• TABLE OF CONTENTS
HIDE
 Table of Contents
 Introduction
 Operations
 Organization chart
 Budget and expense analysis
 Audits and other planned revie...
 Summary of reports issued
 Management advisory services
 ERP-business engineering
 Special advisory reviews
 Investigations
 Follow-up
 Other activities
 Contacts and resources






Group Title: University of Florida Office of Audit and Compliance Review annual report
Title: University of Florida Office of Audit and Compliance Review Annual Report
ALL VOLUMES CITATION PAGE IMAGE ZOOMABLE
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00072255/00002
 Material Information
Title: University of Florida Office of Audit and Compliance Review Annual Report
Series Title: University of Florida Office of Audit and Compliance Review Annual Report. 2003-2004.
Physical Description: Serial
Language: English
Creator: University of Florida Office of Audit and Compliance Review
Affiliation: University of Florida -- College of Liberal Arts and Sciences
Publisher: University of Florida
Publication Date: 2004
 Subjects
Subject: University of Florida.   ( lcsh )
Spatial Coverage: North America -- United States of America -- Florida
 Record Information
Bibliographic ID: UF00072255
Volume ID: VID00002
Source Institution: University of Florida
Holding Location: George A. Smathers Libraries, University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida

Table of Contents
    Table of Contents
        Page 1
    Introduction
        Page 2
    Operations
        Page 2
    Organization chart
        Page 3
    Budget and expense analysis
        Page 4
        Page 5
    Audits and other planned reviews
        Page 6
    Summary of reports issued
        Page 7
        Page 8
        Page 9
    Management advisory services
        Page 10
    ERP-business engineering
        Page 11
    Special advisory reviews
        Page 11
    Investigations
        Page 12
    Follow-up
        Page 13
    Other activities
        Page 14
        Page 15
    Contacts and resources
        Page 16
Full Text




































CONTENTS
ntroduction ...........from th..................... .....
Operations ................................ ......2
Staffing and Other Resources
Organization Chart
Staff Training
Budget and Expense Anal ysis
Time Analysis and Allocation
Audits and Other Planned Reviews ....d c i ........o 6
Trend Anal ysis
Client Surveys
ummary of Reports Issued ...........io...............7

Management Advisory
ervices .................................10
ERP-Business Reeng neering
Special Advisory Reviews

Newsletter
Post-Audit Assistance
Investigations ........................................ ... 12
Summary of Significant Issues
Follow-Up ..................................................... 13
Follow-Up A tatistics
Auditsher Adctivitiesr Planned Revi.......................ews...................14
Contacrs and Resoures Issued ..................................16






Annual Report 2003-2004
Annual Report 2003-2004











OPERATIONS

A key operational objective for the period was training
and maintaining staff to complete the Bridges project
audits in support of the required certification. During
this period, the discovery of fraudulent transactions in
a major support organization further emphasized the
challenges of instituting strong internal controls in
decentralized organizations and required us to direct
additional emphasis and resources to the University's
direct support and affiliated organizations. We dosely
followed the development and application of Sarbanes-
Oxley to not-for-profit organizations and universities
and initiated fit and gap analysis. The next period,
representing the second year of our two year work
plan, will emphasize post Bridges implementation and
OACR STAFF back row: Murat Telli, Carole Silverman,
R S F back row: Mra Tellio, Carole Sleman, business processes and the review of design for student
Suzanne Newman, Liana Hadjigeorgiou, Kayla Spellman, modules.
Al Moon, Vito Hite. Kneeling: Nur Erenguc and Brian
Mikell (not pictured: Jeff Capehart and Dwight Hulse) Staffing and Other Resources

During 2003-2004, of the twelve audit positions, three
INTRODUCTION manager and one senior auditor positions became
vacant. We successfully recruited the Director of
The Office of Audi and Compliance Review Auditing and Managment Advisory Services towards
(OACR) provides a cenral poin for he the end of the period when our prior director decided
coordination of and responsibility for activities thatto coninue her services wihin he Bridges
organizational structure.
promote accountability, integrity, and efficiency for organizational struture.
the University of Florida.
the Universy of F a. To better align audit resources with the University
2003-2004 marked the beginning of a new era for the units expecting and supporting audit effort, we
University of Florida devolution from the State of initiated a study and developed a funding
Florida's accounting and information system and methodology together with an organizational structure
implementation of PeopleSoft Enterprise Resource necessary to meet these needs and expectations. When
Planning System (Bridges Project). The University's fully implemented, with four additional audior
approved transition plan required the OACR's positions, OACR will more favorably compare with its
approved transition plan required the OACR's
certification that system components contain peer organizaions.
adequate controls. As a result, the UF Bridges
project was OACR's primary focus for 2003-2004.
We issued position papers addressing business
procedure issues, assigned one position to the
Bridges team, scheduled and completed audits, and
provided a transition certification letter supporting
implementation as required by Florida Statute. We
expect the impact of this change to be felt
significantly campus-wide during the next six
months and are prepared to continue providing
proactive assistance as well as post implementation
audits to promote good business procedures
together with a reasonable level of controls.





