payment Vouchers – stole over $800,000

Use of ProCard for personal benefit – 2 cases totaling almost $200,000

Cash Losses – over $400,000

Scholarships, Eligibility Falsified – $28,000

Office of Internal Audits

http://www.utexas.edu/admin/audit/

Main Line: 471-7117

Director: 471-0545

mike.vandervort@austin.utexas.edu

Questions?