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ARIZONA BOARD OF REGENTS
AUDIT COMMITTEE
FULL-TEXT DOCUMENTS
INDEX
May 26, 2022
The following full-text documents are incorporated by reference in the 2022-05-26 Agenda Book.*
3.B ASU Coaches Camps and Clinics Audit Report dtd 2022-04-*
3.C ASU Student Employment Audit Report dtd 2022-05-*
3.D ASU KAET Audited Financial Statements for FYE June 30, 2021 and 2020 dtd 2021-12-21.*
4.B NAU Student Athlete Higher Performance Center - Audit Report FY22- dtd 2022-05-*
4.C NAU Conduct, Ethics, Reporting, and Transparency (CERT) - Audit Report FY21-03 dtd 2022-05-*
5.B UArizona Process Review of Student Admissions Report dtd 2022-04-*
5.C UArizona Department of Economic Security, Management Evaluation, Cooperative Extension Mohave County Supplemental Nutrition Assistance Program Nutrition Education Program (UA SNAP-Ed – Mohave) Memo dtd 2022-02-*
5.D UArizona National Science Foundation Virtual Site Visit Letter dtd 2022-03-*
Office of University Audits Coaches Camps and Clinics April 29, 2022
Coaches Camps and Clinics April 29, 2022
PUR 222: Trademark Licensing
This policy defines requirements related to the use of the university’s marks. In support of this policy, there is a defined camp trademark and license agreement that defines which marks can be used in conjunction with a coach owned camp or clinic along with other key requirements including refraining from representing or implying any ASU endorsement or support of the camp or any product or service. EHS 706: Minors on Campus
This policy defines core requirements for individuals who work in activities and programs with minors and informs them of their reporting obligations in instances of known or suspected child abuse or neglect of minors.
While this policy does not specifically apply to activities and programs operated by non-university entities that occur on campus or university facilities, it does require the contract with the third-party organization include the appropriate contract provisions as well as a requirement that their processes exceed or meet those contained within EHS 706.
*There are other policies in place related to the personal use of ASU assets and resources that are not specifically included in the table above.
Audit Objective: The objective of this engagement was to assess oversight of NCAA- regulated sport camps and clinics owned or operated by SDA coaches (non-ASU owned) to ensure compliance to NCAA by-laws as well as applicable institutional policies that apply to third party, private business activities utilizing ASU facilities.
Scope: The scope of the audit focused on camps that occurred during calendar year
- This involved nine sports and 22 camps of which 19 were held using ASU facilities.
At the start of the audit, SDA management confirmed that controls to monitor coach’s compliance to the stated contractual provisions related to the camp trademark and license and facility use agreements had not been implemented. Testing was performed to quantify the risk associated with the lack of third party oversighted related to the coach’s camps.
Information Technology General Control testing was not considered in scope for this audit as it relates to the ARMS Application. This application was reviewed as part of a FY audit.
