University of Tennessee
CBO Meeting
Knoxville, TN
January 22-23, 2014
Conference Room – 8th Floor of Andy Holt Tower
January 22, 2014
IRIS Update – Les Mathews
The IRIS Work Plan for Q3/2014 was distributed.
Preparations are underway for the annual security assessment. There will be a physical review.
The System IT Office’s annual security assessment will focus on the areas where IRIS data is
sent. As we interface with other areas (Parking Services, Banner, etc.), it is important to trace
the data to those systems and access the security of IRIS data sitting on the other systems.
Nothing outside of the University will be looked at.
Richard Smith (HR Team Lead) will be retiring on June 30.
CIP codes are expanding from 4 to 6 digits for every faculty member across the state.
There will be a window on the web page used to view paystub information that will be utilized by
the Treasurer’s Office for policy announcements, open enrollments, etc. It should be out by the
end of January. An estimated 9000 employees view their paystubs online.
Business Plan Accomplishments:
● Application of support packs from SAP. Problem: Browsers
● E-Procurement
● Perfect Forms: can pre-populate with IRIS info and will soon interface with Workflow.
● Space Management & ARCHIBUS – all campuses are using
Next Quarter:
● ESS Travel – looking for recommendations
● Studying Tennessee’s new retirement system called Concord
● Faculty recruitment in TALEO
● Get away from Time Sheets
● Upgrade Space Management to current version
● Work to sync IRIS and NET ID passwords
System Contract Items – Blake Reagan
System contracts are up by 10 over last year. The second version of the contract manual is
expected to be complete in March 2014.
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Multi-Language Contracts – Blake Reagan
To address inevitable translation differences, when a contract is presented in dual or multiple
languages, the Office of General Counsel proposes that the following language be included:
The parties agree that this Agreement has been drafted and signed in English and _________
[foreign language] and that the parties intend for all versions of this Agreement to contain
identical terms and conditions regardless of the language used. Notwithstanding any other
provision of this Agreement which may appear to be to the contrary, in the event that any
version of this Agreement does not contain all of the terms and conditions included in the
English version, or in the event that any version contains any terms and conditions that either
conflict with, are contrary to, or are in addition to the terms and conditions contained in the
English version, then the English version shall prevail over such other versions and be
controlling and legally binding on the parties.
Proposed Future Practice:
1. Contract offices should propose the new language first.
2. As a fallback, the contract offices should propose the “current” language.
3. If neither option is acceptable to the other party or other parties, then the appropriate CBO
and the CFO should determine whether the business risk is acceptable without either
clause.
E-Procurement Update – Mark Paganelli
The purchase agreement reminder system is almost ready. 1000 purchasers, bonds, etc. have
been loaded.
We are in the design process of:
1. Catalog purchases
2. NCJ’s
3. Requisitions (non-catalog orders)
Purchasing Update – Samantha Johnson
 Quarterly reviews will be held with PCS and Dell
 Working on getting paper contract bids
 Research system on RFP is complete. The technical part of the Reverse Transfer RFP is
being opened. An RFP is out there for search firms.
Prevailing Wage Rate – Mark Paganelli/Samantha Johnson
The Prevailing Wage Act protects wage earners from unfair practices regarding pay on statefunded building and highway construction projects.
As of 12-31-13, we no longer have to go to the state to obtain a fair labor wage rate. This raises
the question, “Does each campus need a policy about paying fair labor rates?” We are still
required to pay federal labor rates for federal funding (construction) projects.
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Audit and Consulting Strategic Plan – Sandy Jansen
For the last several months, Audit has been working on a strategic plan. Several CBOs
provided feedback on the plan and expressed a desire for greater communication.
