Executive and Audit Committee Meeting...Executive and Audit Committee Meeting Academic & Student...

Executive and Audit Committee Meeting Academic & Student Recreation Center Building, Conference Room 515

1800 SW 6th Avenue, Portland, Oregon 97201

Wednesday, 6/8/2016 1:30 - 3:30 PM PT

1. Call to Order/Roll/Declaration of Quorum

2. Consent Agenda

a. Approval of Meeting Minutes March 11, 2016 Meeting Minutes March 11, 2016 - Page 2

3. Internal Audit Update and Review of Fiscal Year 2017 Internal Audit Plan David Terry, Director of Internal Audit, will provide a status report regarding Internal Audit activities, review the FY 2017 risk assessment and present a draft FY 2017 Internal Audit Plan for recommendation by the Committee to the full Board. Cover Sheet - FY 2017 Internal Audit Plan - Page 5 FY 2017 Internal Audit Plan - Page 6

4. Presentation of FY 2015 Single Audit and Introduction to FY 2016 Financial Statement Audit Jean Bushong from Clifton Larson Allen will join us by telephone and provide the Committee with a brief update regarding the FY 2015 federal A-133 Single Audit, required by the federal government for recipients of federal funds, which was completed in March. Ms. Bushong will also introduce the Committee to the process underway for auditing the University's FY 2016 financial statements and the Board's responsibilities related to the financial statements audit. 2015 Federal A-133 Single Audit Report - Page 27

5. Faculty Senate Inquiry Regarding Committee Membership and Participation President Wiewel will share an inquiry from the Faculty Senate Steering Committee regarding service of faculty members on Board committees.

6. Trustee Recommendation Policy At its March meeting, the Board referred the Trustee Recommendation Policy back to the Committee.Cover Sheet - Policy re Recommendations for Trustee Appointment - Page 59 Recommendations re Trustee Appointment - Page 60

7. Discussion Regarding Union Interaction with Board The AAUP has requested a discussion regarding options for increasing interaction between trustees and representatives of the University's primary employee unions.

8. Information Follow-up Committee members have inquired and received information regarding the University's relationship with external food service vendors, the University's mandatory student health insurance requirement, and the new collective bargaining agreement with the AAUP. This is an opportunity for the Committee to discuss whether any follow-up regarding these items is warranted. Food Service History - Page 62 Insurance Work Group Report - Page 64 AAUP CBA Summary - Page 70

9. Discussion Regarding Conduct of Board Meetings

Portland State University Board of Trustees

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PORTLAND STATE UNIVERSITY BOARD OF TRUSTEESEXECUTIVE AND AUDIT COMMITTEE

March 11, 2016University Board RoomRoom 515, Academic & Student Recreation Center9:00 am to 11:00 am

Minutes

Committee Members Present: Gale Castillo, Tom Imeson, Margaret Kirkpatrick, Rick Miller, Pete Nickerson (chair), and Wim Wiewel

Committee Members not present: None.

PSU Staff present included: David Reese, David Terry, Christine Croskey, and Shelley Winn

1. CALL TO ORDER/ROLL/ DECLARATION OF QUORUM

Chair Nickerson called the meeting to order at 9:15 am and the Board Secretary took role. A quorum was present, and the meeting, having been duly convened, was ready to proceed with business.

2. CONSENT AGENDAAPPROVAL OF MINUTES FROM JOINT EXECUTIVE & AUDIT AND FINANCE AND ADMINISTRATION DECEMBER 2, 2015 MEETING AND MINUTES FROM DECEMBER 2, 2015 MEETING

Chair Nickerson submitted the minutes from the December 2, 2015 meetings for approval.

ACTION: Castillo moved to approve the minutes. Miller seconded. The motion passed unanimously.

3. REVIEW OF EXECUTIVE AND AUDIT COMMITTEE CHARTER

The committee charter was reviewed and the committee discussed whether the charter accurately and adequately describes the duties of the committee. The committee discussed whether general compensation philosophy is a topic that should be considered by the committee, but determined that it is a topic best suited for the Finance and Administration Committee.

Master Page # 2 of 71 - Executive and Audit Committee Meeting 6/8/2016________________________________________________________________________________


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4. DRAFT POLICY: RECOMMENDATIONS FOR TRUSTEE APPOINTMENT

The committee reviewed the draft policy regarding recommendations for trustee appointment. The draft policy is based on a policy recently adopted and utilized at Oregon State University.

It was agreed that a formal process in which to recommend potential candidates to the Governor is necessary. The committee discussed the importance of providing multiple names to the Governor’s office when there is a vacancy. The committee suggested that trustees have an engagement with Portland State University versus a knowledge of Portland State University and the draft policy was changed accordingly. The policy demonstrates the Board’s willingness to further develop a diverse, skilled and dynamic Board. It was noted this policy applies to at-large positions, which does not include the student, staff or faculty positions.

ACTION: Imeson moved to recommend the draft policy to the full Board for approval at the March 31, 2016 meeting. Kirkpatrick second. The motion passed unanimously.

5. PROPOSED AMENDMENT TO BYLAWS

Reese reminded the committee that the by-laws adopted by the Board on January 30, 2014 include a term limit for the Chair and Vice Chair. The Board Policy on Board Officers, also adopted on January 30, 2014, also includes a term limit. At the time, the Board discussed the value of keeping the by-laws at a high level and using Board policies to establish details that might change over time (such as committee structure, committee charters, the order of agenda items at meetings, etc.). However, the Board officer term limit provision was inadvertently left in both the by-laws and the Board policy. The proposed amendment to the by-laws would take the term limit out of the by-laws and state that the Board can establish a term limit for its officers through Board policy. The Board policy with the two consecutive one-year term limit for Board officers would remain in place.

ACTION: Miller moved to recommend the Amendment to the Bylaws to the full Board for approval at the March 31, 2016 meeting. Imeson second. The motion passed unanimously.

6. RECOMMENDATIONS REGARDING 2016-17 BOARD OFFICERS

Reese reported that he had polled trustees for comments and recommendations regarding Board officers for 2016-17, as required by the Board’s Policy on Board Officers. Reese reported that all trustees indicated support for Chair Nickerson continuing as chair for an additional year, which would require that the Board make an exception to its policy regarding term limits for Board officers. Chair Nickerson indicated his willingness to continue to serve as Chair.



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Vice Chair Tom Imeson has requested that he not be considered for re-election as Vice Chair for another term. Rick Miller has indicated his willingness to serve as Vice Chair. Reese reported that trustees expressed their support for Rick Miller and that some trustees also expressed a hope that Margaret Kirkpatrick would consider a Board officer position at some time. Kirkpatrick stated that she did not want to be considered for an officer position at this time.

ACTION: Imeson moved to recommend to the full Board at the March 31, 2016 meeting that Pete Nickerson and Rick Miller be elected to one-year terms as Chair and Vice Chair, respectively, beginning July 1, 2016. Castillo second. Castillo, Imeson, and Kirkpatrick voted “yea.” Nickerson and Miller abstained. The motion passed.

7. AUDIT REPORT

David Terry presented a status update on the annual audit plan and EthicsPoint complaints. Ten EthicsPoint complaints have been received and nine have been closed. Terry discussed the audits that are in process and the completed NCAA Agreed-Upon Procedures Audit. Terry also discussed his work on the 2016-17 risk assessment. He expects to bring the 2016-17 risk assessment to the Executive and Audit Committee and full Board in June. Results of 2015 audits will be factored into the results.

8. OTHER BUSINESS

The committee discussed whether the Board should have independent legal counsel, separate from the University’s Office of General Counsel that reports to the President. Reese pointed out that the committee has authority to hire its own legal counsel, if the need arises, as provided in the Board’s policy establishing the Executive and Audit Committee. Chair Nickerson reminded the committee that he had worked with outside counsel on the drafting of the President’s new contract in order to avoid any concerns about a conflict of interest in the Office of General Counsel. The committee determined that it is satisfied with the current structure.

The committee debriefed on the March 4 meeting with faculty from Women, Gender, and Sexuality Studies, which several trustees attended. The meeting was in follow up to concerns raised by faculty in this department regarding the University’s response to students who had disrupted the Board’s previous meeting. Trustees who attended the meeting reported that it had been a helpful discussion.

The Seven-Year National Accreditation process and the two recommendations from the report were discussed.

9. ADJOURN

With no further comments or questions from the committee, Chair Nickerson adjourned the meeting at 10:50 am.


BOARD OF TRUSTEES EXECUTIVE AND AUDIT COMMITTEE

AGENDA ITEM: 3

DATE: June 8, 2016

TITLE: FY 2017 Internal Audit Plan

SUMMARY OFITEM: The Director of Internal Audit has drafted a proposed FY 2017 Internal Audit

Plan for review and approval by the Committee.

REQUESTED COMMITTEEACTION: Review and discuss the FY 2017 Internal Audit Plan and recommend its approval

to the full Board.

ATTACHEDDOCUMENTS: Draft FY 2017 Internal Audit Plan

BACKGROUND READING: None


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Portland State University Fiscal Year 2017 Internal Audit Plan

June 2016

Prepared by:

David Terry, CPA, CIA

PSU Director of Internal Audit


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TABLE OF CONTENTS

Fiscal Year (FY) 2017 Internal Audit Plan

Description Page

Cover Page 1

Table of Contents 2

Plan Overview 3

Internal Audit Plan & Budgeted Hours for FY 2017 – Exhibit A 4-5

FY 2017 Entity Wide Risk Assessment – Exhibit B 6

FY 2017 Top 10 Risk Scores and Potential Risks - Exhibit C 7-10

Risk Factors, Scoring Criteria, & Audit Plan Approval Process – Exhibit D 11-15

Auditable Units Defined – Exhibit E 16-21


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PLAN OVERVIEW

This document provides the FY 2017 Internal Audit Plan as required by International Standards for the

Professional Practice of Internal Auditing (Standards).

AUDIT PLAN – Exhibit A

The final audit plan covers a 12-month period beginning July 1, 2016 through June 30, 2017. This plan

includes internal audits selected based on the results of the entity wide risk assessment performed by

Portland State University’s Internal Audit Office (IAO), input from various stakeholders and managers

throughout the university, and input and approval from the Executive & Audit Committee.

PRIORITIZED POTENTIAL AUDITS – Exhibit B

The IAO prioritized the university’s departments, or auditable units, by sorting the units from highest risk

to lowest risk based on scoring criteria used for the entity wide risk assessment. The IAO analyzed the

results to determine if risk ratings were consistent with what professional judgment would expect. In

addition, the IAO considered significant changes in processes units are currently undergoing and/or will

be undergoing in the near future to help identify the timing of when an Internal Audit should occur. This

resulted in the prioritized ranking of audits.

2017 TOP 10 RISK SCORES & POTENTIAL RISKS – Exhibit C

This exhibit helps outline the top 10 audit units by overall risk score and what potential risks could occur

in these areas if internal controls are not implemented and functioning effectively.

RISK FACTOR DEFINITIONS AND SCORING CRITERIA – Exhibit D

The IAO established risk criteria, based on best practices implemented by other Internal Audit

Departments throughout governmental and higher education entities, to be used in determining the overall

risk for each potential audit unit. The IAO scored risk for each auditable unit by: receiving input from

key stakeholders throughout the university; scoring the complexity of each unit; scoring the significance

of the impact an error and/or weakness would have to the university as a whole if a detrimental event

were to occur in that unit; scoring the significance of revenues and expenditures flowing through the unit;

and scoring risk based on the IAO’s professional judgment.

AUDIT ENTITIES – Exhibit E

Exhibit E provides an overview of the audit universe at the university (i.e. “what is auditable”). Defining

the audit universe is a critical step in helping plan future internal audits at the university. Each auditable

unit must be distinct and contain activities structured to obtain common objectives. For the FY 2017

entity wide risk assessment, there are 34 auditable units.


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Internal Audit Plan EXHIBIT A

July 1, 2016 through June 30, 2017

Audit # Engagement Title Hours* Timeframe** Comments

Risk Assessment 2nd Annual Risk

Assessment

200 Mar-June 2016 Annually required

by IIA Standards.

Tier I Audits

2017-1 HR - PSU Background

Checks & Overload Pay

Estimated at 400

hrs.

Jul.-Sept. 2016

2017-2 Risk Management Estimated at 150

hrs.

Jul.-Sept. 2016

2017-3 CPSO & Clery Act Estimated at 500

hours

Aug.-Oct. 2016

2017-4 Research Incentive

Payments

Estimated at 400

hours

Aug.-Dec. 2016

2017-5 Testing Assistance for

External Audit^

Estimated at 500

hours

Jun.-Dec. 2016 Contractually

agreed upon with

external audit firm.

2017-6 Property Management Estimated at 300

hours

Dec.-Jan. 2017 Lease agreements

and compliance

2017-7 Student Health &

Counseling

Estimated at 500

hours

Feb.-May 2017

2017-8 Athletics Follow Up Estimated at 200

hours

May.-Jun. 2017

SPECIAL

REVIEWS

Special reviews 500 Fiscal Year 2017 Special reviews are

largely based on the

# of hotline reports

received during the

year.

CONSULT Consulting & Outreach

Work

190 Fiscal Year 2017 Consulting work as

needed/requested

by mgmt.

Total Audit Hours for

FY 2017

3,840

INDIRECT Indirect hours for FY

2017

320 Fiscal Year 2017 Hours are estimates

for training, leave

time, & mgmt.

meetings.

Total Budgeted Hrs 4,160

Tier II Audits

2018-1 Geology Follow Up Estimated at 250

hours

Estimated for early

FY 2018

2018-2 Financial Aid Follow Up Estimated at 300

hours

Estimated for mid

to late FY 2018

2018-3 Office of International

Affairs

Estimated at 600

hours

Estimated for mid

to late FY 2018

2018-4 School of Social Work Estimated at 600

hours

Estimated for mid

to late FY 2018

* Hours may be adjusted as needed based on scope and objectives of the planned audit and potential issues identified during fieldwork.

** Dates may be adjusted as needed to avoid a negative impact on PSU departments, projects, available staff and resources.

^ External audit testing assistance helps provide coverage for Research & Strategic Partnerships; Financial Aid; and Financial Services,

Treasury, and Budget


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Audit Plan

Description of Audits

July 1, 2016 through June 30, 2017

Audit # Description

2017-1 Audit will focus on reviewing internal controls over background checks for

positions that require these checks and sampling and testing will be conducted

university wide to determine the effectiveness of these controls. In addition,

university wide processes used to establish additional pay for employees will be

reviewed and tested for reasonableness and effectiveness. Additional pay includes

overload, differentials, and other stipends.

2017-2 Audit being conducted per request from General Counsel.

2017-3 Audit will focus on reviewing internal controls over revenues, expenditures,

equipment/assets, and key compliance requirements within CPSO. In addition,

CPSO is responsible for compiling PSU’s annual Clery Act report and helping the

university comply with Clery Act compliance requirements, which will be reviewed

and tested. Audit will also review data maintained in PSU’s Advocate database,

which assists CPSO in their Clery Act reporting requirements.

2017-4 Audit will focus on reviewing internal controls over incentive payments provided to

research participants. IAO’s general understanding is that incentive payments can

be given in the form of gift cards, electronic gift cards, and/or payments of cash or

check. This project will look at internal controls used university wide for these

types of expenditures and will also review how these types of assets are controlled

before being disbursed to participants.

2017-5 IAO contractually agreed to provide audit assistance to external auditors for the

annual financial statement and Single Audit of PSU. This work helps to reduce the

cost of these external services to PSU as a whole and allows IAO to test key

financial controls at PSU.

2017-6 IAO will focus on reviewing internal controls over PSU facilities leased and/or

rented to 3rd parties. Timeframe will cover fiscal years 2014 through 2016 and will

include reviewing a sample of contracts/agreements, related payments, and other

requirements of the agreements such as ensuring insurance and tax requirements are

in compliance with the agreements.

