Higher Education Programs
Helen Vanderland, Audit Director
Joseph Stepp, Project Manager
November 13, 2009
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Audit Assignments
New Audit Approach for Universities
Statewide Reports
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One Card
Institutional Performance Standards
Student Housing
Inspector General
Accounts Receivable
Current Developments – SAS 115
Audit Issues - ARRA
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Helen Vanderland– UVA, UVA Medical
Center, Longwood, Old Dominion, James
Madison, Christopher Newport
Joe Stepp – Virginia Tech, Virginia
Commonwealth, Mary Washington, William
and Mary, George Mason, VCCS
Jim Quesenberry- VMI
Stephanie Johnson – Radford
Staci Henshaw – Virginia State
Tracy Surratt – Norfolk State
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c.
d.
New approach to performing financial statement audits
began in FY09
“Systems approach”- identify, evaluate, and test controls
as well as review functionality within your administrative
systems
Designed to provide an opinion on the financial
statements and identify opportunities to enhance
operations
Final audit report – recommendations to improve
processes and better use administrative systems
functionality
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2.
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4.
One Card
Institutional Performance Standards
Student Housing
Inspector General
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Issued in June 2009
Objectives:
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Type of programs in use
Adequacy of controls over accounting, reporting,
and security
Similarities of operations
Features:
 Crediting financial aid disbursements to One
Card
 Agreements with banks allowing the One Card to
also be the bank’s debit card
 Off campus vendors
Off-campus vendors
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Secure connection between merchant and
school for transmitting data
Merchants do not store or print personal
data at the point of sale
Merchants verify balances before
accepting charge transaction
Security:
 Must be active in data base to receive a
card
 ID is required
 Unused card stock is secured
 Credit card payment information is secure
Reporting and Accounting:
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Timely reconciliations of One card
balances to the university’s accounting
system
One Card balances at FYE are properly
reported on the Financial Statements
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Issued August 2009
Name of report: “Review of Data Collection
Process Over Institutional Performance
Standards”
Four Recommendations
• Controls over data reported TO
SCHEV are adequate
• Controls over data reported BY
SCHEV are adequate
• How data is used in the certification
process
• Controls at SCHEV to protect the
data
Document policies and procedures
Cross train employees
Enhance SCHEV website
Establish a certification subcommittee
Objectives:
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Compare university policies
Discuss enrollment trends, housing inventories, and
on-campus occupancy rates
Provide an overview of the financial arrangements
Objectives:
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evaluate the financial impact of third-party
financing arrangements
review the effect of foundation debt
compare the student cost of housing options
summarize the financial affect
evaluate the impact of university housing policies
Mandatory On-campus Housing Policies:
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One (VMI) - all students four years
One (LU) - all students three years
Two (RU and CNU) - all students two years
Seven - all students one year
Five – no requirement
UMW moving from one year to two years
CNU moving from two years to three years
Universities where a greater
percentage of students live
on-campus in fall 2008 than
in fall 2000:
• Richard Bland College
• Christopher Newport University
• Virginia Commonwealth University
• Old Dominion University
• George Mason University
• University of Mary Washington
• University of Virginia’s College at
Wise
• Norfolk State University
Universities where a smaller
percentage of students live oncampus in fall 2008 than in fall
2000:
• College of William and Mary
• Longwood University
• Radford University
• Virginia State University
• Virginia Tech
• University of Virginia
• James Madison University
Foundation constructed or purchased
facilities that the University operates as
on-campus housing:
GMU, LU,
ODU. RBC,
VCU, UMW
Foundation owned buildings are leased to
the University and operated as on-campus
housing:
CNU
CWM
RU
Third-party owned facilities are leased to
the University and operated as on-campus
housing:
CWM, VCU
Foundation constructed and operated project that
sits on land owned by the University:
NSU, VSU
Universities:
1 –Have on-campus mandatory housing policies based
on individual goals
2 –Have sufficient demand for current on-campus
housing and plan to add additional capacity
3 –Have worked with their foundations to create
financing options
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Report issued November 2009
Purpose
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Determine if the Commonwealth needs an Office of Inspector General
Review the Commonwealth’s current efforts to address accountability,
program mismanagement, fraud, waste, and abuse.
Conclusion
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Current Fraud, Waste, and Abuse Hotline process should be directed
by a joint oversight group (General assembly, Governor, and Chief
Justice) and the hours and coverage should be increased.
If the Commonwealth were to establish an Inspector General Office,
that duplication of efforts (internal audit, internal affairs, and existing
Inspector General functions) should be avoided and that the General
Assembly, including the APA and JLARC have access to any
information generated.
Internal Audit Report
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To be issued Spring 2010
Purpose:
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Compare the Commonwealth’s 40 internal audit departments
Observe and evaluate charters, risk assessments, work plans,
reports of results, and quality assurance reviews
Anticipate including:
Recommendations for more cost-effective strategies for
complying with the standards and industry best practices
 Guiding principles which boards may consider in developing
their own methods for evaluating their internal auditors
against industry best practices
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Accounts Receivable Review – Part 1 – 6/30/08
 Issued May 2009
 Focused on reporting and general processes used to
collect receivables
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Accounts Receivable Review – Part 2 – 6/30/09
 Report to be issued in December 2009
 Examines the individual agency and institution practices
compared to best practices for granting credit
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Replaces SAS 112
Effective FY10 Audits
Main change – Revised definitions
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SAS 112 provided a list in the standard of
indicators of a control deficiencies that should
be regarded as at least a significant deficiency
and a strong indicator of a material weakness
in internal control.
SAS 115 provides examples of circumstances
that may be deficiencies, significant
deficiencies, or material weaknesses.
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Differently defines deficiency in internal
control, significant deficiency, and material
weakness
Provides guidance in evaluating severity of
deficiencies in internal control
Requires the auditor to communicate
significant deficiencies and material
weaknesses in writing to management
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Deficiency in internal control design
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A control necessary to meet a control objective is
missing, or
An existing control is not properly designed so that
the control objective could not be met
Deficiency in internal control operation
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A properly designed control does not operate as
intended, or
Staff do not possess the necessary authority or
competence to perform the control effectively
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Material Weakness
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Reasonable possibility that a material financial
statement misstatement would not be prevented or
corrected on a timely basis
Significant Deficiency
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A deficiency or combination of deficiencies that are
less severe, yet important enough to merit attention
by management
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Evaluating Deficiencies
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Magnitude of potential misstatement
Reasonable possibility of detection and correction
Factors affecting magnitude
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Financial statement amounts
Volume of transactions exposed to the deficiency
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ARRA in 2010
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During the FY09 audit will inquire about:
 Controls
 Reporting
 Formatting
Helen Vanderland, Audit Director
[email protected]
Joseph Stepp, Project Manager
[email protected]