University of Vermont

Former President Daniel Mark Fogel

PeopleSoft and Internal Controls

From: Daniel Mark Fogel, President

To: The UVM Community

RE: PeopleSoft and Internal Controls

Date: April 17, 2008

I have a strong commitment to accountability, and I assure you that the unfortunate situation described in this memo will be corrected promptly, fully, and clearly.

In response to a series of problems associated with the implementation of UVM’s PeopleSoft management information system, an extensive engagement with Huron Consulting Group for consulting services was initiated in 2006. This has been an essential ongoing engagement to deal with a number of problems and challenges, and at its conclusion the total cost for the work is expected to exceed $5 million.

We have discovered that the process of engaging this contract departed from our internal policy and procedures, and there was clearly a breakdown in internal controls. A consulting engagement of this scope and cost requires approval by both the President and the Board of Trustees. In this case, neither approval occurred. Board approval of consulting contracts in excess of $250,000 is required under our policy.

We are taking immediate steps to address the situation. In order to understand thoroughly the breakdowns in procedures that occurred and to prevent a recurrence, we will be using the services of independent experts to examine this situation fully and to assist us in creating better systems and controls going forward.

This unacceptable situation is no reflection whatsoever on Huron; by all indications the firm has been doing effective and productive work on a mission-critical project. In fact, the firm has reported its progress regularly to the Audit Committee of the Board of Trustees during the time it has been engaged with UVM. Huron’s work was and is absolutely necessary in order for the University to resolve serious issues with grant and research administration, financial systems, and a series of other information system transition matters requiring prompt and effective resolution both operationally and to allow UVM to complete mandatory audit processes.

As many of us know, transitions to new financial and human resource information systems have an extensive history of difficulties, challenges, and cost overruns in numerous universities and businesses alike. Painfully, that has also been the case here at UVM. As problems arose, we needed additional expert assistance to complete the transition process and address serious problems, albeit at a significant cost. Although funds were identified to address these expenditures, communication about and approval of the extent of the contractual engagement, its costs, and the funding source did not meet the high standards to which we hold ourselves at UVM.

I will keep the University community fully informed as we make progress.

Last modified October 05 2008 08:33 AM

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