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August 2014

OFFICE OF INTERNAL AUDITS

Mike Vandervort, DirectorJeff D. Treichel, Associate Director

New Academic Administrators Workshop

Internal Audit Committee (IAC) Members: Mr. William O’Hara, External Member, Chair Mr. William Powers, Jr., President Dr. Gregory Fenves, 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 Mr. Cam Beasley, University Information Security Officer Mr. Paul Liebman, Director and Chief Compliance Officer, University Compliance Services Mr. Tom Carter, External Member Ms. Lynn Utter, External Member Vacancy, External Member Mr. J. Michael Peppers, Chief Audit Executive, UT System Audit Office Mr. Michael Vandervort, Director, Office of Internal Audits

Office of Internal Audits StaffingMr. Mike Vandervort, DirectorMr. Jeff D. Treichel, Associate DirectorMr. Chris Taylor, Assistant DirectorMs. Angela McCarter, Assistant DirectorMs. Isabel Sweat, Auditor IV (part-time)Mr. Tod Maxwell, Sr. IT AuditorMr. Brandon Morales, IT AuditorMs. Amber Whelpley, IT Auditor Ms. Brenda Guerrero, Auditor III Ms. Ashley Foster, Auditor III Ms. Cameosha Jones, Auditor IIIMs. Cynthia Martin-Hajmasy, Auditor IIIMs. Miranda Pruett, Auditor IIMs. Stephanie Grayson, Auditor IMs. Victoria Hernandez, 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

Director: 471-0545

mike.vandervort@austin.utexas.edu

Office of Internal Auditshttp://www.utexas.edu/admin/audit/Main Line: 471-7117

Questions?