UNIVERSITY OF CALIFORNIA, RIVERSIDE New Chair Orientation September 19, 2007

1. UNIVERSITY OF CALIFORNIA, RIVERSIDE New Chair Orientation September 19, 2007

2. Academic Planning and Budget - http://ucrapb.ucr.edu/ • Organizational Structure • • Institutional Planning • Bob Daly, Assistant Vice Chancellor bob.daly@ucr.edu • http://ucrapb.ucr.edu/institutional_planning/institutional_planning.htm • • Resource Management & Analysis • Matthew Hull, Assistant Vice Chancellor matthew.hull@ucr.edu • http://ucrapb.ucr.edu/bud_res_analysis/budget_and_resource_analysis.htm • • Real Estate Services • Lisa Hjulberg, Directorlisa.hjulberg@ucr.edu • http://res.ucr.edu/ • • Capital & Physical Planning • Tim Ralston, Assistant Vice Chancellor timothy.ralston@ucr.edu • http://ucrapb.ucr.edu/capital_and_physical_planning/capital_and_physical_planning.htm • • Audit & Advisory Services • Michael Jenson, Director michael.jenson@ucr.edu • http://iviews.ucr.edu/iviews/iVIEWS_EACS.links?p_link=auditadvisory

3. Three-Quarter Average FTE and Headcount Enrollment

4. Fall New Headcount Enrollment

5. Retention and Graduation Rates

6. Student Headcount-to-FTE Conversion Factors

7. Current Fund Expenditures by Fund Group FY 2005-06 Prepared by UCR, Academic Planning and Budget. Source: 2005-06 Campus Financial Schedule D Grand Total: $411,049,000

8. Enrollment Growth Resources Fall, Winter, Spring 2007-08 The driving force of the I&R budget is enrollment growth. According to Compact negotiated with the State, new enrollment is funded at what is called the Marginal Cost of Instruction (MCOI).

9. Helpful Information and Policies • FACULTY RECRUITMENT FUNDING • The Faculty Recruitment Package Policy establishes the amount and the manner in which Chancellorial funding will be provided to the Schools and Colleges for faculty recruitment packages, also known as Initial Complements. This policy applies to General Fund I&R faculty FTE only. • Governing Campus Policy: • The University Of California, Riverside Faculty Recruitment Package Policy -- A Policy on Chancellorial Support for Faculty Recruitment Packages http://ucrapb.ucr.edu/bud_res_analysis/allocation/Faculty%20Recruitment%20Policy%20effective%207_1_06.pdf

10. Helpful Information and Policies • EXTRAMURAL FUNDS CLASSIFICATION • The University receives extramural funding through a variety of channels, such as gifts, contracts, grants, service agreements, sales and service activities, and agency funds. A policy was developed to aid in the proper classification of all extramural funds received by the Campus and to establish administrative responsibility for the management of extramural funds. • Governing Campus Policy: • Campus Policy Number: 200-45 -- Extramural Fund Classification http://www.vca.ucr.edu/index.php?content=policies/viewPolicies.php&policy=200-45

11. Helpful Information and Policies • ALLOCATION OF FEDERAL AND PRIVATE LOCAL COST RECOVERY FUNDS • A campus policy governs the allocation of all Federal cost recovery (Opportunity and Off-The-Top Funds), and Private and Local contract and grant cost recovery (Educational Funds) received by the campus. This policy divides the allocation of Opportunity Funds, Off-The-Top Funds, and Education Funds into four groups: • Pre-Group I, II, and III Genomics ICR Set-Aside is a Garamendi-like set-aside for the purpose of funding campus capital investments, • Group I consists of programs which the Office of the President or the Chancellor have mandated be funded with these sources, • Group II consists of those departments which provide direct support to the research effort of the campus, and • Group III consists of Schools and Colleges that engage in research activities that generate Federal and Private/Local indirect cost recovery Governing Campus Policy: • A Policy for the Allocation of Federal and Private/Local Indirect Cost Recovery Funds (Facilities and Administrative Costs) http://ucrapb.ucr.edu/bud_res_analysis/allocation/NewICRPolicyFY06-07rev11-06.pdf