Methodology: The audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing promulgated by the Institute of Internal Auditors and accordingly consisted of tests of procedures necessary to provide a reasonable basis for expressing our opinion. Specifically, audit work consisted of interviews with various groups responsible for SDA operations and SDA compliance,
Coaches Camps and Clinics April 29, 2022
observation of work processes, review of documented policies and procedures and substantive tests including the following areas:
- Assessing SDA Compliance oversight of camps and clinics by performing the following for a sample of 22 camps:
- Validating each camp received preliminary SDA Compliance approval prior to the camp occurring by reviewing approval workflow in ARMS
- Validating each camp received secondary SDA Compliance approval prior to the camp occurring once employment forms were uploaded by reviewing approval workflow in ARMS
- Ensuring each camp received final SDA Compliance approval by reviewing approval workflow in ARMS
- Ensuring compensation rates were appropriate for duties performed for student- athletes employed by the camp by validating compensation rates and role for each student-athlete
- Ensuring compensation to student-athletes was based on actual work performed by tracing signed time sheets to payment documentation for a sample of 32 payments
- Ensuring a current camp trademark and license agreement was executed for each sport that had camp activity in CY 2021
- Ensuring compliance to the camp trademark and license agreement by verifying the following for a sample of 21 camps: o Verifying that an ASU email account was not utilized to conduct camp business through review of the camp brochures and related websites o Verifying correct reference and use of any ASU marks utilized in marketing the camp through review of the camp brochures and related websites o Confirming that the Notice of License was included on camp materials and website through review of the camp brochures and related websites
- Verifying invoicing occurred timely for each camp trademark and license agreement executed during the review period
- Ensuring a facility use agreement was executed prior to the camp occurring for a sample of 19 camps that utilized ASU facilities
- Ensuring compliance to insurance requirements by verifying the certificate of insurance collected to the defined requirements per the facility use agreement
- For each camp that involved participation by minors, verifying the facility use agreement included provisions required as part of policy EHS 706 Minors on Campus in addition to verifying compliance by validating the following for each camp:
Coaches Camps and Clinics April 29, 2022
apply directly to third party activities, it does state that contacts with third party organizations, such as these coach-owned camps and clinics, must include appropriate contract provisions related to working with minors. Testing identified that the coach owned camps and clinics generally do not require training associated with working with minors including reporting requirements nor do they require a valid fingerprint check within the past three years.
While each camp tested had an executed facility use agreement when using one of ASU’s facilities, invoicing related to the use of facilities was not done timely nor was there consistent treatment related to direct costs incurred by ASU related to the camp. It was also noted that SDA coaches did not consistently pay invoices in a timely manner.
Testing also identified that each of the camps tested violated one or more of the defined provisions included in the camp trademark license agreement such as using an ASU email address in conjunction with the camp, inappropriate use of ASU marks, and failing to include the Notice of License on camp materials which notifies participants that the camp is not affiliated with or sponsored by ASU. In addition, there were three instances noted where the SDA coach did not have an active camp trademark and license agreement in place.
The control standards University Audit considered during this audit and the status of the related control environment are provided in the following table.
General Control Standard (The bulleted items are internal control objectives that apply to the general control standards, and will differ for each audit.)
Control Environment
Finding No.
Page No. Reliability and Integrity of Financial and Operational Information
- Invoicing related to the camp trademark and licensing Agreements and facility use agreements are performed in a timely manner.
Opportunity for Improvement
4 11
- Payments from SDA coach owned camps and clinics are made in a timely manner.
Opportunity for Improvement
4 11
- Payments from SDA coach are made using bank accounts of coach LLC
Reasonable to Strong Controls in Place
NA N/A
Effectiveness and Efficiency of Operations
- Third-party oversight is in place to ensure compliance with core provisions of the camp trademark license agreements.
Significant Opportunity for Improvement
2 9
Coaches Camps and Clinics April 29, 2022
- Third-party oversight is in place to ensure compliance with core provisions of the facility use agreements.
Significant Opportunity for Improvement
1 8
- Third-party oversight is in place to ensure compliance with core provisions of the Minors on Campus Policy.
Significant Opportunity for Improvement
1 8
Safeguarding of Assets
- Camp trademark license agreements are executed for SDA coach owned camps and clinics.
Opportunity for Improvement
2 9
- Facility use agreements are executed for SDA coach owned camps and clinics.
Reasonable to Strong Controls in Place
NA N/A
- SDA coaches are billed for all direct costs incurred through the SDA coach owned camps and clinics as defined by the facility use agreements.
Opportunity for Improvement
3 10
- Third-party oversight is in place to ensure compliance with defined insurance requirements related to facility use agreements.
Opportunity for Improvement
1 8
Compliance with Laws and Regulations
- SDA oversight is in place to ensure compliance with NCAA rules and regulations.
Reasonable to Strong Controls in Place
N/A N/A
I appreciate the assistance of SDA Operations and SDA Compliance during the audit.
