Springfield Audit TrailsIIA Springfield - Sapphire Chapter May 2019

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Inside ThisMonth’s

Newsletter...

In Memoriam: Ameen Dada

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May Training

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Job Openings

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How Willful Diversion Can Land You in Jail

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Internal Audit Awareness Month

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I cannot believe how fast this chap-ter year has flown by. It has been an honor to serve as your Chapter Pres-ident this chapter year. I would like to thank all the vol-unteers who made this Chapter year a success: Officers Nikki, Alex, Sally, Amy, and Tad. A special thanks to Margie, who took care of our mem-berships, and Lisa, who took over the newsletter editing. Sharon did our last two reviews and is going to pass the baton this year. Catherine helped by volunteering for the Nominating Committee, and Robert will be our new historian. A lot more work goes into these roles than is apparent on the surface. It is awesome to be in a chapter with such great people. What is not apparent to our non-officer members is that there are other IIA chapters that struggle with training or attendance issues. For the size of our Chapter, we provide ex-cellent training and have profession-al and proficient volunteers. We also have a great year coming

up starting in June. Due to retire-ments, only three Governors chose to finish their elected terms and one current Governor was reelected to a new three-year term. All other Gov-ernors are new to the Board – Wel-come!

2019-20 IIA Springfield Board Members

Officers•NikkiLanier,President•AlexDeal,FirstVicePresident•LeighannManning,SecondVice President•SallyBurton,Secretary•AmyDeWeeseandTadHuskey, Treasurers

Governors•TracyAllen •AngieBartlett•JamieNardulli •DeniseBehl•AmyLyons •NickBarnard•DouglasTinch •SteveKirk•JoeGudgel •TassiMaton•JulieZemaitis

Past President•SatuAllen

from the

PRESIDENTSatu Allen, MS, CISA

The Institute ofInternal AuditorsSpringfield Chapter

IIA Springfield - Sapphire Chapter May 2019

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May Training Nikki Lanier, CPA Chapter Members - I would like to thank you for a successful year of training.We have had amazing speakers with interesting topics.

The month of May brings our last opportunity for training. It will be a half day session conducted by Mr. Phil Bertram on Operational Auditing. This topic should be very relevant

for most of our members, and I hope to see you there! Register for the training at: http://www.ei severywhere.com/may-2019sem.

Crowe, LLP is currently seeking a Government

Risk Senior Accountant. For more information,

please visit https://jobs.crowe.com/ShowJob/

Id/1958029/Govern-ment-Risk-Senior-Ac-

countant/.

Crowe, LLP is currently seeking a Government

Risk Accountant. For more information,

please visit https://jobs.crowe.com/ShowJob/

Id/1790620/Govern-ment-Risk-Accountant/.

The Teachers’ Retirement System of the State of Il-linois is seeking an Internal Auditor. This position re-ports to the Director of Internal Audit and Risk and will be responsible for conducting and coordinating inter-nal financial, information technology, and compliance audits. This position will assist in presenting audit re-ports including any findings and/or observations to the Executive Director, Executive Management, and the Audit Committee of the Board of Trustees. The position requires a bachelor’s degree in ac-counting, finance, business administration, or related field. A CPA or CIA designation is preferred. It also re-quires at least two years of either public accounting or internal auditing experience; information technology experience is a plus. Applicants may apply online at https://www.trsil.org or by submitting a cover letter and resume no later than May 17 to: Teachers’ Retirement System Attn: Office of Human Resources - Internal Auditor P.O. Box 19253 Springfield, IL 62794-9253

By Past President Jay Wagner Trying to express in words what Ameen Dada meant -- to our Chapter, to his office, and to all who were blessed to know him -- is like trying to capture the ocean in a jar. Ameen was the personification of kind and sincere, humble and caring, professional and personable. He touched many through his life, his work, his service. Ameen was recognized for his Distinguished Service to Members at the Springfield IIA’s 30th Anniversary Celebration in 2008, due in no small part to his faithful service as the editor Springfield Audit Trails Newsletter, a role he served for more than a quarter century. The Springfield IIA offers its sincerest condolences to his wife, Mahnaz; his sisters, Nusrat and Yasmine; his friends; his coworkers; and all who feel the loss of this wonderful man.

Jay Wagner, left, presents Ameen Dada, right, with a Distin-guished Service to Members Award during the Springfield IIA’s 30th Anniversary Celebration in 2008. Ameen passed away on Sunday, April 7 at the age of 61.

