AGENDA ITEM V A 3
REAUTHORIZATION OF PREVIOUSLY APPROVED UNIT LOUISIANA STATE UNIVERSITY AND A&M COLLEGE CENTER FOR INTERNAL AUDITING
AGENDA ITEM V A 3
REAUTHORIZATION OF PREVIOUSLY APPROVED UNIT LOUISIANA STATE UNIVERSITY AND A&M COLLEGE CENTER FOR INTERNAL AUDITING
BACKGROUND INFORMATION This Center was initially approved by the Board of Regents in February 1999. It was subsequently granted additional full, five-year approval in October 2003, when the Board acted as follows: The Board of Regents receives the AY 2003-2004 Progress Report relative to the Center for Internal Auditing at Louisiana State University and A & M College and re-authorizes Center operations through five years from this date. If upon expiration of this term the University decides to continue Center operations, Louisiana State University shall submit a subsequent request. Because there are some outstanding resource issues, the University shall submit to the Commissioner of Higher Education a follow-up report addressing these concerns by October 1, 2004. Follow-up issues were later resolved. The request for reauthorization of Center status was received by staff in January 2009, following approval by the LSU Board of Supervisors earlier that same month. STAFF SUMMARY 1. Description and Need
The LSUCIA is primarily an academic support unit rather than a typical research unit. It provides technical training as part of a holistic, multi-disciplinary educational experience which results in an unparalleled opportunity for career development for undergraduate and graduate students in business and related fields. It also offers concentrated training for non-students who wish to prepare for the Certified Internal Auditor Examination. The basic academic program is offered each calendar year and includes three to five courses with an optional paid summer internship. Along with the LSUCIA education program, the Center researches teaching methodologies to foster continuous improvement in internal auditing training. Case Studies and other techniques have been developed to promote the development of analytical and communication skills, teamwork, integrity and work ethic in students. Designation as a Center has allowed the LSUCIA program to achieve international recognition as the premier internal audit program, a distinction which has significantly increased the marketing and fundraising ability of the E. J. Ourso College of Business as well as facilitate its success in specialized accreditation and competitive rankings. The educational effectiveness of
the Center has provided significant additional career opportunities for CIA program graduates. 2. Activities
Documentation submitted by LSU A&M provides the information which follows. Academic Accomplishments • • • The LSUCIA is a key component in the tactical and strategic plans of the Ourso College. It has assisted the MBA program in achieving a seventh place ranking. Sixteen LSUCIA students have received the highest score on the international Certified Internal Auditor (CIA) Exam. One student received the CIA Gold Medal for the highest score on the CIA Exam. The medal is given for the top score by a practitioner or student. This has only been accomplished one time by a student in the forty-year history of the exam. Two LSUCIA students have received an international award for manuscript competition. The LSUCIA program has placed over 1,300 students in summer internship positions and has created significant full-time position opportunities. The Director received the IIA Cadmus Award. This international award is the highest honor in the internal audit profession. The award is presented for the greatest contribution to the advancement of the profession. The Director has been nominated by the Accounting Department for the Distinguished Faculty Award for excellence in teaching, research, and service. International educators visit LSU to study the operation of the LSUCIA and pursue collaborative research. The Director has made presentations in sixteen foreign countries.
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Research Endeavors • • The LSUCIA faculty just completed a research project that has been accepted for publication. This research was funded by contributions of LSUCIA sponsors. The LSUCIA program has been designated as the leader in internal audit education research. This includes the development of teaching methodologies, and education resources. The LSUCIA has been designated by the Institute of Internal Auditors (IIA) as their pilot school for education research and instruction. The LSUCIA faculty will submit a research proposal entitled “Enterprise Risk Management, Resource Allocation, and Engagement Planning” to the IIA Research Foundation in 2010. The LSUCIA faculty will research teaching pedagogy through unstructured decisionmaking and activity-based learning.
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Fundraising Activities • LSUCIA has over twenty corporate sponsors who contribute to Center efforts annually, as shown in the budget which follows.