Lisa Grace, Executive Director, University Audit and Advisory Services
Coaches Camps and Clinics April 29, 2022
Recommendation: The existing facility use agreement should be modified to incorporate the required provisions as stated in EHS 706 if the activity involves minors. Additional review of the agreement with the third parties should be performed to ensure a full understanding and awareness of defined requirements. In addition, AOF should implement procedures to monitor and validate compliance to contractual terms. To help ensure awareness and compliance, the existing ARMS workflow related to camps and clinics should be enhanced to add additional certification by the coaches that they are aware and compliant with key requirements such as employee screening and training.
Management Response: ASU Office of General Counsel in currently updating the Camp Facility Use Agreement to incorporate provisions stated in EHS 706. In process of adding a checkbox to confirm background checks and/or fingerprinting has been conducted in the ARMS camp process workflow. Additional checkbox will be added to confirm training has been conducted by all members of the organization. Documentation will be required. Immediately making provisions to include verification on the camp facility questionnaire.
ASU Risk Management conducted a staff training for reviewing Certificate of Insurances to ensure compliance. Certificate of Insurance example was created with explanations to send to all coaches. In process of adding the ASU liability requirements information into the ARMS camps workflow which will include a set of questions specific to certain liability coverages (auto liability, workers compensation). In the interim, liability questions have been included in the camp facility questionnaire to verify coverages.
Camp process was reviewed in the monthly rule’s education meeting with all ASU head coaches.
Moved Camp Facility Use Agreements to be signed digitally and will be including a copy of the Certificate of Insurance. Facility Use Agreements will be not be signed until Certificate of Insurance meets all of the requirements.
All actions have been or will be implemented by 09/30/2022.
2. SDA Administration has not implemented third-party oversight of the camp trademark and licensing agreements to ensure compliance to key provisions.
Condition: SDA Coaches are allowed to utilize specific ASU marks in relation to the non- ASU owned camps they operate; however, use is governed by specific guidelines and requirements. Monitoring controls are not operating to identify when coaches do not comply with the terms of the agreement.
In addition, there were three instances where a coach was utilizing ASU marks without an active trademark license agreement.
Coaches Camps and Clinics April 29, 2022
Criteria: A camp trademark license agreement must be executed for SDA coaches to be authorized to use ASU marks. As part of the agreement, it states that ASU email accounts cannot be utilized in conducting the camp, defines appropriate use of ASU marks, as well as requires a specific notice to be posted on all advertisements, publications, rosters, web pages and similar items stating that the camp is not affiliated with or sponsored by ASU.
Cause: SDA Administration has not implemented effective monitoring processes to ensure compliance to camp trademark license agreements.
Effect: SDA coach camps and clinics are not compliant with key provisions required when advertising and marketing camps that utilize ASU marks. Testing identified that each of the camps violated one or more of the defined provisions included in the agreement including using an ASU email address in conjunction with the camp, appropriate use of ASU marks, and including the Notice of License on camp materials which notifies participants that the camp is not affiliated with or sponsored by ASU.
Inconsistent enforcement of camp trademark license agreements may increase ASU’s liability exposure associated with the SDA coach owned camp and clinic activity.
Recommendation: AOF should execute camp trademark and license agreements with the SDA coaches that are currently utilizing ASU marks without authorization. In addition, monitoring processes should be put in place to identify when SDA coaches do not comply including appropriate sanctions as needed such as, but not limited to being prohibited from using ASU marks. To help ensure awareness and compliance, the existing ARMS workflow related to camps and clinics should be enhanced to add additional certification by the coaches that they are aware and compliant with key requirements of the camp trademark and license agreement.
Management Response: Follow up has been performed with each of the coaches found to be in violation by not having a current agreement. Two of the three have already completed new agreements. The third acknowledged the mistake and will be completing a new form prior to conducting any future camps.
