Proceedings of the Board of Regents (1999-2000)

October Meeting, 1999

Mr. Burks reviewed the material handed out at the meeting. He observed that the
audits were conducted in accordance with generally accepted auditing standards which
require that the audits be planned and performed to obtain reasonable assurance of
whether the financial statements are free of material misstatement. He reported, "We
believe that the University's financial statements present fairly, in all material respects,
the financial position of the University." He also said that the audits examined the
internal control structure of the University and noted that the internal control structure
is strong, with no material deficiencies.
Mr. Burks then reviewed the required communications set out in the Statement on
Auditing Standards No. 61. These include "significant new accounting policies and
unusual transactions," "management judgments and accounting estimates," "significant
audit adjustments," "disagreements with the administration," "consultation with other
accountants," "major issues discussed with management prior to retention," "difficulties
encountered in performing the audit," and "other information in documents containing
audited financial statements." He noted that separate reports were prepared for the
combined activities of the University of Michigan and its sub-units: the Board in
Control of Intercollegiate Athletics, the Executive Education Center, the Hospitals and
Health Centers, Veritas, and Michigan Health Corporation. Separate unqualified
reports were issued for the Alumni Association, William Davidson Institute, and the
University Musical Society. Audits are currently in process for the Schedule of Federal
Financial Assistance for the year ended June 30, 1999; the financial statements of
M-Care for the year ended December 31, 1999; and the annual agreed-upon procedures
of the NCAA intercollegiate athletic program and athletic booster information.
Mr. Burks noted that audit observations and recommendations have been included
in the management letter.
Regent Deitch observed that "great compliments are due to everyone involved in this
effort." To have a seamless transition while changing financial accounting systems is, he
said, "an astoundingly excellent accomplishment." He also pointed out that public
accountants are required to report the least aberrations, and to have an unqualified report is
a great compliment to Executive Vice President Kasdin and the University's financial staff.
Executive Vice President Kasdin thanked Regent Deitch and noted that the
compliments paid to staff are very meaningful. Executive Vice President Kasdin said
that he would be reporting back at the March meeting with progress on each comment
made in the management letter.
University of Michigan Financial Report
Executive Vice President Kasdin reported that this year responsibility for this
report had been switched from the chief financial officer to the Office of Development.
He noted that it is an important communication device both to financial professionals
and to the community at large and alumni, and he complimented Vice President Feagin
and the development staff for the results of their efforts.

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