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Audit and Compliance Committee Agenda and Materials Audit and Compliance Committee - Agenda THE UNIVERSITY OF TENNESSEE BOARD OF TRUSTEES AUDIT AND COMPLIANCE COMMITTEE 2:00 p.m. EDT/1:00 p.m. CDT 8th Floor Conference Room Wednesday Andy Holt Tower April 17, 2019 1331 Circle Park Knoxville, Tennessee 37996 AGENDA Public Session I. Call to Order II. Roll Call III. Approval of Minutes from Last Meeting—Action ............................................... Tab 1 IV. UTHSC Practice Plans .............................................................................................. Tab 2 V. NCAA Agreed-Upon Procedures (Written Report) ............................................ Tab 3 VI. 2019 Audit Plan Update (Written Report) ............................................................. Tab 4 VII. 2019 Outstanding Audit Issues (Written Report) ................................................. Tab 5 VIII. Travel Exception Report (Written Report) ............................................................ Tab 6 IX. Other Business Note: Under the Bylaws, items not appearing on the agenda may be considered only upon an affirmative vote representing a majority of the total voting membership of the Committee. Other business necessary to come before the Committee at this meeting should be brought to the Committee Chair’s attention before the meeting. X. Adjournment 1 Audit and Compliance Committee - Minutes of the Last Meeting 1 THE UNIVERSITY OF TENNESSEE BOARD OF TRUSTEES MINUTES OF THE AUDIT AND COMPLIANCE COMMITTEE SPECIAL MEETING March 15, 2019 Knoxville, Tennessee The Audit and Compliance Committee of The University of Tennessee Board of Trustees met by teleconference, originating from the West Wing of the Haslam College of Business in Knoxville, Tennessee, at 11:00 a.m. EDT on March 15, 2019. I. CALL TO ORDER Ms. Amy Miles, Chair, called the meeting to order. II. ROLL CALL Ms. Judith A. Burns, Interim Chief Audit and Compliance Officer, called the roll, and the following Audit and Compliance Committee members were present: Ms. Amy Miles (by telephone) Mr. D. Crawford Gallimore (by telephone) Mr. Decosta Jenkins (by telephone) Mr. John Compton Ms. Burns announced the presence of a quorum. In compliance with the Open Meetings Act, Ms. Miles, Mr. Gallimore, and Mr. Jenkins indicated no others were present at their locations. The Secretary announced that in addition to Mr. Compton, those present in Knoxville were: Mr. David L. Miller, UT chief financial officer; members of the UT administrative staff; and a member of the local media. III. APPROVAL OF MINUTES FROM LAST MEETING Chair Miles asked for any corrections to the January 10, 2019, minutes. Hearing none, Mr. Jenkins moved approval of the minutes as presented, and Mr. Gallimore seconded. A roll call vote was taken, and the motion carried unanimously. Page 1 of 3 Audit and Compliance Committee March 15, 2019 2 Audit and Compliance Committee - Minutes of the Last Meeting 1 IV. RECOMMENDATION FOR APPOINTMENT OF THE CHIEF AUDIT AND COMPLIANCE OFFICER Chair Miles presented the committee with a recommendation for the appointment of Mr. Brian J. Daniels as the University’s Chief Audit and Compliance Officer (CACO). She described the search process, noting characteristics of the applicant pool, the selection of eight candidates for screening interviews, followed by the selection of the top two candidates for on-campus interviews with various stakeholder groups. Mr. Compton commented on the thoroughness of the search process. Chair Miles then provided a brief overview of Mr. Daniels’ qualifications. She highlighted his career in higher education, which included time at a land-grant institution; mentioned he was active in his professional association; and emphasized the benefit of his background in information technology, as cybersecurity is a significant risk for all organizations. She then outlined the compensation and other terms of employment presented in the meeting materials. Mr. Jenkins asked whether the proposed salary was in the 75th percentile. Mr. Miller said yes, commenting that the search committee hoped to offer compensation more toward the median salary, but current market conditions prevented that. Mr. Compton asked whether there was a contract for this position, and Mr. Miller stated there was not, that the CACO works “at will” for the audit and compliance committee. Mr. Jenkins then asked for clarification on the reporting structure for the CACO. Mr. Miller explained the position reports to the chief financial officer administratively, but to the committee functionally. Chair Miles asked Mr. Gallimore to provide any comments resulting from his discussions with the two finalists, and he highlighted Mr. Daniels’ experience in IT security. Ms. Miles then called for a