2 Annual Report











OPERATIONS

A key operational objective for the period was training
and maintaining staff to complete the Bridges project
audits in support of the required certification. During
this period, the discovery of fraudulent transactions in
a major support organization further emphasized the
challenges of instituting strong internal controls in
decentralized organizations and required us to direct
additional emphasis and resources to the University's
direct support and affiliated organizations. We dosely
followed the development and application of Sarbanes-
Oxley to not-for-profit organizations and universities
and initiated fit and gap analysis. The next period,
representing the second year of our two year work
plan, will emphasize post Bridges implementation and
OACR STAFF back row: Murat Telli, Carole Silverman,
R S F back row: Mra Tellio, Carole Sleman, business processes and the review of design for student
Suzanne Newman, Liana Hadjigeorgiou, Kayla Spellman, modules.
Al Moon, Vito Hite. Kneeling: Nur Erenguc and Brian
Mikell (not pictured: Jeff Capehart and Dwight Hulse) Staffing and Other Resources

During 2003-2004, of the twelve audit positions, three
INTRODUCTION manager and one senior auditor positions became
vacant. We successfully recruited the Director of
The Office of Audi and Compliance Review Auditing and Managment Advisory Services towards
(OACR) provides a cenral poin for he the end of the period when our prior director decided
coordination of and responsibility for activities thatto coninue her services wihin he Bridges
organizational structure.
promote accountability, integrity, and efficiency for organizational struture.
the University of Florida.
the Universy of F a. To better align audit resources with the University
2003-2004 marked the beginning of a new era for the units expecting and supporting audit effort, we
University of Florida devolution from the State of initiated a study and developed a funding
Florida's accounting and information system and methodology together with an organizational structure
implementation of PeopleSoft Enterprise Resource necessary to meet these needs and expectations. When
Planning System (Bridges Project). The University's fully implemented, with four additional audior
approved transition plan required the OACR's positions, OACR will more favorably compare with its
approved transition plan required the OACR's
certification that system components contain peer organizaions.
adequate controls. As a result, the UF Bridges
project was OACR's primary focus for 2003-2004.
We issued position papers addressing business
procedure issues, assigned one position to the
Bridges team, scheduled and completed audits, and
provided a transition certification letter supporting
implementation as required by Florida Statute. We
expect the impact of this change to be felt
significantly campus-wide during the next six
months and are prepared to continue providing
proactive assistance as well as post implementation
audits to promote good business procedures
together with a reasonable level of controls.





2 Annual Report













Organization Chart



Chief Audit Executive
Nur S. Erenguc

Coordinator, -
Admin Services
Suzanne Newman
Director, Auditing &
Management Advisory
Services
Brian Mikell




IT & IC Consulting Auxiiary & Support
Services Sponsored Research & S up
Vacant Extension Services ervices
Jeff Capehart Vacant Kayla Spellman
Liana Hadjigeorgiou Dwight L. Hulse Jo l "o"
John "Vito" Hite


Health Center & Academic Mgmt &
Clinical Liaison Affiliated Services
Vacant Carole S. Silverman




Staff Training
Table 1-Staff Training
All OACR professional staff has at least one
certification. Continuing professional education is
highly valued and attendance to relevant
conferences and seminars is promoted. A staff Institute of Internal Auditors 100 11
member concluded her studies in a complementary Pu Gy & C y
discipline and was awarded a graduate degree. Purvis, Gray & Company 40 4
Table 1 reflects a listing of staff participation in Association of Certified
formal training programs in 2003-2004. Fraud Examiners

Association of Health Care
Internal Auditors
Association of College and 22
University Auditors

PeopleSoft Education 14 1

Florida Audit Forum 12 1

National Association of Local
Government Auditors

University of Florida 7 3







2003-2004 3












Budget
Operating Expenses

The OACR budget by category is illustrated in Table 25% 35%
2. The highest budgetary commitment is
professional staff salaries representing 93% of total
expenditures. The 2003-2004 increase in salary
expenditure is attributable to additional positions. 13%
The office was fully staffed for more than half the 6% 7% 14%
year. Copying, office supplies and travel represented Copyng/uppes Teephone/Postage
Copying/Supplies Telephone/Postage
the largest percentage of operating expense. O Dues/Subscriptions O Maintenance
SComputer Supplies *Travel/Other



Table 2-Analysis of Expenditures


Salaries $620,468 $750,647
Other Personal Services 7,329 8,506
OCO & Other Fixed Assets 8,741 11,800
Operating Expenses 15,016 18,935
Training 26,318 11,480







Time Analysis

Table 3 provides a comparison between time Actual project hours available include 908 hours
available as planned and actual time available for worked in excess of normal workweek hours,
projects. offseting hours lost due to vacancies.



