Corruption IN Collegiate Sports

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

Preventive work, however, can be crucial in preserving the organization's integrity. "Ruth Thompson," an audit and Investigations manager at a medium-sized college, maintains that it's far more important to spend money and energy trying to prevent fraud rather than just waiting around for the next hot tip. Thompson says that her department conducts a three-hour fraud awareness training seminar for university business managers and other administrators. "In addition, the athletic departments invite me over all the time, and I have a strong working relationship with the compliance officer," says Thompson.

RESOURCES FOR THE JOB

Although he has a good relationship with the university president and board of regents, Wilson says that his administrators have kept the audit function lean in the 1990s--he only has seven auditors for an eight-campus system, which includes schools in Division I-A, Division I-AA, and Division II. "It hasn't been a strong growth decade for our internal audit department," he says. "We spend most of our time conducting risk assessments and then focusing on our key risks. That doesn't leave us much time for the proactive educational process. If we spend all our time training and educating, who would perform the audits?"

According to Wilson, the audit committee members on the university's board of regents continue to debate this cost-benefit issue. The argument centers around how much money management should allocate to an overhead function such as internal auditing when the explosion of information technology has mandated that the school invest capital in computers and software.

Kite relates a similar situation. "Neither my institution nor my department are staffed adequately to be the athletic watchdog, but that's not what our administration or our board wants from us," she says. "An internal audit staff could consume a vast amount of time providing continuous monitoring of athletic department activities. While some schools do that, we don't."

"The internal auditor has a definite role to play, though," claims Ford, who points to numerous training programs and manuals as proof. The Association of College and University Auditors (ACUA) compiles a manual, with assistance from the NCAA, on how to perform NCAA compliance audits. In setting up his audit schedule, Wilson reported that he consults both the NCAA Division I Manual, which mandates specific routine compliance and financial audits, as well as ACUA's Guide to Audits of NCAA Athletics Compliance. "The key to auditing college athletics is the ACUA publication," Ford says.

COURSES OF ACTION

After receiving a tip or discovering a potential fraud, Little gathers data and researches the situation to ensure adequate familiarity with the preliminary facts. "Sometimes a tipster is mistaken, disgruntled, or interested in starting trouble," she says, "and the situation is not at all what he or she perceived. However, if that's not the case, and I conclude a fraud has probably occurred, I then bring the case to the audit director. I don't proceed with any actions until I get my boss's full cooperation." With the audit director's backing, Little then approaches university administration and the athletic director--unless the director is a suspect, in which case, she goes further up the chain of command. "In some cases we've had to resort to calling in the campus police investigators and using external law firms. Always, though, we bend over backwards to try to keep the situation out of the media."