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1st appeared
13
April 2000
Working to Improve Financial Controls More than 200 staff crowded into a lecture hall last week to hear how UCSF’s controller and auditor plan to make sure campus finances are in order. For Cindy Fenwick, a certified public accountant hired as UCSF’s first-ever controller last August, this was her debut addressing a campuswide group, organized by the Academic Business Officers Group. Fenwick, assistant vice chancellor of finance, briefly acknowledged last year’s embezzlement scandal by an employee in the UCSF cashier’s office. Discovered last May by the campus auditing staff, the loss of $4.5 million was an emotional blow to colleagues, Fenwick says. "Those who go into accounting are usually known for their trustworthiness, integrity and honesty," she says. "And when something happens like this in your midst it affects everybody." Staff initially felt embarrassed and betrayed, but are moving forward to make sure it doesn’t happen again. The campus took immediate corrective actions to shore up controls and procedures and to provide adequate management oversight. As a result of the embezzlement, UCSF called in a banking consultant, who among other things, recommended that the University use a merchant automated teller machine, which would allow campus staff with authorization to deposit funds around the clock without having to go through the cashier’s office. Such systems are used in the private sector – allowing a bank to take immediate custody of the cash and to track balances. "You can only make deposits, you can’t make withdrawals, I might add," Fenwick points out. Five UCSF departments will begin testing the ATM cash pilot program, she says, once the Fire Marshall opines on the site where the centralized ATM will be located on campus. If the pilot is successful, UCSF will develop a Web-based system to make deposit information available online and account for revenues much more frequently than the current system, Fenwick adds. UCSF is also undergoing a complete review of the accounting office itself – essentially allowing its internal control system to be scrutinized by an independent consulting firm. This review will look at staff levels and skills in each function as well as evaluate the effectiveness and efficiency of the accounting office’s services to campus customers. The consultant will also identify best practices that might be used at UCSF. The overall goal for the accounting office, Fenwick points out, is to become more service-oriented for faculty, staff, students and patients alike. Refining systems and procedures is an ongoing process. Fenwick’s primary task for the next six months, she says, is to implement a campuswide program of self-assessment of existing internal controls. The purpose of this management initiative is to assess, monitor and improve the control environment and provide the financial leadership focus for campus operations. In working toward these goals, she says, UCSF will need teamwork and collaboration from everyone. "In the end, hopefully, it will provide us with a stronger internal control system," Fenwick says. "Internal control is everybody’s responsibility." Audits are coming Describing himself as the "friendly auditor," Rich Layne, campus auditor and director of audit and management services, encouraged staff to call his team when they have concerns. "It’s often difficult to understand you have a problem when you’re in the middle of it. It’s much easier for someone on the outside to recognize it and do something about it," he says. Indeed, once notified by UCSF management last May of a problem in reconciling the campus’ bank account, auditors took just six business days to uncover the crime. That team of auditors is now charged with auditing every department at the University -- a process that began this fiscal year and will continue with routine campuswide reviews. Auditors will review the adequacy and effectiveness of internal controls and compliance with University policies and laws. Departmental audits look at the effectiveness of research administration; departmental information systems that track revenues and expenses, such as payroll and purchases; and equipment inventory and cashiering practices. Auditors also plan to review clinical trials, overtime pay, faculty vacation accruals and the use of consultants and cell phones. In addition, auditors will review the campus’ sales and service transactions. While Layne himself has been on the receiving end of employee anxiety and consternation about the campuswide audits, he says the audit process is not meant to be burdensome. The bulk of the work to prepare for an audit, he says, is gathering documents. The typical audit takes no more than three months. "Having a presence in departments is a healthy way of doing business," Layne says. "It helps prevent the kind of incident we had last year in the cashier’s office." The office developed a website designed to introduce to UCSF the team of auditors, define auditing theories and describe the process so that the campus community knows what to expect. Eventually, Layne says, he’d like to post best practices around UCSF on the website. Links: Audit and Management Services Website Source: Lisa Cisneros, Newsbreak Editor |
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