2013

Kaplan Higher Education Judy ACC550

[COMPANY : KAPLAN]

Kaplan Higher Education 1 Company : KAPLAN

Table of Contents
Introduction 2 History 2 Sales Process..4 Objectives of sales process..4 Input Source documents.4 Output Source document ..4 Events in the Sales Process5-6 Input in the Sales process.6 Output in the Sales process.6 Internal Controls6-8 Type of Control..6 Detail of control (Manual or application level control 6 General IT Controls..9 Auditing Software. Types of Auditing Software.. Functions and capability..

Appendix: Fig. 1 Appendix : Table 1 Reference

Kaplan Higher Education 2 Company : KAPLAN

Introduction The corporation known as Kaplan, Inc. traces its roots to a Brooklyn, New York basement in 1938, where company founder Stanley Kaplan first began tutoring students for a living. Kaplan, born in 1919 to Jewish immigrant parents, got his first experience as a tutor while in elementary school, where he paid friends a nickel apiece to let him help them with their math. Later, in high school, he earned 25 cents an hour preparing his classmates for the New York State Regents exam. After graduating from New York's City College, Kaplan expected to attend medical school, but he was not accepted. Returning to his love of teaching, he started a business in his basement tutoring elementary and high school students, as well as new immigrants seeking to learn English.1 From then on, Kaplan has become a leading provider in the private higher education sector. Its goals have been to help people transform their lives through education, serving students of all ages of Pre k to k12, professionals seeking postgraduate training to college degrees. Once a small test prep company, Kaplan has pioneered new territory in online higher education, K12 services and professional training with innovation and imagination. Through new technologies and a personalized approach to learning, Kaplan has opened doors to educational opportunities and inspiring people to strive for their personal best. Throughout the 75-year history, Kaplan has helped students unlock their talent by providing student-centered, outcomes-driven educational programs that help individuals reach their goals. Kaplan believes the company succeeds when their students succeed. The company is structured into three segments Kaplan Higher education which has almost 70 campuses in 20 plus states as well as Kaplan online university including concord Law school. They offer programs that prepare students for employments in areas of healthcare, business, legal and paralegal services, information technology, criminal justice and design. Kaplan offers
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Kaplan Higher Education 3 Company : KAPLAN

students career-oriented masters, bachelors, and associate's degrees, as well as certificates and diplomas. Schools in the U.S. are separately accredited by one of several national or regional accrediting agencies approved by the U.S. Department of Education. 2 The company also has Kaplan Test Prep which is considered as one of the leaders of test preparation, offering preparation for more than 90 standardized tests for college and graduate school admissions and English-language proficiency, as well as academic tutoring and precollege test prep for students in their K through 12 years.3 In addition, Kaplan Test Prep offers programs to prepare professionals for a variety of licensing and advanced designation exams as well as continuing education in various fields. We also have the Kaplan International whose services include offering programs in English language and university pathway offerings, higher education, test preparation and professional training, designed to help students achieve specific educational goals and provide career qualifications that enable them to compete effectively in a global marketplace. Kaplan International is comprised of two units: Kaplan Europe and Kaplan Asia Pacific.

Within this large corporation, I work in one of the corporate offices located in Alpharetta, GA in the accounting department. I work closely with the business office to ensure accuracy of the student accounts. I thought it would be interesting to look at the sales process from the school level. Since Kaplan offers education services, I will look at the sales process from in terms of the process a student goes through to get admitted to Kaplan Online University as the students are Kaplans customers The Sales Process Objectives Enrolling students to different programs Maintaining students records
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Billing for tuition and fees for classes attended Collection of student payments Forecasting student enrollment and revenue receipt Tracking sales of supplies/ books to student Inputs (Source Documents) Enrollment/ Application form Financial Aid Application form Tuition and Fees Statement Sales order (text books/ supplies) Student Voucher Shipping notice Outputs (Reports) Student Billing statement Academic history & advising report Student Retention Report Revenue Analysis Report Cash receipts Report Student Financial Aid report Account aging report Objectives of the Sales process The objective of the sales process is to ensure there is efficiency in the process and that all customers in this case the students get the utmost services. For this to happen the university has to know the enrollment numbers of students for prior and current months and the retention rate of the students. Also the Kaplan Online University has to track all the payments received from students as a result of tuition or purchase of school supplies / books as a way to monitor the revenue inflow. It is therefore expected that the AIS system implemented will be able to all the payments received to post correctly to the correct student account. Events in the Sales process Fig. 1, in the appendix illustrates AIS for the sales process in Kaplans system flow chart. The flow chart assumes all processes are carried out online.

