INTERNAL CONTROLS and UNC-CHAPEL HILL Stan Koziol, CPA.

INTERNAL CONTROLSINTERNAL CONTROLSandand

UUNC-CHAPEL HILLNC-CHAPEL HILL

Stan Koziol, CPA

ADMINISTRATIVE OFFICE ADMINISTRATIVE OFFICE BUILDING (AOB)BUILDING (AOB)

INTERNAL CONTROLSINTERNAL CONTROLS BUNKER BELOW THE AOB BUNKER BELOW THE AOB

Internal Control is aInternal Control is a

Process, effected byProcess, effected by an entity’s an entity’s board of directors, board of directors, management andmanagement and other personnelother personnel, designed to , designed to provideprovide reasonable assurancereasonable assurance regarding the regarding the achievement of achievement of objectives in the objectives in the following categories:following categories:

CATEGORIESCATEGORIES

Effectiveness and efficiency of Effectiveness and efficiency of operationsoperations

Reliability of financial reportingReliability of financial reporting

Compliance with applicable laws and Compliance with applicable laws and regulationsregulations

TOPICSTOPICS

Buzz Words & PhrasesBuzz Words & Phrases

Review Internal Control InitiativesReview Internal Control Initiatives

BUZZ WORDS & PHRASESBUZZ WORDS & PHRASES

SOXSOX

Sarbanes-Oxley Act of 2002Sarbanes-Oxley Act of 2002

SARBANES OXLEY ACTSARBANES OXLEY ACTof 2002of 2002

Enacted on July 30, 2002Enacted on July 30, 2002 In Response to Major Corporate and In Response to Major Corporate and

Accounting ScandalsAccounting Scandals Applies to Companies Registered Applies to Companies Registered

with the SECwith the SEC Does Not Apply to Not-For-Profit Does Not Apply to Not-For-Profit

EntitiesEntities

SARBANES OXLEY ACTSARBANES OXLEY ACTof 2002of 2002

ENRONENRON

WHO IS RESPOSIBLE ?WHO IS RESPOSIBLE ?

GET THE SHREDDER !GET THE SHREDDER !

WHAT HAPPENED ?WHAT HAPPENED ?


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices Did You See Today’s Newspaper?Did You See Today’s Newspaper?


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices Did You See Today’s Newspaper?Did You See Today’s Newspaper? Tone at the TopTone at the Top


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices Did You See Today’s Newspaper?Did You See Today’s Newspaper? Tone at the TopTone at the Top Hotline / Whistle BlowerHotline / Whistle Blower


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices Did You See Today’s Newspaper?Did You See Today’s Newspaper? Tone at the TopTone at the Top HotlineHotline Sub-CertificationSub-Certification


SOXSOX NACUBO Advisory Report 2003-3NACUBO Advisory Report 2003-3 Guidance and Best PracticesGuidance and Best Practices Did You See Today’s Newspaper?Did You See Today’s Newspaper? Tone at the TopTone at the Top HotlineHotline Sub-CertificationSub-Certification Cascade EffectCascade Effect

CASCADE EFFECTCASCADE EFFECT

Risk that some states will pass their Risk that some states will pass their own version of Sarbanes-Oxley for own version of Sarbanes-Oxley for smaller, privately held companies smaller, privately held companies and not-for-profitsand not-for-profits..

AICPA formed the Special Committee AICPA formed the Special Committee on State Regulation.on State Regulation.

UNC CHAPEL HILL INITIATIVESUNC CHAPEL HILL INITIATIVES

Establish the “Tone at the Top”Establish the “Tone at the Top”


Establish the “Tone at the Top”Establish the “Tone at the Top” Dedicate a Full Time PositionDedicate a Full Time Position


Establish the “Tone at the Top”Establish the “Tone at the Top” Dedicate a Full Time Position Dedicate a Full Time Position Implement “Best Practices”Implement “Best Practices”


Establish the “Tone at the Top”Establish the “Tone at the Top” Dedicate a Full Time PositionDedicate a Full Time Position Implement “Best Practices”Implement “Best Practices” EthicsEthics

• New Ethics StatementNew Ethics Statement• Applying Ethics to Your JobApplying Ethics to Your Job• Code of ConductCode of Conduct• Ethics TrainingEthics Training


Hotline & Financial Controls WebsiteHotline & Financial Controls Website


Hotline & Financial Controls WebsiteHotline & Financial Controls Website University Enterprise Risk University Enterprise Risk

Management Advisory CommitteeManagement Advisory Committee


Hotline & Internal Controls WebsiteHotline & Internal Controls Website University Enterprise Risk University Enterprise Risk

Management Advisory Committee Management Advisory Committee Internal Control Self AssessmentInternal Control Self Assessment



Management Advisory Committee Management Advisory Committee Internal Control Self AssessmentInternal Control Self Assessment Audit and Finance Committee Audit and Finance Committee

CharterCharter




CharterCharter Enhanced Data AnalysisEnhanced Data Analysis




CharterCharter Enhanced Data AnalysisEnhanced Data Analysis Sub-CertificationSub-Certification

IN CONCLUSIONIN CONCLUSION

Integrity & Public TrustIntegrity & Public Trust Positioned to be #1Positioned to be #1 FundingFunding Attractive Bond RatingsAttractive Bond Ratings Excellence in Financial Reporting Excellence in Financial Reporting

Award from GFOAAward from GFOA

SELF ASSESSMENTSSELF ASSESSMENTS

Thank you for all the suggestions!Thank you for all the suggestions!


Thank you for all the suggestions!Thank you for all the suggestions! Written disaster planWritten disaster plan


Thank you for all the suggestions!Thank you for all the suggestions! Written disaster planWritten disaster plan Segregation of dutiesSegregation of duties


Thank you for all the suggestions!Thank you for all the suggestions! Written disaster planWritten disaster plan Segregation of dutiesSegregation of duties Equipment inventory listEquipment inventory list

Internal Control is aInternal Control is a

Process, effected byProcess, effected by an entity’s an entity’s board of directors, board of directors, management andmanagement and other personnelother personnel, designed to , designed to provideprovide reasonable assurancereasonable assurance regarding the regarding the achievement of achievement of objectives in the objectives in the following categories:following categories:

THANK YOU !THANK YOU !

INTERNAL CONTROLS and UNC-CHAPEL HILL Stan Koziol, CPA.

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