Corruption IN Collegiate Sports

Internal Auditor, April, 2000 by Joseph T. Wells, Richard B. Carozza

According to Ford, if the internal audit department is well-known for its expertise in the field, it can go a long way toward eliminating corrupt attitudes. "If rules violations occur in an environment where there is a sense that nobody cares, the situation will not rectify itself," says Ford. "However, if it's understood that the internal auditors are knowledgeable about the NCAA rules, keep current on rule changes, and routinely conduct audits, then it isn't so easy for this environment to fester. From the president to the faculty atbletics representative, to the director of athletics, to the coaches-if they know that the auditors are going to come looking, it makes a difference."

"Every school runs into some issues," Little says, "whether they involve betting on sporting activities or giving athletes certain perks that, by law, they're not allowed to receive." Though the internal auditors at her university don't have unlimited resources for monitoring fraud, she believes that her department's solid reputation encourages university employees to alert them to possible irregularities.

MITIGATING THE RISKS

To be successful, internal auditors working in universities and colleges need a proactive program of compliance auditing. "If they don't," maintains Ford, "they're simply not doing their jobs. The internal auditor's role is to test the controls, evaluate the controls, and try to improve the controls." However, Ford stresses that proactive internal audit departments are not a guarantee against intentional rule violators. "Some of the most egregious rule violations have occurred in schools that have darn good internal auditors and proactive compliance auditing programs," he said, "but if the situations involve collusion and intentional misrepresentation, internal auditors will be hard-pressed to prevent them and the major scandal that erupts as a result."

"College sports is a unique animal in higher education, and it has its share of unique risks," adds "Gillian Kite," director of audits at a large, northern university. "A good audit coverage program is going to identify instances of noncompliance early in the process. However, I don't think internal auditors can prevent frauds from occurring in this environment. Maybe we can deter them; but I think it's management's responsibility to implement the systems to prevent."

"Rick Wilson," an internal audit director for a large state-university system, claims that asking an internal audit department how to prevent fraud in the athletic department is like asking a bank how to prevent robberies. "Banks are always going to experience theft," he explains. "As a bank manager, you invest in controls, such as a stronger safe, security cameras, and security guards, but these measures cannot guarantee protection against crime. Athletic departments face a similar situation, and their resources are particularly limited. The best internal auditors can do is to work with available means and try to implement a structure in which there are adequate checks and balances."