Table 3-Planned/Actual Hours


Time Available 12 x 2,040 24,480 24,006
Less: Adjustment for Position
Vacancies 1,686 1,686
Training/ Leave Use/ Operational (7,344) 6,544 (800)
Support
Total (8,230)
Excess hours worked 908 (908)






4 Annual Report













Time Allocation

Chart A represents the planned activity mix for professional position and for the office as a whole.
time available for projects and actual effort Direct time excludes administration, service
expended, and Chart B provides a comparison support, leave and training. Chart C compares
between prior year and current allocation of time direct time achieved in the last two fiscal years.
available for projects. In comparison with the prior Total office direct time increased to 73%, exceeding
year, more time was spent on audits and the direct service goal of 70%. Effort expended for
investigative reviews. Direct time percentages are Bridges certification audits contributed to the
established as a productivity goal for each achievement of this rate.



Chart A-Allocation of Time Available Chart B-Allocation of Time Available
for Projects for Projects
Planned vs. Actual Prior vs. Current Year


Training/Leave Operational
uppoSupportrt


















0% 10% 20% 30% 40% 50% 60% 0% 10% 20% 30% 40% 50% 60%

SPlanned Actual ] 2002-2003 *2003-2004



Chart C-Office Direct Time by Fiscal Years







40%

20%
o%


SFY 02-03 ~ FY 03-04 Goal 70%


2003-2004 5













AUDITS AND OTHER PLANNED
REVIEWS


Trend Analysis Trend Analysis of Projects
Planned/Completed
Table 4 reflects a three-year analysis of projects
planned and completed. The work plan includes 60
planned audits and advisory reviews. 50

Over the last three years, 53 projects were planned 40 -2003
and 55 were completed. This is attributable to the2003-2004
recent increase in staff size. 30 2002-2003
20 U 2001-2002
During 2003-2004, 49% of available time, or 9,690
hours, was spent on audits. Internal audits were 10
planned based on evaluation of risk and included
input from university management.
Planned Completed


Table 4-Trend Analysis of Projects Planned/Completed




2001-2002 19 17 13 3 16
2002-2003 16 16 14 3 17
2003-2004 21 20 15 7 22

iTable 6 lists reports issued this period.


Client Surveys Client Surveys
Client Surveys
(7 Responses)

Client surveys completed at the conclusion of
each engagement reflect that OACR services are Audit Performance
well received. Ninety-five percent of survey
responses indicated ratings of either good or
excellent in all categories, consistent with last
year's 95%. Audit Report



Audit Team


0% 20% 40% 60% 80% 100%
Excellent U Good
O Fair O Poor


6 Annual Report











SUMMARY OF REPORTS Decal sales were properly accounted for and
generally in compliance with eligibility rules. Sales
ISSUED taxes were collected and remitted in accordance
with the applicable regulations. We identified
The summary of reports profiles major opportunities for improvement in accounting for
engagements completed during this fiscal year. The payroll deduction collections and Internet sales.
subjects of the reports illustrate commitment to Student Health Care Center (SHCC)
proactive and diverse coverage through audits of
the Student Health Care Center and the McKnight The primary objectives of this audit were to assess
Brain Institute and five IFAS research and whether controls provided reasonable assurance
education centers. Audits of other critical functions that patient services were properly billed and
of the University such as parking decal sales and recorded and the controls were effective over
travel were audits conducted during this period as record-keeping, reporting and safeguarding of
well. The Bridges project audits included the certain categories of assets, such as cash and
enterprise directory, position backfill, technical receivables.
infrastructure, general ledger, asset management,
human resource, vendor relations and data SHCC, an auxiliary of the University, operates
conversion. These audits enabled us to issue the outpatient clinics, with capacity for up to 400
transition certification on June 21, 2004. patients per day through its main facility. Services
include fee-for-service and those covered by
IFAS Research and Education Centers mandatory student health fees paid by
matriculating students. Total revenues were $13
The five Centers, Indian River (Ft. Pierce) Research million, 70% of which was generated by the student
and Education Center, Range Cattle (Ona) Center, health fee.
Fort Lauderdale Research and Education Center,
Homestead Tropical Research and Education Significant opportunities for improvement existed
Center, and the Southwest Florida Research and in the areas of financial reporting, billing and
Education Center (Immokalee), are under the receivables and in accountability and transfer
oversight of the University's Institute for Food and controls over cash.
Agricultural Sciences. They operate in Florida
counties for the purpose of conducting research, -
teaching and disseminating information to improve SE m
Florida agriculture. The primary objective of these
audits was coverage of areas where procedures and 3I
controls have been decentralized. L ,

Opportunities for improving controls were
identified in fiscal oversight, purchasing cards,
fixed assets, and leave reporting.

