INTERNAL CONTROLS and UNC-CHAPEL HILL Stan Koziol, CPA

ADMINISTRATIVE OFFICE BUILDING (AOB)

INTERNAL CONTROLS BUNKER BELOW THE AOB

Internal Control is a Process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

CATEGORIES Effectiveness and efficiency of operations Effectiveness and efficiency of operations Reliability of financial reporting Reliability of financial reporting Compliance with applicable laws and regulations Compliance with applicable laws and regulations

TOPICS Buzz Words & Phrases Buzz Words & Phrases Review Internal Control Initiatives Review Internal Control Initiatives

BUZZ WORDS & PHRASES SOX SOX Sarbanes-Oxley Act of 2002

SARBANES OXLEY ACT of 2002 Enacted on July 30, 2002 Enacted on July 30, 2002 In Response to Major Corporate and Accounting Scandals In Response to Major Corporate and Accounting Scandals Applies to Companies Registered with the SEC Applies to Companies Registered with the SEC Does Not Apply to Not-For-Profit Entities Does Not Apply to Not-For-Profit Entities

SARBANES OXLEY ACT of 2002

ENRON

WHO IS RESPOSIBLE ?

GET THE SHREDDER !

WHAT HAPPENED ?

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices Did You See Today’s Newspaper? Did You See Today’s Newspaper?

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices Did You See Today’s Newspaper? Did You See Today’s Newspaper? Tone at the Top Tone at the Top

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices Did You See Today’s Newspaper? Did You See Today’s Newspaper? Tone at the Top Tone at the Top Hotline / Whistle Blower Hotline / Whistle Blower

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices Did You See Today’s Newspaper? Did You See Today’s Newspaper? Tone at the Top Tone at the Top Hotline Hotline Sub-Certification Sub-Certification

BUZZ WORDS & PHRASES SOX SOX NACUBO Advisory Report NACUBO Advisory Report Guidance and Best Practices Guidance and Best Practices Did You See Today’s Newspaper? Did You See Today’s Newspaper? Tone at the Top Tone at the Top Hotline Hotline Sub-Certification Sub-Certification Cascade Effect Cascade Effect

CASCADE EFFECT Risk that some states will pass their own version of Sarbanes-Oxley for smaller, privately held companies and not-for-profits. Risk that some states will pass their own version of Sarbanes-Oxley for smaller, privately held companies and not-for-profits. AICPA formed the Special Committee on State Regulation. AICPA formed the Special Committee on State Regulation.

UNC CHAPEL HILL INITIATIVES Establish the “Tone at the Top” Establish the “Tone at the Top”

UNC CHAPEL HILL INITIATIVES Establish the “Tone at the Top” Establish the “Tone at the Top” Dedicate a Full Time Position Dedicate a Full Time Position

UNC CHAPEL HILL INITIATIVES Establish the “Tone at the Top” Establish the “Tone at the Top” Dedicate a Full Time Position Dedicate a Full Time Position Implement “Best Practices” Implement “Best Practices”

UNC CHAPEL HILL INITIATIVES Establish the “Tone at the Top” Establish the “Tone at the Top” Dedicate a Full Time Position Dedicate a Full Time Position Implement “Best Practices” Implement “Best Practices” Ethics Ethics New Ethics StatementNew Ethics Statement Applying Ethics to Your JobApplying Ethics to Your Job Code of ConductCode of Conduct Ethics TrainingEthics Training

UNC CHAPEL HILL INITIATIVES Hotline & Financial Controls Website Hotline & Financial Controls Website

UNC CHAPEL HILL INITIATIVES Hotline & Financial Controls Website Hotline & Financial Controls Website University Enterprise Risk Management Advisory Committee University Enterprise Risk Management Advisory Committee

UNC CHAPEL HILL INITIATIVES Hotline & Internal Controls Website Hotline & Internal Controls Website University Enterprise Risk Management Advisory Committee University Enterprise Risk Management Advisory Committee Internal Control Self Assessment Internal Control Self Assessment

UNC CHAPEL HILL INITIATIVES Hotline & Internal Controls Website Hotline & Internal Controls Website University Enterprise Risk Management Advisory Committee University Enterprise Risk Management Advisory Committee Internal Control Self Assessment Internal Control Self Assessment Audit and Finance Committee Charter Audit and Finance Committee Charter

UNC CHAPEL HILL INITIATIVES Hotline & Internal Controls Website Hotline & Internal Controls Website University Enterprise Risk Management Advisory Committee University Enterprise Risk Management Advisory Committee Internal Control Self Assessment Internal Control Self Assessment Audit and Finance Committee Charter Audit and Finance Committee Charter Enhanced Data Analysis Enhanced Data Analysis

UNC CHAPEL HILL INITIATIVES Hotline & Internal Controls Website Hotline & Internal Controls Website University Enterprise Risk Management Advisory Committee University Enterprise Risk Management Advisory Committee Internal Control Self Assessment Internal Control Self Assessment Audit and Finance Committee Charter Audit and Finance Committee Charter Enhanced Data Analysis Enhanced Data Analysis Sub-Certification Sub-Certification

IN CONCLUSION Integrity & Public Trust Integrity & Public Trust Positioned to be #1 Positioned to be #1 Funding Funding Attractive Bond Ratings Attractive Bond Ratings Excellence in Financial Reporting Award from GFOA Excellence in Financial Reporting Award from GFOA

SELF ASSESSMENTS Thank you for all the suggestions! Thank you for all the suggestions!

SELF ASSESSMENTS Thank you for all the suggestions! Thank you for all the suggestions! Written disaster plan Written disaster plan

SELF ASSESSMENTS Thank you for all the suggestions! Thank you for all the suggestions! Written disaster plan Written disaster plan Segregation of duties Segregation of duties

SELF ASSESSMENTS Thank you for all the suggestions! Thank you for all the suggestions! Written disaster plan Written disaster plan Segregation of duties Segregation of duties Equipment inventory list Equipment inventory list

Internal Control is a Process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories:

THANK YOU !