New auditing group charged with keeping money straight
Every time Franklin College moves money – whether it’s for scholarships, paychecks or anything else – there’s room for error. This year, a new team is tasked with stopping those potential financial slip-ups. When the audit board of the college’s Board of Trustees named Crowe Howarth LLP its new auditing firm in May, it guaranteed an audit team assigned to Franklin and led by Pete Ugo would be dealing with almost all of the college’s financial happenings. "Most people think that an audit team is designed to detect fraud," Ugo said. "We actually look at all the financial statements and perform tests to make sure that everything is materially correct. Also, we look at financial aid and how it is given out because it is based on federal government regulations, which come from the audit committee." While the term auditor is singular, Ugo actually has a team of five or six members. "An audit team works normally for not-for-profit organizations. We also end up working with the tax department when they have to file their tax returns for the IRS," Ugo said. Those who want to be an auditor need to be chameleons, to put it simply, he said. "For our firm, we hire people right out of college," Ugo said. "They definitely need to be able to work with a lot of different people because they are already of a team of five to six other people. We work with different clients every week, and some change daily. They also need to communicate clearly and be able to handle a lot of different responsibilities." Ugo works with other Indiana schools such as St. Mary of the Woods, St. Joseph, St. Mary’s in South Bend, Holy Cross and Manchester, among others Ugo said when the firm heard about Franklin’s audit team opening through a letter, it sent a proposal. Representatives then met with Vice President for Finance Bryan Spetter and had an interview with the audit committee. Spetter said the committee decided to open the position to competition to make sure they were getting the best value. The previous firm, BKD LLP, worked with the college for eight years. Spetter said their contract was not renewed. Spetter said the price of the new firm was "comparable" with the old one. Franklin College President Jay Moseley said a good auditing firm is essential to the college. "We need to know if the finances are in order so that we can make decisions that are rational," Moseley said. "If you don’t know your resources and where you’re conserving and spending them, you can’t make decisions with real consequences." While an auditing firm may be important, its work goes unnoticed. "[It isn’t high profile because] it can be considered routine. There have been so many financial panics in the past five years across America that have been triggered by audits and caused multiple legislations and such," Moseley said. An audit team is like the technical crew of a play – always behind the scenes, but necessary for success. "Not many students go around reading financial statements," Spetter said. "If we went around the campus and asked people if they thought we had a balanced budget or enough money to do our jobs, the answers would be positive. When you bring up auditing, a lot of people are not really interested, but we have a lot of policies and procedures at this school to make sure that we can get a passing grade." Although Spetter did not personally hire the new auditing firm, he knows what the committee looked for. "We look for experience in our type of auditing, because auditing for not-for-profit organizations is different than for-profit businesses and organizations. And, higher education is actually in its own subset with different rules and regulations," he said. "We also look for professionalism in their proposals, in their approach to their work, and that they come in at a fair price." Despite the fact that auditing is a low-key job, it is imperative to the survival of the college. "Franklin College has responsibility to its donors, trustees, those who lend money, students and staff – we have responsibility toward all the stakeholders of this campus," Spetter said. "The audit lends us the credibility to prove that we are doing things the right way."
