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UNCW Institutional Risk Management Update Board of Trustees Audit Committee November 20, 2014.

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Presentation on theme: "UNCW Institutional Risk Management Update Board of Trustees Audit Committee November 20, 2014."— Presentation transcript:

1 UNCW Institutional Risk Management Update Board of Trustees Audit Committee November 20, 2014

2 IRM Best Practice Action Steps 1.Develop a disciplined process to consider risk in strategic discussions. 2.Designate an owner of the risk identification process. 3.Require all top administrators to prioritize risk. 4.Sift through the prioritized risks to decide which ones warrant attention at the highest level. 5.Require annual written reports on each high-priority risk being monitored. 6.Re-assess priority risks at the board level at least once a year. 7.Look for blind spots. 8.Move risk identification deeper into the institution each year. 9.Keep repeating the process. C 2009 Association of Governing Boards of Universities and Colleges, United Educators 2

3 IRM Organization IRM Steering Committee Provost and Vice Chancellor for Academic Affairs Vice Chancellor for Business Affairs Vice Chancellor for Student Affairs General Counsel Director – Internal Audit IRM Committee, Chaired by IRM Officer Academic Affairs (4) Business Affairs (9) Student Affairs (2) Chancellor (2) University Advancement (1) Two processes Two processes :  Tier 1 Profile:  Tier 1 Profile: Engages leadership  Tier 2 and Emerging Risk Assessment Process:  Tier 2 and Emerging Risk Assessment Process: Engages employees across the institution; provides a screening of changing processes; helps the organization to manage interconnected risks. 3

4 Goals of the Tier 1 Profile (Strategic Risk Profile)  To understand institution-level risks*  Correlate those risks to their potential impact on institutional strategy  Measure, monitor and report on those risks to the board *Institution-level risks are not owned by any one department. 4

5 Tier 1 Evaluation – Interim Update IRM Best Practice Action Steps 1.Require annual written reports on each high-priority risk being monitored. (Annual report is in April. November is an interim update.) 2.Keep repeating the process. C 2009 Association of Governing Boards of Universities and Colleges, United Educators 5

6 Interim Tier 1 Update – New Mitigations Essential Resources Monitoring and watching state revenues for any downside impact Monitoring average student debt and student cohort default rate Regulatory Intervention Title IX responsibilities re-organized Federal Grant for $300,000 to provide enhancements to victim advocacy services, prevention and intervention teams, as well as bystander intervention programming Financial Aid Compliance checklist completed during DOE Program Review of Financial Aid Incorporated in the 2014 Annual Security Report (ASR) the requirements of new SaVE Act legislation (Clery Act amendment) Talent Management AVC HR search nearing completion Key positions filled for Assoc. Provost-Research/Dean, Vice Chancellor for Business Affairs, Dean – College of Arts & Sciences, Controller Informal succession planning (by division) 6

7 Interim Tier 1 Update – New Mitigations (cont’d) Campus Health & Safety $300,000 federal grant to enhance prevention and intervention teams as well as bystander intervention programming Active shooter exercise after action report Study and proposal to design replacement of fire alarm notification system Increased frequency of lab inspections and training New and improved touch points between EH&S and new research faculty plus earlier warning of research lab closures Updated Communicable disease plan, partnering with area health providers Added express shuttle route on Randall Drive to accommodate new apartments off campus Continuity of Operations Design proposal received for new code-compliant fire alarm notification system for main campus. Design facilities plan for alarm receiving center in progress. (Also a safety item) Infrastructure improvements: Performance Contract 2; Stormwater Plan; Randall Library structural improvements; Renovation of S&BS. 7

8 Identification Cycle for Emerging/Tier 2 Risks IRM Best Practice Action Steps 1.Sift through the prioritized risks to decide which ones warrant attention at the highest level. 2.Move risk identification deeper into the institution each year. C 2009 Association of Governing Boards of Universities and Colleges, United Educators 8