2017-7 Audit will focus on reviewing internal controls over revenues, expenditures, capital

assets and medicines, and key compliance requirements. In addition, IAO will

follow-up on recommendations made to the department in a prior OUS internal

audit.

2017-8 IAO will follow-up on the items denoted in project 2015-1 to verify the status of

corrective action(s) taken by management.

Risk

Assessment

The annual risk assessment forms the basis of the audit plan. Auditing standards

require the IAO to conduct an annual risk assessment to conform to standards.

Consulting PSU management may ask IAO for consulting services to be performed in

accordance with the Mission & Authority Statement for IAO.

Special

Reviews

Includes hours for unplanned, special requests for audit reviews and investigations

arising from allegations received and/or actual detrimental events occurring at the

university.


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EXHIBIT B

FY 2017 Prioritized Audit Risk Model – Auditable Units

Auditable Entity/Unit

Total Risk

Score Risk

Ranking Risk

Category

IA Planned for FY'17

Research and Strategic Partnerships 142 1 High Yes^

Office of Information Technology (OIT) 142 2 High No*

Campus Public Safety (CPSO) 129 3 High Yes

Office of International Affairs 123 4 High No

Planning, Construction, & Real Estate 123 5 High Yes

Student Health and Counseling 121 6 High Yes

Human Resources & Payroll 112 7 High Yes

Athletics 112 8 High Yes

Risk Management 102 9 High Yes

Financial Aid 101 10 High Yes^

Transportation & Parking Services (TAPS) 99 11 Moderate No*

Financial Services, Treasury, and Budget 98 12 Moderate No*

University Place 98 13 Moderate No*

Diversity and Inclusion 98 14 Moderate No

Office of Academic Affairs (OAA) 92 15 Moderate No

Maseeh College of Engineering and Computer Science (MCECS) 91 16 Moderate No*

School of Social Work (SSW) 91 17 Moderate No*

Enrollment Management & Student Affairs (EMSA) 89 18 Moderate No*

General Counsel 86 19 Moderate No

Office of the President and Board of Trustees 86 20 Moderate No

Intensive English Language Program (IELP) 85 21 Moderate No*

College of the Arts (COTA) 85 22 Moderate No*

Housing and Residence Life 83 23 Moderate No*

Government & Community Relations & Marketing & Communication 80 24 Moderate No

General University 80 25 Moderate No*

College of Urban and Public Affairs (CUPA) 78 26 Low No*

College of Liberal Arts & Sciences (CLAS) 75 27 Low No*

School of Business (SBA) 73 28 Low No*

Graduate School of Education 70 29 Low No*

Institutional Research 66 30 Low No*

University Studies (UNST) 63 31 Low No*

Libraries 61 32 Low No*

Honors College (HON) 60 33 Low No*

Confucius Institute 31 34 Low No* * - IAO may indirectly audit aspects of this auditable unit via the planned audits for FY’17. For example, federal grant expenditures

spent from CUPA’s accounts in Banner may be sampled and tested for the fiscal year 2016 Financial Statement and/or Single Audit.

^ External audit testing assistance helps provide coverage for Research & Strategic Partnerships; Financial Aid; and Financial Services,

Treasury, and Budget.


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EXHIBIT C

Overview of Potential Risks Identified in the Top 10 Risk Scores

# Audit Unit Potential Risks(s) Identified Impact to PSU if

Potential Risk

Occurred

1

Research and Strategic

Partnerships

a) Requirements for export controls

may not be implemented or

effective.

b) New OMB standards may not be

effectively implemented;

c) High turnover in personnel could

lead to inconsistent adherence to

policies and procedures;

d) Monitoring of major grants may

be deficient;

e) Grant compliance requirements

not adhered to;

f) Internal controls over revenues

and expenditures may be

ineffective.

a) High

b) Moderate

c) Low to Moderate

d) Moderate

e) Moderate to

High

f) Moderate

2 Office of Information

Technology (OIT)

a) Malicious attacks are not

sufficiently mitigated, identified

timely, and timely resolved;

b) Software licensing requirements

not achieved leading to fines;

c) Disaster recovery, business

continuity, and incident response

procedures are inadequate;

d) User access to critical systems is

not effectively monitored and

administered.

e) Monitoring of major IT contracts

is not effective and adequate

service level agreements are not

in place to protect PSU.

f) IT controls for PCI compliance

may be ineffective.

a) Moderate to

High

b) Moderate

c) Moderate

d) Moderate

e) Moderate

f) Moderate to Low

3

Campus Public Safety Office

(CPSO)

a) High turnover in personnel could


policies and procedures;

b) Clery Act requirements are not

ensured leading to fines and

impact to financial aid;

a) Low

b) High to

Moderate


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c) Internal controls over revenues

and expenditures are not

effective.

c) Low

4 Office of International Affairs

a) International students must

maintain a certain course load to

maintain student VISA

requirements.

b) International students must show

evidence of health insurance;

c) International students are limited

to the number of credit hours

they can take via distance

education;

d) International students must

present evidence of sufficient

financial resources to pay higher

tuition rates before being

admitted;

e) Lack of internal controls over

revenues and/or expenditures.

a) Moderate

b) Moderate

c) Moderate

d) Moderate to Low

e) Moderate to Low

5 Planning, Construction, & Real

Estate

a) Procurement rules not followed;

b) Monitoring of major contracts

may be deficient;

c) Capital assets not being properly

accounted for and depreciated;

d) High turnover in personnel could


policies and procedures.

e) Safety requirements and

insurance not being maintained

a) Moderate to Low

b) Moderate to

High

c) Moderate to Low

d) Moderate to Low

e) Moderate to

High

6 Student Health and Counseling

a) Medicines not adequately

controlled and accounted for;

b) HIPAA or FERPA compliance

requirements not achieved;

c) Recent turnover in personnel

leads to inconsistent adherence

to policies and procedures;

d) Lack of internal controls over

revenues and expenditures;

e) Major contracts not adequately

monitored and administered;

f) Risk of students with infectious

disease being treated in Student

Health and Counseling.

a) Moderate to

High

b) Moderate

c) Moderate

d) Moderate

e) Moderate to

High

f) Moderate


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7

Human Resources and Payroll

a) Pay inconsistencies and/or

overpayments to personnel;

b) Affordable Care Act compliance

requirements not maintained

leading to fines;

c) Recent turnover in personnel

leads to inconsistent adherence

to policies and procedures;

d) Benefits granted to those that are

ineligible;

e) I-9 compliance requirements not

being consistently followed.

f) Performance evaluations not

performed timely and/or not at

all by managers

g) Overload pay, shift differential,

and stipends lack consistent

controls and questioned costs are

incurred

h) Background checks not

performed when required for

positions.

a) Moderate

b) Moderate

c) Moderate

d) Moderate to Low

e) Moderate

f) Moderate to Low

g) Moderate

h) Moderate

8

Athletics

a) Procurement rules not being

followed;

b) Monitoring of major contracts

may be deficient;

c) Internal controls over revenues

or expenditures not sufficient;

d) NCAA compliance not

maintained;

e) Equipment and other PSU assets

not adequately

secured/controlled.

f) Athletic training staff lack

health/safety

certifications/licenses.

g) Turnover in personnel leads to

inconsistent adherence to


h) Insurance over camps may not

be adequate.

a) Low

b) Moderate

c) Moderate

d) Moderate

e) Moderate to Low

f) Moderate

g) Moderate

h) Moderate


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9 Risk Management

a) Turnover in personnel leads to

inconsistent adherence to


b) EPA, OHSA, DEQ and other

federal and state compliance

requirements not maintained.

c) Internal controls over

expenditures not sufficient.

d) Insurance levels may not be

sufficient for some risk

exposures.

a) Moderate to Low

b) Moderate

c) Low

d) Moderate to

High

10 Financial Aid

a) Turnover in personnel could lead

to inconsistent adherence to


b) Overpayments of financial aid to

students.

c) Federal regulations not adhered

to related to financial aid funds.

d) Debt collection procedures not

effective related to Perkins

loans.

a) Moderate

b) Moderate

c) High to

Moderate

d) Moderate to Low


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EXHIBIT D

Risk Factor Definitions, Scoring Criteria, & Internal Audit Plan

Approval Process

Overview of Entity Wide Risk Assessment

A Complexity of Unit and Impact to PSU B C = A x B D

E F = C + D + E

Auditable Unit

Risk Assessment

Survey Score Strategic Operational Financial IT

Legal Compliance

Total Business

Risk Factors

Combined Risk

Assessment & Complexity

Score

Financial Significance

Score

Last Time Audit by IA Score

Total Risk Score

Example Unit A 40 1 1 1 1 1 5 200 20

25 245

Example Unit B 10 0 1 0 0 0 1 10 .2

0 10.2

Risk Assessment Survey Score – The IAO held interviews with key stakeholders from the

various auditable units to help gain an understanding of risks and obstacles each unit was facing

and to gain a more thorough understanding of the duties and responsibilities of each unit. The

IAO met with approximately 30 stakeholders throughout PSU to obtain input on the FY 2017

risk assessment. In addition, IAO issued an electronic survey to approximately 80 mid-level

managers to help gain a further understanding of risk exposures and internal controls to mitigate

those risks in the auditable units. Approximately 50 mid-level managers responded to the risk

assessment survey. The IAO asked stakeholders questions on:

General Risks

Control Environment – This describes the tone management sets/displays for personnel in

regards to how policies and procedures are followed and control activities are performed.

Risk Assessment is management’s identification and analysis of risks relevant to the

achievement of objectives and goals. In addition, it includes a plan for determining how

known risks should be managed to help the organization achieve its objectives and goals.

Control Activities include policies and procedures, segregation of duties, and physical &

automated controls that help management ensure directives are carried out.

Information and Communication is the identification, capture, and exchange of

information in a form and timeframe that enable people to carry out their responsibilities.

Information systems deal with both internally generated data and information about external

events, activities, and conditions.

Monitoring is a process established by management that assesses the quality of internal

control and program performance over time. Monitoring provides external oversight, either

ongoing or in the form of independent checks of internal controls by management or other

parties outside the process.


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Specific Risks

Obstacles the unit faces – examples include spikes in demand on services, lack of

adequate infrastructure, etc…

Known risks the unit faces – grant requirements, monitoring requirements, safety risks,

etc…

Confirmed or alleged instances of fraud, waste, or abuse – misappropriation of assets,

loss of funds, termination of personnel, etc…

Risks with turnover of personnel – The risk that the organization will lose a significant

amount of institutional knowledge at a key time in operations.

Other areas of concerns – manual vs. automated processes, lack of key data to help

manage programs, perceptions of program processes that cause concerns, etc…

The IAO scored the responses provided by stakeholders to the 10 topic areas listed above based

on his professional experience and observations of each unit by the IAO. The IAO then received

input from stakeholders provided during interviews. The IAO then averaged his risk score with

the stakeholders’ risk scores and placed this averaged score into Column A above. The highest

score possible for this section of the risk assessment was 40 points and the lowest was 10 points. Complexity of Unit and Impact to PSU Scores – The IAO scored each unit based on his

understanding of the complexity of processes overseen by the unit and the impact that an actual

error in the unit’s processes could have to the university as a whole. Complexity and impact

were broken out into five various subject areas as defined below:

Strategic – The IAO scored this category primarily based on his understanding of high

level goals the university wants to strive to achieve. A few examples of a significant

strategic impact for PSU might include the university’s goals for sustainability measures,

and diversity of the university’s workforce and student population.

Operational – The IAO scored this category primarily based on customer service aspects

the auditable unit provided to students and to other university departments. An example

of a significant operational unit for PSU would be Financial Aid.

Financial – The IAO scored this category primarily based on the number of funding

streams each auditable unit had and the significance of the amount of funds flowing

through the unit. An example of a significant financial unit would be Financial Aid.

Information Technology – The IAO scored this category primarily based on the

significant amount of information technology (i.e. computers, specialized equipment,

etc…) the unit used within its daily processes. Also, the IAO looked at how significant a

role the unit had in determining what type of information technology was used and how it

would be implemented throughout the university. An example of a unit that had a

significant impact on information technology would be OIT (Office of Information

Technology).

Legal Compliance – The IAO scored this category primarily based on the complexity of

legal and regulatory compliance requirements each auditable unit faced. The IAO

considered FERPA, HIPAA, ADA, Clery Act, EPA, PCI, Title IX, grant rules and

regulations, etc… in scoring each audit unit for this category. An example of an audit

unit with significant and/or complex legal compliance requirements over it would be

Financial Aid or Campus Public Safety Office.


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The IAO would give a score of either 0 or 1 for each of these five complexity/impact areas per

auditable unit. These complexity/impact scores were then used as a “multiplier” score to help

assess risk. The total complexity/impact scores were placed in Column B above and used to

compute C above for each unit. The highest risk score possible for Column C, after the risk

“multiplier” was considered, was 200 points and the lowest was 10 points.

Financial Significance Score – The IAO also assigned a risk score to each auditable unit based

on how much revenues the unit processed during fiscal year 2015 (FY15) or how much

expenditures the unit incurred during FY15. The primary concept of the risk scoring for this

attribute was that as the amount of revenues and/or expenditures increases in a unit the risk for

that unit also directly increases. The IAO primarily used financial data extracted from FY15

using Banner’s FGIBDST report to obtain the revenue and expenditure amounts. The greater of

revenues or expenditures being processed through the unit for FY15 was used to score the

financial risk for the unit using the scoring matrix outlined below:

Risk Score Matrix for Financial Significance: Revenue or Expenditure Total for FY15

Multiple Risk Score in Column C to Calculate Financial Risk Score Placed in Column D

> $20,000,000 10.00%

$19,999,999 to $10,000,001 8.00%

$10,000,000 to $5,000,001 6.00%

$5,000,000 to $2,000,001 4.00%

$2,000,000 to $0 2.00%

The highest score an audit unit could obtain from the financial risk scoring here would be 20 points,

and the lowest possible score an audit unit could obtain from this scoring would be .2 points. The

highest combined risk score possible for Column D, after the Financial Significance “multiplier”

was considered, was 220 points and the lowest was 10.2 points.


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Last Time Audited by the IAO Score - The IAO also assigned a risk score to each auditable

unit based on how much time has elapsed since the IAO conducted an internal audit or

consultation review at each of the auditable units. A risk score was added onto each auditable

unit using the scoring matrix below based on the length of time that has elapsed from the IAO’s

last audit of the unit.

Last Time Unit was Audited by

PSU IAO

Risk Points

Scale

Never Audited by PSU IAO 25

Audited 10+ years ago 15

Audited 8+ to 10 years ago 9

Audited 5 to 7+ years ago 7

Audited 3 to 4+ years ago 5

Audited by PSU IAO or other External

Auditors in 2014/15 and/or 2015/16

with no follow-up audit performed at

this time.

3

Internal Audit conducted during 2016 0

The risk scores from the length of time elapsing since an internal audit has been conducted at the

auditable unit was placed in Column E above. The highest combined risk score possible for

Column E, after the Last Time Audited score was considered, was 245 points and the lowest was

10.2 points.


15 | P a g e

Total Risk Score - To obtain the total risk score for each auditable unit, the IAO took the risk score

in Column C and added it to the financial risk score calculated in Column D. In addition, the risk

score in Column E based on the last time the unit was audited was added in to get the total risk score

was placed in Column F above. These risk scores are the scores presented in Exhibit B and Exhibit

C that were used to sort the various auditable units from high risk (i.e. a large risk score) down to low

risk (i.e. a small risk score). The highest total risk score an audit unit could obtain using the risk

scoring criteria above would be a score of 245 points, and the lowest score an audit unit could obtain

would be a score of 10.2 points. Finally, to help designate high, moderate, and low risk audit units,

IAO designated that all auditable units with risk scores of 100 or greater were high risk units, units

with score of less than 100 but 80 or greater were designated moderate risk units, and units with

scores less than 80 were designated low risk units.

