Agenda

1. UMBC Audit UpdateOctober 13, 2010Presented byManagement Advisory ServicesTerry Cook, AVP for Admin. ServicesSharon Doherty-Ritter, Mgt. Analyst

2. Agenda • Welcome/Introductions • USM Internal Audit – Equipment Inventory • Presentation on “Ethical Slippage in the Workplace” - Richard L. Wilson, Lecturer, UMBC Department of Philosophy • New USM Fraud Hotline • Other Audit Updates/MAS Efforts

3. USM Office of Internal Audit Equipment Inventory Audit • Completed Equipment Inventory Audit for the period of January 1, 2009 to October 31, 2009. • Identified areas for improvement including: • the recording of inventory locations, • proper tagging of inventory items, • the inventory disposal process, • and controls over Information Technology equipment • Action Plan for Improvements

4. “Ethical Slippagein the Workplace” Richard L. Wilson

5. Ethical Environment • Ethical standards and practices in the workplace are important to the success of the employee and the benchmark of a strong organization. • Ethics is central to good leadership. • The people here today play a crucial role in creating an ethical workenvironment – you are role models for the campus. • Ethical standards should not be compromised.

6. How to Identify Ethical Problems • Philosophical ethics is concerned in general with the question of how we ought to treat persons, others as well as ourselves. • Theoretical ethics attempts to develop principles, rules and systems for assessing appropriate and inappropriate behaviors towards others. • Ethical problems arise because of inappropriate behaviors by ourselves and/ortowards others.

7. Ethical Problem Cycle Ethical Problem Legal Problem Social Problem

8. Identification and Analysis of Ethical Situations 1. Get the facts straight. Review the situation. 2. Identify the central stakeholders. 3. Identify the ethical problem. 4. Solve the problem using both technical and ethical standards. 5. Will your solution to the problem withstand criticism from the perspectives of both a variety of ethical principles and colleagues in the workplace? 6. What recommendations can you make?

9. How to Resolve Ethical Situations Virtue Ethics [Character Traits (i.e. honesty/dishonesty)] Deontology [Duties] Consequentialism [Outcomes]

10. Mail Example Employees are sending personal mail through university mail services.

11. Ethical Analysis Virtue Ethics (Honesty/Dishonesty) Deontology (Duties) Consequences (Outcomes)

12. What does this tell us? • The current situation creates an opportunity for ethical slippage. • You are the role models and need to behave ethically. • You are leaders and you need todiscuss work ethics in staff/unit meetings.

13. Leadership Considerations Virtue Ethics Deontology Consequences

14. Ethics at Work 2008 • Only 9% of employees feel they have an ethical culture at work (Ethics Resource Center) • 74% of employees feel pressure to “do whatever it takes” (KPMG 2008) • 50% of employees observed misconduct that, if revealed, would cause their firms to “significantly lose public trust” (KPMG 2008)

15. Avoiding Ethical Spillage • Curb the pressure – emphasize it not just the results but “how” you got there. • Watch for unconsciously sent signals with your language - “Do whatever it takes”, “Find a way” • Open up communications – spend unscheduled time with employees, talk about getting results “but not by…” • Recognize that you are a role model – do not sign off on the P-card documentation without taking the time to review it.

16. Concluding Remarks • Ethical responsibility can refer to two different but related things. • First, a person has ‘ethical responsibility’ if that person has an obligation to ensure that something happens. • Second, a person has ‘ethical responsibility’ for a situation when it would be correct to ethically recognize a person for their behavior in that situation (positively or negatively).

17. Concluding Remarks • Legally accountable - accountability plays an important role in leadership. • Accountability is the acknowledgment and assumption of responsibility for actions, decisions, and policies within the scope of the role or employment position. • This includes the obligation to report, explain and be answerable for resulting consequences.

18. Concluding Remarks • We should all be cognizant of the importance of an ethical work environment . • As leaders, you play a critical role in the creation of this environment • Consider ongoing discussions on this subject with the leadership in your organization.

19. Ethical Slippage in the Workplace Questions?

20. New USM Fraud Hotline • The USM has established an anonymous and confidential web portal link and hotline. • Web Portal Link:http://www.usmd.edu/usm/IAO/ReportFraud/iao_referral.php • Toll-free Telephone Hotline: 1-877-330-2320

21. USM OIA Audit Updates • Follow-up on Legislative Audit • Change Management Audit • Network Vulnerability Audit • Follow-up on Hazardous Materials Operations Audit

22. Audits in Process • USM OIA Emergency Preparedness Follow-up • USM OIA Working Fund/Petty Cash/Change Funds Follow-up • Abrams, Foster, Nole and Williams NCAA Compliance

23. Upcoming Audits • USM OIA Financial Reporting Follow-Up • Legislative Audit (10/1/08-09/30/11)

24. Other MAS Efforts • Review other agency audits to identify items to consider for proactive efforts. • Operational reviews: Departmental software implementations and others as requested. • Monitoring: P-card split purchases sample reviews, P-card limits reviews, new P-card holder reviews and D-card reviews

25. Other MAS Efforts • Training: • D-card • P-card • Internal Control with new faculty session also available • Fraud Training (new course)

26. Other MAS Efforts • Working with USM OIA and UMBC IT on relationship building with Legislative IT Auditors. • UMBC Policy Committee and Policy Website-www.umbc.edu/policies. • UMBC Cell Phone policy review with DoIT (inventory effort forthcoming).

27. UMBC Audit Update Committee Any Questions?