Parking Decal Sales

Transportation & Parking Services (TAPS) is a self-
supporting auxiliary unit operating within the
Business Services Division. TAPS is responsible for
issuing decals, required to park on campus, and for
collecting parking fees. During fiscal year 2003,
37,631 decals were sold with revenues of $4.5
million. The primary objective of this audit was to
assess the internal controls for accounting for
revenues generated from the sale of parking decals.





2003-2004 7











Enterprise Directory organizations. Rules that governed travel funded
by these affiliated organizations varied.
The University's Enterprise Directory (Directory) by hese affiliated organizations varied.
was created in the fall of 2001 to consolidate Generally, travel expenditures reviewed were
multiple sources of directory information and to authorized and adequately supported. University
replace the Social Security Number as an management agreed to evaluate the implementation
identification number for students, faculty, and of an institutional policy to provide consistency in
staff. The central database for the Directory has travel policies and procedures, and promote an
been integrated with a significant number of major initiative to link travel funding in one standard
applications at the University, providing a travel form.
consistent source of directory information and
allowing for self-service updating of addresses and McKnight Brain Institute
telephone numbers.
telephone numbers. The University of Florida McKnight Brain Institute

The primary objective of this audit was to (MBI) is a campus-wide program created to harness
determine if the Directory is a secure and reliable and enhance the multidiscplinary research, clinical
enterprise directory system. Although good case and educational skills to address the
controls were observed for data integrity, challenges brought on by nervous-system
exceptions were noted including duplicate records disorders. Over 300 faculty members from 51
and various unreasonable values. Data quality academic departments and ten colleges are
standards had not been established or monitored. involved in research and educational programs in
all aspects of basic, clinical and transitional
ERP Position Backfill neuroscience. The primary objectives of this audit
were to evaluate the adequacy of select internal
The primary objective of this audit was to evaluate controls for MBI service centers, tangible personal
the status of positions and funds associated with property, and compliance with health and safety
staff assigned to the Enterprise Resource Planning regulations.
(Bridges) Project. From the earliest
implementation efforts, it was determined that full Key controls over the MBI functions of service
time and undiluted effort was necessary to meet the centers, property, and health and safety issues were
tight implementation schedule. adequate.

During the period of this audit, a total of 106 staff
was associated with Bridges. Some units continued
their operations without filling the positions
vacated, but reorganized, reassigning duties to
existing employees and/or eliminating business
process steps. Overall, 86% of the positions were
filled and 14% were left vacant. With the
assignment and funding of twenty-two employees
to Bridges, a total of $1,403,436 salary funds became
available to units. It was expected that 68% of the
backfilled positions would be maintained after
implementation.

Travel Funded by Support Organizations

The primary objective of this audit was to
determine whether employee travel status is
authorized and adequately documented when
funded by direct support organizations and faculty
practice plan corporations. University travel may
be funded by state funds and funds from affiliated



8 Annual Report











UF Foundation, Inc. Internal Control MEDCON for these programs have exceeded $43
Review million. Over 90 percent of grant funds received
for VBWG programs were disbursed to MEDCON
The University of for program administration, totaling more than $20
Florida Foundation million.
(Foundation), as a direct
support organization, The primary objectives of this audit were to
supports University evaluate the administration of the VBWG
operations through fund educational programs relating to compliance with
raising and asset educational grant terms, oversight of subcontractor
management. This seledion and service delivery, timeliness and
report was issued in accuracy of financial reports, and compliance with
connection with the industry guidelines and applicable University rules.
investigative review Opportunities for improving controls in all areas of
conducted during the the review were identified and communicated.
second quarter of the
period. Bridges Audits I A

