audit committee meeting september 27, 2016 - college of dupage · board of trustees committee...

COLLEGE OF DuPAGE

Audit Committee Meeting

September 27, 2016

NOTICE AND AGENDA BOARD OF TRUSTEES COMMITTEE MEETING

THE AUDIT COMMITTEE OF THE BOARD OF TRUSTEES OF COMMUNITY COLLEGE DISTRICT #502, COUNTIES OF DuPAGE, COOK AND WILL, STATE OF ILLINOIS, WILL HOLD THE FOLLOWING COMMITTEE

MEETING IN THE STUDENT SERVICES CENTER (SSC), ROOM SSC-2200, MAIN CAMPUS, 425 FAWELL BLVD., GLEN ELLYN, ILLINOIS:

TUESDAY, SEPTEMBER 27, 2016 6:00 P.M. ~ ROOM SSC-2200

MEETING: AUDIT COMMITTEE OF THE BOARD

AGENDA

1. CALL TO ORDER/PLEDGE OF ALLEGIANCE 2. ROLL CALL 3. PUBLIC COMMENT 4. COMMENTS BY COMMITTEE CHAIR 5. PURCHASING OFFICE CHANGES 6. CLOSED SESSION 7. RETURN TO OPEN SESSION 8. DISCUSSION: RFQ for Internal Control Review 9. DISCUSSION: Accreditation Task Force Recommendation on Internal Control

10. APPROVAL OF MINUTES: a. September 3, 2015 Meeting b. September 3, 2015 Closed Session – Confidential Committee Only c. November 11, 2015 Meeting d. First November 11, 2015 Closed Session - Confidential Committee Only e. Second November 11, 2015 Closed Session - Confidential Committee Only f. June 29, 2016 Meeting

11. DISCUSSION BOARD POLICY 10-55 INVESTMENT OF COLLEGE FUNDS 12. COMMITTEE DISCUSSION 13. NEXT MEETING DATE 14. ADJOURNMENT

FRANK NAPOLITANO, SECRETARY BOARD OF TRUSTEES OF COMMUNITY COLLEGE

DISTRICT NO. 502, COUNTIES OF DuPAGE, COOK AND WILL, STATE OF ILLINOIS

Posted 9/21/16

REQUEST FOR QUALIFICATIONS (RFQ) FOR INTERNAL CONTROL REVIEW

Issue Date: XX/XX/2016

REQUEST FOR QUALIFICATIONS

The College of DuPage is accepting sealed responses for an internal control review in the Purchasing Office, 425 Fawell Blvd. Room BIC 1540, Glen Ellyn, IL 60137 until XX:XX p.m., XX/XX/2016. RFQ documents, including any addendums, may be obtained on the College website, www.cod.edu. If you do not have internet access, you may obtain the document by contacting the College Purchasing Office at (630) 942-XXXX. RFQs may either be mailed or handed delivered to the College Purchasing Office, 425 Fawell Blvd. Room BIC 1540, Glen Ellyn, IL 60137. Any RFQs received after the above stated time will be returned to the responder unopened. The College reserves the right to reject any and all responses or parts of responses, to waive any technicalities and to accept the response that in its judgment, best suits the requirements of the College of DuPage. The contract is subject to approval by the Board of Trustees. 1. Definitions For the purposes of this Request for Qualifications (RFQ): Responder shall mean contractors, consultants, respondents, organizations, firms or other persons submitting a response to this Request for Qualifications. College shall mean the College of DuPage and any staff, elected officials, and/or appointed committee members. 2. General Background Among the state's public colleges and universities, College of DuPage, with more than 28,000 students, is the second largest provider of undergraduate education in the State of Illinois, after University of Illinois at Urbana-Champaign. College of DuPage offers more than 90 certificates programs and degrees for today’s occupational and technical careers, and nine associate’s degrees in 59 occupational and 45 transfer pre-baccalaureate programs. The Glen Ellyn campus covers 273 acres and has eleven major buildings. In addition, there are four regional centers where both credit and non-credit courses are provided. College of DuPage has a widely diverse workforce of approximately 2,500 employees.

http://www.cod.edu/

3. Scope of Services The chosen consultant is expected to complete the following tasks and offer recommendations for improvement:

Conduct a comprehensive review of current internal controls and make recommendations for improvements. The comprehensive review should document the internal controls the College has put into place, test the controls to verify they are in place and used, and analyze the controls and indicate any weaknesses.