Kaplan Higher Education 5 Company : KAPLAN

Inputs to the Sales Process In this illustration, it shows the process the student goes through when enrolling for the first-time to Kaplan Online University up to the purchase of school supplies/ books to being ready to attend the first class. The first step is a call coming in to the admissions office from a prospective student interested in enrolling. The admissions office would then send via email an application package which the student will complete with a $45 enrollment fee non refundable. Once the admission reviews the documents they will request for transcript which will be evaluated and followed up with a scheduled a phone call interview to gain a further understanding of the students needs. Depending of the transcript, level of education, the prospective student may need to undertake a test or accepted straight to the desired program. The student is then referred to the Financial Aid office if funding is required if not the student will proceed to the academic advisor who will guide him/ her in selection of courses to take. The student will then register for classes. Charges will post to student account and payment received will be posted. If the student chooses to order books from the school store then a sales order will be processed and the student can pay using a student voucher or a credit card. Once payment is processed receive an email verifying purchase and delivery of book. Inputs to the Sales process documents involved are Application form with application fee receipt, Enrollment agreement with receipt of enrollment fee. Acceptance of admission followed, by selecting classes and preparation of invoice showing tuition being charged. The students invoice will indicate how much money will come out of pocket and if student uses financial aid how much is covered and the remaining is scheduled into student payments collected monthly. Outputs of the Sales Process During the Sales process, any transaction that is processed result into several outputs that produces reports that can be useful for decision making. In this case processing students application forms creates several outputs that are useful to the university in determining its growth and where improvements are needed. For example one is able to run a retention report to check how many students the university retains after end of drop period and also looking at the

Kaplan Higher Education 6 Company : KAPLAN

total students graduating. The cash receipts report will assist the accounting department when it comes to reconciling at month end all cash receipts received against postings made to the students accounts. The most important reports will be the bad debt, aging report and revenue analysis which will be used by the accounting department in coming up with measures to ensure reduction and collection of bad debt. The sales process not only provides an effective sales analysis reports and further provides management with needed information to maximize revenue but also at the same time provide better customer service in this case a better education experience that will open doors and opportunities to our students. Internal Control Kaplan University takes seriously when it comes to maintaining not only the integrity of students but also in all of its operations and always trying to provide the best services by putting its students first. As a education institution, not only do they have to hold themselves responsible but they also have to account their actions by U.S. Government Accountability Office (GAO) under the department of education.

Internal controls are important for every organization and in this case for every institution. The responsibilities of Internal Control include the safeguarding of material assets and personal information, conformance to best practices within specific areas of responsibility, compliance with federal and state laws, and adherence to ethical standards of accountability. Hence Kaplan University had developed compliance teams that act like internal auditors to assist in ensuring the controls put in place are effective.

Currently for each department in Kaplan Inc., which services Kaplan online University has controls put in place. In reference to Figure 1. , the admissions office is considered to be the most important unit for Kaplan university as this is the first stopping point for the students and therefore controls are put in place to ensure proper procedures are followed when dealing with new prospective students. One of the policies that admissions officers have to adhere to is ensuring documentation of student trying to enroll into Kaplan is maintained and a file is opened