IIA Springfield - Sapphire Chapter May 2019

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Willful subversion of second line of defense can land you in jailThis article was originally printed on the IIA’s website on April 29, 2019. See the blog post at https://iaonline.theiia.org/blogs/chambers/2019/Pages/Willful-Sub-version-of-Second-Line-of-Defense-Can-Land-You-in-Jail.aspx.

By Richard Chambers

Among my earliest memories as an in-ternal auditor was the constant refrain from officials in my organization that, as internal auditors, our job was to keep them “out of jail.” It was their light-heart-ed way of signaling how important we were to them. I didn’t take them too seriously, because I didn’t know of too many people who went to jail because of an internal control or compliance fail-ure. But, as Bob Dylan so famously sang, “the times they are a-changin’!” The recent guilty plea by a former drug company compliance officer on conspir-acy and other charges is yet the latest example of when willful compliance failures can lead to jail time for execu-tive management. The related arrest of a second company executive, the former CEO, shows that prosecutors are willing and able to reach high into the C-suite to send a message. The stunning arrests of the former Rochester Drug Cooperative executives reflect the high stakes associated with certain kinds of control and compliance failures and, more specifically, the dan-gers of willfully ignoring them. Some have gone as far as characterizing this as a test case for federal authorities prose-cuting drug company executives for traf-ficking narcotics. Prosecutors allege that the two indict-ed executives were repeatedly warned that the company was dispensing dan-gerous opioids, such as oxycodone and fentanyl, to individuals who had no le-gitimate need for them. What’s more, the company made deliberate decisions

“not to investigate, monitor, and report” individuals it knew were diverting con-trolled substances for illegitimate use, according to charging documents filed by prosecutors in the U.S. District Court Southern District of New York. As a registered drug distributor, Roch-ester Drug Cooperative was required to maintain “effective control[s] against di-version of particular controlled substanc-es into other than legitimate medical, scientific, and industrial channels,” ac-cording to the charging document. It also was responsible for reporting to the U.S. Drug Enforcement Administration (DEA) any, “orders of unusual size, orders devi-ating substantially from a normal pattern and orders of unusual frequency.” While the company met the require-ment to create necessary policies and controls, it is accused of ignoring numer-ous red flags warning that drugs were being dispensed for other than legiti-mate medical purposes. One of the most

damning incidents cited in the charging document was a 2014 compliance con-sultant recommendation. The consul-tant urged Rochester Drug to comply with the DEA’s “know-your-customer” due diligence policy, presciently warn-ing that, unless the company changed its practices, it would become a DEA target, “because of [its] willful blindness and de-liberate ignorance.” Assuming the information in the charging document is accurate, this case is different from other recent, high-pro-file governance failures in three signifi-cant ways: 1.Second-line compliance process and structures appear to have been working as designed. 2.The first line apparently subvert-ed the second line by willfully ignoring warnings.

Former Rochester Drug Co-Operative CEO Laurence Doud III was charged last week with unlawfully distributing oxycodone and fentanyl and conspring to defraud the Drug Enforcement Administration. The company’s former chief of compliance William Pietruszewski was also charged.

--- See Subversion on Pg. 4for Article Continuation

IIA Springfield - Sapphire Chapter May 2019

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Springfield Chapter of the Institute of Internal Auditors2018-2019 Program Schedule

You May Pay With a Credit Card

Date

May 23, 2019

Speaker

PhilBertram

Program

Operational Auditing

Hours

12:30 - 4:15

CPE

4

Members

$70

Non-Members

$85

Cancellations should be made at least 24 hours before the meeting to avoid a charge.Meetings will be held at the Northfield Center on Thursdays unless noted differently.

3.The first line repeatedly thwarted the second and pos-sibly the third line, in all like-lihood without the board’s knowledge. This incident points to the need for internal auditors to build strong relationships across all lines within the or-ganization, not just with their audit committees and boards. • Internal audit should bein a position to support sec-ond-line efforts and step in when compliance functions in the second line are effectively thwarted. •Internalauditshouldpro-vide an effective challenge to management when man-agement fails to protect and support control processes and structures. •Internalauditshouldcom-municate all risk management or compliance failures first to management, then directly to the board (especially if man-agement is complicit). •Internalauditshouldpro-vide some level of assurance on information that is present-ed to the board by manage-

ment. The 2019 North American Pulse of Internal Audit, De-fining Alignment in a Dynam-ic Risk Landscape, addresses internal audit’s involvement in information going to the board. This is an area where internal audit can improve. According to the Pulse survey, nearly 6 in 10 CAEs report that internal audit rarely or nev-er provides assurance on the quality of information given to the board, nor does internal audit have formal discussions about the information with the board and management. As regulators’ expectations grow about board oversight, it is imperative that we fulfill our responsibilities as internal auditors. In doing so, not only will we fulfill our missions of protecting and enhancing or-ganizational value, but we may also be keeping officials in our organizations out of jail.

