What others are saying about Risks!

Transcription

1 What others are saying about Risks!

2 Grant Thornton The State of Higher Education 2012 Education Anytime, Anywhere Going where the students are rather than expecting them to come to you. Technology will continue to transform your institution Online education upside - lower cost, not time or place bound downside loss of location advantage upside strong brands power grows by extending into market space of other institutions Digital information digitized libraries are making traditional libraries obsolete Social media need mobile applications that put education on devices students prefer Cloud computing to evolve rapidly over next years, but the most confidential and key computing activities will eventually migrate Long Term Technology Policy embrace new technologies to drive marketing efforts and broaden communication channels

3 Grant Thornton The State of Higher Education 2012 Access and Affordability Costs increase and funding eroding at both the state and federal levels requiring more student debt, diminishing access. Plan for declining support Fears of reallocation of financial aid from high-priced 4-year colleges to moderately priced 2-year institutions and technical schools. Federal funding of research not likely to grow, with intense competition for research dollars from all sources. Fewer opportunities for revenue growth Can revenues be generated by leasing out garage space, rooftops, classrooms, athletic facilities, labs and student housing? Market for adult students may be fastest growing market. Outcomes must improve or tuition revenue will be eroded by lack of government and business support.

4 Grant Thornton The State of Higher Education 2012 A new era in compensation Pressures imposed by regulators, donors, alumni, faculty and other stakeholders to control compensation levels. Recommend use of compensation committees. Link total compensation and institution mission and values Governmental scrutiny through tax enforcement Unrelated business income tax compliance. Employment tax examinations. Sales and use taxes. Municipal payments in lieu of taxes or service fees. A well thought out compliance program is necessary to support challenges by taxing authorities.

5 Grant Thornton The State of Higher Education 2012 Sustaining an ethical culture It takes 20 years to build a reputation and five minutes to destroy it. Reputation is THE asset that matters. - Warren Buffet Good governance increases the likelihood of ethical behavior. Poor governance compromises organizational ethics. Commitment to ethics that engages all employees at all levels is critical. Need formal policies and procedures. Need monitoring. Need communication. Need leadership. Need consistency. Need accountability.

6 Grant Thornton The State of Higher Education 2012 Globalization and the international student US colleges and universities will keep preeminent international standing as long as universities maintain leadership in research and comprehensive education. Since U.S. universities benefit from substantial enrollment of foreign students at their domestic and foreign campuses, university ranking systems developed by other countries are important data to be analyzed and understood. China and Britain rank universities globally. Europe is developing a ranking to rival China s and Britain s.

7 Protiviti/NC State Survey Executive Perspectives on Top Risks for 2013

8 Top 10 Topics for Directors in Oversee strategic planning amid fiscal and economic uncertainty 2. Assess the impact of mobile technology and social media on the company s business plans 3. Address cybersecurity 4. Oversee the management of reputational risk 5. Set appropriate executive compensation as shareholders increasingly voice dissatisfaction with pay practices 6. Assess the impact of health care reform on the company s benefit plans and cost structure 7. Ensure appropriate board composition in light of changing marketplace dynamics and increasing calls for diversity 8. Monitor the company s need for, and ability to retain, key talent 9. Prepare for more government regulation 10. Manage information overload

9 KPMG Today s Top To-Do s for Higher Education Audit Committees Stay focused on the audit committee s core oversight responsibility: financial reporting and related internal controls Understand how technology change and innovation are transforming the higher education landscape - and impacting the institution Consider the effect of the institutions enterprise risk management (ERM) process Stay current on what is happening in the regulatory environment and how changes can impact your institution Focus on the institutions tax compliance risks and how they are being managed Understand what is being done to protect the institutional brand Reassess the institutions crisis readiness Evaluate the audit committee s effectiveness

10 Educause Top-Ten IT Issues, Updating IT professionals- skills and roles to accommodate emerging technologies and changing IT management and service delivery models 2. Supporting the trends toward IT consumerization and bring-your-own device (BYOD) 3. Developing an institution-wide cloud strategy 4. Improving the institutions operational efficiency through information technology 5. Integrating information technology into institutional decision-making (cont d)

11 Educause Top-Ten IT Issues, Using analytics to support critical institutional outcomes 7. Funding information technology strategically 8. Transforming the institutions business with information technology 9. Supporting the research mission through highperformance computing, large data, and analytics 10.Establishing and implementing IT governance throughout the institution

12 Grant Thornton 10 Imperatives Facing Higher Education Institutions in Staying abreast of the changing regulatory environment 2. Anticipating demographic shifts 3. Improving governance and accountability 4. Using assets strategically 5. Decreasing governmental commitment 6. Going global 7. Understanding and controlling costs 8. Sustaining adequate net tuition revenue 9. Making education affordable 10. Going digital

13 Grant Thornton 10 Imperatives Facing Higher Education Institutions in 2012 One commentator has pointed to the newspaper industry struggles as a precursor of what most colleges will go through. Another commentator has predicted disruptions in higher education similar to those that are happening now in the book and music industries. Do these upheavals signal the beginning of the next seismic shift, in which real-time access to knowledge will become universal, fixed locations will become irrelevant, and a truly free market will lower prices?

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