12. Helpful Information and Policies • ANNUAL CONTRACT AND GRANT REPORT ON EXPENDITURES The Annual Report provides information on expenditures, direct and indirect, associated with contracts and grants awarded to the University of California, Riverside (UCR) by non-University entities. These expenditures constitute charges assigned to the contract or grant in order to fully recover expenses incurred by UCR. Information is provided at both the Organization and Department levels. Report Website: http://ucrapb.ucr.edu/bud_res_analysis/Reports/reports.htm

13. Helpful Information and Policies • SALE AND SERVICE ACTIVITIES • Sales and Service Activities are non-profit, campus business enterprises, whose functions are to provide quality services and goods at rates that are reasonable and equitable. These enterprises often have a measurable impact on the campus through their pricing and quality decisions, their charging practices, and their billing methods and cycles. While these Sales and Service Activities have the advantage of being campus based, they are simultaneously constrained by University wide and campus policy decisions, such as those related to employee classifications, union contract provisions, salary range adjustments, employee benefits, etc. • Governing Campus Policies: • Campus Policy Number: 300-66 -- Sales & Service Activities: Establishment and Budgetary Review http://www.vca.ucr.edu/index.php?content=policies/viewPolicies.php&policy=300-66 • Campus Policy Number: 300-66A -- Sales & Service Activities: Establishment and Budgetary Review Organization Sales and Service Fund Policy (OSSF) http://www.vca.ucr.edu/index.php?content=policies/viewPolicies.php&policy=300-66A

14. Helpful Information and Policies • COURSE MATERIAL FEES • A Campus may charge a Course Materials Fee for students to participate in the instructional activities of a course, including: the cost of providing course materials to be consumed, retained or used by the student; the special costs associated with use of University-owned tools, musical instruments, or other equipment; or the cost of other materials or services necessary to provide a special supplemental educational experience of direct benefit to the student not covered by the normal instructional budget. • Governing Campus Policy: • Campus Policy Number: 550-25 -- Course Materials Fee: Establishment and Budgetary Review http://www.vca.ucr.edu/index.php?content=policies/viewPolicies.php&policy=550-25

15. Helpful Information and Policies • FACULTY HOUSING ASSISTANCE PROGRAMS • UC Mortgage Origination Program (MOP) -- The MOP exists to promote the recruitment and retention of faculty and senior management in support of the education, research, and public service missions of the University of California. • Temporary Housing -- Temporary Housing is available on-campus. • Faculty Housing -- The Campus owns 6 family homes in the Redington Community and is currently negotiating the purchase of an additional 78 individual homes in the Creekside Terrace development for initial rental and future sale to eligible faculty. • Information on program or housing eligibility, FAQs, and other additional information and useful links are available on the Real Estate Services Web-Page @http://res.ucr.edu/

16. Campus Development to Support Projected Program Needs Enrollments & Physical Planning LRDPProjected

17. Enrollments and Capital Planning State Funded Program • Rolling 5-year prioritized list • Instruction & Research Space Types • Response to Program (vs. entitlements) • Strategic Investment • Asset Base • Infrastructure Student FTE Faculty FTE Classrooms / Class Labs Research Labs & Support Faculty Offices & Support

18. Enrollments & Capital Planning 2007-12 State Funded Program • Completion of research bldgs • Completion of classrooms • Completion of infrastructure • West Campus Development • GSOE + Public Policy • Infrastructure

19. Enrollments & Capital Planning Non-State Funded Program • Rolling 5-year prioritized list • Self supporting enterprises • Operating/Business Plan • Strategic Investment • Asset Base • Infrastructure Student Headcount Staff Headcount Beds Parking Food, Rec, Other

20. Enrollments & Capital Planning 2006-11 Non-State Program • Completion of new Commons • Completion of new UG Housing • Completion of new Child Care • West Campus Development • Family Student Housing • Infrastructure

