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
Summary of the Regent’s Audit Committee
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
Summary of the Regent’s Audit Committee
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.
Summary of the Regent’s Audit Committee
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
Summary of the Regent’s Audit Committee
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).
Summary of the Regent’s Audit Committee
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
Internal Audit Director’s Status Report
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
Carry Forward from FY10 5
Carry Forward from FY11 24
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
Internal Audit Director’s Status Report
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
Internal Audit Department
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
Internal Audit Department
Status of Audit Recommendations - Past Due Findings
As of August 12, 2011
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.
12/2010 open - partially
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.
06/2011 open - partially
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.
05/2011 open - partially
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.
Finding Recommendation No. and Description Response - Responsible Party Response-Corrective Action Response -
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Gallup Branch will deposit book buy-
back checks upon receipt.
04/2011 open
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
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations has
been reviewing the Bookstore GGRT submissions to
Unrestricted Accounting since December 2010.
12/2010 open
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 2 of 2Status of Audit Recommendations - Past Due Findings
Internal Audit Department
Status of Audit Recommendations - Cleared Findings
As of August 12, 2011
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
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.
David Harris, EVP for
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.
David Harris, EVP for
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.
Ava Lovell, VP for Finance and
University Controller
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
2010-07 Audit of Selected Payroll
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
2010-07 Audit of Selected Payroll
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.
Helen Gonzales, VP, Human
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
2010-07 Audit of Selected Payroll
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.
Helen Gonzales, VP, Human
Resources
concur - HR will explore the possiblity of
consolidating the EDCs into three centers.
07/2011 completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
Friday, August 12, 2011 Page 1 of 4Status of Audit Recommendations - Cleared 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
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.
Ava Lovell, VP for Finance and
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
2010-07 Audit of Selected Payroll
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
2010-07 Audit of Selected Payroll
Processes
1/20/2011 SINGLE PAYROLL DATE 16 Explore the possibility of adopting a
biweekly or semi-monthly payroll date for all
University employees.
Ava Lovell, VP for Finance and
University Controller
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
2010-07 Audit of Selected Payroll
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.
Ava Lovell, VP for Finance and
University Controller
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
2010-07 Audit of Selected Payroll
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.
Carla Prando-Domenici, Interim
Director of Safety and Risk
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
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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
Friday, August 12, 2011 Page 2 of 4Status of Audit Recommendations - Cleared 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
6/16/2011 UNTIMELY CASH DEPOSITS 1.3 The Athletics Department management
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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.
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
Undeposited Cash
Friday, August 12, 2011 Page 3 of 4Status of Audit Recommendations - Cleared 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
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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.
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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
2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
Undeposited Cash
Friday, August 12, 2011 Page 4 of 4Status of Audit Recommendations - Cleared Findings
Internal Audit Department
Status of Audit Recommendations - Not Past Due Findings
As of August 12, 2011
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
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.
David Harris, EVP for
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.
Helen Gonzales, VP, Human
Resources
concur - Will review training programs and update
them to include revised standards, procedures, and
policies.
01/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
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.
11/2011 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
1/20/2011 EMPLOYMENT DATA CENTERS -
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.
01/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
1/20/2011 EMPLOYMENT DATA CENTERS -
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.
06/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
1/20/2011 EMPLOYMENT DATA CENTERS -
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.
06/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
Friday, August 12, 2011 Page 1 of 7Status of Audit Recommendations - Not 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
1/20/2011 EMPLOYMENT DATA CENTERS -
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.
06/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
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.
06/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
Processes
1/20/2011 EMPLOYMENT DATA CENTERS -
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.
06/2012 open - partially
completed -
verified 08/2011
2010-07 Audit of Selected Payroll
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.
Helen Gonzales, VP, Human
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.
08/2011 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
11/2011 open - verified
06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Denece Kessler, Enterprise Risk
Management Council Chair
concur - ERM Council will review the current risk
management policies and practices and will submit
recommended policy revision quarterly to the EVP
for Administration.
07/2012 open - verified
06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Carla Prando-Domenici, Interim
Director of Safety and Risk
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.
10/2011 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
Friday, August 12, 2011 Page 2 of 7Status of Audit Recommendations - Not 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
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.
09/2011 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Denece Kessler, Enterprise Risk
Management Council Chair
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.
10/2011 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Denece Kessler, Enterprise Risk
Management Council Chair
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.