Key control elements in disbursement, check The University of Florida Bridges Project group
issuance and distribution, capitalization policy and (Bridges) is charged with the PeopleSoft
procurement and inventory of assets needed implementation. Bridges is a collaboration of key
improvement. University employees and consultants. The
implementation efforts began in the Fall of 2002.
University Athletic Association, Inc.
ERP Implementation General Ledger (GL) Design and Implementation
The primary objective of this audit was to evaluate
The University Athletic Association, Inc. (UAA) is ahe design and implemenion of he GL
d~ s t oo of te Uwhether the design and implementation of the GL
direct support organization of the University
dire suppor organizaion of he Universiy component will ensure the integrity and reliability
responsible for the intercollegiate athletics program. of sysem da. Rle and res sibiliis ad
of system data. Roles and responsibilities had not
The primary objective of this audit was to evaluate ee lealy dele d between the Conroller's
been clearly delineated between the Controller's
internal controls in place associated with the Oice and Bridges r aily and onthl
Office and Bridges for daily and monthly
implementation of the Enterprise Resource O r nt l
implemenion of he Enerprise Resource reconciliation of feeder systems to the budget and
Planning system and to determine if the system cals lede, and ony reconciliation of
provides for the integrity and reliability of Financials and Payroll transations to the EPM
information.
reporting database. Bridges management
Overall, the business processes were designed addressed these concerns during the course of the
utilizing good business practices and controls to audit.
ensure transactional integrity, accuracy and
completeness. UAA management was very The critical processes and functionalities in GL were
proactive and addressed many control comments generally designed and implemented utilizing good
and issues immediately. business practices and controls to ensure
transactional integrity, accuracy and completeness
Vascular Biology Working Group of transactions.
Educational Programs (MEDCON)
Asset Management Design & Implementation
The College of Medicine initiated the Vascular Asset Manageent Design & Implementation
The primary objective of this audit was to evaluate
Biology Working Group (VBWG) in 1994 to
Biology Working Group (VBWG) in 1994 o whether the design and implementation of Asset
facilitate the dissemination of vascular biology M emen ems (AMS) will ense he
Management Systems (AMS) will ensure the
research data to practicing physicians. Medical
integrity and reliability of information.
Education Consultants (MEDCON) was selected to inegriy and reliabiliy of informaion.
administer VBWG. Since 1998, University of Although core users were not provided adequate
Florida Research Foundation disbursements to



2003-2004 9











training in the generation and use of monitoring Overall, the critical business processes and
reports prior to implementation, controls were functionalities in VR were designed and
generally adequate to ensure appropriate implemented utilizing business practices and
segregation of duties, authorization of transactions controls to ensure transactional integrity, accuracy
and data integrity. The AMS design and and completeness of University transactions. The
implementation also facilitated compliance with VR design also facilitated compliance with
internal and external reporting requirements. reporting requirements.

Human Resources Management System Design & Technical Infrastructure
Implementation This audit was conduded as a joint effort with
The primary objective of this audit was to evaluate Canaudit, Inc., an auditing and consulting firm
whether the design and implementation of the specializing in information control and security.
Human Resources Management System (HRMS) The primary objective was to ensure that controls
suite of applications will ensure the integrity and were in place over the installation, configuration,
reliability of system data. Development of business and security processes within the PeopleSoft
procedures, reports and queries, and the process of application, the database server, and the application
assigning security roles, including associated end servers.
user training, was on-going at the time of
implementation. The audit concluded that server security was well
implemented. Other security and installation issues
The critical HRMS processes and functionalities were identified, ranked by priority, and reported to
were designed and implemented utilizing practices management. The highest priority issues were
and controls to ensure the integrity, accuracy and being followed up by OACR.
completeness of University transadions. The
HRMS design and implementation also facilitated
compliance with reporting requirements. MANAGEMENT ADVISORY

Data Conversion SERVICES
The primary objedive of this audit was to
determine if the data conversion plans and i i i i
OACR is committed to provide proactive,
processes for the Bridges systems ensure the r ,
processes for the Bridges systems ensure the preventive advice on internal controls, operations
integrity, accuracy, and reliability of information for rn li e
impementaion. and compliance. Requests for management
implementation.
advisory services (MAS) usually come from various
Errors in the conversion of some Asset management levels throughout the university. The
mnt a c ersi o e Ase b information provided through these services assists
Management data fields were acknowledged by in decision making and in improving operaions.
in decision making and in improving operations.
Bridges Management and a corredion plan was
B g a e andaco o la wa Results of these types of services are usually
developed. Although ideal practices may not have Rul eeyes of seres are usuall
communicated through management letters.
been followed for every step, data was converted too
meet the needs of the software and the University. During fiscal year 2003-2004, 4,115 hours were
spent on MAS. This represented 21% of available
Vendor Relations Design & Implementation hours. OACR's participation in the Enterprise
The primary objective of this audit was to evaluate Resource Planning (ERP)-Business Reengineering
whether the design and implementation of the Process accounted for the majority of MAS effort.
Vendor Relations (VR) components of Accounts
Payable, E-Procurement, Purchasing, and Travel OACR actively provides consulting assistance,
and Expenses would ensure the integrity and training and training tools, and post-audit
reliability of system data. Development of reports assistance. The following chart illustrates the type
and queries to support monitoring activities, and of MAS performed and the percentage of time
assignment of security roles and related training spent.
were ongoing at the time of implementation.




10 Annual Report












Effort Distribution relations, human resources management
Other and payroll,
Consultations 4% Contributing to the training materials
7% incorporating internal control and record
DSO and retention concerns,
Committee Service Developing a comprehensive transition
8% ERP-Business audit program and,
Reengineering
Governance/ 73% Reengi Reviewing the University's Transition Plan
Publications including the progress reports issued by
transition team leaders.


