Update to Rutgers Board of Governors on Policies and Practices to Enhance Governance and Accountability
Richard L. McCormick, President
October 13, 2008

We are constantly striving to enhance governance and accountability at Rutgers University. In light of recent events and our own assessment of best practices in higher education, I want to take this opportunity to update the Board of Governors on steps that we have already taken, or that we intend to take (with board review and approval as appropriate), both for the Division of Intercollegiate Athletics and the entire university. As you know, we are also awaiting the report of the Athletics Review Committee, which may have additional recommendations on these issues. We will review their report with care as soon as it is completed, and we may have additional action steps that will emerge out of that process.

Steps Already Taken:

Implement ethics and conflicts of interest training and education

• The university is implementing new ethics training and education for all employees.
• This program addresses a wide range of potential conflict situations and also situations that may involve the appearance of impropriety. It includes a new, centralized website with the code of ethics, frequently asked questions, an online answer desk, and other resources.
• We currently provide annual training for all new board members on conflicts of interest and other related state ethics requirements.

Develop a plan to increase internal audit staff

• We have developed a plan to increase the size of the internal audit staff to increase the breadth and depth of its capabilities.
• Bruce Fehn, senior vice president for finance and administration, is reviewing the plan and will work with Joe Sikora, director of internal audit, to implement it.

Appoint a Deputy Director of Athletics–Finance and Administration

• The university has appointed a Deputy Director of Athletics for Finance and Administration, Richard Costello (who is currently the Director of Athletics at Delaware State University). Mr. Costello will be star11/19/2008ct, Mr. Costello’s primary reporting relationship will be to the senior vice president for finance and administration. Of course, he will need to work very closely with the Division of Intercollegiate Athletics and with the athletic director and, in fact, will be located in those offices.
• In his new position at Rutgers, Deputy Director Costello will oversee all day-to-day administrative operations in the Division of Intercollegiate Athletics, including

• Athletic financial matters
  
• Strategic planning
  
• Budget preparation and management
  
• Contract administration
  
• Information technology
  
• Ticket offices
  
• Athletic financial aid administration
  

Conduct a legal review of new athletic sponsorship agreements

• Pursuant to the university’s contract with Nelligan Sports Marketing, all new athletic sponsorship agreements are being reviewed by the general counsel’s office before these contracts are finalized.

Develop a comprehensive manual on policies and procedures for athletics and provide relevant training

• The manual has been drafted and is now under review by various offices around the university as well as external experts. We expect to complete the manual this fall.

Provide training and coordination for business managers

• We are providing training and information about university policies and resources for business managers in units across the university.

Proposed Next Steps:

Coordinate administration of compliance/ethics

• Under the Office of General Counsel (which already has significant responsibilities with regard to compliance/ethics), we will establish a structure and point person to provide leadership and coordination for ongoing compliance initiatives in the areas of ethics and conflicts of interest.
• In conjunction with other offices (such as Human Resources, Internal Audit, etc.), this office could conduct regular training on compliance issues.
• This office could also create an inventory of other compliance offices and efforts within the university, facilitate regular updates to the Board of Governors, and help coordinate information and resources on compliance.
• I have instructed my staff to review models at universities across the country, and to assess our current and future needs, to help define the appropriate definition and scope for these responsibilities.

Update and articulate universitywide policies and practices with regard to the following:

• Signatory authority for contracts

• The university already has policies in place with regard to review and approval of many different types of contracts.
• As a next step, we will create a centralized, web-based resource that will consolidate this information into a single point of reference that will be readily available to all faculty and staff.

• Review and approval of sponsorship agreement policies and practices

• Under the leadership of Kim Manning, vice president for university relations, I will establish a working group to review and update our policy and practices related to sponsorship agreements of all kinds.
• The university’s existing policy on sponsorships has been part of a larger policy that also covered advertising and charitable contributions. We have divided that single policy into three distinct policies to better address the current higher education business environment, and we have already updated the policies on advertising and charitable contributions

• Review and approval of high-level employment contracts

• We need to review the process for high-level appointments of individuals with significant leadership responsibilities and salary packages to clarify when such contracts should be reviewed and approved by the Board of Governors through its committee processes.
• My administration is reviewing the full list of such positions across the university and will recommend options for consideration by the Board of Governors.

Recognizing our responsibility to be as efficient and effective as possible in fulfilling our mission with the utmost integrity, we will continue to identify and act upon areas where improvements can be made.

Richard L. McCormick
President
Rutgers, The State University of New Jersey