Kaplan Higher Education 7 Company : KAPLAN

for every new student. This process includes both a manual and input process. For the manual process the admission officer is required to create a file and all documents completed and submitted by student should be in that folder as a form of back up. The same information will also be input in a system CampusVue and any documentation is scanned in and saved in another program connected the CampusVue for storage known as Orion. A key internal control that ensures the safety of any information provided by student is further safeguarded through background screening of employees and continuous training. Any key personnel working in any of the Kaplan universities or colleges is required to have not only a background check but also a credit check and also should not have defaulted on its loans. All the documents scanned in by the admissions office are further reviewed by a department located at home office in Alpharetta, to ensure authenticity of the documents. This is a control that reduces the chances of having false records of students created which would mislead the enrollment records and also reducing the chance of false loans created. This also involves both a manual and input process whereby a verification person will have to verify the documents and mark them as approved. Once the student has been accepted, the student proceeds to the financial aid office whereby he/she is advised of the alternatives. The purpose of the controls put in place in this area play a very important aspect when it comes to achieving two of Kaplans code of ethics which is integrity and support. At this stage the student is advised of the tuition amounts and alternatives to funding this tuition either through federal funding or private funding. So if the student is privately funding their tuition, they get a copy of the breakdown of tuition and agreement is reached upon the dates of when payment is collected. Here the student will complete and sign a student enrollment document. This document for final approval to ensure everything is in order will be forwarded to the Director of financial aid to sign off on the student file sent to Home office for review and packaging of funding. In case of a student who opts to use government funding, this is another series of documents that need to be completed and verified by the Home Office team. Due to a lot of inefficiencies that the internal controls put in place could not catch as a result lack of separation of duties and also access control, the Home office had to modify the policies and procedures put in place. One of the controls therefore was to enforce the separation of duties and also access

Kaplan Higher Education 8 Company : KAPLAN

flow by eliminating the access to make changes when packaging of students was done from the university office level. Therefore the School level when adjustments are needed to a students account they have to send a contact manager to the home office department Expanded Services who will make the adjustments and send notification back. This reduced the risks of over packaging, changing of the tuition amounts which then do not match what is on the student master file. To further make this control effective, the Home office expanded services team receives reports ran every week with anomalies for them to resolve. To further protect students information, the social security number was blocked and nay reports run that pull this information when one tries to print sends an email to the department head that then has to get a response to from the employee and sign off on it. All this involves a manual process. One important control which is both an input and process control is that before funds are released on the pay date, key documents are to be on file and in a HO approved status. They include: Proof of Graduation ( POG) on file , Ensure valid paying ISIR is received within CVUE, KHE-Verif Form: If paying ISIR is selected for verification, ensure students have an HO-Approved KHE-Verif Form on file , C-Code Checklist: If paying ISIR has a C-Code, ensure students have an HO-Approved Code C Checklist on file , Loan Entrance: Ensure students have an Approved Loan Entrance on file , Master Promissory Note: Ensure students have an Approved MPN on file and Professional Judgment: If paying ISIR has a professional judgment, ensure students have HO-Approved PJ Docs and PJ Approval Form on file. From the financial Aid process, we move onto the business office. Here the company has established key controls to ensure student funds post correctly to the intended student account and that all accounts are of valid student. The process is both manual and input whereby the student can drop by the office and pay with check or cash or the payment is remitted to through a website that is connected to the school account and would post directly to the students account. One of the controls that are place is segregation of duties whereby we have one person who post the checks and one persons who creates a request for a check to be cut for stipends. Furthermore all check requests are made and submitted via oracle to Home office accounts payable another control that creates a paper trail.

