(rev 3/09)

Stewardship, Accountability and Regulatory Compliance

Jim CorkillSandra FeathersonOffice of the Controller

Stewardship

Stewardship

The careful and responsible management of something entrusted to one’s care.

Fund Accounting

Sources and uses of funds.

Why is Stewardship So Important?

• Mission

• Funding

• Image

• Stakeholders

What Is Our Mission?

• Teaching

• Research

• Public Service

We should be able to identify a cost to one of our missions.

Where Does UCSB Get Funding?

• Taxpayers

• Donations

• Variety of Agencies/Foundations

• Fee for Service– Housing– Parking

• Indirect Cost Recovery

Why Is Our Image Important?

• Ability to attract students

• Ability to attract faculty

• Ability to attract staff

• Quality of research

• Community perception

• World renowned public institution

Who Are Our Stakeholders?

• Students

• Parents

• Employees

• Donors/Agencies

• Taxpayers in California

A distinguished visitor is coming at the request of your department to give a lecture. After the program, your department is hosting a wine/cheese reception. What funding source do you use?

19900 Funds

NSF Funds

Opportunity Funds

Gift Funds

Conference Fees

Gift Funds

Discussion Item #1

Additional Considerations

• Does the individual coding the entertainment request know what funding source to use?

• Has he been properly trained?

• Does she understand the policy?

Financial Controls

• Do you have the right ones in place?– Separation of Duties– Reconciliation and Review– Proper Training

• Risk assessment

Risk Assessment

– What are your objectives?– What are the risks to achieving those

objectives?– What are the consequences?– What are the controls in place to manage

the risks?– Do you have an acceptable level of

exposure?

Scenario #1

Your department is hosting an international conference. Expected revenue is $100,000 for 250 participants. You are planning to accept cash/checks for conference registration. The hosting professor decides he wants to accept credit cards. Perform a risk assessment and evaluate whether or not to accept credit cards.

Accountability

Accountability

An obligation or willingness to accept responsibility or to account for one’s actions.

What Are Your Responsibilities as a Business Officer?

• Establish and maintain effective internal controls

• Manage the accountability structure of your department

• Ensure a reasonable distribution of workload

• Make sure your department is adequately trained

• When needed, delegate to qualified individuals who have the necessary knowledge and authority

What Are Your Responsibilities as a Business Officer?

• Review/approve back-up plans, including the assignment of back-up personnel, and review official record of approval delegations on a regular basis

• Assign or obtain the services of a Dept. Security Administrator (DSA)

• Ensure a clear audit trail exists for delegations, preparation and review of transactions

Preparing / Reviewing

• What does the preparer need to know?– Policy– Funding Source– System Navigation

• What does the reviewer need to know?– Policy– Funding Source– Appropriateness

Scenario #2

Your department wants to get a new Flexcard for low value purchasing. What is an appropriate segregation of duties?

Regulatory Compliance: It’s Everywhere

• Payroll– Visa issues, start dates, Oath/Patent, 72

hour rule

• Travel– IRS issues, reimbursement of actual costs

• Purchasing– LVPA, consultants

• Record Retention

Regulatory Compliance:Why Is This So Important?

• Stewardship and ethics– “Doing the right thing”– Decision making and conclusions– Financial reports

• Audit Review– Institution at risk

Policies/Rules:Where Do You Go?

• Agency Regulations

• University Policies (IRS rules)

• Campus Policy and Guidelines

• Control Point Policies

http://policy.ucsb.edu

Scenario #3

An academic department has hired a tenured professor from England. The Chair promised to pay all removal expenses, travel to Santa Barbara, and lodging and meals for one week for her family once in Santa Barbara.

What are the regulatory issues?

Avoiding Conflict of Interest

• Business to benefit the University, not for personal gain

• Perceived conflicts must be evaluated

• Reporting responsibilities

Conflict of Interest

• Vendor decisions– Close friend or relative– Invested in the company– Personal discounts based on University

business

• Policy– UCSB Policy 5005, Conflict of Interest

Discussion Item #2

The copy machine in your office needs to be repaired. Your brother-in-law owns a repair shop located near the campus. He has the best rates, and gets a lot of University business. Is it ok to ask him to repair your machine?

Discussion Item #3

The director of your department has invested in a local software company and they have offered to develop a shadow system for your department free of charge.

What do you do?

Support Groups

• Purpose– Fundraising– Public Outreach

• Examples– Friends of the Library– The Art, Music and UCSB Affiliates

Support Groups

• Must receive official recognition from the Chancellor. – Establishes privileges and responsibilities,

including use of University’s name, facilities and resources.

• Funds raised by such entities must be adequately controlled and expended in the same manner as if the funds were raised by the University.

Questions?