Internal Audit Plan Approval Process Flowchart

IAO conducts a financial analysis over of each

audit unit’s FY15 financial transactions. This

analysis is scored into a portion of each audit

unit’s risk assessment score.

IAO interviews a sample of key stakeholders at PSU to receive

input into the annual risk assessment and audit plan and to

discuss potential risks to PSU and controls implemented to

mitigate those risks. The input from the interviewees is then

scored as a portion of the risk assessment scores.

Annual audit plan and results of annual risk assessment

presented to Executive and Audit Committee (EAC) at June

meeting. EAC and IAO finalize the areas to be audited over

the next fiscal year based on review and discussions over

the results of the annual risk assessment.

IAO projects are then conducted in accordance

with the approved audit plan.


16 | P a g e

EXHIBIT E

Auditable Units

Summary Descriptions

1. Athletics – Athletics includes: Stott Center Operations; Athletic Administrative Costs;

Ticket Office; Training Room Operations; Concessions; Equipment Room; nine women’s

sports (Basketball; Cross Country; Golf; Soccer; Softball; Tennis; Track & Field;

Volleyball; and Cheerleading) and six men’s sports (Track & Field; Cross Country;

Football; Basketball; Cheerleading; and Tennis). This auditable unit also includes the

subsidy PSU contributes to Athletics and the cost of NCAA certification. Athletics is

budgeted under Organization Codes 63xxxx, 902400, and 902410 in Banner.

2. Campus Public Safety Office (CPSO) – CPSO helps to promote a safe and secure

campus community through the delivery of personal and facility security, crime

prevention services, public safety communication, emergency medical services and

public assistance. CPSO is also responsible for Clery Act reporting at PSU. CPSO is

budgeted under Organization Code 600200 in Banner.

3. College of Liberal Arts & Sciences (CLAS) – CLAS is composed of several academic

departments that include: Anthropology; Biological Sciences; Black Studies; Chemistry;

Chicano-Latino Studies; Communication; Economics; English; Environmental Science;

Foreign Languages; Geography; Geology; General Liberal Studies; History; Indigenous

Nations Studies; International Studies; Judaic Studies; Linguistics; Math; Philosophy and

Conflict Resolution; Physics; Psychology; Religious Studies; Sociology; Speech and

Hearing Sciences; Women, Gender, and Sexuality Studies; and numerous professional

centers and other academic areas of study. CLAS is budgeted under Organization Code

22xxxx in Banner.

4. College of the Arts (COTA) – This unit is made up of four schools: architecture; art &

design; music; and theatre & film, where faculty, staff and instructors collaborate with

students and the city’s major arts institutions to energize and enrich the arts community.

COTA is budgeted under Organization Code 30xxxx in Banner.

5. College of Urban & Public Affairs (CUPA) – CUPA is composed of three schools that

include: Government, Urban Planning & Public Affairs; and Community Health. CUPA

is budgeted under Organization Code 31xxxx in Banner.

6. Confucius Institute – PSU’s Confucius Institute (PSUCI) is funded largely through

contributions the Hanban organization sends to PSU to directly support this program.

Hanban has requested that PSU periodically audit the PSUCI to provide reasonable

assurance that Hanban funding is being properly controlled and spent in accordance with

the terms and conditions of the agreement between Hanban and PSU. PSUCI is budgeted

under Organization Code 200815 in Banner.


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7. Diversity and Inclusion – Diversity and Inclusion is responsible for managing

Affirmative Action matters and diversity initiatives at PSU. Diversity and Inclusion is

budgeted in Banner under Organization Codes 100099 through 101615.

8. Enrollment Management and Student Affairs (EMSA) – EMSA includes multiple

departments and functions at PSU including, but not limited to: Veterans Services;

Student Activities; Dean of Students; Commencement; PSU Recreation; Student

Ambassadors; ASPSU and Student Organizations & Clubs; Women’s Resource Center;

Enrollment Management; EMSA Box Office; Food Service; Vending Operations; Viking

Bowl & Billiard; University Market; and Lost and Found. EMSA is budgeted under

Organization Code 330000 through 33500; 640130; 640520; 652504; 670130; 670140;

670202; 670203; and 670400 in Banner. Note – The following departments and

functions were broken out of EMSA and assessed as separate auditable units due to

specific risks inherent in these functions: Financial Aid; and Student Health and

Counseling.

9. Financial Aid – The Financial Aid Office provides customer service and financial

assistance through grants, scholarships, loans, work-study, and/or a combination of these

aid packages to students to help with the cost of education. Financial Aid is budgeted

under Organization Codes 331241 and 80xxxx in Banner.

10. Financial Services, Treasury, and Budget – For the entity-wide risk assessment

presented here, Financial Services, Treasury, and Budget includes the following

departments: Accounting; Treasury; Budget; Purchasing; Surplus Property; Accounts

Payable; the Bursar’s Office functions (i.e. Accounts Receivable/Collections, Cashiering,

and ID Card Services); the VP FADM Office; and the Strategic Management Reserve.

These departments are budgeted primarily under Organization Codes: 640300-640350;

600901; 620000; 640400; 640410; 664100, 600501, 651711, 654000, 670010; 640100-

640140; 600000; 600995; and 999001-999002.

11. General University – General University is used to pay for university wide costs and

services such as utilities, debt service on bonds and loans, accreditation, executive level

job search costs, early retirement incentives, and other miscellaneous university wide

costs. General University is budgeted in Banner under Organization Codes 900000

through 990000.

12. Government & Community Relations and Marketing & Communications – These

departments are charged to support and promote the President’s five themes that include:

Provide Civic Leadership Through Partnerships;

Improve Student Success;

Achieve Global Success;

Enhance Educational Opportunity; and

Expand Resources and Improve Effectiveness

These departments are budgeted under Organization Codes 100200 and 101400 in

Banner.


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13. Graduate School of Education (GSE) – GSE offers over 50 degree, licensure, and

continuing education programs to students. GSE is budgeted under Organization Code

26xxxx in Banner.

14. Honors College (HON) - HON runs students through an academically intense

curriculum that reflects all the challenges, uncertainties, and deep thinking real world

problems require. HON is budgeted under Organization Code 222300 in Banner.

15. Housing and Residence Life – Housing and Residence Life operates 10 locations in the

Portland metro area for student housing. There are approximately 2,000 beds for student

housing throughout PSU’s housing facilities. Housing is primarily budgeted under

Organization Code 670499-670520 and 652503 in Banner.

16. Human Resources & Payroll – The Human Resources department assists PSU with

hiring personnel, negotiating various unionized employment contracts, employee

performance management, and employee compensation and benefits management. The

administration of employee benefits is also managed within this department. Human

Resources is budgeted under Organization Codes 600299 and 600300 in Banner. The

Payroll office administers paying employees for their services to the university and works

closely with Human Resources to help ensure pay and benefits are accurate. Payroll is

budgeted in Banner under Organization Code 999000 and 999899.

17. Institutional Research – Institutional Research assists PSU in conducting research and

surveys, reporting student FTE figures to the State of Oregon and Federal Government,

and assists with other ad hoc student data requests from management. Institutional

Research is budgeted under Organization Code 200901 in Banner.

18. Intensive English Language Program (IELP) – IELP assists students that have been

admitted to PSU who do not have a TOEFL or IELTS score. Students in IELP are fully

immersed in campus life while improving their English skills and preparing themselves

for academic success at PSU. IELP is budgeted under Organization Code 221510 in

Banner.

19. Library – The PSU Library assists students and faculty with homework, research, and

other informational needs. The PSU Library is budgeted under Organization Code 32xxx

in Banner.

20. Maseeh College of Engineering and Computer Science (MCECS) – The MCECS

includes the Computer Science Department, Civil & Environmental Engineering

Department, Electrical & Computer Engineering Department, Mechanical and Materials

Engineering Department, Engineering and Technology Management, and Systems

Engineering. MCECS is budgeted under Organization Code 27xxxx in Banner.


19 | P a g e

21. Office of Academic Affairs (OAA) – The OAA is the central administrative office, with

responsibility for the institutional academic mission, programming and policy

implementation, support programs for academic personnel and students, academic fiscal

management, and collective bargaining with the American Association of University

Professors (AAUP-PSU Charter) and the American Federation of Teachers Union

(PSUFA). The departments and functions that make up this auditable unit include, but are

not limited to: the Provost’s Office; Faculty Senate, Military Science, Advising,

Registrar, Learning Resource Center, and Dean Searches. These departments and

functions are budgeted under Organization Codes 200000 through 200500 in Banner.

22. Office of Information Technologies (OIT) – OIT supports PSU’s technology needs,

which includes, but is not limited to, networks; telecommunications; servers and data

storage; email and web services; and lab and classroom technologies. OIT is budgeted

under Organization Codes 610000 through 610750.

23. Office of International Affairs – International Affairs offers students three different

program options that fit their interest and needs. These programs include: the

BUSINESS Program; LOHAS (Life of Health & Sustainability) Program; and TNP

(Transnational Program) Program. The BUSINESS Program is designed for students

interested in taking American undergraduate business courses. The LOHAS Program is

designed for students interested in the general theme of Environmental Sustainability and

students take courses in PSU’s University Studies curriculum. Finally, TNP is designed

for students interested in Comparative Asian Studies. International Affairs is budgeted

under Organization Code 200800 through 200860 in Banner, excluding Organization

Code 200815. Note that the Confucius Institute was included in this auditable unit for the

2015 Internal Audit Plan, but has been separately broken out as its own auditable unit for

the FY 2017 Audit Plan.

24. Office of the President and Board of Trustees – These offices and positions help to

oversee and administer the core mission and objectives of PSU. These functions are

budgeted in Banner with Organization Codes 100050 and 100000 through 100010.

25. Planning, Construction, & Real Estate – This auditable unit includes: material

management; capital projects & construction; facilities, property, and grounds

maintenance; sustainability and energy management; and custodial. Planning,

Construction, & Real Estate is budgeted in Banner under Organization Codes 650000

through 664211.

26. PSU Office of General Counsel (GC) – GC supports the mission of PSU by providing

legal advice and representation to PSU, to its constituent colleges, schools and units, and

to its officers and employees while acting on PSU’s behalf. GC is budgeted under

Organization Code 100401 in Banner.


20 | P a g e

27. Research and Strategic Partnerships – Research and Strategic Partnerships provides

support for PSU faculty in Research Development, Sponsored Projects Administration,

and Research Integrity for federal, state, and locally grant funded programs. Research

and Strategic Partnerships is budgeted under Organization Code 40xxxx in Banner;

however, grant funds generated from this function impact the majority of auditable units

broken out in this assessment.

28. Risk Management – The Risk Management department helps oversee PSU’s various

insurance policies, safety training and drills for emergency preparedness, and other safety

and health risks present at PSU. Risk Management is budgeted under Organization Code

640450, 662100, 600401, and 600601 in Banner.

29. School of Business (SBA) – The SBA offers majors in: Accounting; Advertising

Management; Finance; Human Resource Management; Management & Leadership;

Marketing; and Supply & Logistics Management. Also, SBA offers certificates in

Athletic and Outdoor Industry; Entrepreneurship; Food Industry Management;

International Business Studies; Post-Baccalaureate Accounting; and Social Innovation.

Moreover, SBA offers various minors to students. SBA is budgeted under Organization

Code 25xxxx in Banner.

30. School of Social Work (SSW) – SSW offers degree programs in Child and Family

Studies; Bachelor of Social Work; Masters of Social Work; and a PhD in Social Work

and Social Research. SSW includes various institutes and centers and offers distance

options for students. SSW is budgeted under Organization Code 24xxxx in Banner.

31. Student Health & Counseling (SHAC) – SHAC is a community-based health care

organization that provides high quality, accessible mental health, physical health, dental

services, and testing services targeted to the needs of the PSU student population. SHAC

is budgeted under Organization Codes 330300 through 333601 in Banner.

32. Transportation and Parking Services (TAPS) – TAPS falls under Auxiliary Services

and sells parking permits to students and faculty, enforces parking rules throughout PSU,

and also operates a bike hub. TAPS is budgeted in Banner under Organization Code

670000, 670003, 640510, and 640511.

33. University Place – University Place is a 235 room hotel and conference center. The

hotel was purchased in 2004 as a strategic investment into future campus growth in

downtown Portland. University Place is budgeted under Organization Code 670551 in

Banner.


21 | P a g e

34. University Studies (UNST) –UNST is PSU's four-year general education program is

required of all students, with the exception of those enrolled in Liberal Studies or the

Honors Program. University Studies begins with Freshman Inquiry, a year-long course

introducing students to different modes of inquiry and providing them with the tools to

succeed in advanced studies and their majors. At the sophomore level, students choose

three different Sophomore Inquiry courses, each which leads into a thematically linked,

interdisciplinary cluster of courses at the upper-division level. Finally, all students are

required to complete a Capstone course which consists of teams of students from

different majors working together to complete a project addressing a real problem in the

Portland metropolitan community. UNST is budgeted under Organization Codes 222699

through 222710 in Banner.


PORTLAND STATE UNIVERSITY OMB Circular A-133

SINGLE AUDIT REPORT

For the Year Ended June 30, 2015


PORTLAND STATE UNIVERSITY REPORT ON SINGLE AUDIT

TABLE OF CONTENTS YEAR ENDED JUNE 30, 2015

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 1

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR FEDERAL PROGRAM, ON INTERNAL CONTROL OVER COMPLIANCE, AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IN ACCORDANCE WITH OMB CIRCULAR A-133 3

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 6

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 13

SCHEUDLE OF FINDINGS AND QUESTIONED COSTS 16

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS 30


INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Members of the Board Portland State University - Single Audit Portland, Oregon

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the business-type activities and the discretely presented component unit of Portland State University (the University), as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the University’s basic financial statements, and have issued our report thereon dated December 18, 2015. Our report includes a reference to other auditors who audited the financial statements of the discretely presented component unit, as described in our report on the University’s financial statements. The financial statements of the discretely presented component unit were not audited in accordance with Government Auditing Standards.

Internal Control over Financial Reporting

In planning and performing our audit of the financial statements, we considered the University's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the University’s internal control. Accordingly, we do not express an opinion on the effectiveness of the University’s internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying the schedule of findings and questioned costs, we identified a certain deficiency in internal control that we consider to be a material weakness.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. We consider the deficiency described as item 2015-001 in the accompanying the schedule of findings and questioned costs to be a material weakness.

CliftonLarsonAllen LLP CLAconnect.com

An independent member of Nexia International

1Master Page # 29 of 71 - Executive and Audit Committee Meeting 6/8/2016

________________________________________________________________________________

Members of the Board Portland State University

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the University's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Portland State University’s Response to Findings

The University’s response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. The University’s response was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

a

CliftonLarsonAllen LLP

Greenwood Village, Colorado December 18, 2015


________________________________________________________________________________

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR

FEDERAL PROGRAM, ON INTERNAL CONTROL OVER COMPLIANCE, AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

IN ACCORDANCE WITH OMB CIRCULAR A-133

Members of the Board Portland State University Portland, Oregon

Report on Compliance for Each Major Federal Program

We have audited Portland State University’s (the University) compliance with the types of compliance requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material effect on each of the University’s major federal programs for the year ended June 30, 2015. The University’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditors’ Responsibility

Our responsibility is to express an opinion on compliance for each of the University’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the University’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the University’s compliance.

Opinion on Each Major Federal Program

In our opinion, Portland State University complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2015.