We also issued position papers on business process
reengineering internal controls and application
access and security. Copies are available at http://
oacr.ufl.edu.
The ERP Project (Bridges) is a multi-year effort to
improve University business processes. PeopleSoft Special Advisory Reviews
systems provide the framework for integrated, web-
based, real-time access to a wide range of OACR provided proactive assistance on matters of
University processes and information. Financial internal controls, system design changes, and
processes implemented include general ledger, governance on the following areas:
procurement, travel and expense, customer
procuremen, rae and expense, cusomer Accounting for Program Revenues (College of
relations, asset management, sponsored research VeAerinary Medicine)
Veterinary Medicine)
and construction projects. Human resource
processes implemented include human resource
processes implemenled inclde h an res e Safe Security (Division of Recreational Sports,
management, payroll processing, and time andh & Human Performance)
College of Health & Human Performance)
labor data collection. PeopleSoft financial and
human resource applications were implemented as for Pr l ( y
CPA Firms Request for Proposal (Baby Gator,
of June 18, 2004. New student systems will be C e of
imleenedin206.College of Education)
implemented in 2006.
ERP-Business Reengineering management advisory Trade & Barter Reports (WRUF AM/FM, College of
activities included: Journalism & Communications)

Participating in Advisory User Counsel, Intern Participation Certificates (Office of Academic
Stakeholder, Bridges Team, and Transition Affairs)
meetings,
Researching governance requirements and Office Accounting Procedures (College of Nursing)
best practices,
Evaluating key elements of project Newsletter
management including whether the system
implementation met the Vision Team's Quarterly newsletters were distributed campus-
objectives, wide with regular features that include highlights
Evaluating security roles for adequate from projects and campus-wide issues. Copies are
segregation of duties and providing available at http://oacr.ufl.edu.
guidance to end-users,
Reviewing open issues and promoting their Post-Audit Assistance
documented resolution,
Developing and issuing key control We routinely provide support and guidance on the
summaries relating to asset management, implementation of planned actions.
cash and investments, billing and
receivables, sponsored research, vendor




2003-2004 11












Effort Distribution relations, human resources management
Other and payroll,
Consultations 4% Contributing to the training materials
7% incorporating internal control and record
DSO and retention concerns,
Committee Service Developing a comprehensive transition
8% ERP-Business audit program and,
Reengineering
Governance/ 73% Reengi Reviewing the University's Transition Plan
Publications including the progress reports issued by
transition team leaders.


We also issued position papers on business process
reengineering internal controls and application
access and security. Copies are available at http://
oacr.ufl.edu.
The ERP Project (Bridges) is a multi-year effort to
improve University business processes. PeopleSoft Special Advisory Reviews
systems provide the framework for integrated, web-
based, real-time access to a wide range of OACR provided proactive assistance on matters of
University processes and information. Financial internal controls, system design changes, and
processes implemented include general ledger, governance on the following areas:
procurement, travel and expense, customer
procuremen, rae and expense, cusomer Accounting for Program Revenues (College of
relations, asset management, sponsored research VeAerinary Medicine)
Veterinary Medicine)
and construction projects. Human resource
processes implemented include human resource
processes implemenled inclde h an res e Safe Security (Division of Recreational Sports,
management, payroll processing, and time andh & Human Performance)
College of Health & Human Performance)
labor data collection. PeopleSoft financial and
human resource applications were implemented as for Pr l ( y
CPA Firms Request for Proposal (Baby Gator,
of June 18, 2004. New student systems will be C e of
imleenedin206.College of Education)
implemented in 2006.
ERP-Business Reengineering management advisory Trade & Barter Reports (WRUF AM/FM, College of
activities included: Journalism & Communications)

Participating in Advisory User Counsel, Intern Participation Certificates (Office of Academic
Stakeholder, Bridges Team, and Transition Affairs)
meetings,
Researching governance requirements and Office Accounting Procedures (College of Nursing)
best practices,
Evaluating key elements of project Newsletter
management including whether the system
implementation met the Vision Team's Quarterly newsletters were distributed campus-
objectives, wide with regular features that include highlights
Evaluating security roles for adequate from projects and campus-wide issues. Copies are
segregation of duties and providing available at http://oacr.ufl.edu.
guidance to end-users,
Reviewing open issues and promoting their Post-Audit Assistance
documented resolution,
Developing and issuing key control We routinely provide support and guidance on the
summaries relating to asset management, implementation of planned actions.
cash and investments, billing and
receivables, sponsored research, vendor




2003-2004 11











INVESTIGATIONS place sub-recipient contracts with two non-
profit organizations. The contracts, totaling
$1,032,111, were sham contracts based on
The OACR receives complaints and allegations of faculty misrepresentations. The inen for
fiscal improprieties from a variety of internal and placng ihe contrats with organizations
external sources, including hotline calls, direct where facult had influence through their
correspondence, and referrals from other universittyofficial role or through connections was to
offices and state agencies. The investigative initiate the establishment of two endowed
reviews conducted by OACR have dual objectives professorship chairs for the Department.
of responding to facts of allegations and addressing All contract funds were returned to the
relevant fiscal and administrative control University. While direct personal gain may
weaknesses. Where appropriate, recommendations not have been the major motivating factor,
for improvements of internal controls are the faculty actions leading to these
communicated to management and are monitored transacions were inappropriate and
for implementation. potentially criminal.