Based upon reviews and assessments conducted, including reviews of other audits and investigations, provide a recommendation of any additional measures to be taken by the College to identify any suspected fraud or misappropriation that has not been detected.

Determine, based on the analysis done, whether internal controls requirements have been met and reasonable assurance achieved.

Outline the nature and extent of controls recommended and costs of implementing these controls so they can be evaluated and updated.

Document all findings in writing.

4. Operational Areas to be Evaluated Purchasing/Procurement/Contracting Cash Receipts/Accounts Receivable Cash Disbursements (Accounts Payable and Payroll) Auxiliary Operations and Enterprises Student Financial Aid Financial Reporting Capital/Fixed Assets Information Technology Access Controls 5. Description of Deliverables Deliverables shall include a kickoff meeting with the College, a comprehensive draft or initial report and a final comprehensive report. Both the draft and final comprehensive reports must cover all operational areas evaluated and audited and include appropriate findings. To satisfy the report deliverables, the contractor shall provide two (2) hard copies and one electronic version in Word for each deliverable report. Both deliverable reports shall be submitted to the individual identified below. The deliverable reports must be submitted on a schedule that will be mutually established immediately following award. All deliverables are the property of the College of DuPage. All deliverable reports shall be submitted to: XXXXXXXXXXX

6. Qualifications of the Awarded Firm The firm selected to perform this work for the College of DuPage will be evaluated on the following criteria:

The firm’s past experience evaluating the internal controls of publicly funded entities in higher education, preferably having experience with community colleges.

Size of firm, i.e. firm should employ XX employees or have XX in annual revenues

The quality of the firm’s professional personnel to be assigned to the engagement and the quality of the firm’s management support personnel to be available for technical consultation

7. Award of Contract In general, to be awarded a contract with the College, a responder must meet the minimum specifications as required. Contracts shall be awarded to the responder determined to be best qualified to meet the College’s needs and which will obtain the highest quality services at the most competitive price. The College anticipates awarding one contract, but reserves the right to award more than one contract if in its best interest. The responder understands that this RFQ does not constitute an agreement or a contract with the responder. An official contract or agreement is not binding until responses are reviewed and accepted by the College and a written agreement or contract is approved by both the College and the successful responder. This project scope is detailed in section 3. The responder must complete the scope within XX days of notification of award. Additional audit measures that may be recommended by the selected consultant will be procured through an additional RFQ process and will not be awarded to the consultant chosen through this RFQ process. 8. Pre-Response Questions Any questions regarding this RFQ should be addressed to XXXXXXX, College of DuPage Purchasing Office, in writing at XXXXX.cod.edu. Any questions answered during the response period, if said answer affects the essence of the RFQ, will be incorporated in an addendum, which will be posted on the College’s website, www.cod.edu 9. Costs Incurred in Responding All costs directly and indirectly related to the preparation of a response to the RFQ shall be the sole responsibility of each responder. Responders should prepare their responses simply and economically, providing a straightforward and concise description of the responder’s ability to meet the requirements of the RFQ.

http://www.cod.edu/

10. Response Format/Required Sections The response shall include, at a minimum, the following information:

Firm name, address and phone numbers (including e-mail address). Firm profile. Three (3) higher education/public institution references. The name and resume of the individual(s) serving as consultants on the project. A schedule of proposed fees, including a schedule of out-of-pocket expenses

and other reimbursable items. Methodology used to complete the process. Estimated time frame for this process. Any other information to assist in the selection process.

Internal Audit Recommendations

In their December 16, 2015 letter the HLC

Board of Trustees Board noted that the College’s

internal auditor “brought 43 separate internal

audits over the last three years to the attention of

senior administration at the College, pursuant to

the College’s audit plan, but the College could

not document College actions taken in response

to such information or that such information was

regularly shared with the College’s Board.”

