澳门六合彩开奖预测

Board of Governors - APPENDIX III - October 29, 1998

REPORT OF THE AUDIT COMMITTEE

FOR APPROVAL

1. Audited Financial Statements: The University of 澳门六合彩开奖预测 Ontario

Recommended: That the Board of Governors approve the audited financial statements for the University for the fiscal year ended April 30, 1997 (Annex 1). [Annex 1 is unavailable on the Web.]

Attached as Annex 2 are responses from management to the Ernst & Young audit results.

FOR INFORMATION

1.Supplementary Financial Statements: The University of 澳门六合彩开奖预测 Ontario

The supplementary financial statements for the University for the year ended April 30, 1998, are available on request.

2. Related Companies and Other Organizations

The financial statements for related companies and other organizations of The University of 澳门六合彩开奖预测 Ontario for the fiscal year ended April 30, 1998, are provided for the information of the Board:

Platt's Lane Estates Inc., as presented by the company's auditors, Ernst and Young, and as approved by the Board of Directors of the Company on September 9, 1998

Spencer Hall Foundation for the period ending November 30, 1997, as presented by the Foundation's auditors, Ernst and Young, and as approved by the Operating Committee of the Board of Trustees on January 20, 1998.

London Museum of Archaeology, as presented by the Museum's auditors, Ernst and Young, and as approved by the Board of Directors of the Company on June 24, 1998.

London and Middlesex Heritage Museum, as presented by the Museum's auditors, Ernst and Young, and as approved by the members of the Museum on June 24, 1998.

Lawson-Jury Heritage Foundation, as presented by the Foundation's auditors, Ernst and Young, and as approved by the Foundation's Board of Directors on June 24, 1998.

Foundation 澳门六合彩开奖预测, as presented by the Foundation's auditors, Ernst and Young, and as approved by the Directors of Foundation 澳门六合彩开奖预测 on October 26, 1998.

The University of 澳门六合彩开奖预测 Ontario Foundation Inc.,as presented by the Foundation's auditors, Ernst and Young, and as subject to approval by the members of the UWO Foundation Inc., at their annual meeting in March 1999.

The University of 澳门六合彩开奖预测 Ontario Research and Development Park, as presented by the Research Park's auditors, Ernst and Young, subject to approval by the Directors of the Company on a date to be determined in 1998.

Combined Pension Fund for Members of the Academic and Administrative Staff - for the fiscal year ended December 31, 1997, as presented by the Pension Funds auditors, Ernst and Young, and as approved by the Joint Pension Board on September 9, 1998.

The University of 澳门六合彩开奖预测 Ontario Foundation for the fiscal year ended March 31, 1998, as presented by the company's auditors, Ernst and Young, and as approved by the Directors of the company on June 25, 1998.

The Siebens-Drake Research Institute, as presented by the Institute's auditors, Ernst and Young, and as approved by the Institute's Board of Directors on August 26, 1998.

Ivey Management Services Inc., as presented by the Ivey Management Service's auditors, Price Waterhouse, and as approved by the Board of Directors of the company in October 1998.

THE UNIVERSITY OF WESTERN ONTARIO

MANAGEMENT COMMENTS

TO

ERNST & YOUNG AUDIT RESULTS

FOR THE YEAR ENDED APRIL 30, 1998

RELATED ENTITIES

a) Richard Ivey School of Business

The University currently is funding certain operations of the Ivey Companies and the School of Business through an internally restricted fund, which as at April 30, 1998, was in a deficit position of $8.4 million. It is our understanding that this deficit accumulated over the year and that the University has been charging interest at prime rate on the balance. It is further our understanding that the University intends to recover these amounts through proceeds on the Government of Canada bonds donated by the Ivey family (the "Ivey bonds"), which are also held by the University and require the consent of the Dean of the Business School as to use. The market value of Ivey bonds as at April 30, 1998 was $8.7 million. However, we would note that the University may wish to consider ensuring appropriate supporting agreements and documentation are in place with respect to the Ivey bonds to enable recovery of the deficit if necessary. In addition, the University has guaranteed $7.8 million of indebtedness of the Richard Ivey School of Business, for a total potential commitment of $16.2 million.

