College Savings Plans Network

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• College Savings Plans Network
• Annual Meeting

Governance
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What is Governance?

• Governance answers the fundamental question
• Who is in-charge and of what!!!

Auditor of Public Accounts
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Who Structures Governance?

• Typical with most governmental units is the
  legislation creating the unit.
• In most states the legislation gives the power to
  the Board.
• The Board structures the Governance.
• Too often the Board lets the staff structure the
  governance, which is no governance.

Auditor of Public Accounts
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What Governance Is?

• Governance establishes an organizational
  structure of communication between
• Board and staff
• Board and the Outside World
• Establishes policies, procedures, guidelines,
  standards, expectations, baselines etc.
• Establishes decision making, oversight,
  delegation authority and responsibilities and
• Finally, the APPROVAL PROCESS!!

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What Governance IS NOT?

• It is not having a Board trying to run the daily
  operations of a complex organization.
• It is not trying to second guess the Executive
  Director and staff on how they implement the
  Boards policies.
• It is not believing the Executive Director and
  staff can do no wrong and not reviewing their
  work.
• It is not believing that the Board has greater
  and better insight into issues it hires experts
  for advice.

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Who Uses Governance?

• Obviously, the AUDITORS
• The Executive Director and Staff
• Outside Consultants and other experts
• The legislature and Governor
• The Public

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What needs Governing?

• Investment Management
• Actuarial Assumptions and Contract Pricing
• Financial Performance, Budgetary, and Other
  Monitoring

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How Do Auditors Use Governance?

• Auditors audit the entitys policies, procedures,
  internal controls, assumptions and financial
  results.
• By statute, in Virginia, this means the Board.
• Our statutes charge the Board with developing and
  implementing these fundamentals of operations.
• While the Board can delegate the development to
  the Executive Director, ultimately the Board has
  responsibility for the adoption of the above.

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How Do Auditors Use Governance?

• Auditors compare the Boards actions with either
  an industry practice or a benchmark of actions.
• Auditors make sure that consultants, staff and
  Executive Director are following the Boards
  actions.
• Auditors also do a reasonableness review of the
  information going to the Board, which hopefully
  is basically the same as the financial report for
  completeness and accuracy.

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How Do Auditors Use Governance?

• Auditors both internal and external typically
  work for the Board or Report to the Board.
• The Board should use the Auditors as their eyes
  and ears, where they have concerns.
• The Board should review with the Auditors the
  audit even if there are no findings.
• QUESTIONS

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