To prevent future issues, we have added a use of trademark checkbox to the initial camp submission process in ARMS. If a coach is conducting a camp and requesting use of Sun Devils or the Pitchfork logo, notification will be sent and the appropriate SDA staff member will:
- Verify there is a current trademark agreement on file a. If there is no agreement, or the agreement has expired, a new form will be provided and required to be completed prior to proceeding
- If an ASU email is provided on the form, it will be sent back requesting a non-ASU
Coaches Camps and Clinics April 29, 2022
has been added to the final invoice if any expenses were adjusted based on the camp scope.
All actions have been or will be implemented by 06/30/2022.
4. SDA Operations and Facilities (AOF) has not implemented effective processes to ensure invoices related to SDA coach camps and clinics are billed and collected in a timely manner.
Condition: AOF has not implemented effective processes to ensure invoices related to SDA camps and clinics are billed and collected timely.
Criteria: The standard agreements in place regarding facility usage state that all invoices should be sent within 30 days of the camp occurring with payment required within 30 days of the invoice.
Cause: Standard processes have not been implemented to ensure invoicing occurs timely in addition to monitoring outstanding receivables to ensure payment is received within 30 days.
Effect: Invoicing related to SDA coach camps and clinics is not performed timely or at all nor are outstanding receivables monitored to ensure payment is received.
- Six of the camp trademark and license agreements reviewed did not include invoicing the SDA coach the defined fee
- 9 of 19 (47%) invoices tested related to 19 camps were not invoiced within 30 days of the camp occurring
- 8 of 19 (42%) invoices tested related to 19 camps were not paid by the SDA coach within 30 days of the invoice date
Inconsistent billing for third-party facility use agreements may increase ASU’s liability exposure associated with the SDA coach owned camp and clinic activity.
Recommendation: Standard billing processes should be established as part of managing the facility use agreements and other activities related to SDA coach owned camps and clinics to ensure ASU receives compensation for the third-party use of ASU facilities and marks.
Management Response: Conducted meetings with internal staff to review the camp invoices process to ensure invoices are being submitted within 30 days. Working with
Coaches Camps and Clinics April 29, 2022
third-party companies to ensure their invoices are submitted for payment less than 30 days after the conclusion of the camp.
Weekly meetings have been established with ASU Shared Services to review each camp payment status. Follow up emails will be sent to camps that are a week from due date. Follow up emails will be sent every week the payment delinquent. If camps invoices are delinquent, when the next camp request is received, the request will not be approved until all associated camp invoices are paid in full.
All actions have been or will be implemented by 06/30/2022.
Office of University Audits Student Employment Audit 05/02/
Student Employment Audit May 2, 2022
Summary: The Student Employment Audit was included in the Arizona State University (ASU) FY 2022 audit plan approved by the Arizona Board of Regents (ABOR) Audit Committee and ASU Senior Leadership. The audit focused on the administrative, operational and financial controls related to hourly student employment. This audit is in support of ASU’s mission of effective management of financial and human resources, and helping students thrive.
Background: ASU’s Student Employment program provides eligible students with part- time employment opportunities on and off-campus, which may be partially or fully funded by the Federal Work-Study (FWS) Program depending on the student financial need and the type of job. Total hourly student employment compensation (including FWS funding) for FY2021 was approximately $60 million. In academic year 2021 there were approximately 12,000 hourly student employees, of which 2,494 earned FWS funds. The primary departments involved in facilitating student employment include the Student Employment Office (SEO), under the umbrella of Financial Aid and Scholarship Services (FASS), and the distributed units across the university hiring the students. Other departments are involved in specific processes as described in the chart below.
SEO has responsibility for the processes that connect students with employment opportunities. SEO manages the posting of requisitions for student jobs, confirms eligibility for FWS funding, and approves key steps in the recruitment and hiring processes. The student employee recruitment process is facilitated primarily through Kenexa BrassRing, with interfaces to the PeopleSoft HR system. PeopleSoft is used to manage the system components of the hiring and employment processes as well as for student eligibility verification as it relates to the FWS Program.
Student Employment Audit May 2, 2022
Scope: The scope of the audit focused on hourly student employment and FWS related practices during the period of July 2020 through December 2021.