In total, 2,862 hours, or 19% of available hours were o OACR was alerted to concerns regarding
committed to investigative efforts. the validity of fixed price contract payments
made from two College of Medicine centers
Significant issues from these reviews are to a contracted sub-recipient. Payments,
summazed belowbased on principal investigator certification
of work performed, were not supported.
Embezzlement The University initiated action for the
return of these funds.
It was determined that the UF Foundation Assistant
Vice President for Administration-Finance altered Conflict of Interest and Resulting
checks for personal deposit, initiated disbursements Improprieties
to make payments to personal bank accounts and
made personal purchases using UFF funds. As of o: A College of Medicine OPS employee, who
December 2, 2003, the loss incurred totaled owned a research consulting company that
$833,724. The Assistant Vice President's position was contracted to provide service to the
was terminated as a result of these transactions and unit where he was employed, was
he is currently awaiting court proceedings for inappropriately reimbursed for expenses.
sentencing. There was no clear separation between the
work performed as an OPS employee and
Resource Misuse the work provided through the research
consulting company. Proper supervisory
Concerns were expressed to OACR regarding the attestation of time worked was lacking
possibility of resource misuse after an employee which made it impossible to verify actual
submitted a fictitious $2,000 invoice and purchase hours worked. Inappropriate
order issued to his spouse. reimbursements totaled $2,080 for travel
and $1,358 for telecommunication.
Two instances of unsettled travel advances were
identified which provided an employee with funds o: A College of Liberal Arts and Sciences
and a property purchase for personal benefit. employee with a personal business and was
Funds involved totaled $10,338. University Police permitted to use University resources in
Department filed a sworn complaint against the performing tasks for his personal business.
employee for theft. While the employee had fulfilled the
disclosure requirements, management did
Inappropriate Service Contracts not establish an adequate monitoring plan
to provide oversight for the activity to
:. Funds from a miscellaneous College of avoid apparent or perceived conflict of
Medicine donors account were used to interest and resource misuse.


12 Annual Report











o: A senior scientist in the College of Medicine management has taken appropriate action
hired and supervised his daughter and his regarding reported audit comments.
unit purchased supplies from a company
owned by his spouse. University Quarterly follow-up procedures were conducted
procedures regarding the employment of throughout the year and their results were
relatives and disclosure of financial interest communicated to University management. For the
were not followed. The Department closed report period, OACR staff expended 795 hours or
purchase orders and removed the vendor 4% of available hours for follow-up reviews.
from the Department's vendor list.
r able 5 summarizes the results of the follow-up
activities as of June 30, 2004.
o. An employee in the College of Education
hired and directly supervised her daughter As reflected by the summarized information,
as an OPS employee. University procedures management generally reacted timely and in an
regarding the employment of relatives were effective manner to implement audit
not followed. The daughter's employment recommendations and planned actions.
was terminated.
Planned Action Implementation Percentage
FOLLOW-UP
Student Affairs 8
Audit reports include auditor's comments and
planned actions developed and agreed to by Athletic Association
the audit team and management and the
estimated time for their implementation. Agriculture &
Reports issued by the external auditors, Natural Resources
including the Office of Auditor General and
Office of Program Policy and Government Health Affairs
Accountability, contain recommendations for
which university management also provides a
corrective implementation plan. Development

Standard 2500, Standardsfor the Professional Finance &
Practice of Internal Auditing, promulgated by Administration
the Institute of Internal Auditors, requires that
the internal auditor determine that Academic Affairs


Table5 Follow-Up Activities 0 5 10 15 20 25 30 35 40 45 50 55 60




Academic Affairs 57 38 19 0 67% 79%
Finance & Administration 41 29 9 3 71% 87%
Development 8 8 0 0 100% 83%
Health Affairs 15 9 3 3 60% 100%
Agricultural and Natural Resources 36 29 7 0 81% 50%
Athletic Association 3 0 3 0 0%
Student Affairs 11 9 2 0 82% 90%


The planned actions "Not to be Implemented" generally reflect changing conditions that render the plan
obsolete.