Richard F. Chambers, CIA, QIAL, CGAP, CCSA , CRMA, is president and CEO of The IIA. In Chambers on the Profes-sion, he shares his personal re-flections and insights based on his 40 years of experience in the internal audit profession.

--- Subversion, Continued from Pg. 3

8 Ideas for Getting the Word to Students About Internal Auditing

1. Develop a Summer Leadership Program: Select students to participate in research projects, simula-tions, company visitations, peer outreach, and pre-sentations to your chapter board. 2. Provide students free admission to events and chapter meetings. 3. Sponsor student memberships in The IIA. 4. Develop a Mentorship Program: Pair practi-tioners with students to meet and talk about career paths, preparation, and more. 5. Appoint students to Chapter Boards and allow them to serve as volunteers on committees. 6. Organize case competitions for students. Stu-dent teams can submit an abstract, work with a prac-titioner and present solutions to an internal audit case. The IIA–Atlanta Chapter has successfully con-ducted state-wide case competition. 7. Invite professors of auditing and/or accounting to be involved with your chapter, whether serving on the board or board, speaking at chapter events. 8. Subscribe to Ia magazine for student centers, university libraries, etc.

May is International Internal Audit Awareness Month

IIA Springfield - Sapphire Chapter May 2019

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Chapter Officials • 2018-2019OFFICERS

PRESIDENT

AdministrationAudit

Nominating

FIRST VICEPRESIDENTPrograms & SeminarsSeminar RegistrationSECOND VICE PRESIDENTAcademic RelationsMembershipCertifications Program

SECRETARY

Directory, Distribution, & PRNewsletterPhotographerWebmaster

TREASURERS

HistorianGOVERNORS201920192019202020202020202120212021

PAST PRESIDENTS

The Board of Governors consists of all Officers, Governors, and the Past President.

Vacant

2017-20182016-2017

Satu Allen, MS, CISA

Jay Wagner, CIA, CFE, CISASharon Bohac, CPASatu Allen, MS, CISANikki Lanier, CPACatherine Madonia

Nikki Lanier, CPANikki Lanier, CPASally Burton

Alex Deal, CGAPCarol Jessup, PhD, CPA, CFEMargie WeiffenbachAlex Deal, CGAP

Sally Burton

Sally BurtonLisa KaighCary Franks, MS, CISASatu Allen, MS, CISA

Amy DeWeese, CPA

Tad Huskey, CPA, CGFM, CGAP

Robert Konzelmann

Satu.Allen2@illinois.gov558-6873524-4094524-1415558-6873785-6515782-4724Nikki.Lanier@illinois.gov785-6515785-6515558-2910ADeal@illinoistreasurer.gov557-5419206-7923782-2237557-5419SBurton@isbe.net558-2910558-2910557-3936741-4410558-6873Amy.DeWeese@illinois.gov558-6931THuskey@atg.state.il.us785-8127785-5627

Stephen D. Kirk, CIA, CGAPLesslie D. Morgan, CIA, CPA, CGFM, CISABarbara Ringler, CPARusti Cummings, CPAM. Ameen Dada, CGFMTracy Allen, CPA, CISABill Sampias, CISA, CFSADenise Behl, CIAAmy Lyons

557-1258524-1503785-6515557-5682785-0165782-8691785-5563558-2701558-4347

Leighann Manning, CGAPH. Jay Wagner, CIA, CFE, CISA

558-0010524-4094

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suggestions, job postings, or other

items of interest, please use

Springfield.IIA.Newslet-ter@gmail.com.

Chapter Mailing addressSpringfield Chapter

Institute of Internal AuditorsP.O. Box 205Springfield, IL62705-0205

SHOUTIT OUT!

May Is International Internal Audit Awareness Month

www.theiia.org/Awareness

Spread the word about

the value internal auditing

brings to organizations and

the business community.