Therefore, the ATF recommends the following:

a. Develop a communication and awareness

campaign to educate College employees about

the purpose, function, and responsibilities of

the College’s Internal Audit Office.

b. Create an Internal Audit site on the Employee

Portal and post the annual internal audit plan

and those audit reports that are not privileged

(e.g., personnel, etc.).

c. Develop a standard audit report that includes

an “action taken” section and revise Board

Policy 5-220 to add language that all internal

audits must note if an action was or was not

taken, and what the action was.

d. Revise Board Policy 5-220 to include specifi c

thresholds or circumstances when an issue

would be assigned to an independent, thirdparty

for audit or review.

e. Place all fi nancial reports on the Employee

Portal under “Documents.”

f. As part of the internal auditor’s work plan,

have the external investment managers’

performance and adherence to Board Policy

evaluated on an annual basis.

Audit Committee Meeting September 3, 2015 Page 1

BOARD OF TRUSTEES OF COMMUNITY COLLEGE DISTRICT NO. 502

COUNTIES OF DuPAGE, COOK AND WILL STATE OF ILLINOIS

AUDIT COMMITTEE MEETING

THURSDAY, SEPTMEBER 3, 2015 HELD ON CAMPUS IN SSC-2200, GLEN ELLYN, IL

CALL TO ORDER At 11:13 a.m., Board of Trustees Chairman Katharine Hamilton, Chairman of the Audit Committee of the College of DuPage Board of Trustees called the meeting to order and led the Pledge of Allegiance.

ROLL CALL Chairman Hamilton called on Trustee Charles Bernstein to call the roll. Present: Chairman Katharine Hamilton, Trustee Charles Bernstein, Dr. William Kresse. Also Present: Attorney Emily Shupe, Rathje Woodward; John Dischner, Alix Partners; Interim CFO, Kurt Beckeman, Alix Partners, Interim Controller; Cynthia Pierce, Crowe Horwath; G. Manning, Crowe Horwath. (Minutes prepared by Monica Miller.)

APPROVAL OF AGENDA Dr. Kresse moved, Secretary Bernstein seconded a motion to approve the Agenda of the September 3, 2015 Audit Committee Meeting. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. PUBLIC COMMENT There was no public comment. MOTION TO GO INTO CLOSED SESSION At 11:19 a.m., Chairman Hamilton called for a motion to move Closed Session. Secretary Bernstein moved; Dr. Kresse seconded a motion to go into closed for the reasons read by the attorney: For purposes of meetings between internal or external auditors and governmental audit committees, finance committees and their equivalents when the discussion involves internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds and fraud interviews conducted in accordance with generally accepted auditing standards of the United States of America. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed.

Audit Committee Meeting September 3, 2015 Page 2

At 12:35 p.m., Trustee Bernstein moved, Dr. Kresse seconded a motion to return to open session. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. ADJOURNED At 12:35 p.m., seeing no further business for the Board of Trustees Audit Committee, Chairman Hamilton called for a motion of adjourn. Dr. Kresse moved, Secretary Bernstein seconded a motion to adjourn. Motion passed on unanimous voice vote.

Signed:____________________________

Charles Bernstein

PLACE HOLDER

September 3, 2015

CLOSED SESSION MINUTES

CONFIDENTIAL COMMITTEE ONLY

Audit Committee Meeting November 11, 2015 Page 1



AUDIT COMMITTEE MEETING

WEDNESDAY, NOVEMBER 11, 2015 HELD ON CAMPUS IN SSC-2200, GLEN ELLYN, IL

CALL TO ORDER At 9:30 a.m., Board of Trustees Chairman Katharine Hamilton, Chairman of the Audit Committee of the College of DuPage Board of Trustees called the meeting to order and led the Pledge of Allegiance.

ROLL CALL Chairman Hamilton called on Trustee Charles Bernstein to call the roll. Present: Chairman Katharine Hamilton, Trustee Charles Bernstein and Dr. William Kresse. Also Present: Attorney Emily Shupe, Rathje Woodward; John Dischner, Alix Partners; Interim CFO, Kurt Beckeman, Alix Partners, Interim Controller. (Minutes prepared by Erin Carrillo.)

