Academic Business Officers Group January 17, 2012 UCSB Audit and Advisory Services FY Mid-Year Briefing

FY AUDIT PLAN HIGHLIGHTS 2 Information Technology Financial System Implementation Project (FSIP): Campus Use of Shadow Systems FSIP Project Progress Mainframe Project: Migration of Other Systems Student Information Systems Replacement : Project Progress Procurement Gateway : Facilitation Implementation (Advisory Service)

3 Completed Projects

COMPLETED PROJECTS: REPORTS ISSUED DURING FISCAL YEAR Project No.Title of Report/MemoTypeFinal or Draft Report Date Final Reports Issued TIA Legal Bills Internal ControlsAdvisoryJuly 12, Earth Research InstituteAuditJuly 13, Materials DepartmentAuditAugust 22, –Local Report on Activities Fiscal Year SpecialSept. 10, Institutional Animal Care and Use CommitteeAuditSept. 13, –Internal Assessment of the Internal Audit ActivitySpecialSept. 28, Financial System Implementation Project: Campus Use of Shadow Systems AuditOct. 5, Travel and EntertainmentAuditDec. 13, Marine Science InstituteAuditDec. 14, Procurement and Contracting: Risk Assessment & Contract Compliance Review AuditJanuary 9, Financial System Implementation: Accounts Payable Vendor Assessment (Draft) AuditJanuary 15, 2013

COMPLETED PROJECTS: TRAVEL AND ENTERTAINMENT 5 The purpose of this systemwide audit was to assess whether procedures are in compliance with University-wide policies over travel and entertainment. We found that campus travel and entertainment reimbursement processes and procedures are generally in compliance with University policies. Management Corrective Actions Business and Financial Services will remind the campus via or other appropriate means of the required approvals for all travel and entertainment reimbursements and of the pre-approvals required for travel expenses to be paid on behalf of others. In addition, they will continue to work with the departments in providing guidance on how to bring their travel expense allowance practices into compliance with Policy G-28.

COMPLETED PROJECTS: MARINE SCIENCE INSTITUTE 6 The purpose of the audit was to assess whether business processes and internal controls established by MSI are in compliance with University and sponsor regulations. Based on the results of the work performed within the scope of the audit, the institute generally has very good processes in place for the areas reviewed. However, MSI had some account-funds in overdraft at the time we started our audit, shortly after the end of fiscal year Management Corrective Actions There are plans to reduce and eliminate the overdrafts, which were the result of past budget cuts, recharge activities, and other factors. MSI has provided a management corrective action plan for bringing all account- funds into balance.

COMPLETED PROJECTS: PROCUREMENT AND CONTRACTING: RISK ASSESSMENT AND CONTRACT COMPLIANCE REVIEW 7 This project included a risk assessment of procurement to inform future audit planning. The project also included limited compliance reviews of some purchase orders and contracts that the risk assessment suggested were good candidates for initial review. The audit identified compliance issues that should be addressed and a number of risk areas to be used to inform future audit planning Management Corrective Actions Business and Financial Services is currently assessing the additional resources needed to continue to improve critical campus procurement processes, and will draft and implement a corrective action plan that includes: Tasking the new Associate Director of Internal Controls with review and assessment of delegated campus procurement processes. Reviewing and enhancing select campus-wide controls, focusing on non-centralized purchasing systems and practices delegated to certain campus departments. Ensuring that department personnel with purchasing and delegated contracting authority responsibilities receive adequate training. Other steps.

8 In Progress

9 IN PROGRESS: SUCCESSION PLANNING To determine whether there are adequate processes in place to ensure that future staffing needs are met. We: Started this review by gaining an understanding of current UCSB succession planning, staff development, retention, and other similar efforts. Will soon be conducting a survey of select UC campuses and other institutions to further identify best practices in this area.

10 IN PROGRESS: IT: FINANCIAL SYSTEM REPLACEMENT PROJECT AUDITS In addition to the completed audit of Campus Use of Shadow Systems, the following FSIP audits are currently in progress: FSIP Project Progress Mainframe Project: Migration of Other Systems Accounts Payable Vendor Assessment

AUDIT AND ADVISORY SERVICES INFO AND CONTACTS 11

AUDIT AND ADVISORY SERVICES INFO AND CONTACTS 12

AUDIT AND ADVISORY SERVICES INFO AND CONTACTS 13 Robert Tarsia, Director Sam Hartline, Principal Auditor Olga Mery, Senior Auditor Raphaëlla Nau, Staff Auditor Jeremy Harbin, Audit Analyst John Kushwara, Whistleblower Complaint Investigator