2003-2004 13












OTHER ACTIVITIES

Professional Activities University Service

OACR staff participated in various national During 2003-2004, OACR members participated in
initiatives, training and organizations including: various university-wide initiatives and assignments
including:
Board member Association for College
and University Auditors (ACUA) Member ERP General Ledger Committee

Member Institute of Internal Auditors Member ERP HRMS Advisory User
Council
Member Association of Healthcare
Internal Auditors Member ERP Vendor Relations
Committee
Member American Institute of Certified
Public Accountants Member ERP Vision Team

Member ACUA Information Exchange Member Information Technology
Committee Advisory Committee

Member IIA North Central Florida Member UF Bridges Information
Chapter Steering Committee Technology Advisory User Committee

Treasurer IIA North Central Florida Member Auxiliary Review Committee
Chapter
Participant Bridges Enterprise Reporting
Program Committee IIA North Central Pilot Program
Florida Chapter
Speaker Information Technology Security
Board Member IIA North Central Florida Awareness (ITSA) Day
Chapter

Web Master IIA North Central Florida
Chapter





















14 Annual Report














Table 6-Reports Issued 2003-04



IFAS-REC-Ft.Pierce As of 5/31/03 11/05/03 UF-03-387-08 Intemal Audit



IFAS Fort Lauderdale REC As of 5/31/03 11/19/03 UF-03-416-19 Internal Audit

IFAS Homestead Tropical REC As of 5/31/03 11/19/03 UF-03-417-20 flitermal Audit
Parking Administration Services As of 6/30/03 11/20/03 UF-04-397-01 Intemal Audit
Decal Sales
Student Health Care Center As of 5/31/03 11/20/03 UF-O3-389-10 Intemal Audit

Enterprise Directory As of 11/03 1/26/03 UF-03-396-17 Internal Audit

ERP-Position Backfill As of 6/30/03 1/28/04 UF-04-399-03 Intemal Audit
Travel Funded by Support As of 3/31/03 2/03/04 UF-03-391-12 Intemal Audit
Organizations
McKnight BraIi InStitute As of 6/30/03 2/09-04 UI-02-364-06 Itemal Audit

IFAS Southwest REC As of 9/30/03 3/18/04 UF-04-416-20 Intemal Audit


University AthleF Fod tic Association As of 9/15/03 /254 UF-04-41-25 im Adi
University Athletic Association As of 7/01/03 4/16/04 UF-04-407-11 Intemal Audit
ERP Implementation




Technical Infrastructure -
As of 4/28/04 4/28/04 UF-04-409-13 Intemal Audit
Bridges

ERP Business Process 9/9/03
7/1/03 6/30/04 72.200401 MAS
Engineering 6/11/04



Asset Management Bridges As of 6/18/04 7/23/04 UF-04-401-05 Intemal Audit*



Vendor Relations Bridges As of 6/18/04 8/6/04 UF-04-400-04 Intemal Audit*


Substantially completed as of June 30, 2004.




2003-2004 15











CONTACTS & RESOURCES Equal Opportunity Programs Office
http://www.aa.ufl.edu/aa/affact/
The Office of Audit & Compliance Review works (352) 392-6004
collaboratively and cooperatively with many other
offices. Below is a partial listing of the contacts and Ombudsman
resources used frequently. http://www.ombudsman.ufl.edu/
resources used frequently. -
(352) 392-1308
State Auditor General
http://www.state.fl.us/audgen/ University of Florida Foundation
http://www.state.fl.us/audgen/
Gainesville Office: (352) 334-1740 http://www.uff.ufl.edu/
Campus Office: (352) 392-5255 (352) 392-1691

State Comptroller's Office University General Counsel
http://www.dbf.state.fl.us/ http://www.generalcounsel.ufl.edu/
(850) 413-3100 (352) 392-135
Consumer Hotline: 1-800-848-3792 University Police Department
Get Lean Hotline: 1-800-GET LEAN http://www.police.ufl.edu/

University Controller's Office (352) 392-1111
http://fa.ufl.edu/ Shands Auditing
(352) 392-1321 (352) 265-7969

Florida Department of Education University President's Office
http://www.fldcu.org/ http://www.president.ufl.edu/

UF Board of Trustees (352) 392-1311
http://www.trustees.ufl.edu/ University Vice-President for Finance &

Health Science Center Compliance Administration
http://www.med.ufl.edu/complian/ http://www.admin.ufl.edu/
(352) 265-8359 (352) 392-1336

Division of Sponsored Research
http://rgp.ufl.edu/research/
(352) 392-1582

Institutional Review Board
http://irb.ufl.edu/

UF Contracts & Grants
http://fa.ufl.edu/cg/
(352) 392-1235

IFAS Sponsored Programs
http://grants.ifas.ufl.edu
(352) 392-2356

Engineering Contract & Grants
http://www.eng.ufl.edu/home/cng/
(352) 392-6626

University Athletic Association
http://www.uaa.ufl.edu/
(352) 375-4683




16 Annual Report




University of Florida Home Page
© 2004 - 2010 University of Florida George A. Smathers Libraries.
All rights reserved.

Acceptable Use, Copyright, and Disclaimer Statement
Last updated October 10, 2010 - - mvs