9 International Travel Determine and codify the alternatives for managing the risk analysis and decision-making around non-credit bearing international travel Executive Sponsors: Provost Battles/VCSA Leonard Facilitator: Dr. Martin Posey Ebola Protocols and partnerships are being established between EH&S, Student Health, EMT’s and local hospitals. An educational and awareness campaign for our students and employees is ongoing. Procurement and usage of PPE. Executive Sponsor: VCSA LeonardFacilitator: Stan Harts Mental and Physical Health Issues in Remote Programs Coupled with the review of international travel policies is the degree of partnership with Student Health, evaluating where this expertise could be leveraged to reduce risks Executive Sponsors: Provost Battles/VCSA Leonard Facilitator: Katrin Wesner Determining which risks warrant attention requires a periodic identification and analysis of emerging and/or tier 2 risks, and evaluation to include completed or planned mitigations

10 Research Programming and Business Continuity Review process for new programming. Assess support and requirements for buildings, laboratories, and equipment as well as adequacy of compliance. Executive Sponsors: Provost Battles/ VCBA Whitfield Facilitator: Dr. Ron Vetter Fire Prevention and Preparedness Fire system upgrades and replacement. Monitoring and reporting systems effective 24/7. Exit drills for academic spaces. Executive Sponsors: VCBA Whitfield/VCSA Leonard Facilitator: Stan Harts Pedestrian, Bicycle and Skateboard Safety Draft policy for on campus. Changes to physical infrastructure, additional shuttle services, and traffic counts at major intersections. Executive Sponsors: VCSA Leonard/VCBA Whitfield Facilitator: Stan Harts Transportation Inadequate coverage at department level. Coordination with NCDOI affirms controls in place are appropriate. White paper forthcoming from DOI to define affiliates. Executive Sponsor: VCBA Whitfield Facilitator: Pam Elliott Determining which risks warrant attention requires a periodic identification and analysis of emerging and/or tier 2 risks, and evaluation to include completed or planned mitigations (continued)

11 PCI Compliance National incidents (Target, Home Depot) and average incurred cost increasing (one source: $200/record). Controller commissioning study. Updating registers and contract language. Executive Sponsor: VCBA Whitfield Facilitator: Sara Thorndike IT Security Breach Response Plan Expand our all hazards response planning to include data breaches. Assess our response to the incident occurring in Executive Sponsors: GC Hoon/VCBA Whitfield Facilitator: Zach Mitcham Network and Physical Plant Infrastructure Our network is in need of significant upgrades, requiring increased funding. Performance contracts are enabling upgrade of HVAC and energy monitoring systems. Executive Sponsor: VCBA Whitfield Facilitators: Steve Perry and Bob Fraser Growth Capacity Analyze the capacity of instruction, facilities and services. Consider teaching and specialized spaces, infrastructure and human capital. Executive Sponsors: Provost Battles, VCBA Whitfield, VCSA Leonard Facilitators: Bob Fraser and Dr. Terry Curran Determining which risks warrant attention requires a periodic identification and analysis of emerging and/or tier 2 risks, and evaluation to include completed or planned mitigations (continued)

12 Applied Learning Applied learning opportunities (e.g., study abroad, service learning, field research practicum) introduce a variety of safety and programming risks. Executive Sponsors: GC Hoon/Provost Battles Facilitator: Pam Elliott ADA – eLearning How we comply with the Americans with Disabilities Act changes as we increase our e- Learning programming. Executive Sponsors: GC Hoon Facilitators: Dr. Martin Posey/Dr. Cecil Willis/Dr. Peggy Turner Financial Aid and Student Debt Cohort Default Rate The financial demographics of our student population is changing reflective of larger societal concerns. Executive Sponsors: VCBA Whitfield/Provost Battles Facilitators: Sara Thorndike/Dr. Ixchel Baker Tate Retention Analytics Significant efforts and planning are required to ensure the success of our student body. Analysis to probe who, what and why around student retention. Executive Sponsors: VCBA Whitfield/Provost Battles Facilitators: Dr. Martin Posey/Dr. Terry Curran Determining which risks warrant attention requires a periodic identification and analysis of emerging or Tier 2 risks, and evaluation to include completed or planned mitigations (continued)

13 Clery Act Compliance New reporting and education requirements in the Violence Against Women Reauthorization Act / and Campus Sexual Violence Elimination Act (SaVE) Provision (Clery Act amendment). Executive Sponsors: GC Hoon/VCBA Whitfield Facilitator: Chief Donaldson Response Protocols for Incidences of gender-based/sexual misconduct How we comply with Title IX is constantly evolving since the Dear Colleague letter of April 2011 and continuing legislation and enforcement. Executive Sponsors: GC Hoon/VCSA Leonard Facilitator: Dr. Brian Victor Determining which risks warrant attention requires a periodic identification and analysis of sufficiently narrow focus in Tier 1 areas. These two items are compliance based and continue to emerge as significant risks.