CliftonLarsonAllen LLP CLAconnect.com

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________________________________________________________________________________


Other Matters

The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A-133 and which are described in the accompanying schedule of findings and questioned costs as items 2015-002 through 2015-006 and 2015-008. Our opinion on each major federal program is not modified with respect to these matters.

The University’s responses to the noncompliance findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. The University’s responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses.

Report on Internal Control over Compliance

Management of the University is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the University’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the University’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items 2015-002 through 2015-008 that we consider to be significant deficiencies.

The University’s responses to the internal control over compliance findings identified in our audit are described in the accompanying Schedule of Findings and Questioned Costs. The University’s responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the responses.


________________________________________________________________________________


The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the result of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by OMB Circular A-133

We have audited the financial statements of the business-type activities and the discretely presented component unit of the University as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the University’s basic financial statements. We issued our report thereon dated December 18, 2015, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditure of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

a

CliftonLarsonAllen LLP

Greenwood Village, Colorado March 31, 2016


________________________________________________________________________________

Research and Development

Department of Agriculture

10.001 Cary Institute of Ecosystem Studies 3253/200201753 31,842

10.310 188,546

Iowa State University 416-41-07D 16,426

Oregon Health & Science Univ (OHSU) 1002187_PSU 27,608

University of Alaska UAF 12-0011 26,151

University of Oregon 238391C 9,507

10.652 13,639

10.675 59,026

10.6XX 1,266

10.903 2,839

10.907 69,272

10.XXX

09-CR-11061800-050 (265)

11-CR-11261975-087 7,439

11-JV-11261975-080 29,892

11-JV-11261975-111 18,194

12-CR11061500-025 4,643

12-CR-11061800-043 3,888

12-CR-11261907-100 8,322

12-CR-11261975-058 78,953

12-CS-11061000-030 905

12-JV-11261985-079 33,183

13-CR-11060720-019 9,727

13-CR-11061800-030 6,437

13-CR-11261900-083 87,543

13-JV-11261979-059 93,050

13-JV-11261985-084 45,648

14-CR-11261975-036 24,909

14-JV-11046000-038 9,877

14-JV-11221611-109 6,604

14-JV-11261944-038 8,688

14-JV-11330136-138 19,008

2012-CR-11261985-084 6,764

G24493124001/HHS-C6681P1 4,766

NFS 11-CR-11062754-030 83,991

PNW 10-CR-11261975-080 14,587

AG-04T0-P-13-0014 4,009

AG-04T0-P-14-0029 65,882

Department of Commerce

11.307Columbia River Economic Development

Council2013-307 39,270

Portland Development Commission 712001 42,930

11.312 51,132

11.417 Oregon State University NA223C-C 9,270

11.431 73,770

11.439 61,217

11.468 88,898

Department of Defense

12.300 University of California 43019217 43,206

583,845

12.420 1,047,658

Brain Trauma Foundation 130908 62,297

12.630 University of California 37697661 PO:S9000212 50,431

12.800 The University of Texas at Austin SUB: UTA12-001068 80,378

12.910 BAE Systems 776911 156,307

Regents of Univ of Michigan 3003408627 176,746

12.XXX

Program

Cluster

Federal

CFDA #

Federal Funding Agency/Major

Subdivision - Program TitleFederal Award Id Pass Through Entity Pass Through Identifying #

US Forest Service - Forest Service Other

US Department of Agriculture - Soil Survey

Natural Resources Conservation Service - Snow Survey and

Other Department of Agriculture Programs

Economic Development Administration - Economic

Development_Technical Assistance

National Oceanic & Atmospheric Administration - Research and

Direct Expenditures Pass Through

Expenditures

Agricultural Research Basic and Applied Research

National Institute of Food and Agriculture - Agriculture and Food

Research Initiative (AFRI)

US Forest Service - Forestry Research

US Forest Service - Urban and Community Forestry Program

US Army Medical Command - Military Medical Research and

Development

US Department of Defense - Basic, Applied, and Advanced

Department of Air Force, Material Command - Air Force

Advanced Research Projects Agency - Research and

Technology Development

National Oceanic & Atmospheric Administration - Sea Grant

Support

National Oceanic & Atmospheric Administration - Climate and

Atmospheric Research

National Oceanic & Atmospheric Administration - Marine

Mammal Data Program

National Oceanic & Atmospheric Administration - Cooperative

Institute for Applied Meteorological Studies (CIAMS) and

Cooperative Institute for Tropical Meteorology (CITM)

Office of the Chief of Naval Research - Basic and Applied

Scientific Research

Other Department of Defense Programs


________________________________________________________________________________

Program

Cluster

Federal

CFDA #


Subdivision - Program TitleFederal Award Id Pass Through Entity Pass Through Identifying # Direct Expenditures

Pass Through

Expenditures

DTI Associates Inc PO-0004697 (1,423)

Metron, Inc. 6F48-002 22,222

Oregon Health & Science Univ (OHSU) 9007517-PSU 39,572

Brain Trauma Foundation BTECPSU 31,627

Arete Associates CA-0015403 13,315

Department of Housing & Urban Development

14.704 City of Beaverton 2688-12 22,094

Department of the Interior

15.231 363,024

15.232 96,229

15.238 2,376

15.560 US Bureau of Reclamation 36,495

15.615 Oregon Department of Fish and Wildlife 198-14 49,944

Oregon Department of Fish and Wildlife 478-14 36,495

15.649 27,459

15.65 23,947

15.657 29,631

15.664 5,838

15.669 26,964

15.807 4,538

15.808 661,946

15.820 Oregon State University GS272B-A 7,531

Regents of the University of Idaho GNK906-SB-001 37,386

15.945 353,777

15.XXX

H8W07060001 J8W07090011 42

H9430100001/ P10AC00584 3,967

J8W07090016 / P09AC00268 9,156

J8W07100029 / P10AC00567 101,788

P10AC00407 49,976

P10AC00422 49,019

P10AC00568 4,221

F14PX00232 17,435

P14PX01242 7,469

Department of Justice

16.541 479,302

16.575 Oregon Department of Justice VOCA-NC-2012-PSU-00054 42,562

16.710 City of Portland 30004636 15,612

16.726 311,933

16.812 Oregon Dept of Corrections 4981 35,245

16.XXX US Department of Justice American Institutes for Research 01064-03260 PO:13RRG10008 69,180

Department of Labor

17.XXX US Department of Labor JBS International Inc S53511-PSU 131,968

Department of State

19.415 4,930

Department of Transportation

20.200 Oregon Department of Transportation 16292 WO 12-03 61,264

Oregon Department of Transportation 16292 WO 14-02 85,870

Oregon Department of Transportation 28382 137,408

Oregon Department of Transportation MASTER #16292, WO 12-01 76,522

Oregon Department of Transportation WORK ORDER 14-03 MST AGR 16292 66,079

20.205 Oregon Bureau of Labor & Industries BOLI-ODOT 2013-106 86,941

Oregon Department of Transportation 27085 (451)

Oregon Department of Transportation 21999 WO 7

Oregon Department of Transportation AGREE# 27085; WO #3

20.507 Home Forward C1306 29,123

20.701 2,334,452

20.XXX US Department of TransportationApplied Enineering Management

Corporation2312-000-PORT01 39,828

US Fish & Wildlife Service - Service Training and Technical

US Fish & Wildlife Service - Research Grants (Generic)

US Fish & Wildlife Service - Endangered Species Conservation

US Fish & Wildlife Service - Fish and Wildlife Coordination and

US Fish & Wildlife Service - Cooperative Landscape

US Geological Survey - Earthquake Hazards Reduction

Community Challenge Planning Grants and the Department of

Transportation's TIGER II Planning Grants

Bureau of Land Management - Fish, Wildlife and Plant

Bureau of Land Management - Wildland Fire Research and

Bureau of Land Management - Challenge Cost Share

US Fish & Wildlife Service - Cooperative Endangered Species

Conservation Fund

Justice Office for Victims of Crime - Crime Victim Assistance

Office of Community Oriented Policing Services - Public Safety

and Community Policing Grants

Office of Juvenile Justice & Delinquency Prevention - Juvenile

Mentoring Program

Bureau of Justice Assistance - Second Chance Act Reentry

Initiative

Bureau of Educational and Cultural Affairs - Professional

Exchanges-Annual Open Grant (B)

Federal Highway Administration - Highway Research and

Development Program

US Geological Survey - Geological Survey Research and Data

US Geological Survey - National Climate Change and Wildlife

National Park Service - Cooperative Research and Training

Other Department of the Interior Programs

Office of Juvenile Justice & Delinquency Prevention - Juvenile

Justice and Delinquency Prevention Special

Federal Highway Administration - Highway Planning and

Construction

Federal Transit Administration - Formula Grants

Office of the Secretary - University Transportation Centers

Program


________________________________________________________________________________

Program

Cluster

Federal

CFDA #



Pass Through

Expenditures

ICF Incorporated 14KJSK0023 29,511

ICF Incorporated 15kbsk0052 8,251

Oregon Department of Transportation TO 5, MASTER 27085 71,868

Resource Systems Group unknown, PSU ID 272283 15,155

National Aeronautics & Space Administration

43.001 539,075

The University of Texas at Austin UTA11-000570 68,761

University of California Los Angeles 2090 G RA940 8,310

43.004 26,034

43.008 NASA Education Purdue University SUB4103-50584 (1)

43.XXX

NNX13AH06G 124,323

NNX09AP66A (7,069)

Institute of Museum and Library Services

45.312 307,952

National Science Foundation

47.041 261,331

Georgia Institute of Technology RB061-G2 2,618

IIP-1447395 Imagars LLC unknown 22,930

47.049 490,744

47.050 1,228,328

The University of Texas at Austin UTA13-000592 802

Univ of Southern California Y83116 17,574

Regents of UC Davis 201501571-01 18,381

Oregon Health & Science Univ (OHSU) GSTCN0106S4 23,162

47.070 1,300,394

47.074 1,069,229

47.075 150,340

47.076 1,330,780

Mathematical Association of America DRL-0910240 2,897

Mathematical Association of America 3-8-710-954/DUE-1430540 481

Oregon Museum of Science & Industry D10-07 28,043

Teachers Development Group 04-DRL02 98,300

University of Washington 658615 10,269

University of Washington 763675 PO# BPO3330 63,362

47.078 91,541

Regents of University of Colorado 1548194 PO: 77305/1000046795 10,086

Smithsonian Institution 30,644

The University of Texas at Austin 1,505

47.XXX Other National Science Foundation Regents of University of Colorado PO 100272404 23,141

Environmental Protection Agency

66.461 140,414

66.509Science to Achieve Results (STAR)

Rsearch Program5,698

66.708 74,616

Department of Energy

81.049 212,855

Regents of UC - Davis DE-SC0008937,201223767-PSU 56,223

81.089Research Partnership to Secure Energy

for America08121-2801-02 17,932

81.XXX

00063182 274,409

332 69,453

56267 164,416

67175 197,245

XGN-3-23453-01 282,489

Pacific States Marine Fisheries

Commission11-45 46,290





Desert Research Institute 659.4160-02

Department of Education

84.010 Oregon Department of Education 27105 48,585

84.016 29,884

84.133 628,766

Institute of Museum and Library Services - National Leadership

Grants

Engineering Grants

Mathematical and Physical Sciences

Geosciences

Science - Aerospace Education Services Program

Aeronautics, Recovery Act

Other National Aeronautics & Space Administration Programs

Polar Programs

Office of Water - Regional Wetland Program Development

Grants

Computer and Information Science and Engineering

Biological Sciences

Social Behavioral and Economic Sciences

Education and Human Resources

USDE - National Institute on Disability and Rehabilitation

Office of Chemical Safety and Pollution Prevention - Pollution

Prevention Grants Program

Office of Science Financial Assistance Program

Fossil Energy Research and Development

Other Department of Energy Programs

Office of Elementary and Secondary Education - Title I Grants

to Local Educational Agencies

Office of Postsecondary Education - Undergraduate

International Studies and Foreign Language


________________________________________________________________________________

Program

Cluster

Federal

CFDA #



Pass Through

Expenditures

Temple University 300104-PSU 23,867

Oregon Health & Science University 9007327-PSU 27,609

84.235 28,505

84.305 University of Virginia GM10128-139152 91,441

84.324 530,152

University of North Carolina at Chapel Hill 5-39253 56,575

84.335 260,931

84.365 332,972

84.XXX US Department of Education American Institutes for Research 0351200001 75,209

NOVA Research Company 120920 21,700

Department of Health and Human Services

93.087 Volunteers of America Oregon Inc 140132 69,340

93.104Northwest Portland Area Indian Health

BoardCONTRACT #: C 14-02 47,822

93.113 396,035

93.136 322,359

93.173 Oregon Health & Science Univ (OHSU) 1001858_PSU 42,931

93.242 48,105

Oregon Health & Science Univ (OHSU) 1002328_PSU 90,620

93.243 Cascadia Behavioral Healthcare unknown, PSU ID: 240292 57,239

Native American Rehabilitation

Associationunknown, PSU ID: 270476 5,123

Outside In unknown, PSU ID: 270348 284

Yellowhawk Tribal Health Center unknown, PSU ID 270448, 270537 133,435

93.262 Oregon Health & Science Univ (OHSU) 9007284_PSU 15,381

Oregon Health & Science University 1005580_PSU 167,149

Oregon Health & Science University GCROE0200A_PSU 80,016

93.273 115,220

University of California Los Angeles 1182 G RA352 35,671

93.279 University of California 41941221 93,588

93.286 196,842

93.307 Oregon Law Center 2R24MD00-2798-06 53,645

93.310 714,473

93.361 University of Pittsburgh 0032090 (123962-3) 22,015

93.393 Univ of Southern California 159443 31,593

93.394 41,351

93.433 353,468

93.500 Oregon Department of Justice 15284 24,067

Oregon Department of Justice IA-15080 8,248

Office of Special Education and Rehabilitative Services -

Rehabilitation Services Demonstration and Training Programs

Institute of Education Sciences - Education Research,

Development and Dissemination

Institute of Education Sciences - Research in Special Education

Centers for Disease Control & Prevention - Injury Prevention

and Control Research and State Grants

National Institutes of Health - Research Related to Deafness

and Communication Disorders

National Institutes of Health - Mental Health Research Grants

DHHS Substance Abuse & Mental Health Administration -

Substance Abuse and Mental Health_Projects of Regional and

National Significance (PRNS)

Office of Postsecondary Education - Child Care Access Means

Parents in School

Office of Elementary and Secondary Education - English

Language Acquisition State Grants

Administration for Children & Families - Enhance Safety of

Children Affected by Substance Abuse

Substance Abuse & Mental Health Services Administration -

Comprehensive Community Mental Health Services for Childern

with Serious Emotional Disturbances

National Institutes of Health - Biological Response to

Environmental Health Hazards

National Institutes of Health - Drug Abuse and Addiction

Research Programs

National Institutes of Health - Discovery and Applied Research

for Technological Innovations to Improve Human Health

National Institutes of Health - Minority Health and Health

Disparities Research

National Institutes of Health - Trans-NIH Research Support

National Institutes of Health - Nursing Research

Centers for Disease Control & Prevention - Occupational Safety

and Health Program

National Institutes of Health - Alcohol Research Programs

National Institutes of Health - Cancer Cause and Prevention

Research

Women and Infants Hospital - Cancer Detection and Diagnosis

Research

ACL National Institute on Disability, Independent Living and

Rehabilitation

Office of the Secretary - Pregnancy Assistance Fund Program


________________________________________________________________________________

Program

Cluster

Federal

CFDA #



Pass Through

Expenditures

93.575 Oregon Department of Human Services 146205 66,517

93.605 Oregon Department of Human Services 142451 146,512

Oregon Department of Human Services 147095 369,434

93.670Northwest Professional Consortium Inc

dba NPC Researchunknown, PSU ID 270636 26,663

Boston Children's HospitalPO # 0000623058

18,891

93.767 University of Washington 755555 98,190

93.837 10,926

Elex Biotech LLC 120420 (724)

