The University of New Mexicoiaudit/2012 pdfs/Open Session EBook 081811.pdf · Internal Audit’s report. They are looking into the governance as well. It is both a performance (looking

The University of New Mexico Board of Regents’ Audit Committee

August 18, 2011 – 8:30 AM Roberts Room

Agenda

ACTION ITEMS

1. Approval of Meeting Minutes from June 16, 2011

INFORMATION ITEMS

2. Information on UNM Regents Travel Policy 7.7 (Lee Peifer, University Counsel)

3. Director of Internal Audit Status Report (Manu Patel, Internal Audit Director)

4. Status of Audit Recommendations as of August 12, 2011 (Manu Patel, Internal Audit Director)

Past Due

Cleared

Not Past Due

EXECUTIVE SESSION

5. Vote to close the meeting and to proceed in Executive Session as follows:

a. Discussion of Final Internal Audit Reports, pursuant to limited personnel matters exception

at Section 10-15-1.H(2) NMSA (1978) and exception for matters subject to attorney-client

privilege pertaining to threatened or pending litigation at Section 10-15-1.H(7), NMSA

(1978) (Lee Peifer, Interim University Counsel)

b. Schedule of Audits in Process, pursuant to exceptions at Sections 10-15-1H(2 and 7),

NMSA (1978) (Manu Patel, Internal Audit Director)

c. Vote to re-open the meeting

6. Certification that only those matters described in Agenda item 4 were discussed in Executive

Session and if necessary ratification of action, if any, taken in Executive Session.

7. Adjournment

THE UNIVERSITY OF NEW MEXICO

Board of Regents Audit Committee

June 16, 2011 –Meeting Minutes

Members Present: Chairman J.E. “Gene” Gallegos, Regent Lt. Gen. Bradley Hosmer, Regent James Koch

(Quorum).

Other Attendees: Ava Lovell, Gilbert Gonzales, Helen Gonzales, Ellen Wenzel, Ella Watt, Brandon Fryar

(Moss-Adams), Wayne Brown (Moss-Adams), Adam Cavin (Moss Adams), Cynthia

Reinhart (KPMG), John Kennedy (KPMG), Suzette Longfellow (KPMG), Greg Monk

(KPMG), Jaime Clark (KPMG), Halie Garcia (REDW), Richard Holder, Susan

McKinsey, Duane Arruti, Mary Clark, Charles Sallee (LFC),Pamela Galbraith (LFC),

Olivier Uytterbrouck (Albuquerque Journal), Liz Metzger, Carol Stephens, Bruce

Cherrin, Chris Vallejos, Lisa Marbury, Richard Wood, Katie Richardson (GPSA), Manu

Patel, Lisa Wauneka, Lola Neudecker, Betsye Ackerman, William Cottrell, Amy

O’Donnell.

Chairman Gallegos called the meeting to order at 8:32 a.m. in ROBERTS ROOM, Scholes Hall, UNM; All

three Committee members present (quorum).

ACTION ITEMS:

The Committee approved the Minutes of the Regents’ Special Audit Committee Meeting from April

11, 2011 and Quarterly Meeting April 14, 2011 (Motion: Koch, Second: Hosmer). The Committee

unanimously adopted the minutes.

The Committee approved dates for the FY12 Audit Committee meetings. The dates are: August 18,

2011, October 20, 2011, February 16, 2011, and April 19, 2011.

Moss Adams, KPMG and Ava Lovell, Vice President for Finance and University Controller,

presented Entrance Conference materials for the FY11 external audit. Per Ms. Lovell, UNM

completed the RFP process for the external audit. UNM accepted a proposal for a 3 year contract

from Moss Adams in conjunction with KPMG. Although the proposal is for 3 years, per the State

Audit Rule, you can accept a 3 year proposal and then do a 3 way contract that includes the State

Auditor, the external auditor, and UNM. Each year you can go back out to bid or accept the second

year or third year of the proposal. After one more year, Moss Adams will rotate off of the Main

Campus audit and KPMG rotates on. Moss Adams will handle the component units in the second and

third years.

Chairman Gallegos noted that the information gathered in the special procedure performed

previously at the request of faculty will now be included as part of the official presentation in the

yearly external audit.

Moss Adams is responsible for the financial statement audits of the University and covers Main

Campus, Branches, Health Sciences Center, Hospitals and other clinical operations and the UNM

Foundation. The UNM Hospital and other clinical operations include a separate audit report. Moss

Adams also performs the Federal Single Compliance Audit at the government-wide level, consistent

with previous years. KPMG is covering the UNM Medical Group and other component units.

Moss Adams detailed their professional requirements: governmental auditing standards issued by the

Comptroller General of the United States, OMB Circular A-133, and the New Mexico State Auditor

Rule. Communication throughout the audit process will include pre- and post-audit communication

directly to the Audit Committee, meetings with the Controller’s office, planned scope and timing and

notification of any significant issues and findings. Moss Adams will form and express an opinion on

UNM Management’s financial statements to obtain reasonable assurance the statements are free

from material misstatement. The audit does not relieve UNM Management from their responsibilities

Summary of the Regent’s Audit Committee

June 16, 2011

nor does it express an opinion on the effectiveness of internal controls over financial reporting. It is a

risk-based approach. Brandon Fryar, Partner, Moss Adams, LLC, noted that the more familiar an

audit firm or auditors are with the entity being audited the easier it is for that agency to identify risk.

They are more familiar with where the risk lies in an organization, and can tailor their work towards

those risks. The scope of the audit includes 3 phases – testing on proper design and implementation

of controls, compliance with Federal grant requirements, and final audit testing and reporting of June

30, 2011 balances and financial statement disclosures. Moss Adams will look at cash receipts,

payroll expenditures and non-payroll expenditures, grants and other funding. They include IT

specialists for IT testing according to the risks identified by Moss Adams. For the Hospital, they will

look at patient revenue cycle, estimated third party payor settlements (Medicare, Medicaid, etc.),

payroll, general expenditures, IT and other items. Other areas of focus include valuation of patient

receivables, other post-employment benefits, bonds, loan covenants, etc. For the government-wide

audit, testing will include compliance, alternative investments, accounts receivable and patient

revenues. Final testing will conclude at the end of September. UNM will receive draft reports mid-

September and the audit reports will deliver to the State Auditor mid-to-late October. It is due to the

State Auditor on November 15th, but Moss Adams is always early. Ms. Lovell pointed out if it is

submitted too close to the deadline it really delays the review process. The State Auditor will have a

draft prior to that and they may suggest changes.

KPMG will also provide UNM with draft reports mid-September on the following units: UNM

Medical Group, Anderson Schools, Alumni Association, Lobo Club, Lobo Development, Lobo

Energy, STC, KUNM and KNME. For the Medical Group, the key areas of focus include in part:

revenue recognition, contributions, SCI income from the State, transactions with UNM,

uncompensated care/uncollectible patient receivables, operating expenses, shared physicians

services, medical malpractice, and financial reporting. Ares of focus for other component units

include contributions, royalties and other revenue sources, expenditures, transactions with UNM and

financial reporting. The timing allows for the component unit financial statements to fold into the

government-wide financial statements.

Chairman Gallegos asked if the ACC payments flow through Lobo Development. The answer to that

question is yes. Regent Koch stated he wants to discuss the scope of the audit related to the UNM

Foundation. Chairman Gallegos asked Moss Adams how they test the investments. Moss Adams

responded they have a group specializing in banking audits as well as a group in Seattle specializing

in investments that will review consultants’ reports, internal controls, and valuation testing.