14 UNCW Institutional Risk Management Update Questions? Board of Trustees Audit Committee

15 Tier 1 Risks Evaluations – Interim Update Volatile Essential Resources – Rated High Risk Strategic Objective Risk NameKey DriversKey Risk IndicatorsCurrent Mitigations Minimize the impact of changing resources supporting University mission and goals Shortfalls in funding with limited time to manage accordingly Other state policy funding priorities State withdrawal from continuing and one time needs Heightened competitiveness for research awards Heightened competitiveness for out of state students Limits on available Pell funding Average student debt Pressure to increase expenses to meet regulatory mandates Updating, retrofitting and replacing critical infrastructure Supporting strategic initiatives No significant change in the revenue mix Positive enrollment (higher than expected) for Fall Housing contracts higher than expected as well. Continuing decrease in indirect cost receipts Budget cut more in FY14 than FY13, but less than FY Biennium, 2% Caps on tuition, 5% Caps on financial aid paid with tuition, 15% (UNCW at 12.7%) Shortfall in state revenues first 2 quarters Student default rate maintaining after several years rising Focused management of research and graduate programs New revenue sources Improved Moody’s credit rating outlook Monitoring and watching out of state enrollment for any downside impact Monitoring and watching state revenues for any downside impact Monitoring average student debt and student cohort default rate Risk Issue  Tuition limits, state support, research funding, and outcomes- based policies have the potential to reduce the availability of essential resources Potential Impact  Financial  Strategic  Operational 15

16 Tier 1 Risks Evaluations – Interim Update Regulatory Intervention – Rated High Risk Strategic Objective Risk NameKey DriversKey Risk IndicatorsCurrent Mitigations Mitigate regulatory compliance risk in an inherently decentralized environment Inability to comply with all laws and regulationsNationally Increase in federal and state regulations Increased political scrutiny Instances of culture caught unaware of compliance failure Increased regulatory oversight and intervention:  Accountability for safety  Pressure to increase affordability and efficiency  Governance Nationally, many states have legislation affecting tuition – freezes, caps and apportionmentUNCW Compliance position turnover Added responsibilities DOE: Title IX/Clery Act Nationally, 85 OCR investigations, key Resolution Agreements, federal inquiries, federal “It’s On Us” program, and legislation in several states DOE program review at UNCW, uptick in Title IX reports (risk of federal complaint) New reporting and education requirements in the Violence Against Women Reauthorization Act / and Campus Sexual Violence Elimination Act (SaVE) Provision (Clery Act amendment). Pending rulemaking on federal financial aid PCI Compliance Internal Audits with Compliance Components UNC System Coordination ITS Assessments Increased use of trained fact finders for Title IX investigations Title IX responsibilities re- organized Federal Grant for $300,000 to provide education and programming Financial Aid Compliance checklist completed during DOE Program Review of Financial Aid Incorporated in the 2014 Annual Security Report (ASR) the requirements of new SaVE legislation (Clery Amendment) Risk Issue  Deficient coordination and support Potential Impact  Financial  Reputational  Operational 16

