1. 1 Stewardship, Accountability and Regulatory Compliance October 22, 2015 Stewardship, Accountability and Regulatory Compliance Jim Corkill | Controller Business and Financial Services Controller’s Office

2. October 22, 2015 2 Stewardship, Accountability and Regulatory Compliance Stewardship The careful and responsible management of something entrusted to one’s care. Fund Accounting Sources and uses of funds.

3. October 22, 2015 3 Stewardship, Accountability and Regulatory Compliance Why is Stewardship So Important? Mission Funding Image Stakeholders

4. October 22, 2015 4 Stewardship, Accountability and Regulatory Compliance What Is Our Mission? Teaching Research Public Service We should be able to identify a cost to one of our missions.

5. October 22, 2015 5 Stewardship, Accountability and Regulatory Compliance Where Does UCSB Get Funding? Taxpayers Donations Variety of Agencies/Foundations Fee for Service  Housing  Parking Indirect Cost Recovery

6. October 22, 2015 6 Stewardship, Accountability and Regulatory Compliance Fiscal Year 2004-2005 / 2014-2015 Comparison

7. October 22, 2015 7 Stewardship, Accountability and Regulatory Compliance Fiscal Year 2004-2005 / 2014-2015 Comparison

8. October 22, 2015 8 Stewardship, Accountability and Regulatory Compliance Why Is Our Image Important? Ability to attract students Ability to attract faculty Ability to attract staff Quality of research Community perception World renowned public institution

9. October 22, 2015 9 Stewardship, Accountability and Regulatory Compliance Who Are Our Stakeholders? Students Parents Employees Donors/Agencies Taxpayers in California

10. October 22, 2015 10 Stewardship, Accountability and Regulatory Compliance A distinguished visitor is coming at the request of your department to give a lecture. After the program, your department is hosting a wine/cheese reception. What funding source do you use? 19900 Funds NSF Funds Opportunity Funds Gift Funds Conference Fees Gift Funds Discussion Item #1

11. October 22, 2015 11 Stewardship, Accountability and Regulatory Compliance Additional Considerations Does the individual coding the entertainment request know what funding source to use? Has he been properly trained? Does she understand the policy?

12. October 22, 2015 12 Stewardship, Accountability and Regulatory Compliance Financial Controls Do you have the right ones in place?  Separation of Duties  Reconciliation and Review  Proper Training Risk assessment

13. October 22, 2015 13 Stewardship, Accountability and Regulatory Compliance Risk Assessment  What are your objectives?  What are the risks to achieving those objectives?  What are the consequences?  What are the controls in place to manage the risks?  Do you have an acceptable level of exposure?

14. October 22, 2015 14 Stewardship, Accountability and Regulatory Compliance Scenario #1 Your department is hosting an international conference. Expected revenue is $100,000 for 250 participants. You are planning to accept cash/checks for conference registration. The hosting professor decides he wants to accept credit cards. Perform a risk assessment and evaluate whether or not to accept credit cards.

15. October 22, 2015 15 Stewardship, Accountability and Regulatory Compliance Accountability An obligation or willingness to accept responsibility or to account for one’s actions.

16. October 22, 2015 16 Stewardship, Accountability and Regulatory Compliance What Are Your Responsibilities as a Business Officer? Establish and maintain effective internal controls Manage the accountability structure of your department Ensure a reasonable distribution of workload Make sure your department is adequately trained When needed, delegate to qualified individuals who have the necessary knowledge and authority

17. October 22, 2015 17 Stewardship, Accountability and Regulatory Compliance What Are Your Responsibilities as a Business Officer? Review/approve back-up plans, including the assignment of back-up personnel, and review official record of approval delegations on a regular basis Assign or obtain the services of a Dept. Security Administrator (DSA) Ensure a clear audit trail exists for delegations, preparation and review of transactions

18. October 22, 2015 18 Stewardship, Accountability and Regulatory Compliance Preparing / Reviewing What does the preparer need to know?  Policy  Funding Source  System Navigation What does the reviewer need to know?  Policy  Funding Source  Appropriateness

19. October 22, 2015 19 Stewardship, Accountability and Regulatory Compliance Scenario #2 Your department wants to get a new Flexcard for low value purchasing. What is an appropriate segregation of duties?

20. October 22, 2015 20 Stewardship, Accountability and Regulatory Compliance Regulatory Compliance: It’s Everywhere Payroll  Visa issues, start dates, Oath/Patent, 72 hour rule Travel  IRS issues, reimbursement of actual costs Purchasing  LVPA, consultants Record Retention

21. October 22, 2015 21 Stewardship, Accountability and Regulatory Compliance Regulatory Compliance: Why Is This So Important? Stewardship and ethics  “Doing the right thing”  Decision making and conclusions  Financial reports Audit Review  Institution at risk

22. October 22, 2015 22 Stewardship, Accountability and Regulatory Compliance Policies/Rules: Where Do You Go? Agency Regulations University Policies (IRS rules) Campus Policy and Guidelines Control Point Policies http://policy.ucsb.edu

23. October 22, 2015 23 Stewardship, Accountability and Regulatory Compliance Scenario #3 An academic department has hired a tenured professor from England. The Chair promised to pay all removal expenses, travel to Santa Barbara, and lodging and meals for one week for her family once in Santa Barbara. What are the regulatory issues?

24. October 22, 2015 24 Stewardship, Accountability and Regulatory Compliance Avoiding Conflict of Interest Business to benefit the University, not for personal gain Perceived conflicts must be evaluated Reporting responsibilities

25. October 22, 2015 25 Stewardship, Accountability and Regulatory Compliance Conflict of Interest Vendor decisions  Close friend or relative  Invested in the company  Personal discounts based on University business Policy  UCSB Policy 5005, Conflict of Interest

26. October 22, 2015 26 Stewardship, Accountability and Regulatory Compliance Discussion Item #2 The copy machine in your office needs to be repaired. Your brother-in-law owns a repair shop located near the campus. He has the best rates, and gets a lot of University business. Is it ok to ask him to repair your machine?

27. October 22, 2015 27 Stewardship, Accountability and Regulatory Compliance Discussion Item #3 The director of your department has invested in a local software company and they have offered to develop a shadow system for your department free of charge. What do you do?

28. October 22, 2015 28 Stewardship, Accountability and Regulatory Compliance Questions?