According to the Chairman, approximately 40% of investments are questionable value, high-

expense, non-liquid funds. This includes hedge funds, real assets and private equities. Regent Koch

asked about I&G funds to the Foundation. For FY 11, the Foundation received I&G funds. For FY12

the funds come from the auxiliary balance, not directly from I&G. All the expenses and revenue will

be audited, including basis points. Moss Adams agreed to go into more detail/drill deeper into this

issue. Regent Koch stated he is concerned about liquidity for Regents’ endowments, especially as

relates to scholarships. Regent Hosmer asked if the auditors can review the terms of land sales and

the Regents’ intent. Are there conditions the Foundation is obliged to honor? What do the private

donors feel the stewardship of the donated funds entails? Ms. Lovell stated she would pull all the

information together for Mesa del Sol and Winrock and provide it to the auditors.

Regent Koch asked Andrew Cullen, Associate Vice President for Budget, about money transfers

between Health Sciences Center and Main Campus. Mr. Cullen noted that is under the direction of

the Audit Department working with Paul Roth, Chancellor for Health Sciences. Ms. Lovell stated

that is all under one column for the auditors. Regent Hosmer asked how intellectual property is dealt

with under the STC audit. Cynthia Reinhart of KPMG stated they will look at the agreement between

parties, terms, payment up front, royalties, and whether the amounts agree with what is recorded in

the financial statements. There are current issues with patent infringement, so Chairman Gallegos


June 16, 2011

noted this is a big issue. Regardless of size, any material findings or anything that constitutes fraud

will be reported to UNM in writing.

Charles Sallee, Deputy Director for Program Evaluation for NMLFC, presented information on the

Health Sciences Center program evaluation. Last year, the LFC excluded the Health Sciences Center

from the scope of the UNM evaluation to come back to at a later date. This is that evaluation. Pam

Galbraith, Program Evaluator, LFC, reviewed the objectives and the high level planning memo. The

process started back in February with an engagement letter to (at that time) Regent President

Sanchez. The entrance conference included HSC, UNM and Hospital administrative staff. The

evaluation plan includes looking at HSC funding, the State’s role in financing, and assessment of

program value for programs receiving state funding within the I&G appropriation to see if there is

room for improvement. They have nearly completed fieldwork. They anticipate evaluation

presentation to the LFC in August. Prior to that, UNM will have the draft report in hand for response.

An exit conference will occur during that time. They are open to providing updates just like they did

with the project last year. Staff will receive an outline of a draft report. Ms. Galbraith stated UNM

will receive the draft in early August and will have 7 days to respond. On the issue of how money

flows into the Health Sciences Center and specifically transfers from the Main Campus, they are

finishing up with field work in this area and they are waiting on a report from Manu Patel, Director

of Internal Audit. Mr. Sallee reported that in an effort to avoid duplicate work, they are waiting for

Internal Audit’s report. They are looking into the governance as well. It is both a performance

(looking at benchmarks, etc.), and financial audit. Chairman Gallegos noted this process is moving

along pretty fast to have a report this summer.

Carol Stephens, Director, UNM Policy Office, filled the Committee in on updates related to follow-

up issues. The first item relates to the LFC evaluation and what is being done to implement

improvements. Last November, UNM developed 20 implementation plans to address

recommendations from the LFC. These plans include dates for implementation. Areas of progress,

discrepancies with the recommendations, as well as State funding issues that have an impact are

noted. In instances where they were able to close a recommendation, backup documentation was

requested and included. For example, Ms. Stephens spoke about research goals, objectives, and

metrics, as well as graduation rates. She provided the Committee with reports detailing the

information gathered thus far. The LFC received a report as well.

The Committee discussed Regents’ Policy 7.7 Travel Reimbursement and Per Diem and Business

Policy 4030. Lee Peifer, University Counsel, briefly provided historical and legal background

information. Mr. Peifer noted NMSU believes the Regents’ constitutional autonomy precludes the

legislature from imposing per diem rates. Regents’ Policy 7.7 appears to reflect that same line of

thinking. Policy 4030 addresses per diem in two places. Section 10-8-4B allows the Regents to

increase the rates, but they have not done so. The Chairman stated he believes we should respect

State law. Per Mr. Peifer, historically, 80% of travel was on Federal funds, so the University would

lose out on monies by paying at the State rate. Regent Koch stated he would like to know what the

discussion was in the Regents’ meeting in 2003 in reference to adopting Policy 7.7. Ms. Lovell stated

80% of travel is done under Contracts and Grants and so the University administers the policy the

same regardless of the fund for the travel. There are many components – mileage, lodging, etc. The

amount of meals for I&G travel is very low. Chairman Gallegos stated the dollar amount does not

matter; we should respect the law.

Ms. Lovell noted there are other funds as well as Federal funds and State appropriations. These

include funds from a contract with IBM or Presbyterian Hospital for field work, etc. The Chairman

stated he does not know that those are not public funds - whether it comes from a State appropriation

or not. He does not know what the number of excess payment was, but if it is only $100 or a great

deal more, the point is there are implications. Mr. Peifer stated he respectfully disagrees and he


June 16, 2011

believes it is not apparent that the policy is unlawful on its face. The law gave the Regents authority

in a public meeting to conclude there are extraordinary circumstances to justify resorting to actual

expenses rather than State per diem rates and evidently there were extraordinary circumstances.

According to the Chairman, the only extraordinary circumstance is that the State rate is lower than

the Federal rate. Faculty Senate President Wood stated approximately 85% of University travel is

done by faculty related to grants, etc. He continued to say that if we are violating State law we need

to change course, but he urges conversation with faculty before proceeding. If we accept this, we

accept the legislature determining down to line item budgets. Regent Koch said that the Legislature

appropriates money to the University. They have the power of the budget and we should not be

fighting with them. They could deduct the amount from appropriated funds. Regent Hosmer stated

that perhaps it is not unlawful but may be imprudent. The imprudence lies in the cavalier

construction of extraordinary circumstances. It may be that the way to rectify it is to formally review

the policy and ask for a reasonable explanation of extraordinary circumstance that does not flaunt the

authority of State law, but rather makes use of it. Chairman Gallegos stated extraordinary

circumstances should be on a case-by-case basis. He believes we are bound by the law on how to use

travel funds, and there is a penalty provision. We should not expose people to that.

Chairman Gallegos also questioned the personal use of frequent flyer miles. Ms. Lovell noted 99%

of airfare is paid by the University. In the few circumstances people pay for their travel with a

personal credit card, it is not possible to track the miles. Discussion detailed that those miles are not

transferable; they stay with the person. Per Regent Hosmer, the Department of Defense went through

the same issue in the 1990s and concluded retrieving any possible frequent flyer benefits is virtually

impossible. Chairman Gallegos stated perhaps we should not allow flight purchase with personal

credit card. Dr. Wood stated that would be catastrophic because sometimes it needs to happen

quickly. Ms. O’Donnell from Internal Audit stated that also, in some instances, departments may not

have PCard access for various reasons and they may not have a choice. According to Chairman

Gallegos, Policy 4030 basically adopts the Federal rate, so that policy needs some work. Regent

Koch again stated we should honor and respect the legislation.

Chairman Gallegos asked for a motion to the Full Board that says the Committee recommends

amendment to Regents’ Policy 7.7 to state that the University shall follow the State Mileage and Per

Diem Act. Regent Koch made the motion and Regent Homser seconded the motion. Regent Hosmer

added perhaps they should consider providing a mechanism for case-by-case exception to allow for

justifiable circumstances. Chairman Gallegos stated he feels that is exactly what Section 5E of the

Act contemplates; that there will be instances that are extraordinary circumstances and that they can

work on the wording that says that when amending 7.7. Regent Hosmer made an amended motion to

include the provision (in lieu of the current wording) of a process for case-by-case consideration.

Regent Koch seconded. All committee members stated unanimous approval.