17 Tier 1 Risks Evaluations – Interim Update Campus Health & Safety – Rated High Risk Strategic Objective Risk NameKey DriversKey Risk IndicatorsCurrent Mitigations Mitigate vulnerability of students, faculty and staff in an open environment Inability to achieve the safest possible environment in which to learn Shift in national expectations from shared responsibility to the safest possible environment in which to learn Title IX, White House “It’s On Us” Alcohol prevention strategies Title IX training of mandatory reporters. Title IX training of investigators. Active shooter threat – increased frequency nationwide UCLA Lab Incident resulting in personal accountability for faculty member and $4.5 million institutional expense for legal and consulting. Ebola (low likelihood, high impact), meningitis, seasonal flu Growth in off campus student housing 2012 to 2013 (calendar year), violent crimes increased from 5 to 10; weapons violations decreased; many KRIs constant Workers’ comp costs up 3.5% FY14, Student health as self reported by students improved; health center visits increased 11% FY15 (current year), uptick in Title IX campus reports and investigations FY12: 0 reportable fires FY13: 1 reportable fire FY14: 2 reportable fire 2014, smoke from malfunctioning lab equipment Fall 2014, Growth in new off campus housing impacting safety on College Road (150 left turns, 60 bicycles/hour) Ebola death in US and travel to affected countries $300,000 federal grant to enhance victim advocacy services, enhance prevention and intervention teams as well as bystander intervention programming Active shooter exercise after action report Funding for Dept. of Insurance recommendations; study and proposal to design replacement of fire alarm notification system Increased frequency of lab inspections and training. New and improved touch points between EH&S and new research faculty plus earlier warning of research lab closures Updated Communicable disease plan, partnering with area health providers Added express shuttle route on Randall Drive Risk Issue  Expectations and accountability for safety and health is increasing, and existing resources must meet stronger requirements Potential Impact  Reputational  Hazard  Operational  Financial  Compliance 17

18 Tier 1 Risks Evaluations – Interim Update Talent Management – Rated High Risk Strategic Objective Risk NameKey DriversKey Risk IndicatorsCurrent Mitigations Mitigate talent management recruitment and retention risk Inability to achieve a right- sized, innovative, highly effective workforce Very limited institutional control over compensation Stagnant wages, colliding with greater economic mobility Noncompetitive salary/benefits/startup packagesCounterpoints Institution Quality and Location FY12 to FY13, Turnover rose from 9% to 10.8%. The highest numbers were in employees with 0-10 years of service; retirements represented 3.0% of workforce turnover. Turnover was highest among professionals and paraprofessionals (these two classes represent 52.5% of all turnover and increased from 10.8% to 14.7%) Faculty turnover is <6% Leadership turnover is resulting in transitions – several key positions filled, new vacancies AVC HR search nearing completion Informal succession planning (by division) Leadership development (LEAD Program Climate surveys SPA compensation philosophy Key positions filled for Assoc. Provost- Research/Dean, Vice Chancellor for Business Affairs, Dean – College of Arts & Sciences, Controller Risk Issue  High quality faculty and dedicated staff are essential to delivering the programs and services that best serve 21st century students Potential Impact  Strategic  Operational 18

19 Tier 1 Risks Evaluations – Interim Update Continuity of Operations – Rated High Risk Strategic Objective Risk NameKey DriversKey Risk Indicators Current Mitigations Mitigate impact to students, faculty and staff, facilities and operations on a campus vulnerable to natural disasters Inability to complete our teaching, research, and service mission following a disaster Critical restoration abilities rely heavily on redundancy and hardening of critical services, such as power and data Scientific and computer-based research heavily dependent upon specialized equipment and facilities Dependency upon provision of supplies and services Monitoring alarms is a 24/7 responsibility Mutual aid is key when there is a larger scale event affecting the region Effectiveness requires developed knowledge, relationships and training of essential personnel Core mission delivery alternatives aid in recovery Campus withstood Hurricane Arthur very well with little issues with stormwater Several temporary failures of fire alarm notification system – (system has since been upgraded to more current technology) MARBIONC building with generators – gives campus hardened research centers Infrastructure improvements: Performance contract 2 and stormwater plan; renovation of S&BS. Eliminated single point of failure for data connection with the addition of MCNC site Design proposal received for new code-compliant fire alarm notification system for main campus, and facilities plan for alarm receiving center in progress. (Also a safety item) Having a FEMA-approved Pre Hazard Mitigation Plan establishes critical restoration priorities and allows federal reimbursement in a declared disaster Relationships with county and UNC system Risk Issue  Continuity of operations plans are essential to minimizing the severity of impact and related business interruption caused by natural or manmade disasters Potential Impact  Strategic  Operational  Financial  Hazard  Reputational 19


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