ACS is committed to the following goals:
1. Meeting stakeholders’ needs and adding value to the university
2. Fostering the professional development of team members
3. Expanding IT audit coverage
4. Expanding grant & contract audit coverage
5. Expanding the use of data analytics to focus audits on high risk areas
6. Ensuring effectiveness and efficiency
Institutional Compliance is committed to the following goals:
1. Enhancing campus compliance program efficiency and effectiveness
2. Promoting an ethical culture
2014 Audit and Compliance Plan – Sandy Jansen
The annual plan includes five areas of work:
1. Audits required by statute, administrative policy, or based on agreements with
management
2. Audits we expect to be in progress on January 1, 2014
3. Unplanned special projects and investigations
4. Planned engagements based on our assessment of risk
5. Other value-added work
The 2014 Areas of Focus include fraud prevention and detection, compliance, controls,
and departmental expenditure audits. Approximate allocation of time will be spent as
follows:
Required Audits
20%
Completion of Risk-Based or Required Engagements
13%
Unscheduled Projects
21 %
Risk-Assessment Projects
46%
Total
100%

2014 Areas of Focus for Institutional Compliance include:
Campus Compliance Committee Facilitation
 UTK – follow up on implementation of plans and address next level of risks.
 Memphis – finalize and implement plans of corrective action.
 UTIA – develop plans for risks identified in risk assessment and begin implementation.

Risk Assessment
 UTM – identify compliance officers and complete risk assessment.
 UTC – begin identifying compliance officers.

Promotion of Ethical Culture
 System-wide communication of Code of Conduct and Compliance Hotline.
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Prior year audits are currently in progress. The audit plan will be distributed monthly in its
current form; however, fraud investigations will be omitted.
Security Assessment – Sandy Jansen
In response to the audit committee’s request for an external assessment of our IT Security
Function, BerryDunn was hired by the University to complete the assessment. A draft report
was submitted to the Audit Committee in December with recommendations. This information
has been shared with campus chancellors by President DiPietro. UT is average when
compared to other institutions. The COBIT-Modified Maturity Model was used to give us credit
for what we were currently doing. University-wide recommendations are as follows:
1.
2.
3.
4.
5.
6.
Managerial
Policy Authority and Enforcement of Standards
Roles and Responsibilities
Staffing Levels
Strategic Levels
Training and Awareness
Risk Management
Operational
7. Data Ownership
8. Incident Response
9. Patch and Vulnerability Management
10. Software Development Life Cycle (SDLC)
11. Disaster Recovery
Technical
12. Access Management
13. Network Security
14. Physical and Environmental Security
Foundational Recommendations include:
 Policy Development and Enforcement – Information Security policy should be
established at the University System level and the Board of Trustees should approve
university-wide policies.
 Staffing Resources – The UT System will need to expand the number of
information security personnel to meet the growing need for security services across
the University system.
 Data Ownership – The University System should establish a common standard for
data classification that recognizes University data is owned by the University System,
which has responsibility for protection and retention.
 Planning and Leadership – University System-wide IT leadership is important to
enable consistent strategic direction and resource planning.
 Training and Education – The University System should adopt NIST standards and
guidelines in developing the most effective training and education.
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Use of University Controlled Property by Non-Affiliated Person – Matthew Scoggins
A new policy has been drafted regarding the use of university-controlled property by
non-affiliated persons. The purpose of this Chapter is to provide a uniform basis on
which the University of Tennessee will regulate the use of University-controlled property
by non-affiliated persons through reasonable, viewpoint neutral regulations consistent
with and in furtherance of the University’s mission. The use of University-controlled
property shall be restricted to University units, students, student organizations,
employees, volunteers, and guests, except as otherwise expressly provided in the
Chapter. University-controlled property shall not be open for use by a non-affiliated
person for free expression activities except as otherwise expressly provided in the
Chapter. Chancellors are to report any changes by Monday, January 27.
Student Activities Fees – Butch Peccolo
A group of individuals were commissioned to study best practices related to use of student
activity fees being used by other institutions. Although campuses are looking at the
recommendations and putting practices into place, we are fearful of what is coming down the
pike through this legislative session. For example, a bill is being proposed that Universities
should distribute student activity fees based on the headcount of students involved in the
organization. Another question is, “What if a student decides to “opt out of the program side of
the fee?” UTC has a reimbursement policy on their campus if a student wants a refund for a
student event. This policy would be problematic for both UTM and UTK. Memphis fees are not
going to student organizations. It is important that capital and student health fees be protected.