Ms. Lovell stated for one index as a sample that was the highest I&G in-state spending, the food total

was $4,590. According to the Federal website, allowances for meals and incidentals are different

depending on the area, i.e. Santa Fe is $71 per day; other area allowances are less so the numbers

vary. Ms. Stephens and Regent Koch noted policy can be changed by Regent vote. Ms. Lovell said,

however, the University would need a period of time to administrate any changes. Dr. Wood noted

this shifts the burden of doing University business on to the employees and creates a disincentive for

people to travel. Chairman Gallegos stated the Legislature might need to change the rates, but that’s

where it should happen.

The Committee discussed items from previous meetings for follow-up. Ms. Stephens updated

signature authority information. The policy is out for campus comment. There have not been major

concerns and it should take effect as soon as it is signed by David Harris, Executive Vice President

for Administration and President Schmidly. Contract management and monitoring policy is written

and is out for campus comment. There is some comment on the clinical and research side.


June 16, 2011

Anticipated effective date is July 1, 2011. The contracts database software has been identified and

they are in purchase negotiations. All contracts will be housed in one area under contract

management by Bruce Cherrin, Chief Procurement Officer. It will take some time to implement a

new system. A repository will start July 1, 2011. Software implementation will begin immediately,

and should be complete within a year. Chairman Gallegos stated this is an excellent, huge

accomplishment. Ms. Stephens commended the team she has worked with for doing such a good job.

Sub-delegations are in the midst of review. EVPs are the key administrators who delegate signature

authority. There is a transition in the Provost’s office. They would like the interim Provost an

opportunity to review them. They also want them to align nicely with the new software program.

With Regent endorsement, they would like an extension on the deadline on this item. It should be

complete by the next Audit Committee meeting. The Committee agreed.

Ms. Lovell addressed the Committee regarding out-of-cycle payroll and EDC processes. A great deal

of work has been accomplished. Richard Holder, Deputy Provost, stated they are on target with

addressing recommendations. The processes are being streamlined and are becoming much more

uniform. Beginning July 1, 2011, there will be one out-of-cycle payroll per type – one for biweekly,

one for monthly. There will be an extra 1 or 2 during the late August, early September hiring for

faculty and graduate students. Regent Hosmer asked if the process had any unexpected gains.

Opportunities for systems improvement have indeed come to light. Dr. Holder stated it has been an

extremely valuable exercise. Regent Hosmer added the University should document the gains.

Helen Gonzales, Vice President, Human Resources, stated she will make a presentation at the next

meeting regarding FTEs. The presentation will focus on numbers of employees above a certain grade

level. They are currently studying the data as an analysis over time. They now have four years worth

of data.

Mr. Patel updated the information on outstanding audit recommendations. There are only a few items

that are past due. Ms. Lovell showed an overview of the Standard Accounting and Reporting Manual

that is now complete. Everything will now be housed in one place on the website and includes video

tutorials. This will be constantly updated. The branch campuses will be able to follow it as well, as

they have the same procedures and same access to the materials on line. The roll out is expected at

the end of September.

Dr. Wood reported to the Committee on status of faculty disciplinary policy. The faculty developed

and approved (up through Faculty Senate level) a policy. Academic Student Affairs voted to table it

for now in order to consult with department chairs. If changes are substantial, it must go through the

Faculty Senate again.

Mr. Patel presented the Committee with the Director’s Report for the Internal Audit Department.

This includes the financial statements. There will be a fund balance - subject to harvest by the budget

office - from the salary budget due to understaffed positions.

Dr. Wood addressed the Committee with some final comments as outgoing Faculty Senate President.

His term expires at the end of the month. He stated he feels it has been a constructive year as well as

a productive relationship and thanked all those involved. He recognized the importance of what the

Committee is doing and urged a sense of balance in the midst of the zeal to follow rules that it is

balanced with careful judgment and does not get in the way of the University’s mission. The function

of the Provost’s office is critical. An audit of that office could either help successful transition or

create chaos. This is where the faculty lives and breathes. The faculty also sent a letter to the Regents

to ask for an outside look at the hiring process as relates to the hiring of the Internal Audit director

position and they hope to address this issue at the full Board meeting. Chairman Gallegos stated he

also feels the relationship has been positive and wants to know why the position is only a one year


June 16, 2011

term. Dr. Wood stated the Faculty Senate President takes up a large amount of time and takes away

from research and research writing. It should not take a year to develop new policy, and we should

also look at many areas of how the governance is structured at the University. There is also a severe

lack of staff to ask for assistance.

The Committee reviewed a presentation from Ms. Lovell and Duane Arruti, Director, Information

Technology Services, on the proposed Kronos electronic time reporting system. Due to the cost-

prohibitive nature of the original quote, UNM restructured the proposal utilizing a phased-in

implementation approach, and therefore received a quote with less up-front costs. The original quote

was for complete institutional implementation with about 11,500 staff members. UNM provided

Kronos with revised numbers for a phased implementation. Kronos submitted a quote maintaining

the rate and allowing for a smaller first phase (about 3400 employees) as long as the vendor gets

commitment for full implementation over time. Several departments are using the system already

and a number of departments have expressed interest. The Committee moved (Motion: Regent

Hosmer, Second: Regent Koch) to recommend to the full Board of Regents purchase of the Kronos

system with up-front costs of $1,026,000 as per the new agreement. Regent Koch noted departments

will need to come up with the funds, but it will save the University money in the long run. He stated

the University could communicate that it is mandatory and reward departments that move quickly,

charging more for each year departments postpone implementation. The Committee moved (Motion:

Regent Koch, Second: Regent Hosmer) that the implementation plan be mandatory for hourly

employees by the end of 2014, with financial incentives to departments for early implementation.

The meeting went into Executive Session for the reasons stated in the agenda. (Motion to close: Regent

Koch, Second: Regent Hosmer).

a. Discussion of limited personnel matters pursuant to exception for matters subject to attorney-

client privilege pertaining to threatened or pending litigation at Section 10-15-1.H(7), NMSA

(1978) (Manu Patel, Internal Audit Director)

b. Discussion of Final Internal Audit Reports, pursuant to limited personnel matters exception at

Section 10-15-1.H(2) NMSA (1978) and exception for matters subject to attorney-client

privilege pertaining to threatened or pending litigation at Section 10-15-1.H(7), NMSA (1978) (Lee Peifer, Interim University Counsel)

c. Schedule of Audits in Process, pursuant to exceptions at Sections 10-15-1H(2 and 7), NMSA

(1978) (Manu Patel, Internal Audit Director)

d. Vote to re-open the meeting

The meeting returned to open session (Motion: Regent Hosmer, Second: Regent Koch). Certification that

only those matters described above were discussed in Executive Session.

The Committee approved by unanimous consent two University of New Mexico Hospital audits:

UNMH Controlled Substances dated January 2011, and OptumHealth – Requested Procedures also

dated January 2011.

The Committee approved by unanimous consent the following audits for publication: 2011-06,

Gallup Branch Audit of Business Processes and 2011-02, Department of Intercollegiate Athletics

Men’s Basketball Audit of Undeposited Cash.

There being no further business, the meeting was adjourned to go into closed session with the Internal Audit

Director at 1:00 p.m. (Motion: Regent Koch, Second: Chairman Gallegos).


June 16, 2011

Approved:

____________________________

Audit Committee Chairman

INFORMATION

TO

BE

SUPPLIED

AT

MEETING

Internal Audit Director’s Status Report

1st Quarter FY12

August 18, 2011

1

ACTION ITEMS

External Financial Audit for Fiscal Year (FY) Ended 2011. Moss Adams, KPMG, and

Vice President Ava Lovell presented Entrance Conference Materials for the FY11 external audit

at the last meeting. Since then, contract auditors have completed interim work procedures and

are scheduled to be onsite during the latter part of the August through the middle of October to

complete work on the FY11 financial statements. The contract auditors will present the external

financial audit report in Executive Session at the October meeting.