Management Comments: We have raised the question of cashing the Ivey bonds with the Dean of Ivey School of Business and we will be discussing this item further at a meeting with the Dean, as soon as possible. We are working closely with the Dean of the Ivey School of Business and with the Director of Financial Resource for the School to monitor the financial position and plans for all of their operations.

b) The University of 澳门六合彩开奖预测 Ontario Research and Development Park

The University has provided comfort letters to the bank as part of the current financing of the Research Park and the Manor. Any discussions with the bank which related to renegotiation or settlement of this debt should take into consideration the University's ongoing position with its lenders, and should ensure that the University's ability to raise financing on favourable terms is protected, and/or the potential costs of a review of its overall credit position are a priority consideration in any approach.

It should be further noted that the successful implementation of any plan will be dependent upon a strong individual to champion the initiative.

Management Comments: We will take into account the University's ongoing position with the Bank of Montreal and with other lenders as we discuss options for the Research Park and Windermere Manor.

c) Lawson-Jury Heritage Foundation/London Museum of Archaeology/London Middlesex Heritage Museum

We would also note for the information of the Committee that the LJHF released endowed monies to the LMHM to enable it to discharge its indebtedness to LJHF. We understand that permission was received from the original donor to permit this release. This is reflected in note 12 of the combined financial statements of the University.

Management Comments: We agree with the revision to the financial statements related to the presentation of the endowed funds and we feel that note 12 related to endowments clearly discloses the original capital of endowed gifts as well as the amounts of deferred endowment income.

PEOPLESOFT PROJECT

a) Project Management Issues

PeopleSoft HRMS/Payroll is an established, market-proven product. This contributed to the smooth and successful implementation. The same cannot be said as readily for the public sector version of PeopleSoft Financials and even less so for the Student Administration System. The University should not base its expectations for success entirely on the HRMS/Payroll experience. In particular, the highest risk resides with Student Administration, both from the standpoint that the system is not proven and mature, and because the timelines allow for minimal flexibility to deal with implementation issues. We continue to encourage the development of contingency plans, including manual contingency plans, in sufficient detail that any unexpected problems which delay implementation do not cause a business failure for the University.

Management Comments: In November 1998, the first phase of the Higher Education module will go live and will include admissions for all students and include records, student financials and financial aid for graduate students. All main business processes associated with those functions are being reviewed. The processes will be categorized for inclusion in the November roll-out, inclusion in the spring roll-out, exclusion or one with potential difficulties. This last group of processes may require contingency plans. It is expected that if graduate students go live in November, that this will entail a conversion of 70%-80% of the processes required for undergraduate students.

The University should develop a strategy for safeguarding the "intellectual capital" developed through the training and experience of project team members and users in the implementation of PeopleSoft. Such skills and knowledge are currently very marketable commodities in the external marketplace, as demonstrated by recent departures. The loss of these resources to the University during the post-implementation phase may impede the University's ability to maximize its investment in PeopleSoft, and to maintain controls during a period of high transition.

Management Comments: The turnover of people is always a concern. We recognize there is a high demand in the marketplace for people with computing and PeopleSoft skills. Working within our existing Staff Association and Professional and Managerial Association (PMA) policies we have done the following to remain competitive with other organizations:

• Reviewed individual team member responsibilities and increased salary rates to match the responsibility level.

• Removed the maximum vacation carry forward requirement for team members, recognizing earned vacation time accumulates as team members cannot take time off prior to the implementation date of the project.

• The University approved a policy for paid overtime for PMA members.

b) Business/control Risks

Reliance on management review of various monthly reports is a key feature of the University's existing control environment. The importance of this control will increase with PeopleSoft, which enhances the openness and automation of the system, thus also increasing the potential for error. The potential for error is also increased due to the changes in process and behavior required of users by the new system. At the same time, the timeliness and level of detail of management reports will be significantly impacted by PeopleSoft, and in the immediate term the quality of management reports may decline. Consequently, this key control may be compromised until such time as improved management reporting is available. The University should take steps to alleviate this concern, including, as examples:

• improved communication during the implementation process and through more timely training in PeopleSoft's report-writing and query capabilities, to enable managers to most effectively use currently available features.
• the assessment of control risk in prioritizing post-implementation requests for system changes, such as the inclusion of edit checks and exception reporting;
• new system features which provide for additional controls should be stressed. For example, audit trails and system logs have been established to track changes made to key payroll data items such as salary and pay rate information. These logs need to be reviewed regularly to provide further assurance that changes are made accurately and that access controls are adequate; and,
• consider a post-implementation review of this key control by Internal Audit.

