The UM System Board of Curators will consider issuing approximately $337 million in debt before June 30, the end of fiscal 2020.
The last issuance of debt was in November 2014, MU spokesperson Christian Basi said, so this would be the UM System’s first issuance in over five years.
Ryan Rapp, the system’s vice president for finance and chief financial officer, discussed the issuance during a finance committee meeting Wednesday. The committee will present the debt issuance at the upcoming curators meeting next Thursday, with plans to vote on it later in the spring.
The money would go toward refinancing past debt as well as various projects such as the South End Zone Facility and the Patient-Centered Care Learning Center. Up to $75 million could go to the NextGen Precision Health Institute project.
According to a document from the UM System, the debt would be issued in “System Facilities Revenue Bonds,” which are financed by the UM System Central Bank.
The new debt issuance would not be expected to impact the system’s credit rating, Rapp said.
At a UM System Audit, Compliance and Ethics Committee meeting Wednesday, Rapp also presented an action to continue using the firm BKD LLP as the UM System’s independent auditor for fiscal 2020. The three curators on the committee — Maurice Graham, Jeffrey Layman and David Steelman — voted unanimously to move the action to the full board meeting.
The audit for fiscal 2020 will be the last of a five-year agreement between the UM System and BKD, so the system would put out a bid for future auditing.
Internal audit activity
The Audit, Compliance and Ethics Committee will also present a summary of the system’s internal audit activity at the curators’ meeting next Thursday.
Michelle Piranio, the system’s chief audit executive, discussed three internal audits: the One Card Process, the Cardiology Picture Archiving and Communications System and the General Officers’ Expense Report Review. She only went into detail on the One Card Process because the other two topics were rated low-risk.
The One Card Process, which has been in effect since 2016, issues cards to system employees that work for both travel and purchasing. This “streamlines the transaction process,” Piranio said. While the card can take on both roles, employees may only be authorized for a travel card or purchasing card.
Piranio said the One Card Process audit produced recommendations to impose “stricter sanctions for noncompliance,” keep track of data analytics, decrease the time it takes to approve expense reports and develop more training for those who use the program.
In other news
Piranio said the proposed fiscal 2021 risk assessment process will focus more on objectives like collaboration with the leadership of the programs being audited instead of “just looking at a list of risks and trying to understand how they could potentially impact us.”
Another report will be brought to the full board on establishing an executive audit and compliance committee to increase the UM System’s oversight of its financial compliance program.
Piranio also spoke about the Integrity and Accountability Hotline Annual Report, which is a method for reporting financial fraud in the UM System. There has been improvement in the substantiation rate for reports filed with the hotline, Piranio said, but she said the rate is still below the system’s desired benchmark.
The UM System Board of Curators is scheduled to meet next Thursday at MU.
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