Proposed FY12 Audit Work Plan. The Internal Audit Department is drafting the FY12 audit

work plan. The five-year plan includes input gained from University administration through: a

questionnaire; materiality thresholds; the Association of College and University Auditors risk

dictionary and hot topics; Regents’ request; required audits; time since last audit; and, auditor

judgment. Priorities are based on the rankings resulting from the risk assessment. The annual

audit plan is based on the number of working hours in a year, adjusted for estimated leave and

holidays, administrative duties, and other duties as assigned. The proposed FY12 audit plan has

approximately 400 audit hours exceeding available working hours. Internal Audit will present

the FY12 proposed audit plan in Executive Session and incorporate any changes proposed by the

Committee. Once the Committee approves the plan, we will present any future changes to the

Committee for approval to manage available working hours. The FY12 proposed audit plan

includes:

Current Audits and Investigations

New Audits proposed for FY12

INFORMATION ITEMS

Audit Committee Meeting Calendar for Fiscal Year 2012. The following are remaining

approved meeting dates for the Audit Committee during FY12.

October 20, 2011

February 16, 2012

April 19, 2012

FY 2011 Audit Plan Status. The FY 2011 audit plan consisted of 19 audits, including those

carried over from FY10, and audits added as a result of concerns brought to Internal Audit. The

budget to actual report for the audit plan is at Tab #5B. The status of the plan as of June 30,

2011:

Planning 4

Waiting Responses 1

Completed 4

Subtotal 9

Unassigned/Delayed 10

Total 19


1st Quarter FY12

August 18, 2011

2

Complaints. During FY 2011, the department received 63 reports of misconduct or fraud. For

FY 2012, since July 1, 2011, the department received 9 reports of misconduct or fraud; the

department has 37 open complaints.

FY 2011

Re-opened from 2008 2

Carry Forward from FY10 16

New Complaints in FY11 64

Total Complaints FY 2011 82

Closed Complaints FY11 53

Total Open Complaints 29

FY 2012



New Complaints in FY12 9

Total Complaints FY 2011 38

Closed Complaints FY12 1

Total Open Complaints 37

Following is the status of FY 2012 open complaints:

Pending in Internal Audit 24

Referred to Human Resources 4

Referred to HSC Compliance Officer 1

Referred to the Provost 5

Referred to the UNM Police 1

Referred to the President 1

Referred to HSC Clinical Affairs 1

Total 37

Attached are two graphs that summarize the number of complaints for FY11 and FY12 by major

organization within the University.

Information Technology Security. Gilbert Gonzales, Chief Information Officer, will present

an update on the status of information technology security in Executive Session.

University of New Mexico Hospital. UNMH will present one or two audit reports at the

October meeting. There are no Hospital reports at this meeting.

Department Financial Report. At Tab #3 is the Internal Audit Department’s budget status

report for your review. The FY11 actual expenditures for the Department were $602,480.13

which left approximately $82,000 in unexpended funds resulting from vacancy savings. Internal


1st Quarter FY12

August 18, 2011

3

Audit is researching implementation of Electronic Work Paper software for Risk Assessment,

Audit Planning, and Audit Management to improve department efficiency. With the Audit

Committee’s approval, the unexpended balance will be designated (reserved) for the Electronic

Work Paper project (purchase and maintenance). Current approved budget for FY12 is

$759,371.00.

Audit Vacancies. The Department has two vacancies, Internal Audit Manager and Auditor 3.

The Audit Manager position is posted in UNMJobs and the hiring process is underway. As of

August 12, 2011, we have received 14 applications through UNMJobs. A committee of five will

review all applications, interview five to six applicants, and may recommend two to three

candidates for the final interview. We are hoping to complete the hiring process for the Audit

Manager by the end of August.

Internal Audit Department

Summary of Complaints Worked on by Fiscal Year

As of 08/12/2011

For FY 2012 as of July 10, 2011, 9 complaints have been received, and 29 complaints have been carried forward

from previous years.

0102030405060708090

26 18

12

26

82

Number of Complaints FY 2011

Number of Complaints

05

10152025303540

13 9

3

13

38

Number of Complaints FY 2012

Number of Complaints


Audit and Complaint Status

As of August 12, 2011

Audit and Recommendation Status FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Total

Number of Audits Completed 13 11 10 12 18 7 11 4 0 86

Audit Recommendations - Implemented/Closed 54 77 96 107 135 91 75 27 662

Audit Recommendations - Not Past Due/Open 2 42 44

Audit Recommendations - Past Due/Open 3 4 7

Total Number of Audit Recommendations 54 77 96 107 135 91 80 73 0 713

Complaints/Misconduct Reporting Status FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 Total

Closed Complaints 29 56 64 54 74 87 41 40 1 446

Pending Complaint 15 8 23

Referred Complaints 5 9 14

Number of Reported Complaints 29 56 64 54 74 87 46 64 9 483


Status of Audit Recommendations - Past Due Findings


Report Name Audit

Comm.

Apprv.

Finding Recommendation No. and Description Response - Responsible Party Response-Corrective Action Response -

Implement. Date

Followup Status

(Open/ Complete)

Verified Date

10/23/2009 ACCOUNTING BUSINESS PROCESSES 1 Develop standardized accounting (business)

models for the departments and colleges.

Ava Lovell, VP for Finance and

University Controller

concur - Will provide a Standard Accounting and

Reporting Manual.

12/2010 open - partially

completed -

verified 08/2011

Corrective Action Issue: An overview of the manual was presented at the Audit Committee Meeting in June 2011. The manual will be web based, will reside on the Financial Services Division web site, and will be available by the end of September 2011.

2008-05 Review of Selected Business

Process Redesign

1/22/2010 INFORMATION TECHNOLOGY -

Physical Security

6 Develop, document, and maintain adequate

physical security of IT equipment, including:

the IT server room, IT equipment rooms, and

the IT shop.

Jim Blackshear, Gallup IT

Manager

concur - Gallup PPD and IT will work with central

campus PPD and IT to develop a plan to provide

adequate physical security of IT equipment.


completed -

verified 08/2011

Corrective Action Issue: Gallup PPD and UNM PPD are working together to complete the installation of the new locks with an expected completion date of 08/2011.

2009-17 The University of New Mexico

Gallup Campus Audit of Business

Practices and Processes

1/22/2010 INFORMATION TECHNOLOGY -

Disaster Recovery Plan

8 Develop an IT Disaster Recovery Plan, and

an IT Business Continuity Plan.

Jim Blackshear, Gallup IT Manger concur - Gallup IT will work with central IT to

develop an appropriate IT Disaster Recovery Plan

and IT Business Continuity Plan.

06/2011 open - verified

08/2011

Corrective Action Issue: The expected completion date for IT Disaster Recovery and IT Business Continunity Plan by 07/2012. Main Campus IT and Gallup IT will coordinate the development of the plans.

2009-17 The University of New Mexico

Gallup Campus Audit of Business

Practices and Processes

4/14/2011 ORGANIZATIONAL STRUCTURE 2 SRS should be operating from one physical

location in order to achieve maximum

efficiency and cost effectiveness.

Carla Prando-Domenici, Interim

Director of Safety and Risk

Services

concur - In light of the proposed future demolition of

the Tucker Building and the Onate Building SRS

will work with the Manager of Space Management

and the Space Allocation Committee to identify an

appropriate space for SRS and will submit a plan of

consolidation to EVP for Administration.


completed -

verified 08/2011

Corrective Action Issue: Per Carla Prando-Dominici, recently appointed Interim Safety and Risk Services Director, alternatives for a site that will house all of the department is being considered. Ms. Prando-Dominici will draft a memo requesting an extension for

completion of the recommendation to the Internal Audit Department.

