Kevin Patton is director of Internal Audit           By Kevin Fitzsimons

Small department, big responsibility

New director oversees internal audit process

Some changes are in store for Ohio State's approach to internal auditing, and Kevin Patton is confident that he has the tools to help guide the transition.

After managing the internal audit team at the University Medical Center for six years and gaining more than 10 years of auditing experience prior to that, Patton became interim director of the entire Internal Audit operation in February when Aletha Shipley left the University. He was named permanent director in August.

"We are very fortunate to have someone of Kevin's skill and commitment," said William J. Shkurti, senior vice president for business and finance. "Kevin understands the University and knows what we do well and what we need to do better. He can be firm when the circumstances warrant, but he also knows that Internal Audit is most effective when it can work with deans, chairs and support unit managers to prevent problems before they occur."

Equipped with a staff of 12 employees, Patton describes Internal Audit as "a small department with a big responsibility."

The department is organized into three primary sections: Information Systems Audit, Medical Center Audit and University Audit. Primary functions include review of financial transactions for accuracy and compliance; evaluation of financial and operational procedures for adequate internal controls; evaluation and monitoring of the systems of internal control for the University's computer facilities; consulting services; and fraud investigations.

As far as changes, Patton said Internal Audit will continue to take on more of a management consulting presence in addition to its assurance role. Also, changes in the University's administrative systems and the auditing profession's standards have prompted a new approach to the scheduling and conducting of audits at Ohio State.

"A new model for assessing risk will be developed and implemented in phases over the next three years," Patton said. "We'll be looking at more global, enterprise reviews that focus on processes that span multiple departments."

For example, expenditure testing was previously conducted at the departmental level. Now, he said, with the use of PeopleSoft and audit-specific software, expenditure testing can be conducted across all levels of the University.

"So audit results that used to be very defined in one area can now be reported across the entire University," Patton said.

Historically, reviews were departmental in nature and statistically structured, and audit findings and recommendations were reported at a college or department level. Future audit findings will be produced at an enterprise-wide level, allowing internal audit to address high-risk issues globally.

"We recognize that this will be a change from what the University community has previously experienced," Patton said. "We think that overall, we will deliver a better, more value-added product to University management."

Another future change will involve departmental audits, which were previously based on routine areas such as payroll, leave timekeeping, expenditures and equipment inventory. Under the new system, Patton said routine areas will be evaluated quarterly across the University, which will reduce time spent on these areas during departmental audits. This means time can be better spent on earnings and operations unique to each college/vice presidential area.

The new approach will mean more efficiency across the board.

It also will mean faculty and staff may see Internal Audit more often, but for more specific reasons. With the capability of performing more routine reviews -- payroll, expenditures, procurement card activity -- at higher levels, audits will be more collaborative and interactive.

"We will work with management to identify areas of concern or risk within a college or administrative area and then focus our efforts there, where our results will help them most in their management capacity," Patton said.

But while some procedures are changing, many services will remain the same. Internal Audit will continue to: accept management-requested reviews; perform special and investigative reviews; coordinate external audits and be the liaison between the external auditors and University organizations or units; facilitate the state auditor for external accounting or auditing services required by University organizations or units; and provide consultative and management advisory services.

Patton said cash shortages and suspected theft or improprieties should continue to be reported to Internal Audit and University Police.

For a detailed list of services, visit www.ia.ohio-state.edu.

Getting fit on west campus

Larkins satellite to offer 45,000 square feet of exercise relief

Those craving an exercise fix on west campus will soon find relief when a 45,000-square-foot satellite to Larkins Hall is built off of Woody Hayes Drive, east of the Blankenship Hall parking lot. The grassy space is currently unoccupied.

Features will include a climbing wall, a basketball court and a fitness center, said Diane Jensen, associate director of the Department of Recreational Sports. She said designers basically "peeled off" some of the square footage and features from the Larkins Hall project design when it became apparent space was too tight to include everything at the current site. She said the availability of space and lower building costs made west campus an attractive option.

The facility will be built in conjunction with the first phase of the Larkins project. Groundbreaking for the one-story west campus facility is expected to take place in a year.

"Because of its simplicity, it could take as few as 14 months to complete," Jensen said. "At the same time, phase one on the main campus could take up to 24 months because of its complexity."

The entire Larkins Hall project consists of more than 600,000 square feet, and will add classroom space and such amenities as new aquatic facilities; a student wellness center; 20,000 square feet of fitness space; air conditioning; new locker rooms; and laboratories and research facilities. The project will be constructed in two phases, with the current facility to be razed sometime in 2004, after the first phase has been built.

Features being relocated to the satellite include the climbing wall and basketball court, 4,000 square feet of fitness space, an outdoor adventure center, locker rooms, and a multi-activity court that can be used for indoor soccer, baseball or rugby, Jensen said. Also, if bidding comes in under budget, three additional basketball courts and an extra multi-activity court could double the size of the satellite facility.

Also being proposed for the future -- but with separate funding -- is an outdoor rope course for leadership development that will feature high and low elements.

"We think it could have a nice tie-in with the leadership courses that are offered through the residence halls, student organizations and the Fisher College of Business Executive Education program," Jensen said. "Right now, those groups must go off campus to participate."

Another interesting twist in the original plan involves one of the four multipurpose fields to be located in the area west of the current Larkins Hall. One of those will have artificial turf, and besides accommodating intramural, sports clubs and informal recreation, Jensen said it would also function as the practice field for the Ohio State Marching Band.

Jensen said the estimated cost of the entire Larkins project -- including the satellite -- has risen slightly, from $136 million to $140 million. State money, the Department of Athletics, a faculty and staff membership fee and a student fee intended to go into effect at the completion of the first phase will pay for construction costs. However, a plan to fund operating costs for the satellite has not yet been devised since the satellite could open as much as a year prior to the time when collection of those fees begin.

Press box to carry Shelly family name

The press box in Ohio Stadium will be named the Richard L. Shelly Family Press Box in recognition of a $2.5 million gift to the Department of Athletics from the Richard L. Shelly Family of Pilot Point, Texas, and Granville.

"We are very grateful to the Shelly family for their generous donation to this exciting project," said Athletics Director Andy Geiger. "Through their efforts, I am convinced that we will have one of the premier press box facilities in the country."

Stretching from end zone to end zone, the new Shelly Family Press Box features nearly 250 seats -- up from 140 prior to stadium renovation -- each with its own phone line. It also features a greater number of computer outlets and television monitors, in addition to more spacious television and radio booths.

Richard Shelly is chair of the Thornville-based Shelly Co., a highway paving and construction materials business and integrated aggregates, asphalt and paving contractor. His son, Mark J. Shelly of Granville, who has been with the company since the age of 18 and is now president, runs the company for his father.

Richard Shelly and his wife, Marie, are longtime supporters of various communities, most notably Thornville, where they donated a building for the emergency squad and helped to fund the building of better sidewalks. At Ohio State, the Shellys have supported such areas as the College of Veterinary Medicine and the College of Food, Agricultural, and Environmental Sciences, in addition to the Department of Athletics.