Audit Committee Meeting

March 18, 2004

Regents Present: Nancy Paul, Chair, Maggie Warren, Blanche Parks

Staff Present: Jerry Farley, Wanda Hill, Ron Wasserstein, Tom Ellis, Denise Ottinger, Chris Leach, Rhonda Thornburgh

Minutes of the February 24, 2004 meeting were approved as distributed.

Internal Financial Control Consulting update was given at yesterday's Board of Regents meeting.

Conflict of Interest Policy Development -

It was decided it would be appropriate to have two separate conflict of interest policies, one for Regents and one for University employees.

Sarbanes-Oxley requires a stated code of ethics. In answer to the question whether the draft covers everything in Sarbanes-Oxley Vice President Hill indicated the draft code of ethics addresses everything in Sarbanes-Oxley and much more.

The committee discussed disclosure statements and whether all employees should be required to sign one. President Farley said it is reasonable to apply the conflict of interest policy to any employees who have authority to commit for the University. Although the policy will apply to all employees, only certain people will be required to sign. On the academic level, deans and higher should be required to sign the disclosure statement, and on the administrative side, department heads and higher level should sign.

Relationships that could jeopardize a relationship with Washburn, as well as, potential investments over a certain amount should be revealed.

Regent Parks indicated the State has employees sign conflict of interest forms every year. She and Regent Paul said they will review disclosure statements they have signed for use in putting the Washburn disclosure statements together. The administration will also review the form the Kansas Board of Regents uses.

Enforcement of conflicts of interest was discussed. In most cases, it would be a matter of disclosure of a conflict and abstaining from a vote the conflict involved. Conflicts are not necessarily inappropriate, they just need to be disclosed.

Dr. Wasserstein indicated accreditation bodies will want to see that Washburn has a conflict of interest policy.

Vice President Hill will take the draft forms and make revisions based on changes discussed at the meeting. The revised University form will be circulated to the appropriate people on campus for their input. Vice President Wasserstein will review it to make sure it agrees with the proposed University intellectual property policy and faculty handbook.

Draft policies with the latest revisions will be distributed to the committee for approval. The proposed policies will be included in the April 21st board agenda as an information item.

Audit Services -

Vice President Hill met earlier today with Brad Koehn, Berberich Trahan & Company. Audit services were bid out four years ago. When the original services were bid they did not include GASB-34, GASB-35, preparing for GASB-39, Sarbanes-Oxley requirements, or the inclusion of WEA in the University audit. There is a substantial difference in what was bid and the number of hours required to complete the fiscal year 2003 audit. She has asked Mr. Koehn to pinpoint the extra hours involved for the additional services and will have the committee review the additional costs involved. In answer to a question, VP Hill indicated Sarbanes Oxley requires public companies to rotate audit partners every five years. NACUBO recommends rotation every seven years.

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