2010-13 Safety and Risk Services Audit

of Operations and Compliance

6/16/2011 GALLUP BRANCH BUSINESS

OPERATIONS - Fixed Assets

6 The Executive Director should locate the

fixed assets that could not be located in the

fixed asset testing. The turbine purchase

should be reviewed to determine why the

turbine was purchased without all necessary

installation components. The turbine should

be installed, or returned if the pole to install

the turbine cannot be purchased.

Sylvia Andrew, Executive

Director of UNM-Gallup; Director

of Business Operations

concur - Most of the assets have been located. The

turbine was purchased by Construction Tech. They

are investigating whether a vendor specific pole is

required or not.


completed -

verified 08/2011

Corrective Action Issue: The Executive Director is in the process of hiring a Director of Business Operations. The recommendation will be reviewed with the new Director of Business Operations.

2011-06 Gallup Branch Audit of

Business Processes

Friday, August 12, 2011 Page 1 of 2Status of Audit Recommendations - Past Due Findings

Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

6/16/2011 BOOKSTORE - Safe Security and Cash

Deposits

19 Upon receipt, all checks should be kept in

the safe in a locked drawer until deposited.

The checks should be deposited at the latest

by the next business day after receipt.




concur - The Gallup Branch will deposit book buy-

back checks upon receipt.

04/2011 open



Business Processes

6/16/2011 BOOKSTORE - Governmental Gross

Receipts Tax (GGRT) Reporting

20 The Business Operations Director should

review all GGRT submissions before

sending them to Unrestricted Accounting to

ensure that the GGRT submissions are

complete and timely.




concur - The Director of Business Operations has

been reviewing the Bookstore GGRT submissions to

Unrestricted Accounting since December 2010.

12/2010 open



Business Processes

Friday, August 12, 2011 Page 2 of 2Status of Audit Recommendations - Past Due Findings


Status of Audit Recommendations - Cleared Findings


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

4/15/2010 SIGNATURE AUTHORITY AND

CONTRACT REVIEW POLICY

1 Work with University Counsel and the

Policy Officer to revise UPB 2010 Contracts

Signature Authority and Review.

David Harris, EVP for

Administration

concur - The EVP for Administration will work with

University Counsel and the Policy Officer to revise

UBP 2010.

05/2011 completed -

verified 07/2011

2008-03 Business Contracts Audit of

Contract Monitoring

4/15/2010 CONTRACT MONITORING

PROCEDURES

3 Develop and implement a contract

monitoring policy.


Administration

concur - The EVP for Administration, taking into

account available fiscal resources, will develop a

contract monitoring procedure.

07/2011 completed -

verified 07/2011

2008-03 Business Contracts Audit of

Contract Monitoring

1/20/2011 PAYROLL PROCESSES - Policy for Off-

Cycle Payrolls

1 Implement policies to curtail off-cycle

payrolls and adjustments.


Administration

concur - Policy office will revise Policy 2000

"Responsibility and Accountability for University

Information and Transactions," Payroll will evaluate

off-cycle payrolls and create a schedule that reduces

the number of off-cycle payrolls, and HR will

develop a monthly summary report of off-cycle

payrolls for deans and directors.

07/2011 completed -

verified 08/2011

2010-07 Audit of Selected Payroll

Processes

1/20/2011 PAYROLL PROCESSES - Communicate

Changes in Policy

2 Develop a plan to communicate changes in

procedures to the UNM Payroll Community.



concur - Will use Standard Operating Procedure SOP

FISC-133: Process-Change Communication

Guidelines to communicate any proposed changes in

procedures and practices.

07/2011 completed -

verified 08/2011


Processes

1/20/2011 PAYROLL PROCESSES - Develop

Standard Guidelines

3 Develop standard guidelines and policies for

departments to follow including terminations

and separations, adjustments, and deadlines.

Helen Gonzales, VP, Human

Resources

concur - Will develop standard guidelines and

procedures for departments to follow which will

address payroll special exceptions.

07/2011 completed -

verified 08/2011


Processes

1/20/2011 EMPLOYEE ACCOUNTS

RECEIVABLE - Address Delays in

Processing Terminations

6 Develop specific guidance on the

termination process to avoid employee

accounts receivable, and develop a feedback

report for department directors and

supervisors.


Resources

concur - Will develop standard guidelines and

procedures for departments to follow, including a

report for department directors and supervisors

providing feedback for accuracy and completeness of

payroll data.

07/2011 completed -

verified 08/2011


Processes

1/20/2011 EMPLOYMENT DATA CENTERS -

Consolidation of Employment Data Centers

7 Management should consolidate the seven

EDCs into three centers - Human Resources,

School of Medicine, and Academic Affairs.


Resources

concur - HR will explore the possiblity of

consolidating the EDCs into three centers.

07/2011 completed -

verified 08/2011


Processes

Friday, August 12, 2011 Page 1 of 4Status of Audit Recommendations - Cleared Findings

Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

1/20/2011 COMMUNICATION AND

COORDINATION - Enhance

Communication

14 Vice President for Finance and University

Controller, the Vice President for Human

Resources, and the Provost should work

together to improve communication and

coordination of processes among the ERP

administrators and users.


University Controller, Helen

Gonzales, VP, Human Resources,

Suzanne Ortega, Suzanne Ortega,

EVP Academic Affairs/Provost

concur - Vice Presidents will work together to ensure

there is better communication and coordination of

processes among the ERP administrators and users.

09/2011 completed -

verified 08/2011


Processes

1/20/2011 COMMUNICATION AND

COORDINATION - Continuous

Improvement Process

15 EVP for Administration should establish a

Continual Improvement Process to identify,

analyze, and eliminate inefficient or

ineffective processes throughout the ERP

system

ERP Leadership Group concur - EVP for Administration will have ERP

Leadership Group review current Continual

Improvement Processes (CIP) used by the ERP

Steering Committee, the HRPR Project Prioritization

Teams, the Business Process Owners initiatives, and

the Leadership Group.

07/2011 completed -

verified 08/2011


Processes

1/20/2011 SINGLE PAYROLL DATE 16 Explore the possibility of adopting a

biweekly or semi-monthly payroll date for all

University employees.



concur - Audit Committee recommends the

University adopt a semi-monthly payroll cycle for all

non faculty employees, retain a monthly cycle for

Faculty, and adopt a single off-cycle payroll run for

each corresponding payroll cycle.

07/2011 completed -

verified 08/2011


Processes

1/20/2011 AUTOMATED TIME ENTRY SYSTEMS 17 Expedite evaluation of alternative time entry

methods and explore the possibility of

implementing a University-wide system.



concur - Audit Committee recommends full

implementation of Kronos at PPD, and a phased

implementation of the automated time keeping

system at other departments.

12/2012 completed -

verified 08/2011


Processes

4/14/2011 DATA MANAGEMENT 15 SRS should work with UNM IT and HR to

properly recruit and place a full time IT staff

member to assist with the tremendous

database needs of SRS.



Services

concur - SRS will initiate a MOU with IT to provide

Student Field Agents to assist the Support Analyst I.

HR will evaluate the User Support Analyst Position

and the vacant IT position and make

recommendations to the EVP for Administration.

07/2011 completed -

verified 08/2011



6/16/2011 UNTIMELY CASH DEPOSITS 1.2 The Athletics Department management

should implement a system of internal

control and a monitoring process to ensure

that funds are deposited intact by the next

working day following receipt. For example,

the Athletics Department management

should consider requiring all personnel

performing financial transactions, including

cash handling, to report to the Associate

Athletic Director for Finance.

