Academic Business Officers Group

January 17, 2012

UCSB Audit and Advisory Services

FY 2012-13 Mid-Year Briefing

FY 2012-13 AUDIT PLANHIGHLIGHTS

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Information Technology

•Financial System Implementation Project (FSIP):

Campus Use of Shadow Systems

FSIP Project Progress

Mainframe Project: Migration of Other Systems

•Student Information Systems Replacement:

Project Progress

•Procurement Gateway:

Facilitation Implementation (Advisory Service)

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Completed Projects

COMPLETED PROJECTS:REPORTS ISSUED DURING FISCAL YEAR 2012-13

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Project No. Title of Report/Memo Type Final or Draft Report Date

Final Reports Issued

1 08-12-0020 TIA Legal Bills Internal Controls Advisory July 12, 2012

2 08-12-0011 Earth Research Institute Audit July 13, 2012

3 08-12-0002 Materials Department Audit August 22, 2012

4 – Local Report on Activities Fiscal Year 2011-12 Special Sept. 10, 2012

5 08-12-0005 Institutional Animal Care and Use Committee Audit Sept. 13, 2012

6 – Internal Assessment of the Internal Audit Activity Special Sept. 28, 2012

7 08-13-0004 Financial System Implementation Project:

Campus Use of Shadow Systems

Audit Oct. 5, 2012

8 08-13-0005 Travel and Entertainment Audit Dec. 13, 2012

9 08-13-0003 Marine Science Institute Audit Dec. 14, 2012

10 08-12-0008 Procurement and Contracting: Risk Assessment & Contract Compliance Review

Audit January 9, 2013

11 08-11-00022 Financial System Implementation: Accounts Payable Vendor Assessment (Draft)

Audit January 15, 2013

COMPLETED PROJECTS: TRAVEL AND ENTERTAINMENT

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The purpose of this systemwide audit was to assess whether procedures are in compliance with University-wide policies over travel and entertainment. We found that campus travel and entertainment reimbursement processes and procedures are generally in compliance with University policies.

Management Corrective Actions

Business and Financial Services will remind the campus via email or other appropriate means of the required approvals for all travel and entertainment reimbursements and of the pre-approvals required for travel expenses to be paid on behalf of others. In addition, they will continue to work with the departments in providing guidance on how to bring their travel expense allowance practices into compliance with Policy G-28.

COMPLETED PROJECTS: MARINE SCIENCE INSTITUTE

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The purpose of the audit was to assess whether business processes and internal controls established by MSI are in compliance with University and sponsor regulations. Based on the results of the work performed within the scope of the audit, the institute generally has very good processes in place for the areas reviewed. However, MSI had some account-funds in overdraft at the time we started our audit, shortly after the end of fiscal year 2011-12.

Management Corrective Actions

There are plans to reduce and eliminate the overdrafts, which were the result of past budget cuts, recharge activities, and other factors. MSI has provided a management corrective action plan for bringing all account-funds into balance.

COMPLETED PROJECTS: PROCUREMENT AND CONTRACTING: RISK

ASSESSMENT AND CONTRACT COMPLIANCE REVIEW

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This project included a risk assessment of procurement to inform future audit planning. The project also included limited compliance reviews of some purchase orders and contracts that the risk assessment suggested were good candidates for initial review.

The audit identified compliance issues that should be addressed and a number of risk areas to be used to inform future audit planning

Management Corrective Actions

Business and Financial Services is currently assessing the additional resources needed to continue to improve critical campus procurement processes, and will draft and implement a corrective action plan that includes:

•Tasking the new Associate Director of Internal Controls with review and assessment of delegated campus procurement processes.

•Reviewing and enhancing select campus-wide controls, focusing on non-centralized purchasing systems and practices delegated to certain campus departments.

•Ensuring that department personnel with purchasing and delegated contracting authority responsibilities receive adequate training.

•Other steps.

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In Progress

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IN PROGRESS:SUCCESSION PLANNING

To determine whether there are adequate processes in place to ensure that future staffing needs are met. We:

•Started this review by gaining an understanding of current UCSB succession planning, staff development, retention, and other similar efforts. •Will soon be conducting a survey of select UC campuses and other institutions to further identify best practices in this area.

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IN PROGRESS:IT: FINANCIAL SYSTEM REPLACEMENT

PROJECT AUDITS

In addition to the completed audit of Campus Use of Shadow Systems, the following FSIP audits are currently in progress:

•FSIP Project Progress•Mainframe Project: Migration of Other Systems•Accounts Payable Vendor Assessment

AUDIT AND ADVISORY SERVICES INFO AND CONTACTS

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AUDIT AND ADVISORY SERVICES INFO AND CONTACTS

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AUDIT AND ADVISORY SERVICES INFO AND CONTACTS

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www.audit.ucsb.edu

•Robert Tarsia, Director•Sam Hartline, Principal Auditor•Olga Mery, Senior Auditor•Raphaëlla Nau, Staff Auditor•Jeremy Harbin, Audit Analyst•John Kushwara, Whistleblower Complaint Investigator