Office of the Controller and
Internal Controls
Jim Corkill
Controller
Office of the Controller
September 2014
Abbreviated Organization Chart
Peggy Arrivas
Associate Vice President
and Systemwide Controller
- Financial Accounting,
UCOP
Henry T. Yang
Chancellor
Sheryl Vacca
Senior Vice
President/Chief
Compliance and Audit
Officer, UCOP
Pam Lombardo
Associate Vice Chancellor,
Administrative Services
Jim Corkill,
Controller, Business &
Financial Services
Robert Tarsia
Director,
Audit and Advisory
Services
Distinct and Complimentary
Roles

Office of the Controller
• Provide leadership in a campuswide effort to ensure effective
controls and accountability
practices.
• Assist management in assessing
their control environment and the
effectiveness and efficiency of
operations.
• Ensure that campus financial
policies and procedures are clear,
adequate, and current.
• Evaluate systems and participate in
system development to ensure
proper controls are implemented
and compliance with policy.

Audit and Advisory Services
• Independent evaluation of
systems of accountability and
control.
• Investigate reported cases of
alleged improper financial
activities.
• Serve as the liaison between
the University community and
external audit agencies.
UCSB Control Initiative
Business Officer
Institute (BOI)
 BOI Feedback
 Common Audit
Findings
Campus Financial
Mgmt. Training
& Manual
Control Advisory
Committee
(CAC) Financial
Risk Assessment
Departmental
Control SelfAssessments
Departmental
Process Risk
Assessment
Campus Wide
Process Risk
Assessment
Assessments
 Departmental
Control Self Assessments
 Departmental Process Risk Assessment
 Campus Wide Process Risk Assessment
Office of the Controller
http://www.bfs.ucsb.edu/controller/welcome

Jim Corkill
Controller
Director, Business & Financial Services
x5882
jim.corkill@bfs.ucsb.edu

Vacant
Associate Director of Controls
x7667

Liz Molina
Budget Analyst
x8593
liz.molina@bfs.ucsb.edu

Alexandra Cugnier
Financial & Payroll Assistant
x8593
alexandra.cugnier@bfs.ucsb.edu
Internal Controls
 What
are Internal Controls?
• Definition
• COSO Model
• Examples
 Why
are They Important?
 Who is Responsible for Internal Controls?
Internal Control - A definition

Internal Control is a process, effected by a college
or university’s governing board, administration,
faculty and staff, designed to provide reasonable
assurance regarding achievement of objectives in
the following areas:
• Effectiveness and efficiency of operations
• Reliability of financial reporting
• Compliance with applicable laws and regulations
Internal Control Concepts & Applications, 1992, Committee of Sponsoring Organizations of the Treadway Commission
COSO Internal Control Model
 COSO
stands for Committee of Sponsoring
Organizations.
 Committee was formed to develop a
common definition of internal controls and
provide guidance on judging its
effectiveness.
 COSO is referred to as an Internal Control
Model or framework.
COSO Internal Control Model
 Officially
adopted by the University of
California
 A tool for departments to use in evaluating
their internal controls.
COSO Internal Control Model
There are five components of internal control
in the COSO Model:

Control Environment

Risk Assessment

Control Activities

Information and Communication

Monitoring
Control Environment
Control Environment

The “tone at the top” set by people in positions of
authority
Based on attitudes and habits of those in authority

An element in establishing the organizational culture

Control Environment
Control Environment Factors:




Integrity and Ethical Values
Commitment to Competence
Management’s Philosophy and
Operating Style
Assignment of Authority and
Responsibility
Risk Assessment
 Risk
- Anything that gets in the way of
meeting your goal/objective
 Risk Assessment - The identification and
analysis of relevant risks associated with
achieving business goals/objectives
Risk Assessment
Why is a risk assessment important?
 Risks impact an organization’s ability to
meet its objectives such as:

• Positive Public Image
• Providing Excellent Customer
Service
• Reducing Overdrafts
Control Activities
 Control
Activities
• Policies and procedures that help ensure management
directives are carried out and necessary actions are
taken to address risks
Control Activities Specific Examples
 Segregation
of Duties
 Transaction Reviews
 Reconciliations
Control Activities –
Specific Examples
 Financial
Performance Reviews
 Systems Controls
 Physical Controls
Information and Communication
The information system must provide data
that is:
• Relative to established objectives
• Accurate and in sufficient detail
• Understandable and in a usable form
This information must be provided to the
right people in time to allow appropriate
action
Information and Communication
Communication
• Up and down the organization
• Across organizational lines
Communication Examples
• Employee duties and control
responsibilities should be clearly
communicated
• Ability to report suspected problems,
without fear of repercussions
Monitoring
Monitoring

A process that assesses the quality of an internal control
system’s performance over time
Monitoring
Monitoring Activity Examples


Management
• Review of actual expenditures vs.
budgeted
• Comparison of various reports with
physical assets
Separate evaluations
• Assessment of internal controls by
Audit and Advisory Services
• External auditors reviews
The department has a documented PPS plan. This is an
example of what type of control in the COSO model?
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information/Communication
Monitoring
The department evaluates all options before
making a financial decision.
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information/Communication
Monitoring
The Chair/MSO reviews monthly budget reports
comparing actual expenditures to budgeted.
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information/Communication
Monitoring
PricewaterhouseCoopers, the University’s external
auditors, audit the campus on a yearly basis.
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information/Communication
Monitoring
The department performs and annual inventory
1.
2.
3.
4.
5.
Control Environment
Risk Assessment
Control Activities
Information/Communication
Monitoring
Internal Controls
 Why
are They Important?
 Who is Responsible for Internal Controls?
Internal Controls and SAS 112
 SAS
112: Statement of Accounting
Standards
 Auditors will be reviewing not only the
transactions and ensuring the numbers are
correct, but also the controls in place to
ensure those numbers are correct.
 Controls must be documented – or they are
not considered controls.
Questions??