Elex Biotech LLC 140322 56,331

Oregon Health & Science Univ (OHSU) GCROE0192A_PSU 27,825

93.855 1,072,565

DesignMedix Inc 130356 165,063

Oregon Health & Science Univ (OHSU) GMMBI0187A 32

93.859 276,353

Oregon State University P0312A-A 55,112

University of Florida UFDSP00010573 54,052

Western University of Health Sciences 2097-SWAIRJO-PSU 20,755

93.865 476,807

Duke University 13-NIH-1051 25,572

Oregon Health & Science Univ (OHSU) GOBGY0202A PSU 5,936

President & Fellows of Harvard

College/Harvard Business Scho114119.5071117 10,413

93.866 EmbedRF LLC 120733 95,496

IR01AG034211-01 (99)

93.928 University of North Carolina at Chapel Hill 5-33236 35,426

93.958 Oregon Health Authority 145213 82,211

93.969 Oregon Health & Science Univ (OHSU) ASONO0303-PSU 80,675

93.XXX

200-2013-M-55121 6,717

200-2014-M-59156 93,821

Oregon Health Authority 145914 332,515

Sociometrics Corporation C-136 28,909

University of Maryland 9021 60,617

Research Triangle Institute 17-312-023405-52174L 8,513

Research Triangle Institute 1400290 / PO#SR00003488 12,585




Research Triangle Institute 9023 TASK 4 84,368

Conferated Tribes of Siletz Indians unknown, PSU ID: 270414 86,317

Yellowhawk Tribal Health Center PO# 65597 90,132

Agency for International Development

98.001

AID-OAAF-13-00040 Innovation for Poverty Action unknown, PSU ID: 270045 (2,654)

Administration for Children & Families - Family Connection

Grants

Administration for Children & Families - Child Abuse and

Neglect Discretionary Activities

Centers for Medicare and Medicaid Services - Children's

Insurance Program (A)

National Institutes of Health - Cardiovascular Diseases

Research

Administration for Children & Families - Child Care and

Development Block GrantAdministration for Children & Families

National Institutes of Health - Research for Mothers and

Children

National Institutes of Health - Allergy Immunology and

Transplantation Research

National Institutes of Health - Pharmacology Physiology and

Biological Chemistry

National Institutes of Health - Research for Mothers and

Children

Health Resources & Services Administration - Special Projects

of National Significance

Substance Abuse & Mental Health Administration - Block

Grants for Community Mental Health Services

Health Resources & Services Administration - PPHF-2012

Geriatric Education Centers

Other Department of Health and Human Services Programs

USAID Foreign Assistance for Programs Overseas (B)


________________________________________________________________________________

Program

Cluster

Federal

CFDA #



Pass Through

Expenditures

AID-OAA-A-13-002 University of California 00008194 BB00213826 187,666

Total Research and Development Cluster 22,194,416 6,470,744

Student Financial Aid


84.007 1,114,434

84.033 1,276,304

84.038 8,307,699

84.063 39,671,061

84.268 143,561,551

84.379 1,335,237

Total Student Financial Aid - Cluster 195,266,286 -

TRIO Cluster


84.042 364,869

84.044 322,126

84.047 421,399

84.217 222,020

Total TRIO Cluster 1,330,414 -

CCDF Cluster


93.575 Oregon Department of Education 14.003 2,835,885

93.596 Oregon Department of Human Services

128995

3,305

Total CCDF Cluster - 2,839,190

Non Cluster Programs

US Department of Agriculture

10.558 Oregon Department of Education26 16018 & 2608003

71,315

10.559 Oregon Department of Education26 16018

5,941

US Department of Defense

12.550 Institute of International EducationNSEP-U631073-PDX-RUS

344,537

US Department of Housing & Urban Development

14.218 Portland Development CommissionPSU-EOI

(681)

14.XXX Portland Development Commission unknown, PSU ID 273795 207,000

Department of the Interior

15.231 168,360

15.239 131,091

15.608 15,116

15.945 31,171

Department of State

19.040 226,393

19.400 Institute of International Education unknown, PSU ID: 278540 18,840

19.500 Univ of Delaware unknown, PSU ID: 278550 11,741

S-NEAPI-12-CA-0016/PMS D5263P1 279,185

Department of Transportation

20.215 133,202

National Science Foundation

Office of Federal Student Aid - Federal Supplemental

Educational Opportunity Grants

Office of Federal Student Aid - Federal Work-Study Program

Office of Federal Student Aid - Federal Perkins Loan

Office of Federal Student Aid - Federal Pell Grant Program

Office of Federal Student Aid - Federal Direct Student Loans

Office of Federal Student Aid - Teacher Education Assistance

for College and Higher Education Grants (TEACH Grants)

Food and Nutrition Service - Child and Adult Care Food

Program

Food and Nutrition Service - Summer Food Service Program for

Children

Office of the Secretary of Defense - The Language Flagship

Grants to Institutions of Higher Education

Office of Community Planning and Development - Community

Development Block Grants/Entitlement Grants

Community Development Block Grants

Bureau of Land Management - Fish, Wildlife and Plant

Conservation Resource Mangement

Office of Postsecondary Edcuation - TRIO Student Support

Services

Office of Postsecondary Edcuation - TRIO Talent Search

Office of Postsecondary Edcuation - TRIO Upward Bound

Office of Postsecondary Edcuation - TRIO McNair Post-

Baccalaureate Achievement

Administration for Children & Families-Child Care and

Development Block Grant

Administration for Children & Families-Child Care Mandatory

and Matching Funds of the Child Care and Development Fund

Federal Highway Administration - Highway Training and

Education

Bureau of Land Management - Management Initiatives

Fish & Wildlife Service - Fish and Wildlife Management

Assistance

National Park Service - Cooperative Research and Training

Programs - Resources of the National Park System

Secretary of Public Diplomacy and Public Affairs - Public

Diplomacy Programs

Academic Exchange Programs - Graduate Students

Bureau of Near Eastern Affairs - Middle East Partnership

Initiative (MEPI) (B)


________________________________________________________________________________

Program

Cluster

Federal

CFDA #



Pass Through

Expenditures

47.049 Mathematical and Physical Sciences 4,625

47.076 Education and Human Resources 191,746

47.078 Polar Programs 60,396

Environmental Protection Agency

66.514 15,820


84.015 27,433

84.021 944

84.129 109,674

84.299 152,979

84.325 286,771

84.325V Salus University 83401 30,338

84.33548,366

84.367Oregon University Systems dba Western

Oregon UniversityTRSUB15.02 89,025


93.051 Oregon Department of Human Services145896 (145486)

31,059

93.243 80,024

Georgetown UniversityRX4285-900-PSU

54,646

Multnomah Educational Service District C01575 & C01576 170,848

Oregon Health & Science University1003942_PSU

22,581

Oregon Health Authority147636

33,283

Quartz Valley Indian ReservationCONTRACT #405/2015-010-COC

27,527

93.262 155,771

93.648The Research Foundation of State Univ

of New York 14-06/1113708-4-66158

74,178

The Research Foundation of State Univ

of New York 14-51

330,102

The Research Foundation of State Univ

of New York 1105807-16-62495

6,617

93.969 Oregon Health & Science Univ (OHSU)ASONO0303-PSU

650

Oregon Health & Science Univ (OHSU)SUB#:9006177_PSU

12,954

Corporation for National & Community Service

94.003 State Commissions Oregon Housing & Community Services4245

182,325

Total Non Cluster Programs 2,119,067 1,724,826

Total Federal Awards Expended 220,910,183 11,034,760

Office of Research and Development - Science To Achieve

Results (STAR) Fellowship Program (B)

Office of Postsecondary Education - National Resource Centers

Program for Foreign Language and Area Studies or Foreign

Language and International Studies Program and Foreign

Language and Area Studies Fellowship Program

Overseas Programs - Group Projects Abroad


Rehabilitation Long-Term Training

Office of Elementary and Secondary Education - Indian

Education Special Programs

Administration for Children & Families - Child Welfare Services

Training Grants

Health Resources Services Administration - PPHF-2012

Geriatric Education Centers

Centers for Disease Control & Prevention - Occupational Safety

and Health Program


Personnel Preparation to Improve Services and Results

f/Children w/Disabilities


Department of Education - National Leadership Consortium in

Sensory Disabilities (Doctoral Fellowship)

Office of Postsecondary Education - Child Care Access Means

Parents in School

Office of Elementary and Secondary Education - Improving

Teacher Quality State Grants

Alzheimer's Disease Demonstration Grants to States (B) -

Alzheimer's Disease Demonstration Grants to States (B)

Substance Abuse & Mental Health Services Administration -

Projects of Regional and National Significance (PRNS)


________________________________________________________________________________

Note A – Basis of Presentation

The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes the federal award activity of Portland State University (PSU) for the year ended June 30, 2015. The information in this Schedule is presented in accordance with requirements of OMB Circular A-133, “Audits of States, Local Governments, and Non-Profit Organizations.” Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. The Federal Perkins Loans amount of $8,307,699 represents total student Perkins loans outstanding as of June 30, 2015. Matching costs, the nonfederal share of certain program costs, are not included in the Schedule.

Note B – Summary of Significant Accounting Policies

Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Such expenditures are recognized following the cost principles contained in OMB Circular A-21, Cost Principles for Education Institutions, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where available.

Note C – Relationship to Federal Financial Reports

The regulations and guidelines governing the preparation of Federal financial reports vary by Federal agency and among programs administered by the same agency. Accordingly, the amounts reported in the Federal financial reports do not necessarily agree with the amounts reported in the accompanying Schedule which is prepared on the basis explained in Note A.

Note D – Sub-Recipients

During the fiscal year ended June 30, 2015, PSU disbursed federal funding to various program recipients from the following federal programs: CFDA Number Major Subdivision - Program Title Expenditures

10.310 National Institute of Food and Agriculture - Agriculture and Food Research Initiative (AFRI)

$48,563

10.652 US Forest Service - Forestry Research 7,020

11.312 National Oceanic & Atmospheric Administration - Research and Evaluation Program

10,791

11.417 National Oceanic & Atmospheric Administration - Sea Grant Support

1,050

12.300 Office of the Chief of Naval Research - Basic and Applied Scientific Research

104,234

12.420 US Army Medical Command - Military Medical Research and Development

125,588


________________________________________________________________________________

15.232 Bureau of Land Management - Wildland Fire Research and Studies Program

2,389

16.541 Office of Juvenile Justice & Delinquency Prevention - Juvenile Justice and Delinquency Prevention Special

73,454

16.726 Office of Juvenile Justice & Delinquency Prevention - Juvenile Mentoring Program

70,937

20.205 Federal Highway Administration - Highway Planning and Construction

56,357

20.701 Office of the Secretary - University Transportation Centers Program

686,647

20.XXX US Department of Transportation 33,290

43.001 Science - Aerospace Education Services Program 27,883

45.312 Institute of Museum and Library Services - National Leadership Grants

4,959

47.049 Mathematical and Physical Sciences 56,915

47.050 Geosciences 536,389

47.074 Biological Sciences 116,304

47.076 Education and Human Resources 92,089

47.078 Polar Programs 664

66.461 Office of Water - Regional Wetland Program Development Grants 42,567

66.708 Office of Chemical Safety and Pollution Prevention - Pollution Prevention Grants Program

15,723

81.XXX Other Department of Energy Programs 50,454

84.010 Office of Elementary and Secondary Education - Title I Grants to Local Educational Agencies

27,145

84.021 Office of Postsecondary Education, Overseas Programs - Group Projects Abroad

944

84.133 USDE - National Institute on Disability and Rehabilitation 39,577

84.324 Institute of Education Sciences - Research in Special Education 25,198

84.412 Race to the Top - Early Learning Challenge 187,100

93.136 Centers for Disease Control & Prevention - Injury Prevention and Control Research and State Grants

187,448

93.273 National Institutes of Health - Alcohol Research Programs 70,405

93.286 National Institutes of Health - Discovery and Applied Research for Technological Innovations to Improve Human Health

17,622

93.310 National Institutes of Health - Trans-NIH Research Support 194,556


________________________________________________________________________________

93.605 Administration for Children & Families - Family Connection Grants

111,027

93.855 National Institutes of Health - Allergy Immunology and Transplantation Research

330,531

93.859 National Institutes of Health - Pharmacology Physiology and Biological Chemistry

53,608

93.865 National Institutes of Health - Research for Mothers and Children 132,603

93.958 Substance Abuse & Mental Health Administration - Block Grants for Community Mental Health Services

15,569

Total Federal funds passed through to sub-recipients

$3,557,600


________________________________________________________________________________

PORTLAND STATE UNIVERSTIY SCHEDULE OF FINDINGS AND QUESTIONED COSTS

For the Year Ended June 30, 2015

SECTION I – SUMMARY OF AUDITORS’ RESULTS

Financial Statements

Type of auditors’ report issued: Unmodified

Internal control over financial reporting:

Material weakness(es) identified? yes no

Significant deficiency(ies) reported that are not considered to be material weakness(es)? yes none reported

Noncompliance material to financial statements noted? yes no

Federal Awards

Internal control over major programs:

Material weakness(es) identified? yes no

Significant deficiency (ies) identified that are not considered to be material weakness(es)? yes none reported

Type of auditors’ report issued on compliance for major program: Unmodified

Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A-133? yes no

Identification of major program:

CFDA Number(s) Name of Federal Program or Cluster 84.SFA R&D 84.TRIO 93.CCDF

Student Financial Aid Cluster Research and Development Cluster TRIO Cluster Child Care Development Fund Cluster (CCDF Cluster)

Dollar threshold used to distinguish between type A and type B programs $1,100,360

Auditee qualified as low-risk auditee? yes no


________________________________________________________________________________

PORTLAND STATE UNIVERSITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED JUNE 30, 2015

PART II – FINDINGS RELATED TO FINANCIAL STATEMENTS

Finding 2015-001 Accounting for Certain Contracts Material Weakness

Criteria: The University should have controls in place over financial reporting to prevent material error from occurring within the financial statements.

Condition: During the audit, the following two material misstatements were noted:

1) The University brought to our attention that, over the years, the University was assessed debt by the City of Portland (the City) in the form of Local Improvement District (LID) obligations as evidenced by contract signed by the University and the City. Such obligations were assessed over the years for capital improvements made by the City near the University. Since inception of the first obligation, the University expensed the payments as paid. In fiscal year 2015, the contracts were re-examined by management and it was determined that long-term liabilities should have been recorded at the time the LID obligations were assessed by the City.

2) During fiscal year 2015, the University entered into a space use agreement with Oregon Heath and Science University (OHSU). Per the contract, OHSU paid the University $6.5 million for the future use of space in the University’s Viking Pavilion and Academic Center (under construction). During fiscal year 2015, rather that treating this payment as prepaid rent received and deferring the revenue, the University recognized the full $6.5 million as revenue.

Effect: For the LIDS obligation, the University recorded an adjusting entry to record the liability as of June 30, 2015 and passed on an adjustment to restate the financial statements for $3.8 million. As a result of the adjustment passing through the current year, current year expenses were overstated by this amount. For the agreement for OHSU, as adjustment for $6.5 million was made to reduce revenue and to record this amount as unearned revenue.

Recommendation: For contracts entered into by the University, the University should:

a) Adopt a policy that requires certain contracts be shared with the Finance Department for analysis. Criteria for review should be established and should consider factors such as materiality/amount, complexity, routine vs non-routine, and other considerations.

b) Once routed to the Finance Department, the Department should prepare a written analysis of its conclusion of how to account for the contract in accordance with generally accepted accounting principles. This written analysis should be reviewed and approved and maintained to support the University’s position on the matter.

