Boosted by federal stimulus funds and the strongest endowment performance in years, many colleges and universities experienced better-than-expected operating results in fiscal 2021. However, the pandemic-driven crises of the last two years and the disruptions they triggered—from accelerating technology transformations to upending long-standing norms of the campus-based workforce and financial model—have added stress and strain to the institutional risk profile. That pressure is likely to continue given evolving workplace expectations; intensifying wage and price inflation; lingering supply chain issues; growing cybersecurity risks; heightened scrutiny of environmental, social, and governance (ESG) programs; greater regulatory complexity; and other factors impacting the global risk environment—including the direction of COVID-19.
Higher education boards and audit committees will again need to recalibrate their risk-driven agendas in 2022. Drawing on our research, insights, and interactions with higher education audit committees and senior administrators, we’ve highlighted several areas to keep in mind as audit committees consider and carry out their 2022 agenda:
- Stay focused on cybersecurity.
- Understand how the institution is managing and reporting on ESG.
- Monitor other emerging risk and industry matters.
- Reinforce the institution’s focus on ethics and compliance.
- Help ensure internal audit is focused on the institution’s critical risks.
- Make the most of the audit committee’s time together.