Richard Weig-Pickering,

Associate Director Business

Operations, Athletics; Ava Lovell,

VP for Finance and University

Controller

concur - The Financial Services Department will

serve as a consultant to the Athletics Department to

reinforce strong internal controls and monitoring

processes.

04/2011 completed -

verified 08/2011

2011-02 Department of Intercollegiate

Athletics Men’s Basketball Audit of

Undeposited Cash


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date


should consult with Human Resources and

the President’s Office to address personnel

issues in accordance with UBP 3215,

Performance Management for the

Administrative Assistant 3. This employee

disregarded University Business Polices, as

she did not deposit monies by the next

working day following receipt on two

separate occasions.

Paul Krebs, VP, Athletics; Helen

Gonzales, VP, Human Resources

concur - The Athletic Department and Human

Resources will address any personnel issues in

accordance with Policy 3215.

04/2011 completed -

verified 08/2011



Undeposited Cash

6/16/2011 TRANSFER OF CASH 2 The Athletics Department management

should consult with Human Resources to

address personnel issues in accordance with

UBP 3215, Performance Management for

the Team Operations Director who did not

document the transfer of money in writing.






04/2011 completed -

verified 08/2011



Undeposited Cash

6/16/2011 CASH MANAGEMENT TRAINING 3 The Athletics Department management

should develop a written plan for ensuring

that all personnel receive their required

training in a timely manner.

Paul Krebs, VP, Athletics concur - The Athletic Department will require Cash

Handling training of all new hires and current

employees involved in handling cash.

05/2011 completed -

verified 08/2011



Undeposited Cash

6/16/2011 REPORTING THEFT 4.1 The Vice President for Athletics should

immediately file an official report with the

University Campus Police Department if

obvious theft has taken place.

Paul Krebs, VP, Athletics nonconcur - The Athletic Department believes that

they were responsive and aggressive in pursuing this

matter. When the situation became apparent that

money was missing from the Basketball Office, the

Athletics Department contacted the UNM Police,

UNM Risk Management, and UNM Human

Resources regarding the loss of money from the

Basketball Offices. The Athletics Department was

not aware that golf outing monies were missing until

discussions with internal auditors were held.

none completed -

verified 06/2011



Undeposited Cash

6/16/2011 USE OF UNM FOUNDATION SIXTH

MAN ACCOUNT FUNDS

5 The UNM Foundation and the Athletics

Department should prepare a Memorandum

of Understanding between the UNM

Foundation and the Athletics Department

that clearly defines the purpose of the

account and allowable expenditures from the

UNM Foundation’s Sixth Man account.

Lawrence Ryan, VP University

Development Office, Athletics;

UNM Foundation

concur - The Athletic Department and the UNM

Foundation will clarify the purpose and allowable

expenditures of the UNM Foundation’s Sixth Man

account.

04/2011 completed -

verified 08/2011



Undeposited Cash


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

6/16/2011 USE OF UNM FOUNDATION SIXTH

MAN ACCOUNT FUNDS

5.2 The Business Office should communicate

allowable expenditures for UNM Foundation

accounts to Athletics personnel. The

Business Office should ensure that the Vice

President for the Athletics Department and

head coaches are aware of the University

Foundation accounts that are available to

each team, and what types of expenditures

are appropriate for each UNM Foundation

account.

Lawrence Ryan, VP University

Development Office, Athletics

concur - The Development Office will confirm that

the funds in the Athletic Department accounts in the

UNM Foundation are being used in accordance with

the descriptions of these accounts.

03/2011 completed -

verified 08/2011



Undeposited Cash

6/16/2011 UNTIMELY SUBMISSION OF TRAVEL

REIMBURSEMENT REQUEST

6.2 The Athletics Department management

should consult with Human Resources to

address personnel issues in accordance with

UBP 3215, Performance Management, for

the Team Operations Director who did not

submit a timely travel DPA form.






04/2011 completed -

verified 08/2011



Undeposited Cash

6/16/2011 ALLOWABILITY OF TRAVEL

EXPENSES FOR COACHES’ FAMILIES

7.2 The Athletics Department needs to refund

the University for the unallowable travel

costs.

Paul Krebs, VP, Athletics concur - The Athletics Department intends to cover

the cost of travel for the coaches’ families out of

donated funds.

06/2011 completed -

verified 08/2011



Undeposited Cash



Status of Audit Recommendations - Not Past Due Findings


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

4/15/2010 CONTRACT REVIEW OFFICER

TRAINING

2 Designate contract review officers and

conduct regular contract review officer

training.

Lee Peifer, Interim University

Counsel

concur - University Counsel will conduct periodic

Contract Review Officer training once UBP 2010

revisions have been made and approved. Training to

be implemented in Fall 2011.

07/2011 open2008-03 Business Contracts Audit of

Contract Monitoring

4/15/2010 VARIOUS CONTRACT ISSUES 4 Require that the contract monitors for the

contracts audited resolve the issues

identified in the audit report. Additionally,

inform all departments of the contract

monitors’ obligations regarding contract

monitoring.


Administration

concur - The EVP for Administration will advise all

contract monitors of all obligations under the revised

policy UPB 2010.

07/2011 open2008-03 Business Contracts Audit of

Contract Monitoring

1/20/2011 PAYROLL PROCESSES - Enhance

Training Programs

4 Develop and enhance training programs to

include new policies and initiatives.


Resources

concur - Will review training programs and update

them to include revised standards, procedures, and

policies.


completed -

verified 08/2011


Processes

1/20/2011 EMPLOYEE ACCOUNTS

RECEIVABLE - Develop University-wide

Policy

5 Develop a University-wide policy on

employee accounts receivable that addresses

the origination, repayment and collection of

overpayments to employees.

Carol Stephens, Director,

University Policy and

Administrative Planning

concur - Develop a proposed administrative policy

on employee accounts receivable in accordance with

Policy 1100 Development and Approval of

Institutional Policy.


completed -

verified 08/2011


Processes


Review OGS Procedures

8 Review the hiring process for graduate

assistantships; develop deadlines, realistic

lead time for hiring, and specific guidance

for reporting terminations and contract

revisions.

Jane Slaughter, Associate Provost concur - Will establish a deadline calendar for hiring

graduate assistants, and will work with the Deans

and Chairs of Colleges and Schools to make them

aware that deadlines will be enforced.


completed -

verified 08/2011


Processes


Review Faculty Assignment, Contract

Revision Process

9 Review the faculty contract process and

ensure that faculty contracts are in place

prior to the commencement of the academic

year.

Jane Slaughter, Associate Provost concur - Will establish a calendar for determination

of SACs and STCs so that contracts for regular and

part-time faculty are in place prior to the beginning

of the academic year and in time to meet hiring and

payroll deadlines.


completed -

verified 08/2011


Processes


Review Faculty Contract Deadlines

10 Review the hiring and payroll processes at

Faculty Contracts for compliance with

faculty hiring guidelines and payroll

processing policies.

Jane Slaughter, Associate Provost concur - Will review and reinforce deadlines with the

Deans and Chairs of the Colleges and Schools for

hiring part-time faculty so that the UNMJobs portion

of the data entry is complete before hires are input

into Banner for payroll.


completed -

verified 08/2011


Processes

Friday, August 12, 2011 Page 1 of 7Status of Audit Recommendations - Not Past Due Findings

Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date


Review Faculty Contract Hiring Processes

11 Design and implement an effective hiring

process to ensure timely completion prior to

employee start date, and prior to

commencement of payroll payments.

Jane Slaughter, Associate Provost concur - Will work with Faculty Contracts to review

the current hiring process and make any necessary

modifications to ensure hires are completed before

the employee start date and before commencement of

payroll payments.


completed -

verified 08/2011


Processes

1/20/2011 EMPLOYMENT DATA CENTERS - Part

Time Temporary Faculty

12 Will work with Faculty Contracts to develop

effective hiring procedures for part-time

temporary faculty.