CBOs were reminded of the importance of responding to information requests regarding the
fiscal impact of these bills. A video conference will be held tomorrow (January 23) with
chancellors, student affairs officers and provosts for additional discussion.
Sunset Audit Update – Butch Peccolo, Katie High, Catherine Mizell
The draft had seven findings:
● CCTA – Four findings dealt with CCTA provisions. Programs have been designed for
students to start at a junior college and take 41 hours of general education courses and 19
hours of a pre-major. Students could then transfer to a state university and all credits would
transfer. Programs were only built for paths deemed appropriate. We have been instructed to
do all majors.
● Dual Admissions – There is an agreement in place for high school seniors who apply to
Roane State and UT Chattanooga whereby they can be enrolled in classes at both at the same
time. The law says that we must have agreements with all community colleges.
● Promotion of Transfer Pathway – The auditors want changes on the University’s homepage.
● Background checks - The Legislature passed a law that says that housing residents must
pass a background check before being hired. The statute says that we must obtain fingerprints
of all fingers; we have only gotten the thumbprint in the past.
The UT Foundation does not report on the value of the indirect support UT provides.
This information will be provided so that it can be included on their financial report.
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Our hearing will be held on February 10 in Nashville
Demo COI Forms and Processing – B. J. Roberts, Mark Paganelli, Ron Maples
PerfectForms is currently being used for completion of T-5s (Moving Allowance), and several
others are in the process of being finalized. The Conflict of Interest form has been used for two
years by UTM and was used last year by UTK. Forms are routed to the supervisor’s name
which is entered. The individual who is to take action will get an email every two business days
until the review is complete. If an employee reports no conflicts, the form is routed directly to
Human Resources. A decision needs to be made regarding how to handle duplicate entries due
to computer glitches. Chris mentioned that there was some faculty push back last year due to
security issues (wanted to know where the data was stored); however, this has now been
corrected. Any other campus/institute that wants to participate this year should let the
Treasurer’s Office know the names of individuals for the workflow stops.
Ideas for improvements for next year should be sent to B. J. Roberts.
Capital Projects/Facilities Planning Update – Robbi Stivers
● Current SBC requests are plentiful
● The sale of the President’s home at 940 Cherokee is complete.
● The 7 ½ acres in Chattanooga will be used for expand parking (600 spaces) & reconstruction
● We have retained some gift property and sold some.
● Work is continuing on lease requests
● Have a healthy list of institutional projects: 200 +/- projects of approx. 1.5 billion.
Capital Outlay & Maintenance – Butch Peccolo
Someone devoted to capital outlay budgeting is in the process of being hired to assist all units
with the development of their annual capital outlay and maintenance budget requests. This
individual will be visiting each campus routinely during the process to facilitate campus/units
efforts and keep the process on time. Early indications from the Governor’s Office are that there
will be no money for capital outlay projects.
Agency for Utility Manager Software – Butch Peccolo
The Baker Center at UTK has been selected by the Tennessee Department of Environment and
Conservation (TDEC) to assist in developing a database of energy use in all state buildings
across Tennessee. This plan supports Tennessee’s Customer Focused Government Plan that
sets a goal of reducing energy consumption 10% by 2017, from the 2012 baseline, for State
buildings. They are asking for 24 months of utility use data for each campus by 2/10/14. A
contact from each campus should be chosen and the name given to Butch.
UT Foundation Funding – Butch Peccolo
Chancellors are convening to discuss future funding. The chancellors are suggesting a $3.7M
cut; however, President DiPietro is suggesting a $2.2M cut. The problem is the loss of
approximately $1M/year in funding provided by the Affinity Card program. The Foundation is
struggling to put together a budget and is working to determine what activities they provide that
are no longer necessary. Campuses/Institutes will ultimately have to fund the increased costs.
