MnSCU Audit
Committee
September 18, 2002
Discussion on the Role of
the Audit Committee
MnSCU Audit Committee
September 18, 2002
Audit Committee Roles
• Audit Charter (Policy 1.D.)
• Hire Executive Director (Policy
1A.4 Part 5)
• Preserve Independence of Audit
Function
• Set Tone for Ethical & Legal
Conduct
Audit Committee Roles
• Approve Annual Audit Plan (June)
• Select External Auditors (April)
– OLA
– CPA firms
• Appraise Audit Quality
– Review Audit Reports (Sept & Dec)
– Annual Report (Sept)
– Peer Review
Audit Committee Roles
• Monitoring
– Significant Legal Violations
– Unresolved Audit Findings
– Performance Measurement
Legislative Auditor
Reports
MnSCU Audit Committee
September 18, 2002
OLA Audit Finding Trend
200
175
150
125
100
75
50
25
0
1997
1998
1999
All Findings
2000
2001
Critical Findings
2002
Internal Audit Annual
Report
MnSCU Audit Committee
September 18, 2002
Internal Auditing
Major Accomplishments
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•
•
•
•
•
Board-level Indicators Project
Progress on OLA reports
Audited Financial Statements
Increased Requests for Services
Fraud Policy
Guidelines for New Internal
Auditing Standards
System-wide Studies
• Fiscal Year 2002
– Board-level Indicators
• Recent Years
– Post-Secondary Enrollment Options
– Network Security
– Incumbent Workforce Training
OLA Audit Finding Trend
200
175
150
125
100
75
50
25
0
1997
1998
1999
All Findings
2000
2001
Critical Findings
2002
Audited Financial Statements
• December 2001 – Received clean
opinion on 1st Comprehensive MnSCU
Financial Statements
• Added 6 college & university audits
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–
–
–
–
–
St. Cloud State
Mn State University – Mankato
Mn State University, Moorhead
Bemidji State University
Winona State University
Northwest Technical College
Request Services
• Assurance Service Examples
– University Budget Reporting Practices
– College Student Life Fund
– Grant Close-out
• Consulting Examples
– Activity-based Costing
– Shared Administrative Services
– Business Process Improvement Workshop
Challenges Ahead
• Performance Measurement
Framework
• Computer Security Issues
• Adding College & University
Financial Statement Audits
• Internal Auditing Metrics
Board-Level Indicators:
Update
MnSCU Audit Committee
September 18, 2002
Performance Measures
Work Plan Action Steps
17.1 Performance Measurement
Framework Proposed (December
2002)
17.2 Establish Baselines & Context
(February 2003)
17.3 Set Performance Targets (June
2003)
Measurement Framework
• System Focused
– Core of Accountability for Colleges &
Universities
– Supplemented by Local Measures
• Monitoring Perspectives
– Foreground
– Background
– External
• Address data sources, validation,
timelines, system issues, etc.
ENDS
Citizenship
External
Information
Key Stakeholder Needs
Student
Success
Workforce
Needs
Higher Ed
Partners
State & Federal Laws + Other Expectations
Mission & Vision
Mega Ends
Foreground
ENDS &
Strategic Means
Background
Exceptions to
Tactical Means
Board of
Trustees
Board Policies
Ends & Executive Limitations on Means
Positive
Reporting
Strategic
MEANS
Exception
Reporting
Tactical
MEANS
Chancellor
Financial Perspective
State
Approp
Non-state
Revenues
Tuition
Reserves
Internal Processes
Enrollment
Mgmt
Program
Develop
Use of
Tech
Use of
Facilities
Strategic Plan
Learning & Growth
Faculty
Acad
Program
Business
Trng
Research
Measurement Framework
• System Focused
– Core of Accountability for Colleges &
Universities
– Supplemented by Local Measures
• Monitoring Perspectives
– Foreground
– Background
– External
• Address data sources, validation,
timelines, system issues, etc.
Accountability – Side View
Colleges & Universities
Board of Trustees
Accountability Cross Section
Colleges & Universities
Board of Trustees
Foreground Monitoring
• Is the strategic plan being
implemented?
• Anchored in strategic plan and
work plan
• Reconciled to College &
University Work Plans
Background Monitoring
• Are operations legal, ethical, and
in compliance with policy limits?
• Network of responsibility by
Chancellor, Vice Chancellors,
Internal Auditing, & Presidents
• Examples
– Accreditation
– Fraud
External Monitoring
• Trends outside MnSCU
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Demographics
Economics
Higher Education Industry
Technology
• Various communication options,
e.g., annual state of system or
series of updates, etc.
Next Steps
• Create an internal structure to
build measurement framework
– Consult with presidents & other key
stakeholders
• Determine role of Board of
Trustees in planning & setting
performance targets (Nov. retreat)
MnSCU Office of
Internal Auditing
A CATALYST
FOR IMPROVEMENT
Website: www.internalauditing.mnscu.edu