Views of responsible officials and planned corrective actions: Management agrees with the recommendation. The controller’s office will work with the contracting and procurement services and other relevant departments to determine how to best capture the full population of contracts and establish the parameters for reviewing contracts for accounting and financial reporting implications. Documentation may be in the form of a checklist or memorandum depending on the nature of the contract.

Contact: Jennifer Kahl, Controller, (503) 725-5096


________________________________________________________________________________



PART III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

Finding 2015-002 Return of Title IV Funds (R2T4) Significant Deficiency, Noncompliance

DEPARTMENT OF EDUCATION Federal Supplemental Educational Opportunity Grants (SEOG) – CFDA # 84.007 Federal Work Study Program (FWS) – CFDA # 84.033 Federal Perkins Loan (FPL) – CFDA # 84.038 Federal Pell Grant Program (PELL) – CFDA # 84.063 Federal Direct Student Loans (FDL) – CFDA # 84.268 Teacher Education Assistance for College and Higher Education Grants (TEACH) – CFDA # 84.379

Criteria:

When a recipient of Title IV grant or loan assistance withdraws from an institution during a payment period or period of enrollment in which the recipient began attendance, the institution must determine the amount of Title IV aid earned by the student as of the student’s withdrawal date. If the total amount of Title IV assistance earned by the student is less than the amount that was disbursed to the student or on his or her behalf as of the date of the institution’s determination that the student withdrew, the difference must be returned to the Title IV programs within 45 days as outlined in this section and no additional disbursements may be made to the student for the payment period or period of enrollment.

Condition:

During testing, we noted that the University used the incorrect last day of the terms when calculating the percentage of aid earned by students. In addition, we noted that for the month of October 2014 the financial aid office incurred a manual error resulting in 98 of the returns for that report period to be returned late (not within the 45 days).

Context:

The University was using the academic calendar established by the Oregon University System to determine student attendance. The University should have been using their own academic calendar, as it was different from the Oregon University System calendar. For the late returns made during the month of October, we noted 98 returns made for that month that were not performed within the 45 day required time period.

Cause:

This error in using the incorrect term dates was due to the University becoming a separate legal entity from the Oregon University System in the current year. In addition, the key control in place for October 2014 did not function as designed and funds were returned beyond the 45 day requirement.

Effect:

The University miscalculated R2T4 calculations for 100% of the students tested. In addition, the University failed to timely return funds for 98 students in October 2014.

Questioned Costs:

$176 represents the error in returned funds due to the University using the incorrect term dates.


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Recommendation:

We recommend that the University use their own academic calendar when calculating student aid earned. We recommend that the University implement a control process over R2T4 that will not allow funds to be returned past the 45 days.

Views of responsible officials and planned corrective actions:

Management agrees with the finding that for a short period in October 2014 R2T4 calculations for some withdrawn students were delayed, resulting in PSU’s returning funds to the U.S. Department of Education later than the 45 days allowed in regulation.

Management also agrees that an academic calendar was used for the R2T4 calculations, which, while official since it had been provided by the Oregon University System, was one day different from the one that reflects the beginning and ending dates of PSU’s class and exam schedule.

We will also communicate with the Registrar to ensure that we are using the correct academic calendar.

The Registrar’s Office agrees with the finding related to the PSU academic calendar dates, and believes Financial Aid staff can use the official Academic Calendar to find the applicable term begin/end dates. The PSU Academic Calendar is published three years out and can be found on the Registrar’s Office website.

Contact:

G. Michael Johnson Director of Student Financial Aid (503) 725-5442

Finding 2015-003 Enrollment Reporting Significant Deficiency, Noncompliance

DEPARTMENT OF EDUCATION

Federal Pell Grant Program (PELL) – CFDA # 84.063 Federal Direct Student Loans (FDL) – CFDA # 84.268

Criteria:

The Federal Code of Regulations (685.309(b) for Direct Lending and 690.83(b) for Pell) require schools to update all information included in the enrollment report from the National Student Loan Data System (NSLDS) and return the report within the prescribed timeframe (30 days). In addition, schools are required to make necessary corrections, and return, within the prescribed timeframe (ten days) for any report errors subsequently noted by NSLDS.

Condition:

Review of enrollment reporting data from the University showed that errors were not corrected and returned to NSLDS within the prescribed timeframe.


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Context:

The University utilizes the National Student Clearinghouse (NSC) to report student information to NSLDS. After uploading batch roster updates to NSLDS within the required timeframe, the University’s error/acknowledgment file from NSLDS is available to them via their NSC services. In an attempt to correct the errors, NSC resubmitted the files within the required 10 days but unfortunately, some of those records continued to not pass the NSLDS enrollment reporting edits and we noted no additional uploads by NSC to correct these errors until the next enrollment roster request from NSLDS.

Cause:

The University did not properly monitor that the third party was uploading error corrections timely. Universities have noted there has been an error in the NSC process and they have made institutions aware of it, providing letters to the institutions for submission to any audits if necessary.

Effect:

The University was not in compliance with error reporting requirements as noted above.

Questioned Costs:

None noted

Recommendation:

We recommend that the University work with their service provider to implement a process to ensure that all rosters are accurately uploaded, or corrected, in a timely manner to NSLDS.


Registrar’s Office management agrees with the finding, being aware of the difficulties introduced by the new NSLDS reporting standards defined to support the 150% legislation. This created an increased volume of errors in the NSC – NSLDS SSCR validation process. Representatives from the Registrar’s Office and Office of Financial Aid spoke with NSC operations specialists to find out the nature of the new errors and what could be done to resolve the high numbers. The vast majority of the errors were caused by new reporting standards that were not matched between NSC and NSLDS. The NSC is working to meet all the newly defined data standards. There are a few errors that require the school to update individual records within the NSC database in order to fit updated standards. These updates will be incorporated into standard NSC error report updates so that NSLDS SSCR error rates will be reduced and eventually eliminated.

The NSC has announced a change effective December 31, 2015, that will automatically add students to the SCCR roster who may have received aid at previous institutions but are not receiving aid at our institution. The Registrar’s Office will continue to take the lead in working with NSC to improve the process and correct the NSLDS errors as quickly as possible.

Contact:

Cindy Bacaar Associate Vice Provost and University Registrar, Academic Affairs (503) 725-5533


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Finding 2015-004 Subrecipient Monitoring Significant Deficiency, Noncompliance

Research and Development Cluster

Criteria:

An entity passing through funds is responsible for ensuring that subrecipients expending $500,000 or more in Federal awards during the subrecipient’s fiscal year for fiscal years ending after December 31, 2003 as provided in OMB Circular A-133 have met the audit requirements of OMB Circular A-133 and that the required audits are completed within 9 months of the end of the subrecipient’s audit period; (2) issuing a management decision on audit findings within 6 months after receipt of the subrecipient’s audit report; and (3) ensuring that the subrecipient takes timely and appropriate corrective action on all audit findings. In cases of continued inability or unwillingness of a subrecipient to have the required audits, the pass-through entity shall take appropriate action using sanctions.

Condition:

When testing CFDA 93.855, we noted that the University sends a form to subrecipients inquiring about completion of A-133 audits; however, the University does not obtain a copy of the A-133 to determine whether or not the subrecipient had any findings, which would require follow-up and/or a management decision.

Context:

Upon inquiry, the University does send out questionnaires to subrecipients requesting data contained on the subrecipient’s A-133 audit. However, we noted no instances where the University corroborated this information.

Cause:

The University did not have a process in place to monitor subrecipients properly that would allow them to corroborate subrecipient information and assess whether or not follow up procedures should be performed.

Effect:

A subrecipient’s noncompliance with federal programs regulations over funds that are passing through the University may go undetected.

Questioned Costs:

None.

Recommendation:

We recommend that the University implement a more robust process surrounding their subrecipient monitoring and ensure they are in compliance with federal regulations.


Response: Portland State University generally concurs with this finding. PSU’s office of Sponsored Projects Administration (SPA) currently applies a risk-based approach to subrecipient monitoring that relies as a minimum on annual reporting and certification regarding audit findings by its subrecipients. It is a common business practice for recipients of federal funding to rely on subrecipient organizations to certify their compliance with the requirements outlined in the award document.


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Corrective Action:

SPA will continue the practice of relying on annual A-133 certifications for low-risk subrecipients but will implement a process to corroborate the information reported on certifications provided by institutions deemed higher risk as identified through a formal risk assessment process and develop a more formal monitoring program based on the risk assessment.

Anticipated Implementation Timeline: April 30, 2016

SPA will expand its risk-based approach to subrecipient monitoring to incorporate a formal risk assessment prior to entering into a subrecipient agreement and tailor its monitoring process for individual subrecipients based on the risk assessment. The risk assessment takes into account several factors including the subrecipient's audit experience, the prior oversight and monitoring the subrecipient has received, the nature and complexity of the proposed research project, and fiscal maturity of the subrecipient. Where a subrecipient risk assessment reveals a high potential for financial risk, a proposed risk mitigation strategy will be developed by SPA as appropriate before proceeding with establishment of the subaward.

Anticipated Implementation Timeline: December 31, 2016

Contact:

Dawn Boatman Director, Sponsored Projects Administration [email protected] (503) 725-8306

Finding 2015-005 Cash Management, Reporting Significant Deficiency, Noncompliance

DEPARTMENT OF HEALTH AND HUMAN SERVICES Research and Development Cluster

Criteria:

As outlined in the OMB A-133 Compliance Supplement, when entities are funded on a reimbursement basis, program costs must be paid for by the entity before reimbursement is requested from the Federal Government. Entities submit reimbursement requests to federal agencies in order to be reimbursed for program costs. In addition, entities receiving such federal funds are required to submit various reports as specified by the awarding agency or in the award documentation.

Lastly, as discussed in OMB Circular A-133, Subpart C, those receiving federal funds are required to maintain internal control over Federal programs that provides reasonable assurance that the entity is managing federal awards in compliance with laws and regulations.

Condition:

During testing over cash management and reporting, we noted the following:

Two instances where reimbursement requests totaling $30,438.56 were drawn from incorrect projects as follows:

o CDFA 93.310, Trans-NIH Research Support

Draw amount $377.18


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o CFDA 93.855, Allergy Immunology and Transplantation Research

Draw amount $30,061.38

One instance under CFDA 93.310, Trans-NIH Research Support, where an award was requested for reimbursement of $38,367.15 but the general ledger support for expenditures totaled $34,296.27. Per discussion management, management was attempting to correct a draw from a previous period, which was originally made from the incorrect project.

One instance of ten financial reports tested in which the amounts reported to the federal government differed from the University’s general ledger system.

One grant, CFDA 93.310, Trans-NIH Research, had $72,124 more in expenditures recorded in the general ledger system than were reported to the federal agency. This amount was transposed with another grant, which had $72,124 more in expenditures reported to the federal agency than were recorded in the general ledger system.

These errors were most likely caused from the draw down errors noted above.

On all of the grants tested, we noted no evidence of review (or other type of control) over cash draws or reporting. While cash draws were reconciled monthly, this control appeared to be ineffective as there were errors noted during testing as described above.

Context:

Of the ten grant reports tested, one grant was noted as having errors as noted above. Of the 40 cash draws tested, two were noted as having errors as noted above. The draw error was related to a change in process for how the University drew funds from pooled to project based.

Cause:

While the University did have a process in place to draw down funds and report financial data to the federal awarding agencies, we found that there were not adequate controls in place to ensure reports and cash reimbursement requests were submitted timely and/or accurately.

Effect:

The University was not in compliance with reporting and cash management requirements.

Questioned Costs:

Draws were requested from the incorrect projects for the following expenses:

CDFA 93.310, Trans-NIH Research Support

o Draw amount $377.18

CFDA 93.855, Allergy Immunology and Transplantation Research

o Draw amount $30,061.38

Draw exceeded general ledger detail for CFDA 93.310, Trans-NIH Research Support, by $4,071 as reported above.

Recommendation:

We recommend that the University implement a formal review control to ensure that they are properly submitting required reports (including reimbursement requests) timely and accurately. This review process should be performed by someone separate from the preparer and should include an audit trail to verify the control is occurring, as it should.


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Response: Portland State University (PSU) generally concurs with this finding. We stipulate that there was not a two-step preparation and verification process in place for all letter of credit draws during FY2015. The amounts for the draws are based on expenditures recorded in PSU’s Financial Information System (FIS) and are generated directly from pre-established events and billing process within the FIS that captures unbilled expenses for individual awards associated with PSU’s letter of credit account(s) for individual sponsors. Amounts from the output of the billing process are entered into online systems designated by the federal sponsor. Most federal agency systems, including the PMS system used to draw funds for US Department of Health and Human Services awards, do not provide for a two-step verification process within the system itself to allow for review of the data entered prior to submission. Because of these system limitations, we cannot uniformly double check the draw amounts typed into the system prior to submission. In these cases, we must rely on accurate transfer of information from PSU records to sponsor systems in conjunction with post draw reconciliations. The errors noted in the audit were the result of entry errors of amounts from the billing system into the sponsor system. Some of the errors were the result of NIH’s transition from pooled draw accounts to subaccounts in the Payment Management System (PMS). They were identified by PSU prior to the audit as part of a post audit review of the draw documentation. SPA recognized the frequency of the errors indicated the need for stronger controls outside of the sponsor systems and implemented a more robust system for review of billing output and reconciliation documentation by a second individual prior to entry of the figures in the agency systems.

Corrective Actions:

SPA added a step to the letter of credit draw process that provides for more detailed documentation of the billing output analysis and regular reviews of the documentation in support of draw amounts. The FIS billing process output and reconciliation documentation are reviewed by a second individual prior to entry of the figures in the agency systems.

Status: Implemented February 2016

SPA updated the reconciliation process for draws from DHHS awards to add a step that compares PMS account and subaccount numbers and amounts from PMS system to PSU’s financial system records.

Status: Implemented September 2015

SPA updated its award setup procedure to add the PMS Subaccount number to the Banner Grant Maintenance Form to clarify the relationship of PMS Subaccount number to the PSU Banner Grant Code.

Status: Implemented August 2015

The FIS billing output report was revised to display PMS Subaccount numbers along with the PSU Grant Codes and expenditure amounts.

Status: Implemented August 2015

Contact:



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Finding 2015-006 Activities Allowed or Unallowed Significant Deficiency, Noncompliance

DEPARTMENT OF EDUCATION TRIO Cluster

Criteria:

In accordance with Circular A -21, Cost Principles for Educational Institutions, costs of entertainment, including amusement, diversion, and social activities and any costs directly associated with such costs are unallowable. In addition, as discussed in OMB Circular A-133, Subpart C, those receiving federal funds are required to maintain internal control over Federal programs that provides reasonable assurance that the entity is managing federal awards in compliance with laws and regulations.

Condition:

During testing, we noted instances of charges to the grants which appeared to be for entertainment costs.

Context:

We noted 19 expenditures made on behalf of program participants that were for costs related to entertainment activities. Of the 19 disbursement, 4 were for 84.044 - Talent Search and 15 were for 84.047 - Upward Bound.

Cause:

The University did not have adequate controls in place to ensure compliance over federal awards.

Effect:

The University incurred costs that were not allowable under the program.

Questioned Costs:

$5,853.41 for the Upward Bound CFDA 84.047 program and $639.00 for the Talent Search CFDA 84.044 program.

Recommendation:

We recommend that the University reevaluate their control environment over the TRIO Cluster and the activities funded by this grant to ensure expenditures made from grant funds are for allowable costs.


