A meeting of the Audit and Insurance Committee of the Board of Trustees convened at 9:14 a.m. on Friday, February 9, 2018, in Room 326 of Stewart Center on the campus of Purdue University in West Lafayette, Indiana.

All members of the Committee were present: Thomas Spurgeon, chair; JoAnn Brouillette; and Malcolm DeKryger. All other trustees were present: Sonny Beck; Michael Berghoff; Vanessa Castagna; Gary Lehman; Michael Klipsch; Daniel Romary; and Don Thompson.

Officers and administrators in attendance were: Mitch Daniels, president; Jay Akridge, provost and executive vice president for academic affairs and diversity; Bill Sullivan, treasurer and chief financial officer; Jim Almond, senior vice president and assistant treasurer; Steve Schultz, legal counsel; Trent Klingerman, assistant legal counsel and chief privacy officer; Janice Indrutz, corporate secretary and executive assistant to the Board; Ronald Elsenbaumer, chancellor of Purdue University Fort Wayne (PFW); and Tom Keon, chancellor of Purdue University Northwest (PNW).

I. APPROVAL OF MINUTES

Upon proper motion duly made and seconded, the Committee voted unanimously to approve the minutes of its last meeting on December 8, 2017.

II. APPROVAL OF 2017 ANNUAL REPORT OF THE DIRECTOR OF AUDITS

Ms. Peg Fish, director of audits, discussed the 2017 annual report of the Internal Audit Office which had been provided to the Committee for its review. Ms. Fish informed the Committee that a staff of eight professionals, each who had met continuing education requirements in accordance with the International Professional Standards of Internal Auditing, had conducted the audits in accordance with the Standards. She provided an overview of the number of audit reports issued, both planned and unplanned, and pointed out to the Committee that enterprise-wide systems and associated processes were reflected in the West Lafayette campus audit coverage. Ms. Fish compared the audit report to the actual plan, and she informed the Committee that a new software tool for anonymous reporting had been implemented during 2017. She referred to Appendix A in the report and concluded her discussion of the report by saying that the Internal Audit Office acknowledged the vision and direction of the Board of Trustees, President Daniels, and other leadership throughout the university.

Trustee Spurgeon remarked that he was impressed by the number of audits and the hours expended on them by a staff of just eight. Trustee Brouillette observed that most of the audit hours were spent on information technology, which, she said, had been identified as the university’s greatest risk, and she said it was great to see those align. In response to a question from Trustee Romary, Ms. Fish said that the number of unplanned audits was normal and that flexibility was built into the audit plan for that reason. Upon proper motion duly made and seconded, the members of the Audit and Insurance Committee voted unanimously to receive the 2017 Annual Report of the Director of Audits, a copy of which was filed with the minutes.

III. APPROVAL TO CHANGE THE NAME OF THE COMMITTEE

Legal Counsel Schultz recommended to the Committee that Article V of the Bylaws of the Trustees of Purdue University be amended to change the name of the committee from the Audit and Insurance Committee to the Audit and Risk Management Committee. He explained that changing the name would reflect the increasing focus on issues beyond mere insurance coverages to important topics in enterprise risk management. Mr. Schultz also recommended amending Article IV of the Bylaws in order to make minor updates to the description of the treasurer’s duties and reflect the name change of the Committee. Upon proper motion duly made and seconded, the Audit and Insurance Committee voted to recommend full Board approval to change the name of its committee to the Audit and Risk Management Committee. Supporting documents were filed with the minutes.

IV. DISCUSSION OF 2018 AUDIT PLAN

Ms. Fish briefly discussed the audit plan for the 2018 calendar year, which had been provided to the Committee for its review. She pointed out that the plan included consideration of major institutional initiatives including regional campus redesign, business transformation, and reshaping the technology infrastructure, and she pointed to the risk drivers and impact measures that would be applied. Ms. Fish outlined the planned audit coverage and reiterated that enterprise-wide systems and associated processes were reflected in the West Lafayette campus numbers. Ms. Fish said the plan was designed with flexibility to anticipate the unanticipated, and information technology would encompass the largest percentage of audits given the university’s focus on transformation projects, continuous change in infrastructure, data integrity, and cybersecurity.

Trustee Spurgeon remarked that the 2018 audit plan was strong once again and asked how long the audits could be completed with a staff of only eight. Ms. Fish responded that the Internal Audit Office had aligned its skill sets with the institutional initiatives and expressed her belief that it was well-positioned for the coming year. Trustee DeKryger observed that more audits were planned for PFW versus PNW, which Ms. Fish explained was because of PFW’s upcoming transition, just as PNW had more audits in the last two years because of its transition. Trustee Spurgeon noted that the report was for informational purposes only and no action was required by the Committee. A copy of the audit plan was filed with the minutes.

V. ADJOURNMENT

By consent, the meeting adjourned at 9:26 a.m.