Audit Committee Meeting
September 16, 2008
College, University and System
Affiliated Foundations
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Objectives
Slide 2
•
Study compliance with Board Policies
7.7 and 8.3, and Procedure 8.3.1
•
Provide useful information regarding
the renewal of the MnSCU Foundation
contract
•
Facilitate policy analysis of Board
Policy 8.3
Policy Matter #1
• What should be the economic tests, if any,
used to evaluate foundations affiliated with
MnSCU?
Slide 3
MnSCU Affiliated Foundations – Flow of Funds for Fiscal Year 2007
Slide 4
Slide 4
Economic Tests
• Current Board Test – Cost to Raise $1
MnSCU Support Costs ÷ Program
Benefits
$8.0 ÷ $20.7
Slide 5
Economic Tests
• Current Board Test – Cost to Raise $1
MnSCU Support Costs ÷ Program Benefits
• Donor Test – Distribution of Donor Funds
Program Benefits ÷ Foundation Operating
Costs
$20.7 ÷ ($20.7 + $4.2)
Slide 6
Economic Tests
• Current Board Test – Cost to Raise $1
MnSCU Support Costs ÷ Program Benefits
• Donor Test – Distribution of Donor Funds
Program Benefits ÷ Foundation Operating Costs
• Operating Efficiency Test - Distribution of
All Funds
Program Benefits ÷ (Foundation Operating
Costs + MnSCU Support Costs)
$20.7 ÷ ($20.7 + $4.2 + $8.0)
Slide 7
Policy Matter #2
• To what extent, if any, should
foundations be subject to oversight
provisions beyond the basic
requirements for non-profit charitable
organizations?
Slide 8
Possible Oversight Provisions
• Accountability standards.
• Dissolution clause.
• Presidents on foundation governing
boards.
• Foundation strategic plan.
• Compliance with state and federal laws
and regulations.
• Disclose MnSCU support costs.
• Annual approved budget.
Slide 9
Possible Oversight Provisions
• Notice about new affiliations being
explored.
• Preclude governmental grants to
foundations.
• Foundation gifts subject to MnSCU
acceptance.
• Remedy audit exceptions satisfactorily.
Slide 10
Policy Matter #3
• What should be the ramifications for
foundations that cannot meet board
requirements?
Slide 11
Possible Ramifications
• Extensions for required reports.
• Reporting of non-compliance.
• Alternative administrative structures.
Slide 12
Policy Matter #4
• To what extent, if any, should board policy
be broadened to address relationships
with other private, non-profit
organizations, such as booster clubs and
alumni associations?
Slide 13
Broadening Board Policy
• MnSCU Board Policy does not contain
provisions for other types of affiliated
organizations.
• Other higher education systems have
policies that require external entity to be
recognized by the system’s governing
board.
• Athletic booster clubs may pose particular
risks to universities that have Division I
intercollegiate sports.
Slide 14
Audit Committee Meeting
September 16, 2008
Fiscal Year 2009 Internal
Auditing Audit Plan
The Minnesota State Colleges and Universities system is an Equal Opportunity employer and educator.
Possible Internal Audit Topics for
FY 2009
• Information Technology Operations
– Project Management, including adherence to
schedules and budget
– Quality Assurance Testing
– Data Warehouse
• Compliance with Board Policies &
Procedures
– Procedure 7.3.3 Credit Cards
– Policy 5.20 Presidential Expense Accounts
• Spending on Diversity programs
Slide 16
Possible Internal Audit Topics for
FY 2009
• Other Possible Policy Analyses
– 2.6 Intercollegiate Athletics
– 3.2 Academic Program Inventory
– 3.21 Undergraduate Credit Transfer
– 3.4 Admissions
– 3.26 Intellectual Property
– 3.3 Student Assessment
– 3.5 Post-secondary Enrollment Options
– 4.9 Employee Evaluation
Slide 17
COMMITTEE ACTION:
On September 16, 2008, the audit
committee reviewed the draft Fiscal Year
2009 Internal Auditing Plan and approved
the following motion:
RECOMMENDED MOTION:
The Board of Trustees approves the Office
of Internal Auditing annual audit plan for
fiscal year 2009.
Slide 18