21. Enrollments & Space Management Procuring & Projecting Space • CPEC Guidelines • Classroom, Class Lab Utilization • Operational Plans Managing the Asset • Policies, Partnering & Reporting • Systems Development Student FTE Student HC Faculty FTE Staff HC I&R Space non-I&R Space Inventoried Assets

22. Changes in UCR Space Actual Projected

23. Five-Year Capital Program 2006-07 to 2010-11 State and Non-State Funds

24. Space Management Resources

25. Audit & Advisory Services Mission Statement • Our mission is to assist the University community in the discharge of their oversight, management, and operating responsibilities by providing relevant, timely, independent and objective assurance, advisory and investigative services using a systematic, disciplined approach to evaluate risk and improve the effectiveness of control and governance processes. Vision • We advance the University of California’s ability to achieve its mission by promoting a culture of integrity and accountability.

26. ABCD’s ofA&AS A – Auditing B – Business Consulting C – Controls (Internal) Training D – “Detectives” • Whistleblower Investigations pertaining to financial fraud, waste and abuse

27. Fiduciary Responsibility to Taxpayers To be good stewards of the University resources committed to our care, assets must be: • Properly safeguarded . • Managed. • Accounted for accurately and timely.

28. Duties of Department Chairs • APM-245-4: • A department chair is a faculty member who serves as the academic leader and administrative head of a department of instruction or research • APM-245 Appendix A: • The chair’s administrative duties include the following: 5. To prepare the budget and administer the financial affairs of the department, in accord with University procedures. 8. To be responsible for the custody and authorized use of University property… 10. To maintain records and prepare reports in accord with University procedures.

29. Occupational Fraud “ The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets.”

30. 3 Elements of Fraud Concealment of Act Conversion to Personal Benefit Deliberate Act

31. False claims Bribery Conflicts of interest Theft Embezzlement Misappropriation of funds, assets Document forgery/alteration Misrepresentation of information on documents or reports/FS Examples of Fraud

32. Common Types of Fraud at UC • Procurement Card • Fictitious travel vouchers & purchase orders • Unrecorded vacation and sick leave • University resources used for personal gain • Entertainment without legitimate business purpose • Missing cash without forced entry • Unrecorded cash collections • Payroll Issues

33. Fraud is Costly • Direct monetary costs/losses to the dept. • Devastating (senior trusted employee) • Question management skills • Time and resources involved in investigation procedures • Disciplinary action decisions • Damaged careers and reputations • Negative impact on staff morale • Possible external agency audits • Negative impact on future funding • Negative media exposure

34. Red Flags of Fraud • Lifestyle and Personality • Organizational • Financial Documents • Accountability and Control • Other

35. Wheeler/Dealer Dominating Personality Poor Money Management Dissatisfied Worker Unable to Relax No Vacation/Sick Time Too Good to Be True Performance Close Customer/ Vendor Relationships Unusual or Change in Personality (alcohol, drugs, sleep, irritable, defensive, argumentative) Living Beyond Means Red Flags of Fraud 1. Lifestyle and Personality *From Harvard Internal Audit Home Page

36. No Communication of Expectations Too Much Trust in Key Employees Lack of Proper Authorization Procedures Lack of Attention to Detail Changes in Organizational Structure Tendency Toward Crisis Management Red Flags of Fraud 2. Organizational *From Harvard Internal Audit Home Page

37. Missing Documents Alteration of Documents Excessive Number of Voided Documents Questionable Handwriting or Authorization Duplicate Payments Excessive Use of Clearing Accounts Unusual Billing Addresses or Arrangements Address of Employee Same as Vendor Duplicate or Photocopied Invoices Unusual Purchases Cash Overages and Shortages Red Flags of Fraud 3. Financial Documents *From Harvard Internal Audit Home Page