Butch will engage President DiPietro to include the CBOs in discussions before an agreement is
made.
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We have a third amendment to our agreement with the Foundation which is ready to go to the
Comptroller’s Office; however, it will not be submitted until after the Sunset Audit has been
issued and we’ve met before the Oversight Committee.
System-to-Campus Budget Meetings – Ron Maples
The President and CFO will visit each campus/institute to discuss the proposed FY2015 budget.
These meetings will occur prior to the June board meeting. Each campus/institute unit may
provide any handouts that help tell their story. There is no mandatory format.
January 23, 2014
Tax Update – Megan Talley
● Clothing Allowance Reimbursement – The result of an IRS audit of Ohio University
determined that 100 percent of the allowance for athletic and police clothing should be
considered as taxable income. If clothing is specifically required as a condition for employment,
or if they are not worn or adaptable for general use, then the allowance is not considered as
taxable income. However, if they can be worn for everyday use, the cost of the clothing should
be reported as income. If you have a question, call Megan.
● The Employee Request for Job Related Tuition Waiver form on the Payroll website
concerning educational assistance has been updated to make sure that we conform with all
changes outlined in Section 132 of the IRC.
● No major payroll changes for 2014; however the Social Security wage base did increase to
$117,000.
● Amazon is now charging sales tax. We are still exempt. The exemption form is on-line.
● In unrelated business taxable income, our fiscal year 2013 tax return, normally due in midNovember, has been extended to a mid-May due date.
HR Policies and Alternative Leave Rollover Suggestion - All
Several new HR policies have been developed to correct part-time wage problems. These will
go into effect on February 1. The new rule states that individuals will be able to use accrued
leave in FY 2014; however, at the end of December 2014, any amount over the new pro-rated
maximums will roll into sick leave.
A handout displaying the cost of paying out leave balances was distributed. This would be a
one-time payout which would get everyone caught up to the new carryover totals. This new
policy only affects part-time employees. A decision needs to be made soon; however, since the
cost mainly affects Memphis, we will wait until Tony proposes a plan.
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Nancy questioned if we were considering changing the probationary period of new employees
from six months to one year. Mark said that HR had said no, as this is not in the best interest of
the employee. One option would be to request an extension an employee’s six month
probationary period to one year. Ryan said that he would contact the lawyers to see if there are
any legal ramifications of a 12-month probation period.
OMB Circular Update – Ron Maples
The Omni Circular has been released as Final Guidance so it is law. The government took 8
circulars and combined them into 1. The three that affect us are A - 110, A - 21, and A - 133.
Some things were included in the Final Guidance that weren’t in the Proposed Guidance.
 It requires Federal awarding agencies to establish Conflict of Interest policy for all Federal
awards and requires disclosure to awarding agencies of potential conflicts in accordance
with the agency’s policies.
 Micropurchase – anything under $3000 can be purchased any way. What is unsaid is that
anything over $3000 must have a competitive bid.
 There are new requirements for subrecipient monitoring.
 There may be some relief in charging administrative/clerical charges to grants and
contracts.
 They put in a de minimis F & A rate for those who don’t have an F&A rate. They can now
charge 10%.
 One time 4-year extension on F&A rate
 Cost Accounting standards were left in
 There is no reference to Effort Certification anymore, but it does say that the institution
should proceed with caution when making decisions on this issue. We still report the
number of Effort Certifications that we have to the auditors.
 Audit requirements went from $500,000 to $750,000.
 When a non-Federal entity uses a Cash Basis of Accounting to pay for leave, the cost of
leave is recognized in the period that the leave is taken and paid for. Payments for used
leave when an employee retires or terminates employment are allowable as indirect costs
in the year of payment. This can mean 1 of 2 things:
1. If it is really an indirect cost, our cost sharing has just gone way up because we won’t
recover any of that money because we are already over the cap and it would be an
administrative cost. If this is what they are implying, then we need to figure out how to
accrue leave as it is charged and charge it to the grant or contract.
