A meeting of the Audit and Enterprise Risk Committee of the Board of Trustees convened at 9:25 a.m. Friday, February 5, 2021, on the Purdue University campus in West Lafayette, Indiana. The meeting was held in Stewart Center, Room 214, to allow for social distancing amid the COVID-19 pandemic. Restrictions were placed on the number of observers in the room, and other members of the media and the public who wished to observe the meeting virtually were provided such instructions. Everyone in the room was wearing a mask.

All members of the Committee were present in person or, where specifically noted, by means of electronic communication pursuant to the Electronic Meeting Policy: Vanessa Castagna, chair; JoAnn Brouillette; and Theresa Carter (virtually). All other trustees were present: Sonny Beck; Michael Berghoff; Malcolm DeKryger; Michael Klipsch; Gary Lehman; Noah Scott; and Don Thompson (virtually).

Officers and administrators in attendance were: Mitch Daniels, president; Jay Akridge, provost and executive vice president for academic affairs and diversity; Chris Ruhl, chief financial officer and treasurer; Jim Almond, senior vice president, assistant treasurer, and assistant secretary; Steve Schultz, general counsel; Trent Klingerman, deputy general counsel (virtually); and Janice Indrutz, corporate secretary and senior executive assistant to the Board.

I. APPROVAL OF MINUTES

Upon proper motion duly made and seconded, the Committee voted unanimously to approve the minutes of its meeting convened on December 4, 2020.

II. APPROVAL OF 2020 ANNUAL REPORT OF THE SENIOR DIRECTOR OF AUDITS

Ms. Peg Fish, senior director of audits, reviewed the 2020 Annual Report which the Committee had been provided in advance of the meeting. She began by saying there were many challenges in 2020 due to the COVID-19 pandemic, beginning with a swift move to a remote working environment. She said the Internal Audit Office was able to continue its work amid the complexities and fluctuations presented by the pandemic by being flexible and adaptable to the plan and recognizing its responsibilities to the Board and university leadership. She described the six members of the Internal Audit Office staff as having been dedicated, professional, and flexible.

Ms. Fish informed the Committee that all audits were conducted in accordance with the International Standards for the Professional Practice of Internal Auditing. She said 76% of the staff’s time was directed to audit work while the remaining time was spent in support of the anonymous reporting program, external audits, and enterprise risk management initiatives, and she pointed to the number of audits completed or in process at each campus. She said the university remained committed to providing an environment in which individuals may report suspected fraud, waste, or abuse of university assets, and said she was not surprised to see an increase in the number of such reports due to working conditions caused by the pandemic.

Having no questions for Ms. Fish, and upon proper motion duly made and seconded, the Audit and Enterprise Risk Committee voted unanimously to recommend full Board approval of the 2020 Annual Report of the Senior Director of Audits, a copy of which was included with the minutes.

III. REVIEW OF AUDIT PLAN FOR CALENDAR YEAR 2021

Ms. Fish discussed the 2021 audit plan which the Committee had received in advance of the meeting. She drew attention to the list of emerging industry risks she said were taken into consideration, and she noted that a remote workplace infrastructure was identified as key for every industry the university had benchmarked. Ms. Fish informed the Committee that all aspects of remote work, including movement of university equipment, were considered when developing the plan, and the audit staff would be cognizant of CARES Act regulations to ensure the university’s compliance. She said the plan would once again focus on the four audit classifications of compliance, financial, integrated/operational, and system infrastructure, and the staff would have additional discussions with leadership teams before undertaking an audit in case it became necessary to refocus in response to the rapidly changing environment.

In response to a question from Trustee Castagna, Ms. Fish expressed her belief that the biggest risks in 2021 would be remote work and retention of talent. She stated that data analytics had become key in the approach to, and completion of, audits. A copy of the audit plan was filed with the minutes. No Committee action was required.

IV. APPROVAL OF RESOLUTION OF APPRECIATION FOR PEGGY L. FISH

Trustee Castagna announced that Ms. Fish would retire from the university on February 28, 2021, and, in recognition of Ms. Fish’s distinguished service, she read the following Resolution of Appreciation:

WHEREAS, Peggy L. Fish has served Purdue University since March 12, 1990, holding positions in internal audit and as manager of university collections prior to her appointment as director of audits in 1996; and

WHEREAS, the Internal Audit Office serves as an independent and objective resource to examine and evaluate University activities as a service to the Board of Trustees and the management of Purdue University; and

WHEREAS, Peg and her staff of professional auditors provided audit services for the Purdue University system, with a focus on continuous improvement; and

WHEREAS, her responsibilities included developing an annual audit plan designed to ensure that the University’s network of enterprise risk management, control and governance processes, as designed and implemented by management, functioned effectively; and

WHEREAS, Peg distinguished herself as a teacher with her team and other stakeholders, is held in high esteem for her professionalism and is well regarded for being adaptable, approachable and collaborative; and

WHEREAS, the University’s audit program is robust as a result of Peg’s leadership and her ability to effectively plan and prioritize staff time and resources to accomplish the mission of the Internal Audit Office; and

WHEREAS, Peg worked in close partnership with the State Board of Accounts regarding the annual financial and federal funds audits; and

WHEREAS, she holds the professional designation of Certified Internal Auditor, is certified as an external validator by the Institute of Internal Auditors and has performed independent validations for other internal audit offices; and

WHEREAS, Peg has been a volunteer on the Board of Governors for the Institute of Internal Auditors – Indianapolis Chapter and on various local community boards and committees; and

WHEREAS, Peg is a United States Army Veteran; and

WHEREAS, Peg is an Indiana native who earned bachelor’s and master’s degrees in management from Purdue in 1984 and 1997, respectively; and

WHEREAS, she will retire from Purdue University on February 28, 2021, after nearly 31 years of service;

BE IT THEREFORE RESOLVED BY THE TRUSTEES OF PURDUE UNIVERSITY:

1. That the Trustees recognize the positive impact of Peggy L. Fish’s tenure as director of audits and wish her good health and much happiness in her retirement; and

2. That enormous gratitude and appreciation are expressed to Peg for her loyalty and service to Purdue University; and

3. That Peg is to be congratulated and thanked for her tremendous contributions to our University; and

4. That her many achievements are part of the great, permanent history of Purdue and will never be forgotten; and

5. That this resolution be spread upon the minutes of the Trustees as part of the permanent record of the University.

Addressing Ms. Fish, Trustee Castagna remarked, “I have such respect for you. You are a role model for so many and have given so much of yourself to Purdue.” Treasurer Ruhl added that he was privileged to have worked with Ms. Fish, whom he described as professional and approachable. He said he appreciated her efforts to teach and mentor her staff, saying it was a hallmark of her career.

Upon proper motion duly made and seconded, the Audit and Enterprise Risk Committee voted unanimously to recommend full Board approval of the resolution. A formal copy of the resolution was filed with the minutes.

V. ADJOURNMENT

By consent, the meeting adjourned at 9:40 a.m.