motion that the Audit and Compliance Committee recommend that the Board of Trustees adopt the following resolution: Resolved: The Board of Trustees approve the appointment of Brian J. Daniels as the Chief Audit and Compliance Officer, effective June 1, 2019, or such other date agreed to by the Chair of the Audit Page 2 of 3 Audit and Compliance Committee March 15, 2019 3 Audit and Compliance Committee - Minutes of the Last Meeting 1 and Compliance Committee, with the compensation and other terms of employment presented in the meeting materials. Mr. Gallimore so moved; Mr. Compton seconded the motion. Ms. Burns called the roll, and the motion carried with all members approving. Chair Miles then thanked members of the search committee and others who assisted with the search. V. MEETING DATES IN 2019 AND 2020 Chair Miles then recommended dates for regular meetings of the Audit and Compliance Committee through 2020 as listed in the meeting materials. She moved approval of the dates; Mr. Gallimore seconded the motion. A roll call vote was taken, and the motion carried unanimously. VI. ADJOURNMENT The committee could consider no other business at this special meeting; therefore, the meeting was adjourned. Respectfully Submitted, ___________________________________ Judith A. Burns Interim Chief Audit and Compliance Officer Page 3 of 3 Audit and Compliance Committee March 15, 2019 4 Audit and Compliance Committee - UTHSC Practice Plans 2 UTHSC’S TRANSFORMATION OF PHYSICIAN PRACTICES Presented to the Board of Trustees Audit and Compliance Committee April 17, 2019 5 Audit and Compliance Committee - UTHSC Practice Plans 2 Background of the Health Science Center 2 6 Audit and Compliance Committee - UTHSC Practice Plans 2 ■ Six Colleges Health . Dentistry . Graduate Health Science . Health Professions Center . Medicine . Nursing • Established in . Pharmacy 1911 ■ 3,097 students • Contributes more ■ 1,273 residents than $2.7 billion ■ 1,713 faculty to the Tennessee economy ■ 1,954 staff 3 7 Audit and Compliance Committee - UTHSC Practice Plans 2 All Funds Budget FY 2008 -- $380 mill FY 2018 -- $501 mill Gifts/Endow, Gifts/Endow, $15 $18 Other, Other, $21 $22 State, State, $154 $134 Sponsor Sponsor ed ed Progra Progra ms, ms, $219 $169 Tuition, Tuition, $40 $88 Excludes any practice plan income (nor VA Salaries) 4 8 Audit and Compliance Committee - UTHSC Practice Plans 2 Tennessee’s Statewide Academic Health Center Nashville •Medicine Union City •Pharmacy Bristol Dentistry •Dentistry • Jackson •Medicine – Family Practice Knoxville • Medicine • Dentistry Memphis – Main Campus Chattanooga • Health Professions • Dentistry • Dentistry • Medicine • Pharmacy • Graduate Health • Medicine • Health Professions • Nursing • Pharmacy 5 9 Audit and Compliance Committee - UTHSC Practice Plans 2 Hospital Relationships The Health Science Center does not own a hospital and, therefore, doesn’t have access to hospital revenues to support academic and research growth Our hospital relationships are disparate: Methodist Le Bonheur Healthcare Methodist University Hospital Le Bonheur Children’s Hospital The Regional Medical Center (county hospital) The VA Medical Center Memphis St. Francis Hospital (Tenet Healthcare) St. Jude Children’s Research Hospital Baptist Memorial Healthcare (limited) UT Medical Center (Knoxville) Erlanger Health System (Chattanooga) St. Thomas Health (Nashville) 6 10 Audit and Compliance Committee - UTHSC Practice Plans 2 Memphis Medical Center Methodist University Hospital 7 11 Audit and Compliance Committee - UTHSC Practice Plans 2 History of UT Medical Group Created in 1974 Then primarily affiliated with the Baptist Hospital System Member (physician) owned, with historically limited campus oversight 350 faculty / physician members in 2010 Created and operated more for clinical practice opportunities rather than to meet the academic mission of the College of Medicine No primary care strategy Family Medicine in; then out; then…. Minimal dean’s tax 8 12 Audit and Compliance Committee - UTHSC Practice Plans 2 UTMG Struggled to Breakeven The group did not have a large ancillary service base Most ancillary services were run in and by the hospitals Key disciplines have been historically separate from HSC involvement in their management: Orthopedic Surgery through the Campbell Clinic Neurology / Neurosurgery through Semmes-Murphey Spinal Institute Cancer through Boston Baskin Cancer Group Radiology is segregated in multiple groups mostly hospital based RESULT Minimal, if any, financial support to the academic mission 9 13 Audit and Compliance Committee - UTHSC Practice Plans 2 2008 -- How to move the HSC forward with the looming health care changes. 10 14 Audit and Compliance Committee - UTHSC Practice Plans 2 Priorities for HSC Programmatic
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