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2. If a school has a terminal leave rate and the terminal leave would be charged as an
indirect cost. If this is what they are talking about, then we will probably get one. We
would negotiate and put in our rate agreements.
These rules go into effect in December, 2014.
Systems Charge – Ron Maples
The following schedules were presented. Any questions should be directed to Ron Loewen,
Ron Maples, or Butch Peccolo.
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2015 IT Initiative List - All
The following list from James Perry was reviewed. Lack of dollar amounts were noted.
Consensus was that no additional funds should be allocated.
NOTE: When we are ready to go full board on PerfectForms, a server can be purchased to
house information. This would allow for a more secure location of the data. Numerous licenses
can also be purchased for approximately $100,000.
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TERA Discussion - All
Current System: TERA
7 FTE $642,700
Proposed Research System: EVisions
6 FTE
$213,500 Implementation Fee (David Millhorn has agreed to pay. The suggestion was made
that his office agree to support the Implementation Fee which could increase.)
Annual subscription beginning the 2nd yr: $314,800 split between the campuses
They still need to prove that it will work on multiple campuses.
Possible need: Tableau for reporting @ $47,000
When you look at the net cost, if we go with this hosted system, we should see immediate
savings as well as more after one year. Because it is hosted, we shouldn’t have many
programming needs, mostly communication issues.
The time frame for Proof of Concept is 2-3 weeks for recommendation to the COP.
Vendor Presentation – Dell Representative
Dell is a $60 billion dollar company and Dell Global Services is an $8 billion dollar portion of it.
They are the 3rd largest privately held company in the world. We have a new Sales Team and
contract that takes effect February 1 and will have quarterly meetings with them to discuss any
issues.
David Lynn (Account Rep) David_Lynn@dell.com
Allen Hare (Inside Sales Rep for quotes) Alan_Hare@dell.com
Jason Walton (Specialist-for services & consulting) Jason_Walton@dell.com
New contract:
On-site Systems Engineer: Erin Fortenberry @ OIT
Member purchase program – 2% rebate dollars are available
Printer warranties include lifetime fuser maintenance kits ($300)
Software and peripherals catalog – has Dell and non-branded Dell items
Dell Education Services/On-line training classes
They can streamline the deployment of PC purchases (i.e. If we purchase 100 laptops, they
take care of the set-up of the new and removal of old computers.
Data center operations
Customer support
Specific applications
Microsoft products consulting, deployment, implementation
Cloud computing
{After the presentation, a question was raised regarding the location and expenditure of
rebate money. Butch Peccolo said that a full accounting will be presented at the next
meeting.}
Best Practice Showcase - All
Nancy Yarbrough in Martin said that they are using Perfect Forms to fill out Timesheets and
upload them to IRIS using iPads.
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Governor’s Budget – Butch Peccolo, Ron Maples
The state is behind about $172 million behind budget projections for this year. Sales tax
revenues are right at or just marginally behind budget. The excise taxes are down 25-30%.
From the state’s perspective, the next 2 or 3 months will be critical in determining how this fiscal
year turns out. There will be no capital outlay. We probably won’t get the full $45 million in
capital maintenance. New money is probably non-existent. They are talking about a 1% COLA
for employees. They are talking about running that through the formula. Because of these
projections, they won’t hold us to the 3% tuition increase. Each campus should determine what
percentage increase is reasonable. The extra money that we’ve asked for for student advising
initiative is not on the table. That would be something that we might want to target for an
incremental tuition increase to cover. They are committed to the Engineering improvements.
They are continuing programs like the Centers for Excellence and the Research Initiative at the
status quo level. So far there are no cuts.
In addition to going to the Governor’s budget hearing, the Senate education budget meeting,
and the House, Ways and Means budget meeting we get to go to the House Education
Committee meeting this year. They’ve asked us series of questions and said that we should
bring the answers with us to the meeting. We need your help with the last two. They are
1.
Do you anticipate the loss of any one-time funding, state or federal, in the FY 2014-15
budget?
