1. Internal Auditing & Management Consulting Overview BOT On-Campus Orientation August 29, 2011 Presentation to UWF BOT

2. Authority Finance, Administration and Audit Committee Charter BOT Finance, Administration and Audit Committee Charter Internal Audit Charter UWF Internal Audit Charter Florida Statute 20.055 Inspector General Act August 29, 2011 Presentation to UWF BOT

3. Reporting Authority August 29, 2011 Presentation to UWF BOT President Associate Vice President Internal Auditor III Student Employee Internal Auditor UWF Board of Trustees Finance, Administration and Audit Committee Note: One position (.75 FTE auditor) was lost in 2011/12 for budget cuts

4. August 29, 2011 Presentation to UWF BOT NameBetsy Bowers Cindy Bookout Greg HaleAmy Bueno Title Associate Vice President Internal Auditor III Internal AuditorStudent Worker Years in Internal Auditing 277 1.5 (internship @ Escambia County School District) 8 months Years with UWF 18 years10 months7 months8 months Years Audit Experience 2992 8 months Educational Degrees, Institution, and Major MBA and BA (Acct) East Tennessee State University BS Accounting University of South Alabama MAcc and BSBA (Acct Information Systems) University of West Florida Working toward BSBA General Business, Management Minor Professional Certifications Certified Internal Auditor (CIA), Certified Fraud Examiner (CFE), Certified Government Financial Manager (CGFM), Certified Inspector General (CIG) Certified Public Accountant (CPA) Alabama and Florida

5. Committee Responsibilities  Meets quarterly  Vice President-Administrative Services, Chief Budget Officer, and General Counsel prepare agenda items  Associate Vice Internal Auditing prepares agenda – typical discussions include status of audit plan, reports issued, hot topics/risks.  Oversight of the financial statement preparation process.  Oversight of the internal audit function.  Oversight of external audits.  Reporting to the FAA(Finance, Administration & Audit) Committee of the Board.  Approval of Annual Audit Plan. August 29, 2011 Presentation to UWF BOT

6. Standards Institute of Internal Auditors International Standards for Professional Practice of Internal Auditing Institute of Internal Auditors Code of Ethics Government Auditing Standards (Yellow Book) Generally Accepted Accounting Principles (GAAP) August 29, 2011 Presentation to UWF BOT

7. Internal Auditors vs. External Auditors August 29, 2011 Presentation to UWF BOT InternalExternal UWF EmployeeIndependent contractor Serves needs of UWF Serves 3 rd parties, who need reliable financial information Focuses on FUTURE events by evaluating controls designed to assure accomplishment of UWF goals and objectives Focuses on accuracy and understandability of HISTORICAL events as expressed in the financial statements Is DIRECTLY concerned with prevention of fraud in any form INCIDENTALLY concerned with fraud, but DIRECTLY concerned if materially affect financial statements Independent of activities audited, but ready to respond to needs/desires of all UWF management Independent of management and board of directors, both in fact and mental attitude Reviews activities CONTINUALLY Reviews records/financial statements PERIODICALLY, usually once a year

8. AUDITS Financial Financial Compliance Compliance Operational Operational Combination Combination Management Advisory Services (consulting) Investigations August 29, 2011 Presentation to UWF BOT ACTIVITIES

9. Functions Supervise and coordinate audits, investigations, management reviews, and other accountability activities Conduct activities to promote economy and efficiency in the administration of or preventing fraud, waste and abuse in the university programs and operations. Follow-Up on prior audit findings (internal and external auditors ) Keep the President and Board of Trustees informed concerning fraud, abuses, and deficiencies in university programs Coordinate activities with the Auditor General, federal auditors and other governmental agencies Share with management collective expertise, insight, and knowledge, and assist management in establishing/enhancing internal control system August 29, 2011 Presentation to UWF BOT

10. UniversityBusiness Cycles University Business Cycles UWF Internal Auditing Risk Analysis August 29, 2011 Presentation to UWF BOT

11. Overall View of Business Cycles August 29, 2011 Presentation to UWF BOT University Core Missions InstructionResearchPublic Service Ancillary Missions Other(DSOs) Fiscal ProprietaryOperational Student Services Administrative Services Personnel

12. University Core Missions Instruction Academic Reporting Instruction & Instructional Support Research Research Management & Support Public Service August 29, 2011 Presentation to UWF BOT

13. August 29, 2011 Presentation to UWF BOT University Core Missions InstructionResearchPublic Service Ancillary Missions Academic reporting Instruction & Instructional Support Research Management & Support Public Service OtherFiscalProprietaryPersonnelAdministrativeStudent ServicesOperational DSOs Budgeting & Performance Measures Revenues & Collections Disbursements Asset Management Financial Reporting Procurement Auxiliary Activities & Contracted Services Personnel Management & Recruitment Facilities Development & Management Computing & IT Support Student Support Services Student Health Services Planning & Policy Development Administrative Support Services

14. External Audits Performed Auditor General  Financial Statement  Federal Funds  Bright Futures  SACS Special Purpose Financial Statement (every 10 years) Federal  Florida Small Business Network CPA firms  WUWF-FM  Intercollegiate Athletics Financial Statement  Direct Support Organizations/Affiliated Organizations  UWF Foundation  West Florida Historic Preservation, Inc.  Florida Institute for Human & Machine Cognition August 29, 2011 Presentation to UWF BOT