Response: Portland State University (PSU) partially agrees with this finding. Given the purpose and specific objectives of TRIO, funding for the Upward Bound and Talent Search programs PSU has historically considered charges that may appear as entertainment costs as allowable charges to these programs as an exception to the provisions for selected items of cost specified in OMB Circular A-21.

The majority of the expenses have specific, documented educational or cultural purpose directly related to the objectives of the program. Other costs are for activities that functioned as participant incentives and rewards for attendance required educational activities such as workshops or summer classes. The approved project proposal and budget clearly describes and requests funding for cultural/recreational activities to expose the students to new experiences, help improve their social and communication skills and serve as incentives for participation in all aspects of the program.


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Because the auditors alerted us that the US Department of Education Inspector General issued an TRIO program audit report that determined that costs of activities that do not have a direct instructional, college or career purpose do not meet the requirements for allowable costs under 34 C.F.R. § 645.40 and 34 C.F.R. § 643.30, PSU will discontinue charging these types of activities if their sole purpose is as a participant incentive.

Corrective Actions:

PSU TRIO programs will discontinue programming recreational activities that do not have a direct instructional, college, or career purpose.

Status: Implemented March 30, 2016

When requesting activity approval, TRIO staff will be required to submit detailed agendas outlining the purpose of every workshop or field trip, including the instructional, college, or career component.

Status: Implemented March 30, 2016

Contact:


Finding 2015-007 Cash Management Significant Deficiency

DEPARTMENT OF EDUCATION

TRIO Cluster

Criteria:

As discussed in OMB Circular A-133, Subpart C, those receiving federal funds are required to maintain internal control over Federal programs that provides reasonable assurance that the entity is managing federal awards in compliance with laws and regulations.

Condition:

During our testing, we noted that the University was not able to provide evidence of controls over compliance related to cash draws.

Context:

We tested two of the four draws occurring during the fiscal year. While we were not able to observe evidence of review controls, we noted no errors in the reimbursement requests submitted.

Cause:

The University did not have adequate review processes in place to provide evidence of controls over compliance.


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Effect:

Although no errors were noted in our testing, without proper controls in place, noncompliance could occur without being detected.

Questioned Costs:

None noted

Recommendation:

We recommend that the University ensure proper controls are in place over the cash reimbursement process. Such controls could include segregation of duties between the preparer and the reviewer. The review should include an audit trail and be performed by someone knowledgeable of the compliance requirements.


Response: Portland State University generally agrees with this finding. We stipulate that there was not a two-step preparation and verification process in place for all letter of credit draws during FY 2015 fiscal year. The amounts for the draws are based on expenditures recorded in PSU’s FIS are generated directly from pre-established events and billing process within the FIS that captures unbilled expenses for awards associated with PSU’s letter of credit account(s) for individual sponsors. Amounts from the output of the billing process are entered into online systems as designated by the federal sponsor. Most federal agency systems, including the G5 system used for drawing US Department of Education funds, do not provide for a two-step verification process within the system itself to allow for review of the data entered prior to submission. Because of these system limitations, we cannot uniformly double check the draw amounts typed into the system prior to submission. In these cases, we must rely on accurate transfer of information from PSU records to sponsor systems in conjunction with post draw reconciliations.

Corrective Actions:

SPA added a step to the letter of credit draw process that provides for regular reviews of documentation in support of G5 draw amounts prior to submission of draw amounts. FIS billing process output and reconciliation documentation are reviewed by a second individual prior to entry of the figures in the agency systems.

Status: Implemented February 2016

SPA updated the reconciliation process for each draw to add a step that compares US Department of Education award numbers and amounts from G5 system to PSU’s financial system records.

Status: Implemented September 2015

Contact:



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Finding 2015-008 Eligibility Significant Deficiency, Noncompliance

DEPARTMENT OF HEALTH AND HUMAN SERVICES passed through the OREGON DEPARTMENT OF EDUCATION

CCDF Cluster

Criteria:

Applicants to the program receive funds based on the specific criteria for which they qualify. Qualification is based on a mix of hours, courses, and other professional requirements determined by the State of Oregon (the State). In order for an applicant to be eligible, they must work at least 20 hours a week with children under the age of 13. Entities receiving federal funds are required to have controls in place to ensure compliance.

Condition:

During testing, we noted that the University incorrectly awarded a participant for criteria they did not qualify for based on their mix of experience. We also noted six instances where a participant file did not indicate through supervisor signature or self-certification that they work 20 hours per week with children under the age of 13. It was further noted that while the University had a process to determine eligibility, there was no evidence of a control performed over the eligibility determination process (a review control, for example) to ensure the process was being performed in accordance with federal regulations.

Context:

We tested a total of 40 participants. Of the 40 tested, one person was noted as not being eligible. Further, we noted six participants who did not have a signed certification (supervisor or self-certification) of working 20 hours a week with children under the age of 13. Lastly, none of the participant files tested appeared to have a control performed over the eligibility determination process to ensure participants were, in fact, eligible.

Cause:

The University did not have adequate controls over the eligibility determination process to ensure the participants are correctly awarded.

Effect:

The University was not in compliance with eligibility requirements as it relates to the Child Care Development Fund.

Questioned Costs:

Total payments during the fiscal year to the participant deemed not eligible was $100.

Recommendation:

We recommend that the University implement a review process to ensure all participants are eligible based upon the criteria of the grant. This review should be performed by someone familiar with the program that is separate from the preparer. Such review should be documented to demonstrate evidence of the control and should ensure proper certifications are obtained as evidence for those working 20 hours a week with children under the age of 13.


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Response: PSU generally agrees with this finding. The Oregon Center for Child Development (OCCD) has a process in place to evaluate the eligibility of participants to receive an award of funds. Awards are based upon adherence to eligibility requirements in place at the time the participant submits an application for funding. OCCD confirms eligibility within 45 business days processing of the application. The participant eligibility requirements are reviewed annually in accordance with the Oregon Department of Education’s Early Learning Division’s oversight of CCDF funds. The responsible officials acknowledge an oversight was made in documenting the supervisor’s certification of the eligibility requirement for one of the participant award payments.

Corrective Action:

The Oregon Center for Child Development at PSU will implement the following changes to the current participant award payment process.

An additional review of the eligibility documentation will be inserted into OCCD’s award approval process. Participant eligibility forms will be routed to an initial reviewer on a weekly basis. The reviewer will ensure the form and eligibility requirements are complete and document the review using the established process. OCCD staff will perform a quarterly audit of 5% of randomly selected eligibility documentation to verify eligibility requirements have been met.

Anticipated Implementation Date: July 2016

OCCD will require recipients to sign an accountability statement on all forms attesting that their work meets the CCDF eligibility requirements

Anticipated Implementation Date: July 2016

Contact:

Pamela Deardorff Director, Oregon Center for Child Development (OCCD) (503) 725-8527


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PORTLAND STATE UNIVERSITY SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS


As this was a first year the University was subject to a Single Audit in accordance with Circular A-133, no prior year items to report.


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BOARD OF TRUSTEES EXECUTIVE AND AUDIT COMMITTEE

AGENDA ITEM: 5

DATE: June 8, 2016

TITLE: Draft Policy Regarding Recommendations for Trustee Appointment

SUMMARY OFITEM: Trustees have expressed an interest in adopting a Board policy regarding the

manner in which the University will suggest nominees for appointment to the Board by the Governor. Historically, the Governor’s Office has sought input from the University when considering appointments to the non-designated positions on the Board.

This draft policy is based on a policy recently adopted and utilized by the Oregon State University Board of Trustees. Under this policy, the Executive and Audit Committee would serve as the committee that considers and approves recommendations to the Governor. In March, the Committee suggested revisions to the original draft and recommended the policy to the full Board.

At the March full Board meeting, it was suggested by Trustee Maude Hines that consideration be given to whether revisions could be made to this policy to strength shared governance. As a result, the policy was referred back to this Committee.

REQUESTED COMMITTEEACTION: Review and discuss the draft policy, make amendments if necessary, and then

approve and forward a proposed policy to the full Board for consideration.

ATTACHEDDOCUMENTS: Draft policy regarding Recommendations for Trustee Appointment

BACKGROUND READING: None


1

Recommendations for Trustee Appointment

Under ORS 352.076, Portland State University trustees are appointed by the Governor and confirmed by the Oregon Senate. It is a goal of the Board of Trustees to recommend at-large candidates for the Governor’s consideration that meet the individual characteristics desired for the Board and complement the needs of the Board as a whole. The purpose of this policy is to guide the Board’s efforts in identifying potential candidates to recommend to the Governor for at-large Board positions.

Board Composition

The Board should be composed of members who have:

1. A commitment to public higher education;2. A record of public or community service;3. Knowledge of complex organizations or academic institutions;4. Demonstrated collaborative leadership;5. A willingness and availability for constructive engagement;6. A commitment to open-minded, non-partisan decision-making; and7. A record of integrity and civic virtue.

There should be a balance of perspectives, backgrounds, experience and skills among the members of the Board. These could include, but are not limited to:

1. Gender, ethnicity, age, geographic location of residence, and other expressions of diversity;

2. Unique skills and competencies;3. Complementary skills and perspectives; 4. A broad range of professional fields (e.g., education, legal, finance, engineering,

business); and5. Engagement with Portland State University.

Process

The process for identifying and vetting potential candidates will include the following:

A. Conduct Needs Assessment

When a vacancy on the Board is anticipated or occurs, the Executive & Audit Committee (Committee) will conduct a needs assessment by analyzing the present Board membership against the composition identified above.


2

B. Vet Potential Candidates

Based on the Committee’s needs assessment, the President will identify potential candidates. To assist the President in identifying potential candidates, the Secretary of the Board will maintain a list of individuals submitted by sources such as Trustees, the President, senior administrators, alumni, and others. The President will vet potential candidates in consultation with the Board Officers. Vetting will include a discussion with potential candidates about the responsibilities of serving as a Trustee and their interest, readiness for nomination, and fit with the desired characteristics.

C. Present Recommendations

The President will present recommendations to the Committee for potential candidates who are willing to serve and who satisfy the needs identified by the needs assessment conducted by the Committee. If the Committee concurs with the President’s recommendations, the Chair will submit names of potential candidates on behalf of the Board of Trustees to the Governor for consideration. If the Committee does not concur with the President’s recommendations, it may direct the President to provide additional or alternative recommendations.


University Services Building | Suite 302A

[email protected]

http://www.pdx.edu/planning-sustainability

FOOD SERVICE HISTORY

BACKGROUND:

Fiscal year 1994 – The University terminated self-operation of campus food services and conducted an RFP process

for the selection of a private food services operator.

Fiscal year 1995 – ARASERVE (later becoming ARAMARK) was selected as campus food services operator and was

awarded a three-year contract beginning July 1, 1994. Later, a two-year contract extension was negotiated,

terminating on June 30, 1999.

Fiscal year 1999 – The University conducted a full RFP process and ARAMARK was again selected to provide food

services. ARAMARK provided campus food services from July 1, 1999 through June 30, 2005 (a five-year contract

term and an additional one-year extension).

Fiscal year 2005 – The University conducted a full RFP process and Sodexho Co. was selected and awarded a seven-

year contract beginning July 1, 2005, with a possibility of three, one-year extensions. ARAMARK scored second in

the proposal review.

At the end of Fiscal Year 2007, the University terminated the Sodexho contract for poor performance in campus

catering, the operation of the Student Union food court, and the University Place Hotel. Simultaneously, the

University entered into emergency negotiations with ARAMARK for the provision of campus food service.

Aramark was awarded a ten-year contract beginning July 1, 2007, with the possibility of two five-year extensions.

Summary of the current contract:

1. Term – July 1, 2007 to June 30, 2017 (with the possibility of two five-year extensions)

2. Aramark is the sole provider of, and granted the exclusive right to provide, food services in the operation

of the food court in the Smith Memorial Student Union, catering services within the Smith Memorial

Student Union, operation of the Ondine student cafeteria, operation of the Meetro Bistro in King Albert

Hall, operation of the library coffee and snack venue, catering services and the operation of the

restaurant and Bar at the University Place Hotel.

3. Aramark has the exclusive right to serve alcohol for the entire University. The contractor is required to

hold all appropriate licenses for alcohol services to be provided. The University granted the contractor

campus-wide alcohol service exclusivity as a single point of control for events including alcohol in order to

mitigate risks associated with alcohol service and to streamline compliance with state liquor licensure

requirements.

4. Revenue and expense allocations between Aramark and the University are dependent on location and

food service program. For catering, food court, and restaurant/bar operations at the Hotel—the

University receives 8.25% commission on gross sales from the contractor (or about $340,000 per year

campus wide). For the residential board program, Aramark charges University Housing on a “sliding scale”

denoting a price per day, per participant in housing meal programs. The more participants, the lower the

price per day per participant as the contractor experiences greater economies of scale. University


mailto:[email protected]

University Services Building | Suite 302A

[email protected]

http://www.pdx.edu/planning-sustainability

revenues for the board program are roughly $2.06 million annually in student charges, while University

expenses are roughly $1.97 million per year in payments to the contractor. The executive breakfast

program of the hotel costs the University roughly $500,000 per year in payments Aramark. This expense

however is recaptured through room revenues derived from overnight lodging.

The University is planning to initiate a new full RFP process within the next several months, rather than

automatically extend the existing contract pursuant to a five-year extension. Aramark has been verbally informed

that the University will be putting out a new RFP and Aramark is expected to again bid for the contract.

There are pros and cons to utilizing a private food service provider in lieu of self-operation of food service.

PROS:

Ease of management. University administration has generally considered outside contract administration of food

service (rather than self-operation) to be advantageous in terms of total administrative/managerial cost and

enterprise risk.

Cost of labor. It is generally accepted that labor costs are lower for a private operator than a comparative

operation managed directly by the University. It is expected this will yield a lower price point in product offerings

to students as the primary consumer of food service.

Costs of goods sold. It is generally accepted that large private operators enjoy significant economies of scale

through access and control of food service supply chains and advantageous food and beverage pricing that the

University would find difficult to duplicate. Similarly, this should result in a lower price point in product offerings to

students as the primary consumer of food service.

Access to capital. Contracting with private operators provides the University opportunity to access capital for

improvements in physical plant devoted to food service operations. These costs are generally “distributed” by the

contractor to the University across the life of the contract and amortized over the life of the contract.

CONS:

Profit optics. Awarding contracts to for-profit entities for something as visible as campus food service can be

difficult to present or discuss with members of the community who are sensitive to corporate involvement in

public education at any level.

Profit incentive. Doing business with a for-profit operator imbues in departmental operations the requirement of

generating a profit margin to the contractor and also yielding an acceptable return on any capital investments

made on behalf of the University. This places upward pressure on the price point in product offerings to the

students as the primary consumer of food service and must be actively surveilled and managed by the University.