2. Is there any impact of Federal sequester on programs?
Please email your responses in the next week or so.
Funding Plant Fund Projects – Butch Peccolo
As projects go forward and are approved by the Building Commission, we want to make sure
that we have the represented funding in place.
State Audit Update – Ron Maples
We have our exit interview on Monday. We still just have the 2 findings: both Financial Aid, one
in Knoxville and one in Martin. The auditors have finished with the NCAA audits, in Knoxville,
Chattanooga, and Martin. They are currently working on an audit to comply with SACs
accreditation for the Health Science Center. Accreditation for Knoxville will include entities
01,02, and18. is coming up and we are hoping for a limited audit.
Fiscal Policy Update – Ron Maples
We are ready to issue the Moving Allowance revision 2/1/14. In CBO review are:
● Student Payments Policy
● Accounts Payable Policy
● Fee Approval Policy
● Surplus Property Policy
● A/P Vendor Policy
● Credit Card Processing Policy
● Independent Contractor Policy
The committee is working on a Gift Card Policy, a Vending and Solicitations Policy, and one for
lotteries, drawings, raffles, and auctions.
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On the CFO/Treasurer’s Office website there is a link to the minutes to the Fiscal Policy
Committee meetings and all of the CBO meetings. Minutes from other meetings should also be
posted so that they are available to anyone who would like to review them.
Independent Contractor Policy – Mark Paganelli
The due date is the end of January. It is being circulated. We will be requiring a new form to be
completed before a new vendor will be set up for an individual and they will have to sign that
form. This will comply with IRS regulations.
AP Vendor Policy – Mark Paganelli
We are getting out of the check writing business, so when we set up any new vendor we are
going to require them to select between ePayable or ACH Direct Deposit. Checks will be written
on an exception basis. We have paid 25,000 vendors in the last 2 years and we will be sending
letters to those asking them to choose.
Term Employee Discussion – Mark Paganelli, Rob Chance
We’ve done a really good job of cleaning up our Percent of Effort, so we shouldn’t have a big
budget impact when the Affordable Care Act goes into effect. State Insurance was thrilled that
we only have 300. We have a draft policy ready to be circulated this Summer so that we will be
ready to go this Fall, but we have to be in compliance so we are waiting to see if anything
changes. We will have enrolled people and have insurance cards in hand January 2015.
Katie Colocotronis came up with a really good solution for our Term Temporary Employee
situation with retirement and offering other benefits to these long term employees. Rob Chance
will run reports monthly and if they’ve been on the Payroll and paid every pay period for more
than one year, we are going to give that report to HR and we are going to copy the CBOs and
one of three things needs to happen:
1. Move them to regular
2. Terminate them
3. Document in the file why they should remain term
Employee Payroll Debit Cards – Mark Paganelli, Rob Chance
We have about 20 employees who receive their payroll in the form of a debit card. One of our
concerns is that we can’t get our money back if we’ve overpaid them. Also, these cards are
hitting the employees with fees. We are going to do an RFP with Bank of America, First
Tennessee, Regions and others that offer the same thing. We want to protect our employees
by allowing them to go to an ATM without fees, but also allow us to get our money back if we
need to. It would be strictly voluntary.
***********************************************************************************************************
Other points made by Mark Paganelli:
● Risk Management says that the State has agreed to treat any damage from broken pipes, etc.
as one claim.
● Partnership Promise Questionnaires need to be completed by March 15. Biometric screenings
are due July 15.
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Rob Chance presented information regarding an alternative time collection system, KRONIS,
which would cost $20,000-$30,000 to implement and then $70,000 annually for licenses.
Richard Brown said there is a growing concern among employees that when we do tuition
discounting of differential tuition, employees are now being charged more because we won’t
discount those fees to those specialized programs.
Gail White complimented Susan Wilson in the Treasurer’s Office who works with Procurement
Cards for doing research and making things easier for everyone by accepting scans.
The next meeting will be May 21-22, 2014.
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