APPROVAL OF AGENDA Secretary Bernstein moved, Dr. Kresse seconded a motion to approve the Agenda of the November 11, 2015 Audit Committee Meeting. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. PUBLIC COMMENT There was no public comment. MOTION TO GO INTO CLOSED SESSION At 9:40 a.m., Chairman Hamilton called for a motion to move Closed Session. Dr. Kresse moved; Secretary Bernstein seconded a motion to go into closed for the reasons read by the attorney: For purposes of meetings between internal or external auditors and governmental audit committees, finance committees and their equivalents when the discussion involves internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds and fraud interviews conducted in accordance with generally accepted auditing standards of the United States of America. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed.

Audit Committee Meeting November 11, 2015 Page 2

At 10:09 a.m., Dr. Kresse moved, Secretary Bernstein seconded a motion to return to open session. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. 2nd MOTION TO GO INTO CLOSED SESSION At 10:12 a.m., Chairman Hamilton called for a motion to move Closed Session. Dr. Kresse moved; Secretary Bernstein seconded a motion to go into closed for the reasons read by the attorney: For purposes of meetings between internal or external auditors and governmental audit committees, finance committees and their equivalents when the discussion involves internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds and fraud interviews conducted in accordance with generally accepted auditing standards of the United States of America. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. At 11:05 a.m., Dr. Kresse moved, Secretary Bernstein seconded a motion to return to open session. On a roll call voting aye: Chairman Hamilton, Trustee Bernstein and Dr. Kresse. Motion passed. TRUSTEE DISCUSSION None ADJOURNED At 11:05 a.m., seeing no further business for the Board of Trustees Audit Committee, Chairman Hamilton called for a motion of adjourn. Secretary Bernstein moved, Dr. Kresse seconded a motion to adjourn. Motion passed on unanimous voice vote. Signed:____________________________ Charles Bernstein

PLACE HOLDER

November 11, 2015

FIRST CLOSED SESSION MINUTES

CONFIDENTIAL FOR COMMITTEE ONLY

PLACE HOLDER

November 11, 2015

SECOND CLOSED SESSION MINUTES

CONFIDENTIAL FOR COMMITTEE ONLY

Audit Committee Meeting June 29, 2016 Page 1



AUDIT COMMITTEE MEETING WEDNESDAY, JUNE 29, 2016

HELD ON CAMPUS IN SSC-2200, GLEN ELLYN, IL CALL TO ORDER At 6:14 p.m., Charles Bernstein, Chairman of the Audit Committee of the College of DuPage Board of Trustees called the meeting to order and led the Pledge of Allegiance.

ROLL CALL Chairman Bernstein: Asked Dianne McGuire to serve as Secretary Pro Tempore in Committee Secretary David Olsen’s absence. Present: Charles Bernstein, Karen Kobialka, William Kresse and Dianne McGuire. Quorum is present. Absent: David Olsen. Also Present: Attorney Emily Shupe, Rathje Woodward; James Martner, Scott Brady and Kim Michael-Lee. (Minutes prepared by Erin Carrillo.)

PUBLIC COMMENT None COMMENTS BY THE COMMITTEE CHAIRMAN None. APPROVAL OF MINUTES OF THE MAY 11, 2016 MEETING Chairman Bernstein entertained a motion that the Committee approve the minutes of the May 11, 2016 Audit Committee Meeting. Dianne McGuire moved and William Kresse seconded the motion. On Roll Call voting aye: Charles Bernstein, Karen Kobialka, William Kresse and Dianne McGuire. Motion passed. DISCUSSION: BOARD POLICY 10-55, INVESTMENT OF COLLEGE FUNDS

Deferred by Board. Roger Kempa’s June 21, 2016 email to the Board reviewed. Karen Kobialka has not seen this list and Charles Bernstein has not read through the

list. Chairman Bernstein asked Dianne McGuire to please read list aloud:


o A list of authorized investments. o A rule, such as the prudent person rule, establishing the standard of care that

must be maintained by the persons investing the public funds. o Investment guidelines that are appropriate to the nature of the funds, the

purpose of the funds and the amount of the public funds within the investment portfolio.

