"What Happened Presentation: UB and Agency Accounts" Summary

Introduction

• Title: What Happened Presentation -- UB and Agency Accounts
• Presenter: Kara Kearney-Saylor, Director of Internal Audit, University at Buffalo (UB)
• Theme: Analysis of financial mismanagement and embezzlement at UB

The Scandal

• Key Figure: Dennis Black, former Vice President at UB
• Main Issue: Embezzlement of $320,000 from the university
• Media Attention: Focus on UB's financial controls and state investigations

Breakdowns in Control

• Inadequate Segregation of Duties: A critical factor in the scandal
• Decentralized Billing and Accounts Receivables: Led to oversight challenges
• Organizational Governance Issues: Especially within the Faculty Student Association (FSA)

Fraud Triangle and Prevention

• Fraud Triangle Components: Explored as reasons for the fraud
• Preventative Measures: Strategies for preventing similar issues in educational settings

COSO Framework Application

• Control Environment: Emphasis on ethical values, capable governance, and accountability
• Risk Assessment: Focus on cash safeguarding, contract compliance, and accurate employee payments

Monitoring and Ethics

• Internal Audit Role: Continuous risk assessment in financial, regulatory, and operational areas
• ERM (Enterprise Risk Management): As defined by COSO, for managing risks
• Ethics Hotline: A tool for anonymous reporting

Conclusion

• Wider Implications: Acknowledgment of fraud in government sectors
• Overall Message: The importance of robust internal controls and ethical practices in preventing fraud