ASU accepted an invitation to participate in the FWS Experimental Site Initiative (ESI), an ED program started in 2019 to encourage universities and near-by off-campus employers to collaboratively develop relevant, career-focused paid internships for students. Eligibility testing of the participants in the FWS ESI, and ASU’s administration of the program were excluded from the scope of the audit due to low participation levels. Controls over ASU payroll systems were also not considered in the scope of this review.
Methodology: The audit was conducted in accordance with the International Standards for the Professional Practice of Internal Auditing promulgated by the Institute of Internal Auditors and accordingly consisted of tests of procedures necessary to provide a reasonable basis for expressing our opinion. Specifically, audit work consisted of interviews with appropriate leadership and staff of SEO, FASS, SBS and six hiring departments that annually employ or support the employment of large numbers of students, review of work processes, documented policies and procedures, and substantive tests in the following areas: ● Verifying fiscal controls over the FWS Program meet requirements by: o Confirming total drawdowns from the G5 Activity Report to revenues in Workday o Reviewing supporting documentation for four drawdowns from the G5 system o Verifying the calculations of administrative cost allowances and transfers to the Job Location Development (JLD) program ● Recalculating Part V of the FY2020-21 Fiscal Operations Report and Application to Participate (FISAP) for the FWS Program, verifying timely submission and accuracy of supporting documentation by: o Reviewing the FY21 annual reconciliation between PeopleSoft and Workday by SBS and verifying the participant counts and federal/non-federal shares o Performing a reconciliation to Workday at the student level o Verifying participant counts and federal/non-federal shares for the JLD program, community service, and tutors from supporting documentation o Comparing expenditures to the FWS awards for the academic year 2021, and validating the FWS awards of 10 students with the highest difference and 22 students with no award for the fall/spring semesters ● Assessing the oversight of recruitment for student employment by: o Verifying all requisitions for the review period (5,683) had appropriate SEO approval and remained open for the minimum length of time o Validating job postings were at appropriate wage rates for a sample of 25 on- campus and 10 off-campus requisitions
Student Employment Audit May 2, 2022
o For the sample of 25 on-campus job posting, confirming security screening requirements were identified on the posting o Verifying international students were not placed in FWS funded positions through review of 207 conditional offers processed for international students o Validating PeopleSoft rules in place to evaluate student eligibility for the FWS Program through review of system logic and walkthrough of rules with system administrator ● Verifying offers of employment meet FWS and ASU requirements by: o Reviewing offer letters and hiring documents and confirming offers agreed to the requisitions, met timing requirements, were approved by SEO, and included continuation requests for a sample of 23 on-campus student employees o Confirming the Intent to Hire and Continuation Request were obtained where applicable for a sample of 25 off-campus student employees o Confirming the 6 current Off-Campus employers have a current agreement in place including required language ● Assessing controls over payroll for off-campus FWS student employees and the billing of employers for the non-subsidized portion by: o Confirming payroll was supported by signed and approved time cards validating hours worked for 25 student employees o Reviewing the accounts receivable aging report and revenue accrual entry for year-end and reconciling 7 monthly invoices to payroll expenditures ● For 5,117 active student employees (on and off-campus) hired between July 2020 and September 2021, verifying completion of Fire Safety and Prevention and Information Security training between Jan 2020 and Dec 2021, and determining timeliness of training (new hire or refresher) for a sample of 25 on-campus student employees who completed both trainings ● From job requisitions opened between July 2020 and Dec 2021, assessing appropriateness and completion of security screenings by: o Confirming background checks were completed for a sample of 25 active on- campus student employees where screening was required as part of requisition o Confirming fingerprinting was completed for a sample of 25 active on-campus student employees where screening was required as part of requisition o Confirming background checks of 10 active student employees and fingerprinting of 22 active student employees hired as tutors through the America Reads and Counts programs ● Verifying graduating student employees were terminated in a timely manner for a sample of 88 student employees ● Interviewing departmental human resource teams of 6 hiring departments to confirm existing student employment practices comply with federal requirements and ASU