Jane Slaughter, Associate Provost concur - Will work with Faculty Contracts to review

the current hiring procedures for part-time temporary

faculty so that data entry accurately reflects payment

processes and employee records.


completed -

verified 08/2011


Processes


Office of Equal Opportunity Coordination

with Faculty Contracts

13 Faculty Contracts should work with OEO to

determine the proper data necessary for the

ERP systems to produce accurate

Affirmative Action Reports.

Jane Slaughter, Associate Provost concur - Will ensure that Faculty Contracts and OEO

work together to determine the correct data and

reporting methodology so that accurate Affirmative

Action Reports are produced.


completed -

verified 08/2011


Processes

4/14/2011 ORGANIZATIONAL STRUCTURE 1 HR needs to evaluate the SRS job

descriptions, job duties, grade levels and

salaries to verify accuracy and provide fair

assessment of staff performances in the

future.


Resources

concur - SRS staff will prepare PRQ's; PRQ's will be

signed off by the employee, supervisor and Director;

HR will perform a Classification Review Study; HR

will prepare and present a summary of

recommendation for realignment of SRS staff

positions.


completed -

verified 06/2011



4/14/2011 ORGANIZATIONAL STRUCTURE 5 Best Practices recommend an EH&S peer

review, however SRS has not had a peer

review since 1994. SRS should participate

in a peer review to gain insight and

efficiency.

Denece Kessler, Enterprise Risk

Management Council Chair

concur - ERM Council will evaluate the costs and

need for an EH&S peer review and will submit a full

recommendation to the EVP for Administration.


06/2011



4/14/2011 COMPLIANCE WITH UNM AND

REGULATORY POLICIES AND

PROCEDURES

6 SRS does not mandate corrective action and

compliance when working with other

departments, but they attempt to work

collaboratively with others to address issues.

This is not compliant with UBP 6100 which

requires that SRS mandate corrective

action. Policy should change to reflect

actual practices.



concur - ERM Council will review the current risk

management policies and practices and will submit

recommended policy revision quarterly to the EVP

for Administration.


06/2011



4/14/2011 COMPLIANCE WITH UNM AND

REGULATORY POLICIES AND

PROCEDURES

7 SRS involvement during preconstruction,

construction and renovation should be

reviewed by all stakeholders to determine

best practices in order to address liability

and future costs and maintenance issues

associated with decisions made during

construction planning and design.



Services

concur - ERM Council will appoint a Task Force

headed by the University Architect to review and

evaluate the proper degree of SRS involvement

during preconstruction and construction.

Recommendations will be submitted to the EVP of

Administration. SRS will be a member of the

Capital Planning Process/Retreat.


completed -

verified 06/2011




Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

4/14/2011 LIFE SAFETY/FIRE SAFETY 10 SRS, in conjunction with PI's and research

staff, need to implement and fully utilize the

chemical inventory tracking database

program. Lack of proper chemical tracking

presents safety, compliance and prohibitive

cost issues for UNM.

Julia Sager, Chemical Hygiene

Manager, Safety and Risk Services

concur - SRS will continue implementation of the

stand-software system which is currently being beta-

tested with UNM PI's. Once fully tested and

implemented, the resulting reports generated for the

system will provide information for SRS staff to

monitor chemical inventory in labs.


completed -

verified 06/2011



4/14/2011 LIFE SAFETY/FIRE SAFETY 11 Best Practices suggest formulation of a

Research Safety Committee to provide

collaborative safety efforts for research and

lab safety.



concur - ERM Council will review the membership

and scope of the two current Chemical Safety

Committees to determine level of support needed to

address research and lab safety.


completed -

verified 06/2011



4/14/2011 LIFE SAFETY/FIRE SAFETY 12 UNM Administration needs to make fire

safety a priority. This requires all

stakeholders to participate in upgrading the

fire safety program at UNM. All UNM

housing facilities should be brought up to

NFPA standards and a Fire Safety Task

Force should be implemented.



concur - ERM Council will review and evaluate the

status of the Fire Safety Program and will establish a

Fire Safety Task Force if necessary. The ERM

Council will make recommendations to the EVP for

Administration pertaining to retrofitting or

sprinkling all UNM living facilities. Fire Safety

Capital Funding Report will be prepared annually.


completed -

verified 06/2011



4/14/2011 DATA MANAGEMENT 14 SRS should review and evaluate all data

management needs to determine whether

they are currently being met. SRS should

work in conjunction with UNM IT to

evaluate their needs and solution options.



Services

concur - SRS will guide development of forms and

hardware applications to meet all current data

management needs. FAMIS software, currently used

by the Planning Department, will be considered for

some needs.


completed -

verified 06/2011



4/14/2011 DATA MANAGEMENT 16 Turnover within the IT area of SRS has

played a significant detrimental role in the

lack of direction and proper technology in

meeting the SRS needs. SRS should

collaborate with UNM IT to establish an

overall strategic plan for technology in the

department.



Services

concur - SRS will consult with UNM IT to develop a

strategic plan for technology in the SRS Department.


06/2011



4/14/2011 RESPONSIBILITY AND

ACCOUNTABILITY FOR

INFORMATION AND TRANSACTIONS

19 Responsibility and accountability for SRS

business and administrative functions rests

with the Director of SRS. The Director of

SRS should institute proper internal controls

and procedures to assure that University

policies are followed and University assets

are protected.



Services

concur - The Director of SRS will adopt an Insurance

Claims Procedure; SRS P-Card holders will be

trained to allocate expenses; SRS managers will learn

Banner; SRS Director will review financial

transactions and reports; and SRS will reconcile the

insurance premium collection account at year-end.

Financial Services will provide assistance.


completed -

verified 06/2011




Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date


should require all personnel who handle cash

to take Cash Management training within

the next 15 working days.



Operations, Athletics Department;

Douglas Nelson, Accounting

Manager, Unrestricted Accounting

concur - The Athletics Department proposes that

Financial Services Division deliver a one-day

financial workshop specifically tailored to Athletics.

This workshop would include all training

recommended in the audit.

09/2011 open2011-02 Department of Intercollegiate


Undeposited Cash

6/16/2011 UNTIMELY SUBMISSION OF TRAVEL

REIMBURSEMENT REQUEST

6.1 The Business Office should communicate

travel policies to all Athletics personnel.



Operations, Athletics; Ava Lovell,

VP for Finance and University

Controller

concur - Policies will be communicated. 09/2011 open2011-02 Department of Intercollegiate


Undeposited Cash

6/16/2011 ALLOWABILITY OF TRAVEL

EXPENSES FOR COACHES’ FAMILIES

7.1 The Athletics Department management and

the Financial Services Division should

perform a thorough review of all NCAA

tournaments, regular season away games,

and the Mountain West Tournament travel

expenditures of the Athletics Department

and itemize which expenditures were

unallowable travel expenditures for the

coaches’ families.

Paul Krebs, VP, Athletics; Ava

Lovell, VP for Finance and


concur - The Athletics Department management and

the Financial Services Division should perform a

thorough review of all NCAA tournaments, regular

season away games, and the Mountain West

Tournament travel expenditures of the Athletics

Department and itemize which expenditures were

unallowable travel expenditures for the coaches’

families.

12/2011 open2011-02 Department of Intercollegiate


Undeposited Cash


OPERATIONS - Business Operations

Manual

1 The Director of Business Operations should

develop and implement a comprehensive

business operations manual that outlines

office policies and procedures for business

functions, including but not limited to:

accounts payable transactions; purchasing

card transactions; fixed assets; grants;

Bookstore operations; cashiering operations;

purchasing; and payroll processes.




concur - The Director of Business Operations will

work with staff to develop and implement a

comprehensive Business Operations Manual for the

Gallup Branch.