03/2012 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Carla Prando-Domenici, Interim
Director of Safety and Risk
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.
12/2014 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Carla Prando-Domenici, Interim
Director of Safety and Risk
Services
concur - SRS will consult with UNM IT to develop a
strategic plan for technology in the SRS Department.
08/2011 open - verified
06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
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.
Carla Prando-Domenici, Interim
Director of Safety and Risk
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.
12/2012 open - partially
completed -
verified 06/2011
2010-13 Safety and Risk Services Audit
of Operations and Compliance
Friday, August 12, 2011 Page 3 of 7Status of Audit Recommendations - Not 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
6/16/2011 UNTIMELY CASH DEPOSITS 1.1 The Athletics Department management
should require all personnel who handle cash
to take Cash Management training within
the next 15 working days.
Richard Weig-Pickering,
Associate Director Business
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
Athletics Men’s Basketball Audit of
Undeposited Cash
6/16/2011 UNTIMELY SUBMISSION OF TRAVEL
REIMBURSEMENT REQUEST
6.1 The Business Office should communicate
travel policies to all Athletics personnel.
Richard Weig-Pickering,
Associate Director Business
Operations, Athletics; Ava Lovell,
VP for Finance and University
Controller
concur - Policies will be communicated. 09/2011 open2011-02 Department of Intercollegiate
Athletics Men’s Basketball Audit of
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
University Controller
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
Athletics Men’s Basketball Audit of
Undeposited Cash
6/16/2011 GALLUP BRANCH BUSINESS
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
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
6/16/2011 GALLUP BRANCH BUSINESS
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
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.
07/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
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.
07/2011 open2011-06 Gallup Branch Audit of
Business Processes
Friday, August 12, 2011 Page 4 of 7Status of Audit Recommendations - Not 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
6/16/2011 GALLUP BRANCH BUSINESS
OPERATIONS - Fixed Assets
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
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.
10/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
OPERATIONS - Fixed Assets
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.
Sylvia Andrew, Executive
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.
10/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
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.
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
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."
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
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.
07/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
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.
10/2011 open2011-06 Gallup Branch Audit of
Business Processes
Friday, August 12, 2011 Page 5 of 7Status of Audit Recommendations - Not 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
6/16/2011 GALLUP BRANCH BUSINESS
OPERATIONS - Auto Technology and
Auto Club
11 The Executive Director should require that
all Auto Technology Department personnel
who handle cash take Cash Management
training.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations; Human
Resources Manager
concur - The training will be mandatory for
management and staff responsible for handling cash.
10/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 GALLUP BRANCH BUSINESS
OPERATIONS - Auto Technology and
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.
10/2011 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - Employee roles will be changed so the
employee will have either timekeeper or time
approver roles, but not both.
07/2011 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
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.
07/2012 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Gallup HR Manager will work with
Albuquerque HR as the official employee files are
kept in Albuquerque.
07/2012 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
work with the Cashier Supervisor to review security
processes.
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 CASH RECEIPTS - Cash Receipts
Procedures
17 The Director of Business Operations should
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
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.
10/2011 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 BOOKSTORE - Business Operations
Manual
18 The Director of Business Operations should
develop and implement a comprehensive
Bookstore business operations manual that
outlines office policies and procedures.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
work with the Bookstore Manager to develop and
implement a comprehensive Bookstore operations
manual.
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
Friday, August 12, 2011 Page 6 of 7Status of Audit Recommendations - Not 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
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The reconciliation of the Bookstore
inventory system and Banner will be part of the
Bookstore Operations manual.
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
6/16/2011 BOOKSTORE - Reconciliation of Cash
Drawers
22 The Director of Business Operations should
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
work with Bookstore employees to develop and
implement a review and approval process for the
daily cash drawer reconciliations.
08/2011 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - The Director of Business Operations will
work with the Bookstore staff to implement changes
in procedures.
07/2012 open2011-06 Gallup Branch Audit of
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.
Sylvia Andrew, Executive
Director of UNM-Gallup; Director
of Business Operations
concur - Effective July 2011, all P-Card
reconciliations will be sent to the Gallup Business
Office for review.
07/2012 open2011-06 Gallup Branch Audit of
Business Processes
Friday, August 12, 2011 Page 7 of 7Status of Audit Recommendations - Not Past Due Findings
EXECUTIVE
SESSION