Loss of brand control and directional flexibility. As service levels and product offerings are thoroughly modelled

during contract negotiation, it can be difficult to modify operations as campus culture or politics evolve. This can

be especially true if the University requests changes in operations that bring additional costs to the operator but

were not contractually stipulated. For instance, these could be requested changes associated with dietary trends,

sustainable practices or consumer pressures for example.


mailto:[email protected]

Student Insurance Work Group Report March 23, 2016

Members: Kevin Reynolds, Vice-president of Finance and Administration John Fraire, Vice-president of Enrollment Management and Student Affairs Mark Bajorek, Director, Health Services Michele Toppe, Dean of Student Life, Assoc. VP of EMSA Dana Tasson, Executive Director, Center for Student Health and Counseling (SHAC) Andria Johnson, Interim University Budget Director Kerry Gilbreth, Director for Human Resources Amanda Nguyen, Director, Student Financial Services

Charge: Kevin Reynolds and John Fraire convened this working group at the request of President Wiewel. The charge was to review the student health insurance requirement and assess the effects of the Affordable Care Act on the PSU student health insurance program. History: Portland State has had a mandatory insurance requirement since the early 1970s. Students were required to purchase the “basic” university plan regardless of their other coverage. For an extra fee, they could also purchase a voluntary “supplemental” plan that offered full major medical coverage. (Attachment 1: Insurance History) By the mid 2000s the basic plan was no longer adequate for students’ needs and the price was increasing each year. Students referred by the Center for Student Health and Counseling (SHAC) for specialist care, lab tests, and medications routinely did not follow through with care because they had inadequate financial resources to do so. The voluntary supplemental plan was in an economic death spiral with rates rising sharply and enrollment declining each year. Other OUS schools were having similar challenges and in 2008 they collaborated on a student insurance survey (Attachment 2: OUS Health Insurance Survey). Survey results indicated that access to health care was a key issue for students. 54% of PSU students said they would not be able to continue in school if faced with a major medical expense and 78% endorsed a campus wide comprehensive health insurance plan. OUS came very close to establishing a system-wide mandatory hard-waiver insurance program but the plan was ultimately not realized. PSU continued its basic/supplemental insurance program until 2011/12 when it was determined to no longer be economically viable. Both the basic and the supplemental plans were in a death spiral and insurance companies were ceasing to bid on such plan designs. Student Affairs began a discernment process involving campus forums and conversations with key stakeholders (including Athletics, Admissions, Financial Aid, Diversity and Minority Student Services, Finance and Administration, International Student and Scholar Services, Student Senate, Faculty Senate, the President’s Executive Committee, and others). PSU converted to a mandatory hard waiver insurance program based on the following rationale:


A large portion of students depended on getting coverage through PSU and they had

little access to other plans.

High utilization rates of our previous plans likely reflected PSU’s older demographic

and their increased need to for health care.

The OUS survey and other literature suggested that untreated student health

problems and medical debt negatively affected retention.

A voluntary plan was not feasible and would economically fail like the old

supplemental plan. It was unlikely carriers would bid on a voluntary plan.

More public universities were adopting mandatory hard waiver plans or were

moving in that direction.

There was potential to offer a competitively priced comprehensive plan that was

designed for students and met their specific health care needs.

Current Insurance Program: PSU operates a mandatory hard waiver program. Students taking 5 or more credits (also referred to as “eligible”) are required to have insurance and are automatically enrolled in the university plan, but can waive out if they have comparable insurance through their employers, families, or the exchange. It is a gold level plan with a $300 deductible (waived for any services received at SHAC) and 80% hospitalization coverage. The plan insures approximately 7,000 students (32% of eligible students) and is highly utilized by those enrolled. Premiums have risen yearly since the 2012/13 offering and can be attributed to three factors: 1. Benefit increases and fees mandated by the Affordable Care Act, 2. High utilization rates, and 3. Medical inflation. Year Cost per term Utilization Rates (% of premium paid in benefits) 12/13 $560 94% 13/14 $594 112% 14/15 $694 91% 15/16 $776 pending It generally takes 3-5 years for new plans to stabilize in price and current indicators suggest 2016/17 will see a much more modest increase than in the previous two years. Students with comparable plans ($2500 deductible, 80% inpatient coverage) can waive for the entire academic year by entering their information on a secure website. Over 2/3 of students required to have insurance (those taking 5 or more credits) waived for fall 2015. A recent SHAC survey indicated high satisfaction with the plan administration and waiver process. Students with Oregon Health Plan and Indian Health Service benefits automatically qualify to waive. Waiver criteria are continually adjusted each year to reflect the most common offerings on the exchange. 99% of students who applied successfully waived for fall 2015. Complaints from students and families appear to fall into two categories: 1. Students who do not file a waiver by the deadline and 2. Students who are denied a waiver because their plans do not meet the waiver criteria (approximately 1% of those who apply). To mitigate these situations, SHAC has a robust communication Master Page # 65 of 71 - Executive and Audit Committee Meeting 6/8/2016

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plan in place to alert students about the requirement and their insurance team works with individuals to identify other factors, such as health savings accounts, that help them meet waiver criteria. Effects of the Affordable Care Act (ACA) The main effects of the ACA on the student insurance program have been the expansion of Medicaid and the broadening of insurance options available to students through the exchange. About 4,000 students now waive with Oregon Health Plan as opposed to 1,000 in 2012. There is no premium or copay cost for OHP enrollees. The number of students waiving with traditional insurance plans has remained relatively constant. The committee conducted a review of available options on the exchange for a 24 year old male making $10 per hour. (Attachment 3: Student Health Insurance Options). The PSU plan remains competitively priced in comparison to other plans with similar benefits. Of note is that the premium for a student older than 24 would be considerably higher and likely out of reach to older students. There was acknowledgment by the committee that the health insurance market is in transition and continues to evolve. Most sources predict that prices will rise with fewer traditional plans being offered. While the ACA has increased the number of insurance options available to students, it is difficult to predict what those options will look like in the future. The ACA expansion of the Oregon Health Plan has provided more students with free health insurance. However, access to care, especially mental health care, has been an issue and many students have returned to the PSU plan because they preferred the coverage and open access of our program. Practices at other universities: According to a recent survey by the American College Health Association, 48.7% of colleges and universities require health insurance for full-time students (37% of publics and 62.4% of privates). The majority of these schools use a restrictive waiver system similar to PSU. Only 4.7% use a voluntary enrollment system. In Oregon most private colleges and universities have insurance requirements. Of the publics, PSU is the only school to operate a mandatory hard waiver plan. At the time of this writing UO had designed a mandatory insurance program and was considering its implementation. A recent SHAC survey of urban comparator universities revealed no clear pattern or trend in insurance requirements at these institutions (Attachment 4: Urban 21 Student Insurance). Budget and operations implications if the requirement were eliminated: The University does not financially benefit from the insurance fee. All fees collected are paid to the insurance carrier to pay the cost of student premiums so any change in the insurance requirement would be neutral in this regard.


SHAC currently submits $250,000 per year in billings to the student health plan for services outside of regular office visits (diagnostic tests, IUDs, minor surgeries, and wisdom tooth extractions). There would be an estimated savings of $35,000 in staffing changes if the requirement was terminated. Lost billing revenue coupled with salary savings would result in a predicted net loss of $215,000. The potential effect on SHAC operations is unclear. The general assumption is that without a requirement fewer students would be adequately insured. Some students would likely continue to purchase insurance and would be able to follow through with treatment recommendations from SHAC providers. Experience at PSU and other universities indicates that many students would likely not purchase insurance and this would result in a greater number of uninsured students seeking care at SHAC. These students would be unable to follow through with treatment plans involving medications, referrals, or diagnostic tests that were associated with significant cost. The elimination of an insurance requirement has potential funding implications for SHAC. Many larger universities are transitioning to health service funding models based on billing insurance. These models rely on students having adequate insurance so a lack of insurance requirement could preclude SHAC from adjusting its funding model in the future. Benefits and Risks: The group spent a significant amount of their meeting time discussing the risks and benefits to students if PSU were to eliminate its insurance requirement and no longer offer a university-sponsored student insurance plan. The group affirmed that a voluntary plan is not economically viable. The only feasible way to offer a university sponsored plan is through a hard waiver requirement. Thus, eliminating the requirement would also eliminate the student insurance plan. In terms of benefits, removing the requirement would allow for students and families to have full autonomy in funding their health care. It would eliminate any challenges with students who miss the waiver deadline or disagree with the requirement. It would also eliminate the cost to SHAC of administering the program and end the perception that the university was imposing an additional fee on students. While students indicate they would likely drop out of school if confronted with unanticipated medical expenses, we do not have data on how many students take on additional debt or leave PSU due to the cost of health insurance. When considering risk, there was concern that removing the insurance mandate would result in more uninsured or underinsured students thus reverting to a time when students were unable to follow through with medical recommendations, longer-term mental health care, and diagnostic testing. Adverse clinical outcomes as well as adverse events in the university community could be more frequent. There is a risk that without access to a student plan, health insurance with adequate benefit structures would be financially out of reach for many students. Prices on the exchange are predicted to rise and fewer employers are offering low cost employee


and family coverage as part of their benefit package. Students would still be eligible to purchase plans on the exchange, but many would be priced out of high quality plans. Students consistently rank health issues among the top impediments to their academic success. Decreased access to medical and mental health care could negatively impact retention. It is common for out of state families to have insurance that does not include a network of Portland area providers. For these families, a university-sponsored plan is often the best option for their student. While some students would be pleased if the requirement ended, it is likely that students who subscribe to the university plan would be upset about losing this option. PSU has partnered with underserved student groups to shape a plan that serves the needs of our diverse student body. For example, transgender students have come to rely on our plan because of its generous and accessible transgender health benefit. Finally, there was discussion about maintaining a culture of health on campus that supports student academic success and prepares students to be responsible, engaged citizens in our communities. There was general consensus that PSU insurance requirement and program supports that mission. Student Input: The Student Health Advisory Board reviews the PSU student insurance plan on a yearly basis and provides student input on plan design, price, and administration. Their comments are attached. (Attachment 5: Student Input). In addition, members of the SHAC insurance team meet yearly with the Student Senate and the president of ASPSU. Insurance forums are held on an annual basis to aid students in choosing the best plan to meet their needs and solicit feedback about the insurance program. Summary and Recommendations: Portland State University has a long history of providing health insurance to its students with the goal of ensuring their access to health care and ultimate academic success. The current requirement and mandatory hard waiver program is the result of years of study and planning in the midst of a constantly evolving health care system. At present the PSU Student Health Insurance Plan is competitively priced and highly utilized by its enrollees. Over 2/3 of students successfully waive with private insurance or the Oregon Health Plan. Some students have complained about the requirement but the majority of students navigate the system easily. The Affordable Care Act has provided additional insurance options for students and the Medicaid expansion has allowed more students to be covered by the Oregon Health Plan at no cost. The health insurance market is still in transition and continues to evolve with prices expected to rise.


Mandatory hard waiver insurance requirements are a common practice in public and private universities. There is no clear pattern or trend that can be identified among our urban comparators. There was consensus among work group members that access to health care is essential to student success and the risks of eliminating the PSU insurance requirement and plan outweigh any potential benefits that could be gained. The committee makes the following recommendations:

1. PSU should continue its insurance requirement and continue to offer a

student insurance plan.

2. SHAC should continue to provide comprehensive communication strategy

along with input from the Student Health Advisory Board to ensure students

have the best possible information about their health insurance options.

3. SHAC should continue to adjust waiver requirements to match current

market offerings while ensuring that students are adequately insured.

4. This group should reconvene in one year to assess the changing insurance

market and the status of the student insurance program.

Att 1.Insurance History.docx

Att 2.OUS Health Insurance Survey.doc

Att.3.Student Health Insurance Options.docx

Att.4.Urban21 Student Insurance.pdf

Att. 5. Student Insurance Feedback.docx


1

2015-2019 Collective Bargaining Agreement

Between Portland State University and PSU Chapter of the American Association of University Professors

The following is a brief summary of key provisions of the newly completed 2015-2019 collective

bargaining agreement with PSU-AAUP, prepared by University General Counsel David Reese.

SALARY AND BENEFITS

Cost of Living Adjustments (COLA). A COLA will be provided in each year of the contract to all

members of the collective bargaining unit in either January or February. The FY 2016 increase is 2.0%

and is retroactive to either January 1 or February 1 of this year. The COLA for FY 2017, FY 2018 and FY

2019 will be determined based on the Portland/Salem CPI-U index published by the federal government

the previous summer, but shall be no less than 1.5% and no greater than 3.5%.

Equity-based Salary Increases. Salary pools will be created in FY 2017, FY 2018 and FY 2019 to

provide additional salary adjustments to faculty based on market and internal equity factors, using a

methodology to be determined by the University and AAUP. The FY 2017 pool will be equal to 0.75% of

the total base salaries of eligible faculty; by FY 2019, the amount of the pool will increase to 0.9% of the

total base salaries of eligible faculty.

Academic Professionals (APs). The University will conduct a comprehensive classification and

compensation study regarding APs. This group of employees is significantly impacted by new federal

regulations requiring that many of these employees be paid on an hourly, rather than salaried, basis.

The University and AAUP have worked together to select an external consultant to perform the study

and the parties will engage in interim bargaining following completion of the study. In the meantime, in

FY 2017, some APs will receive an additional base salary increase based on years of service. In FY 2018

and FY 2019, salary pools of 0.8% and 0.9%, respectively, are established to fund implementation of the

classification and compensation study or, if interim bargaining is not complete, as additional across-the-

board increases.

Donated Sick Leave Bank. The new CBA creates a sick leave bank into which members can

donated a limited number of accrued sick leave hours for use by other members who have exhausted

their accrued sick leave.

Sabbatical Pay. As a stand-alone University, PSU is now able to establish its own sabbatical

policy. Under the new CBA, starting in FY 2018, faculty on an approved year-long (three-term)

sabbatical will be paid 75% of base salary (rather than 60%) and faculty on an approved two-term

sabbatical will be paid 80% (rather than 75%). The rate for one-term sabbaticals (85%) is unchanged.

Ability to Reopen due to Changed Circumstances. Either party may reopen the economic

provisions of the CBA in the event that circumstances significantly change the financial resources

available to the University during the term of the Agreement.


2

JOB SECURITY AND STATUS

Non-Tenure Track Instructional Faculty (NTTIF). A new system for employment of NTTIF has

been developed. It will no longer be the case that NTTIF are employed on one-year or multi-year

contracts that are repeatedly renewed. Now, newly-hired NTTIF will be employed on annual contracts

for a six-year probationary period. Following the probationary period, the faculty member will be

granted a continuous appointment or provided notice of termination. Once on a continuous

appointment, a NTTIF can be terminated only through retrenchment, as a sanction based on just cause,

due to a change in curricular needs or programmatic requirements, or due to a failure to remediate an

unsatisfactory evaluation. The Faculty Senate is responsible for developing guidelines regarding the

evaluation of NTTIF. The parties have agreed on a mechanism for the immediate conversion of some

current NTTIF to the new system (taking into account years of service, whether the member has been

promoted and/or the member’s recent evaluations) and a process through which other NTTIF can be

considered for conversion. The transition will take several years.

Non-Tenure Track Research Faculty (NTTRF). The CBA clarifies that NTTRF can be employed on a

fixed-term contract, which could run the length of a particular research grant, or on an ongoing basis

contingent on the continued availability of research funding. In addition, the CBA establishes a modest

pilot bridge funding program to assist NTTRF during temporary gaps in research funding.

Academic Professionals (APs). Newly-hired APs will now serve a 6-month trial service period,

after which they can be terminated only through retrenchment, as a sanction based on just cause, or

due to a change in departmental needs or program requirements. This resolves longstanding

disagreement regarding the job security of APs. The parties also agreed that the full-time workload for

overtime-exempt APs is expected to approximate 2080 hours per year and the CBA now provides a

mechanism for raising and resolving concerns regarding workload. In addition, vacant AP positions will

now be posted internally before they are posted externally in order to promote career mobility within

the University.

Inclement Weather Closures. AAUP-represented employees will no longer be required to use

vacation time during inclement weather or other short-term University closures.

PROFESSIONAL DEVELOPMENT

The CBA requires establishment of individual professional development accounts for faculty and

academic professionals, which can be rolled over from year to year and be used, with supervisor

approval, for professional travel, conferences, professional licensure, equipment, etc. These funds will

take the place of the existing professional development pool which was distributed by lottery.

TERM

For the first time, PSU and PSU-AAUP have a four-year, rather than a two-year, contract. This

new contract expires on November 30, 2019. The parties are to confer by February 28, 2019 regarding

the format of successor bargaining and whether to again use an interest-based bargaining approach.


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