Management Comments: Agree that reporting, whether it is a management report or a system log, is an important control.

• As the PeopleSoft modules move into production and stabilize, it becomes apparent what reports are required by external and internal users to ensure data is accurate.

• Training is an on-going issue that changes over the life of the project. Prior to implementation, training is delivered as close to implementation as possible. Training after implementation depends on the user's needs. External user's needs will be assessed, if production reports do not satisfy their requirements.

• Post-implementation requests will be handled through the PeopleSoft Resource Centre using a model that considers several priorities including control risk.

• Post-implementation reviews completed by Internal Audit review the use of reports and logs.

• The main benefit of an integrated system such as PeopleSoft lies in its ability to link virtually all business processes across an organization's traditional functional structure. Our work, and that of Internal Audit, has focussed only on those processes that have a direct financial statement impact. Similar attention, in the form of process reviews, risk assessments, and issue resolution, should be directed to the other non-financial yet equally important business processes. For example, the University's ability to track courses and grades will be an important component of the PeopleSoft Student Administration System once implemented, and the effectiveness of these processes can have significant impact on the University's reputation. The responsibility for these areas is currently with the project teams, and the University may wish to consider the benefits of an independent review of these areas.

Management Comments: The audit work completed to-date has focussed on processes with a financial impact. However, there are plans to review processes that have a non-financial impact. This will include student record processing in the Higher Education module.

c) HRMS/Payroll Specific Issues

• Segregation of payroll-related duties within smaller departments could be improved by sharing resources with larger departments, and/or testing the existence and accuracy of these departments' payroll information on a regular basis.

Management Comments: A review of these departments needs to be done to determine if this can be done efficiently and effectively. Part-time employees have a higher risk of non-existence than full-time employees because of the approval process required for full-time appointments is more extensive than for part-time appointments. In addition, the budget process also provides a strong control over the existence of employees.

• PeopleSoft requires the use of "effective dates" for proper processing of payroll transactions. The use of an incorrect "effective date" could result in errors in employee terminations and wage changes, as examples. This is a new and certainly more stringent requirement compared to the former ManPower system, and consequently one with which users are unfamiliar. During the post-implementation phase as a minimum, procedures should be put in place to ensure that effective date information is accurate. For example, effective date information should be included in the departmental payroll review and reconciliation processes.

Management Comments: Currently the only people entering "effective dates" are employees in the Payroll/Benefits area. These employees are knowledgeable about effective dated information and the importance of accurately entering the information. Anomalies are checked with the originating department as data is entered. As a compensating control, if data is entered incorrectly, people are not paid correctly (which is detected in departmental reconciliation reports) or the system stops the pay process.

• The PeopleSoft environment for HR and payroll is far more automated and integrated than the previous ManPower system. This necessitates an elevated reliance on the reconciliation performed by the various departments. To complement these departmental reviews, various exception reports should be generated with PeopleSoft to monitor such occurrences as duplicate payments, data entry errors, and payments to terminated employees. As well, senior management and/or Internal Audit should periodically review these processes to ensure their accuracy and appropriateness.

Management Comments: Exception reports of this nature will be considered. A review will be completed by Internal Audit.

• Full data and system backups are performed regularly and are maintained in two different locations on campus. While we commend the backup processes in use at the University for the PeopleSoft HRMS/Payroll application, these archives should be tested periodically to verify that they can be restored completely, accurately and in a timely manner.

Management Comments: We have done full recoveries of the HR data base, this is standard procedure for all of our databases. Two full backups, one before and one after batch processes, are run are done daily. These copies are maintained for four months.

A role forward on the existing HR production system (roll forward is a recovery from a full backup and applying all online transactions from the transaction log) has been done. We have also done a roll forward on other databases.

• Given the complex security architecture of the system, an up-to-date security register is maintained for all users having access to the PeopleSoft HRMS/Payroll application. A periodic, perhaps annual, review of the security register and the corresponding appropriateness of users' access should be conducted. This assists in promoting security as an important consideration for all user groups and helps keep security "clean" by removing unused or test ID's from the system. This type of review should also be extended to include the other systems and applications under the direction of ITS.

Management Comments: This review will be considered for all PeopleSoft applications.