o A policy regarding diversification of the investment portfolio that is appropriate to the nature of the funds, the purpose of the funds and the amount of the public funds within the investment portfolio.

o Guidelines regarding collateral requirements, if any, for the deposit of public funds in a financial institution made pursuant to this act and if applicable, guidelines for contractual arrangements for the custody and safekeeping of that collateral.

o A policy regarding the establishment of a system of internal controls and written operational procedures designed to prevent losses of the funds that might arise from, fraud, employee error or misrepresentation by third parties or imprudent actions by employees of the entity.

o Identification of the Chief Investment Officer who is responsible for establishing the internal controls and written procedures for the operation of the investment program.

o Performance measures that are appropriate to the nature of the funds, the purpose for the funds and the amount of the public funds within the Investment Portfolio.

o A policy regarding appropriate periodic review of the investment portfolio, its effectiveness and meeting the public agency’s needs for safety, liquidity, rate of return and diversification and its general performance.

o A policy establishing at least quarterly written reports of investment activities by the public agency’s Chief Financial Officer for submission to the governing body.

o A policy regarding the selection of advisors, money managers and financial institutions.

o A policy regarding ethics and conflicts of interest. Kim Michael-Lee explained that what is listed is in the updated policy; however, Mr.

Kempa’s terms are a bit outdated. Dianne McGuire questioned why then was the policy not approved by the Board. Chairman Bernstein suggested that there were a couple of trustees who were not

comfortable with some of the wording. DISCUSSION: INTERNAL CONTROL REVIEW

Chairman Bernstein: Dr. Rondeau will issue an RFQ to various firms to give presentations.

Kim Michael Lee: We need to know the scope before an RFQ can be issued. Jon Hoffmeister: Any thoughts will be provided in Closed Session. Dr. William Kresse: Discreet internal design is appropriate and wants to ensure that

best practices are being used. Scope should include the following: o Procurement o Purchasing


o Contracting o Revenue o Accounts Payable o Accounts Receivable o Satellite Enterprises:

Bookstore Restaurant

o Financial Aid and Grants o Controls over Financial Controller

Jon Hoffmeister: As your independent auditors we have limits to how much we can

do in terms of designing the actual controls the College puts in place. Dianne McGuire: Will the areas where an audit has already taken place be looked at

to determine whether the controls we have put in place are actually working. Jim Martner: Will be able to provide his input during Closed Session.

DISCUSSION: INTERNAL AUDIT PLAN Will discuss in closed session. CLOSED SESSION At 6:56 p.m. Chairman Bernstein entertained a motion that the Committee go into Closed Session. Dr. William Kresse moved and Dianne McGuire seconded the motion. The Committee will go into Closed Session for the following reason: “Meetings between internal or external auditors and governmental audit committees, finance committees, and their equivalents, when the discussion involves internal control weaknesses, identification of potential fraud risk areas, known or suspected frauds, and fraud interviews conducted in accordance with generally accepted auditing standards of the United States of America.” On roll call voting aye: Dr. William Kresse, Dianne McGuire, Karen Kobialka and Chairman Bernstein. Motion passed. At 8:40 p.m. Chairman Bernstein entertained a motion that the Committee return to Open Session. Dr. William Kresse moved and Karen Kobialka seconded the motion. On roll call voting aye: Dr. William Kresse, Dianne McGuire, Karen Kobialka and Chairman Bernstein. Motion passed. COMMITTEE DISCUSSION None. NEXT MEETING DATE The next meeting of the Audit Committee will be determined by Chairman Bernstein.


ADJOURNMENT At 8:41 p.m., seeing no further business for the Board of Trustees Audit Committee, Chairman Bernstein called for a motion to adjourn. Dianne McGuire moved and Dr. William Kresse seconded a motion to adjourn. Motion passed on unanimous voice vote.

Signed:____________________________________ Dianne McGuire, as Secretary Pro Tempore