15. RISK FACTORS Executive Management Interest Internal Controls System Fraud Likelihood and Impact Changes in Personnel/Procedures Prior Audit Findings Time Since Last Audit Dollar Volume Exposure Interdependence Public Disclosure Implications External Audit Coverage August 29, 2011 Presentation to UWF BOT RISK TYPES OF RISK Strategic Financial Operational Compliance Reputational

16. Evaluation of Audit Areas August 29, 2011 Presentation to UWF BOT TopicFactors AVP Evaluation Conclusion Financial Risk Dollar Volume Exposure Dollar Volume Exposure 27% budget cut in 3 years; ARRA one-time funding; reduced endowment interest; changes to Financial Aid Management Interest Management Interest : High Change Change : Significant reductions, new Chief Budget Officer Public Exposure : Highly newsworthy, external interest high Prior Audits Prior Audits : AG audits financial statement, federal funds and Bright Futures ; IAMC Treasury Management audit Competency of Personnel : Fin Svcs and Budget Office personnel competent; leadership strong. We are cognizant of tight budget Ethical Climate : Those entrusted appear ethical; however, cognizant that fraud can occur anywhere Interdependence : High Fraud Potential : High Reduced funding is foremost on all manager’s minds, as well as the Board of Trustees. Increased exposure for fraud exists as many are asked to do more without salary increases, as well as personal financial situations may have been significantly impacted with the recession. Every area IAMC will work in during the coming two fiscal years will touch the financial risk in the course of work. All IAMC personnel are competent to perform an assessment of financial risk. Some IAMC personnel have professional certifications (CIA, CPA, CFE, and CGFM) which will compliment the financial acumen within the IAMC portfolio of skills. Incorporated into all aspects of IAMC financial, operational, and compliance audits as well as MAS and investigative activities. Parking Services Dollar Volume Exposure Dollar Volume Exposure : $500k (decals, fines, meters) Prior AuditNever audited Prior Audit : Never audited ; MAS by IAMC on decals Management Interest Management Interest: Moderate; pressure to build a parking garage Strategic Impact Strategic Impact : If parking not available, students may not continue at UWF; revenues decline External Audit External Audit : AG looks at revenue on financial audit Ethical Climate: Ethical Climate: Parking Svcs does not collect money; Parking Svcs clerk enters A/R into system Fraud Potential Fraud Potential : Level of unpaid fines Internal Auditing personnel are competent to assess the motor pool and vehicles. We can assess the validity/ reasonableness of the rates assessed by Motor Pool. We can also review the advantages/ disadvantages regarding lease/purchase/rental of vehicles. Management has expressed concern over this area. AUDIT AUDIT PARKING SERVICES

17. Examples of Audit Areas AthleticsAuxiliaries Computer Security Construction Financial Aid Housing Institutes & Centers Library Parking & Transportation Services Procurement Purchasing Card Research & Sponsored Programs Student Activities Student Government Association Vending/Contracted Services August 29, 2011 Presentation to UWF BOT

18. Work Plan 2011/12 Audits Aquatic Center Aquatic Center Construction Construction Educational Research Center for Child Development (ERCCD) Educational Research Center for Child Development (ERCCD) Institutes and Centers (in process) Institutes and Centers (in process) PCard Audits (department level) PCard Audits (department level) Recreation Recreation Revenue Generating Contracts (in process) Revenue Generating Contracts (in process) Telecommunications Telecommunications Testing Center Testing Center Voyager Student Center Voyager Student Center Management Advisory Services Evaluation of Policies, Rules, Procedures and changes Evaluation of Policies, Rules, Procedures and changes Risk & Compliance Council Risk & Compliance Council Banner Student Implementation – team members Banner Student Implementation – team members Facilitator for Workgroups and Departments Facilitator for Workgroups and Departments August 29, 2011 Presentation to UWF BOT

19. Activities 2010/11 Audits  Auxiliaries  American Recovery and Reinvestment Act (ARRA)  Institutes and Centers (in process)  Parking & Transportation Services  Revenue Generating Contracts (in process)  Treasury Management  Vending Management Advisory Services  Research and feedback on rules, policies, and procedures  DMV annual certification  Emerald Coast cashiering  Export controls, eCustoms  External Auditor selection Athletics and WUWF Public Media  Mobile Data Plans  Oil Spill claims  Parking Decal inventory  Perquisites  Retention and destruction of electronic records  Risk Council  SACS 5 th Year report (Section leader)  Search committees  Small and attractive assets  Staff Senate  Terminated employee security change  Ticket Office Procedures and workflow  Websense August 29, 2011 Presentation to UWF BOT

20. Other Services Academic Outreach Student internshipStudent internship Teaching UWF White Collar Crime course (CCJ4644)Teaching UWF White Collar Crime course (CCJ4644) Guest speaker in classesGuest speaker in classes Chapter Advisor –Delta Sigma Pi Business FraternityChapter Advisor –Delta Sigma Pi Business FraternityVolunteerism Move-In for Residence HallsMove-In for Residence Halls No Run Around: Student Assistance 1 st week of class (worked since 1994)No Run Around: Student Assistance 1 st week of class (worked since 1994) Hand to Paw DriveHand to Paw Drive Staff SenateStaff Senate August 29, 2011 Presentation to UWF BOT

21. Questions & Comments? August 29, 2011 Presentation to UWF BOT