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The LSUCIA received a $105,000 grant from the IIA ($35,000 over three years 20082010). This grant is for diversity recruiting, graduate assistants, faculty exchange, and development of case studies to be used by all 40 schools teaching internal auditing. A significant fundraising opportunity exists for the LSUCIA to be named for a donor, whose contributions would fund substantial research activities. An additional proposal will be submitted to the Institute of Internal Auditors IAEP (Internal Audit Education Partnership) in 2011.
Recognition • • • The Director has been designated as a “Rainmaker” by LSU for research, teaching, and service contributions. The Director has been designated as an honorary professor at the University of Pretoria, South Africa. LSUCIA is acknowledged as the international leader in internal audit education and executive training. Faculty, Facilities and Equipment, and Administration
3.
The University reports no significant changes in this category; the program director and assistant director are employed as faculty in the Department of Accounting at LSU. Two other Departmental faculty teach in the CIA program. One FT graduate assistant is provided by the Master of Business Administration program; a part-time graduate assistant is provided by the Accounting Department. If this grad student wishes to work full time, the Center pays the other half of his/her assistantship. LSUCIA pays for four to five student workers and/or graduate assistants each year with external funds. Basic facilities and equipment are provided by the institution. 4. Budget
The institution reports that there is no line item in LSU’s budget for the CIA, although the Director’s salary and a portion of the Assistant Director’s salary are allocated to the Department of Accounting. Other sources of revenue for Center activities are provided by organizations that recruit the LSUCIA graduates. Contributions are placed into accounts with the LSU Foundation; interest accrues to the Foundation. As of October 31, 2008, their balances totaled $ 157, 280 which includes $ 31,168 in grant funds from the IIA Internal Audit Academic Advancement Fund. Because the LSUCIA does not have a line item in the University’s budget, one fundraising goal is to establish a $200,000 fund to assure continuation of the program during periods when external funding might be reduced. The institution provided the following budget for the Center for Internal Auditing:
REVENUE
Year 1 AY 2008-2009
Year 2 AY 2009-2010
Year 3 AY 2010-2011
Year 4 AY 2011-2012
Year 5 AY 2012-2013
IIA - Internal Audit Academic Advancement Fund
$ 35,000
$ 35,000
Contributions TOTAL
80,000 $ 115,000
80,000 $ 115,000
80,000 $80,000
80,000 $80,000
80,000 $80,000
EXPENDITURES
Year 1 AY 2008-2009 $ 18,000 20,000 7,000 10,000 2,000 15,000 $ 72,000 $ 43,000
Year 2 AY 2009-2010 $ 18,000 20,000 7,000 10,000 2,000 15,000 $ 72,000 $ 43,000
Year 3 AY 2010-2011 $ 18,000 20,000 7,000 10,000 2,000 15,000 $ 72,000 $ 8,000
Year 4 AY 2011-2012 $ 18,000 20,000 7,000 10,000 2,000 15,000 $ 72,000 $ 8,000
Year 5 AY 2012-2013 $ 18,000 20,000 7,000 10,000 2,000 15,000 $ 72,000 $ 8,000
Asst. Direct. Sal. Supplement Grad Asst/Student Workers Travel Supplies, Equip/Resources Scholarships Curriculum Develop/Research TOTAL Anticipated NET
STAFF ANALYSIS The staff affirms the Center’s integral role in the College of Business at LSU A&M and acknowledges its importance to the institution. LSUCIA’s accomplishments are impressive and have brought acclaim to the College and University. The value of the Center to the campus far exceed its requirements for external support. Hence, this asset and its activities should be encouraged and maintained, even if resources from outside of the institution become less available. The Center should continue to be recognized as a Board of Regents-approved unit for the next five years. STAFF RECOMMENDATION The staff recommends that the Academic and Student Affairs Committee grant continued full approval for the Center for Internal Auditing at Louisiana State University and A&M College through March 31, 2014. If upon expiration of this term the University decides to continue Center operations, LSU shall submit a subsequent request for additional authorization. Should such a request not be received by the aforementioned date, the Board of Regents shall re-examine the need for this unit.