Internal audit undergoes changes with director retirement

Having overseen a revolution in the role of his department in UW–Madison’s administration, Jerry Lange will soon step down as director of Internal Audit after more than three decades of service.

Internal Audit assesses the reliability of accounting and administrative controls, and as its director, “Jerry has been a tremendous asset to the university,” says Don Miner, assistant vice chancellor of business services and a member of the search committee for the next director. “Everybody you can talk to will say he provides a tremendous service because of his ability to see the bigger picture.”

Given the variety of administrative units on campus, that picture is indeed quite big. Internal Audit evaluates the reliability of controls throughout UW–Madison, an institution with nearly 17,000 employees, a budget of more than $2.1 billion, and research and development funding of more than $600 million. Numbers alone do not reflect the scope of the office’s mission, either. When Lange became the director in 1972, Internal Audit focused on evaluating accounting practices, but the department’s role has expanded to encompass compliance in areas beyond strictly financial accounting.

Lange and his team must steep themselves in the administrative systems and procedures of areas as diverse as federal grant administration and NCAA regulation compliance. And the stakes are high: Failure to comply with NCAA rules has crippled athletic programs at other schools, and substandard Internal Review Board practices can shut down research throughout the university, which has thrown major medical programs into tailspins, including those at UCLA, Harvard and the University of Illinois at Chicago, putting a freeze on federal research funding.

In all these sectors, Lange and his team have to be sensitive to the fact that administrative control has to strike a balance between eliminating risk and not impeding all work in the university. Internal Audit identifies potential problems and tests existing control systems, but sometimes the cost of fixing a problem is greater than the risk inherent in the first place. Total control over procedures throughout the university would essentially stifle all innovation, and Internal Audit has to focus on where their recommendations will have the most impact. The department advises the administration of potential problems, but the administration must decide the level of risk to accept.

Miner and others around the school express appreciation for Lange’s grasp of this balance. Lange says his guiding philosophy has been to listen to people’s concerns and maintain continuous lines of communication with an office during his team’s evaluation of their control processes, stressing the importance of getting issues in the open early and avoiding any sense of a looming “gotcha” moment. An adversarial role may be appropriate in the corporate world, but at a public university, Internal Audit must focus on ways to help administrators improve their systems and processes, not just point out where they are making mistakes.

Having assumed the job when the UW System was reorganized in the early 1970s, Lange is the only person to direct the department, and it is clear he leaves big shoes to fill. Miner says the search is going well, and he expects the next director to begin sometime in September. What will Lange do then? “Clean my basement — that’ll take a while,” he says.