10/2011 open2011-06 Gallup Branch Audit of

Business Processes


OPERATIONS - General Ledger Accounts

Not Reconciled

2 The Gallup Branch should confer with the

UNM Unrestricted Accounting (Main)

Department to ensure the financial accounts

are reconciled monthly.





work with the Supervisor of Fiscal Services and

UNM Unrestricted Accounting to develop a list of all

G/L accounts needing to be reconciled on a monthly

basis.


Business Processes


OPERATIONS - General Ledger

Authorization

3 Although access to enter journal entries may

be appropriate for the Supervisor of Fiscal

Services, the Director of Business

Operations should review and approve them

before submittal of journal entries to the core

accounting office.




concur - The Director of Business Operations and the

Supervisor of Fiscal Services will work with

Albuquerque Financial Services Division to ensure

the Banner Approval Queues are configured properly.


Business Processes


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date



4 The Executive Director should direct the

Business Office to review all computer

purchases over the past three years to

determine if departments purchased other

computers and charged them to the incorrect

account code. These computers should be

tagged and added to inventory records. All

future computer purchases should be

charged to the correct account codes, tagged

and inventoried.





coordinate a review of the past three years'

purchases. IT's list of computers will be reconciled

with Property Accounting's asset list to identify any

computers not properly tagged.


Business Processes



5 The Executive Director should ensure that

department deans/directors responsible for

inventory attend formal training to

communicate the responsibility for

accounting for and safeguarding assets

through the inventory process. This includes

methods for adding, deleting and changing

locations of inventory assets.


Director of UNM-Gallup

concur - There will be a series of trainings for

management and staff responsible for inventory.

Faculty also provides supervision of staff that are

responsible for inventory and will be included in

training during Fall Orientation. The Director of

Business Operations will provide the training based

on UNM policies and procedures.


Business Processes


OPERATIONS - Security Cameras

7 The Executive Director should provide a

comprehensive plan for maintaining and

monitoring the existing security cameras.

Jim Blackshear, Manager,

Information Services

concur - The IT Manager will work with UNM-Main

Campus IT to implement and maintain a campus-

wide security camera system which includes all

security cameras on campus. This system will be

monitored by personnel as directed by the Executive

Director.


Business Processes


OPERATIONS - Hard Drive Erasure

Procedures on Surplus Computers

8 The Business Office should work with the IT

Department to develop and implement a

filing system to track and document asset

deletions.

Jim Blackshear, Manager,

Information Services

concur - Gallup will develop a procedure to

document UNM-Gallup's process for complying with

UBP 4610 Section 3, "Disposal of University

Property."


Business Processes


OPERATIONS - Hard Drive Erasure

Procedures on Surplus Computers

9 Main Campus Surplus Property Department

now performs hard drive erasures, UBP

4610 should be revised to reflect the new

procedures.

Carol Stephens, Director, UNM

Policy Office

concur - The UNM Policy Office will revise the

policy to reflect the new process.


Business Processes


OPERATIONS - Auto Technology and

Auto Club

10 The Executive Director should ensure that

the Gallup Branch Auto Club deposits all

monies received to the Cashiers Department

intact by the next working day following

receipt.

Neal Mangham, Dean of

Instruction, Gallup Branch

concur - Written policies and procedures will be

developed to track car repairs and donations for the

Auto Club and the Auto Technology Department.


Business Processes


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date



Auto Club

11 The Executive Director should require that

all Auto Technology Department personnel

who handle cash take Cash Management

training.



of Business Operations; Human

Resources Manager

concur - The training will be mandatory for

management and staff responsible for handling cash.


Business Processes



Auto Club

12 The Auto Technology Department should

develop written policies and procedures to

track car repairs and donations.

Neal Mangham, Dean of

Instruction, Gallup Branch

concur - Written policies and procedures will be

developed to track car repairs and donations for the

Auto Club and the Auto Technology Department.


Business Processes

6/16/2011 PAYROLL - Timekeeper Segregation of

Duties

13 The Gallup Branch should segregate

timekeeper duties so employees do not have

both entry and approval roles.




concur - Employee roles will be changed so the

employee will have either timekeeper or time

approver roles, but not both.


Business Processes

6/16/2011 PAYROLL - Timesheet Calculation 14 The Executive Director should modify

timesheets to guard against changes to

timesheet formulas and cells. The Gallup

Branch should perform timesheet training

for supervisors and employees.




concur - Effective July 2010, all UNM Gallup non-

exempt, hourly employees have been required to use

the standard Excel time sheet found on the UNM

Main Campus Payroll website. We will work with

Main Campus Payroll to protect the cells. We will

coordinate with the Main Campus project to explore

the option of a campus wide timekeeping system that

would upload into Banner.


Business Processes

6/16/2011 PAYROLL - Personnel Action Notices 15 The Executive Director should implement a

policy or procedure that requires updates to

all blanket compensation changes in

employees’ paper files.




concur - The Gallup HR Manager will work with

Albuquerque HR as the official employee files are

kept in Albuquerque.


Business Processes

6/16/2011 CASH RECEIPTS - Cash Safekeeping 16 The Director of Business Operations should

require that cashiers keep the main safe

locked at all times, and should key the vault

to require dual control access.





work with the Cashier Supervisor to review security

processes.


Business Processes

6/16/2011 CASH RECEIPTS - Cash Receipts

Procedures


create policies to address specific cash

receipts processes. It is possible that they

could combine the Daily Vault Sheet and

Cash-In Report into one form.





work with the Supervisor of the Cashiers to develop

and implement cash receipts policies for the Gallup

Campus. As part of the Bookstore Renovation and

Business Office Relocation, receipt signage will be

posted.


Business Processes

6/16/2011 BOOKSTORE - Business Operations

Manual


develop and implement a comprehensive

Bookstore business operations manual that

outlines office policies and procedures.





work with the Bookstore Manager to develop and

implement a comprehensive Bookstore operations

manual.


Business Processes


Report Name Audit

Comm.

Apprv.


Implement. Date

Followup Status

(Open/ Complete)

Verified Date

6/16/2011 BOOKSTORE - PRISM Inventory System

Inaccuracies

21 The Bookstore Manager should develop a

policies and procedures manual to document

Bookstore inventory procedures and should

reconcile the Banner account index of

purchases to the Bookstore inventory system

on a monthly basis.




concur - The reconciliation of the Bookstore

inventory system and Banner will be part of the

Bookstore Operations manual.


Business Processes

6/16/2011 BOOKSTORE - Reconciliation of Cash

Drawers


hold personnel accountable for the

reconciliation of Bookstore receipts. These

reconciliations should occur daily.

Reconcilers should sign and approve the

form, note any outages, and state the reason

for the outage.





work with Bookstore employees to develop and

implement a review and approval process for the

daily cash drawer reconciliations.


Business Processes

6/16/2011 BOOKSTORE - Purchasing Card for

Inventory Purchases

23 The Bookstore should utilize the purchasing

card for all bookstore inventory purchases

and ensure duties are properly segregated.





work with the Bookstore staff to implement changes

in procedures.


Business Processes

6/16/2011 BOOKSTORE - Reconciliation of Cash

Drawers

24 The Business Office should obtain and

review Gallup Branch purchasing card

reconciliations to monitor departmental

budgets and spending. The personnel in the

Gallup Branch Business Office should

obtain purchasing card and financial system

reporting training.




concur - Effective July 2011, all P-Card

reconciliations will be sent to the Gallup Business

Office for review.


Business Processes


EXECUTIVE

SESSION

Documents

The University of New Mexicoiaudit/2012 pdfs/Open Session EBook 081811.pdf · Internal Audit’s report. They are looking into the governance as well. It is both a performance (looking