38. Lack of Separation of Duties Lack of Physical Security and/or Key Control Weak Links in Chain of Controls and Accountability Missing Independent Checks on Performance Lax Management Style Poor System Design Inadequate Training Lack of Numeric Control over Sensitive Documents (e.g. checks) Red Flags of Fraud 4. Accountability and Control *From Harvard Internal Audit Home Page

39. Customer Complaints Stale or Increasing Reconciling Items Excessive Credit Memos Common Names and Addresses for Refunds General Ledger Out of Balance Inventory Shortages Increased Scrap Large Payments to Individuals (Form 5’s) Post Office Boxes as Shipping Addresses Excessive Employee Overtime Red Flags of Fraud 5. Others Source: Business Fraud Detection Services

40. Fraud Prevention Measures 1- Strong Internal Controls 2- Background Checks on New Employees 3- Continuing Monitoring Procedures 4- Established Fraud Policies 5- Willingness to take action 6- Employee Ethics Training 7- Anonymous Fraud Reporting Mechanism 8- Workplace Surveillance

41. Helpful Hints • Be involved with finances • Compliance with policies/procedures • Set an example • Continual monitoring procedures • Take timely action/steps to minimize fraud • Employee training • Independent reconciliation procedures • Be Aware of Red Flags to Detect Fraud • Balance Risk and Controls • Be ethical and do the right thing

42. Conclusion on Fraud Detection “ Relatively few fraud and abuse offenses are discovered through routine audits. Most fraud is uncovered as a result of tips and complaints from other employees.” Source: Association of Certified Fraud Examiner

43. Whistleblower Policies Policy on Reporting and Investigating Allegations of Suspected Improper Governmental Activities and Policy for Protection of Whistleblowers From Retaliation and Guidelines for Reviewing Retaliation Complaints (Whistleblower Protection Policy) represent the University’s implementing policies for the California Whistleblower Protection Act Effective October 2002 http://www.ucop.edu/ucophome/coordrev/policy/10-04-02.html

44. POLICY OBJECTIVE To assure an appropriate INSTITUTIONAL response to any known or suspected impropriety and to create an environment that encourages candor while protecting the rights of all parties (i.e. whistleblowers, investigation participants, subjects and investigators).

45. Improper Governmental Activity • Any activity by a state agency or by an employee that is undertaken in the performance of the employee’s official duties, whether or not that action is within the scope of his or her employment, and that (1) is in violation of any state or federal law or regulation, including, but not limited to, corruption, malfeasance, bribery, theft of government property, fraudulent claims, fraud, coercion, conversion, malicious prosecution, misuse of government property, or willful omission to perform duty, or (2) is economically wasteful, or involves gross misconduct, incompetency, or inefficiency. • Serious or substantial violations of University policy may constitute improper governmental activities. • Must directly involve the University either as victim or perpetrator

46. PROTECTED DISCLOSURE Any good faith communication that discloses or demonstrates an intention to disclose information that may evidence: 1) an improper governmental activity; or 2) any condition that may significantly threaten the health or safety of employees or the public if the disclosure or intention to disclose was made for the purpose of remedying that condition.

47. Whistleblower • Person/entity making a protected disclosure (reporting party) • UC employees (academic personnel or staff), students, applicants for employment, vendors, contractors or general public • NOT investigators or fact-finders (do not determine appropriate corrective or remedial action that may be warranted)

48. Section III Conditions • Possible violation of any state or federal law or regulation • Significant internal control or policy deficiency that puts campus at risk of potential losses • Likely to receive media or other public attention • Misuse of campus resources or creates an exposure to a significant liability • Significant possibility of being the result of a criminal act

49. Section III Conditions (continued) • Significant threat to the health or safety of employees, students or the public • Situation that is economically wasteful, or involves gross misconduct, incompetence, or inefficiency • Likely to involve multiple investigative units • Significant or sensitive for other reasons Significant = $1,000

50. Making a Whistleblower Report REPORTS: • Encouraged to be written • May be oral • Should be factual and detailed • May be direct or anonymous