Kaplan Higher Education 9 Company : KAPLAN

Last year Kaplan University was among a15- nonprofit colleges identified whereby it recruiters allegedly encouraged investigators posing as prospective students to commit fraud on financial aid applications or misled them about such matters as tuition costs and potential salaries after graduation. This not only reflected badly on the school but it went against the schools code of ethics and also showed a failure of Universitys internal control system. Internal controls are part of the day to day process and they reflect the companys procedures and policies and therefore when recruiters failed to follow the process and no one caught it meant there was weakness in the internal controls process. In this case admissions office failed to follow protocol in that there was no documentation being collected and they were further encouraging students to provide inaccurate information when it came to their income as this would have been a requirement for those intending to use government funding. After that incident, Kaplan Inc., conducted training for all departments in the university and also created a check list that the student completed and signed off as having received the required documents. To create a paper trail it became a must for all appointments of new potential students be recorded not only on paper but in CampusVue briefly detailing what had been discussed and whether there would be a follow up needed. General IT controls One control that is important is establishing documentation process. This control is important due to the high risks it creates for the university from falsification not only from outside (students falsifying data) but also from within whereby employees creating false records of students attending school and collecting Title IV finding from the government. Therefore it becomes a necessity to have control that will access every document received for legitimacy. This is achieved by not only requiring original copies of proof of graduation for high school and having the person after reviewing documents to make copies and certify them by stamping and signing ones name and date of receipt. Then these documents are scanned into computer system and sent to home office to further verify them before being marked as approved within the system. This process involves both a manual and input and process control. Documentation should be of sufficient detail to permit effective supervisory review, as well as oversight review. Independent reviewers should be able to examine and understand the documentation and determine how the original campus reviewers reached their conclusions.

Kaplan Higher Education 10 Company : KAPLAN

Another general IT control that the IT personnel I was able to talk to can be categorized under the computer facility control was the separation of IT department that houses all the servers in our building and no one has access expect the IT personnel. Due to the usage of both laptops and desktops and having access to internet with no limitation of which websites an employee can go, many computers unfortunately became susceptible to Trojans viruses which can make the security of information vulnerable to hacking, therefore the company placed restrictions on changes that can be made on this devices through administrative rights restrictions. This has reduced the number of laptops / desktops that have caught viruses or slowed down due to a lot of download and safeguarded from information being retrieved. One other IT control that the company has in place is separation of duties, whereby restrictions have been put in such a way that although all departments can view the same information only key personnel have access to be able to make changes to the student accounts file. Therefore accounting can view the financial Aid information of a student but cannot make changes to it and vice versa , also to further reduce errors there has been a further separation of duties in that the financial aid situated in the university can no longer input student funding in the system and this process is done in the Home office. There has been also a further requirement for all managers to signoff every month on the reports they receive that show details of students funding as being accurate. This control falls under the personnel policies has tremendously helped and reduced some of the fixes and adjustments that have had to be made in the previous years. Controls for personal computers is one control that is considered very important as employees get to go with them home and are able to work from home and ensuring they are secure is really important. One way the company does this is continuously taking an inventory of not only the laptops but also the desktops. Also before any application is placed in ones computer there has to be a request made via email signed off by the manager , this way able to know the risks involved if the computer falls in the wrong hands and what applications to disable first. Since the organization deals with sensitive information this a crucial control that requires

Kaplan Higher Education 11 Company : KAPLAN

regular inventory takes so that if a person is let go or fired and do not return the laptop , the It can immediately disable all applications linked to that computer.
Auditing Software Audit software helps centralize audit information so businesses can make coordinated decisions with a generalized idea of the company's financial statistics. Auditing software is also usually designed to speed auditing processes so businesses do not have to devote as much time to auditing.4As we have seen from the research above companies depend a lot on IT including Kaplan to conduct there auditing and therefore it is imperative to select a software not only fits the company uses but its also cost effectively and considers the continued changes in accounting / auditing policys. Some of the auditing software include; Metric Stream auditing software, CaseWare IDEA and ACL.

Metric Stream auditing software MetricStream provides a comprehensive IT audit management solution for Information Technology (IT) audits and assessments. The solution is part of MetricStream IT GRC Solution. By deploying the IT audit solution, organizations can streamline their IT audit and assessment processes, and enable multiple stakeholders to have visibility and control into these processes. The solution provides a single system of record for IT audits and assessments by integrating with various solutions that have already been implemented to automate the testing of controls.5 MetricStream solution supports risk-based IT auditing and allows IT processes, assets, projects, and other audit entities to be selected to define the scope of the audit based on the risk assessments. The solution integrates with third-party tools to gather risk and vulnerability information from IT systems (e.g. weak passwords and unused ports in web servers) so that auditors can plan audits based on the risk profile of IT assets. The MetricStream solution enables IT auditors to record qualitative or quantitative findings with detailed observations and recommendations in predefined formats, alongside the checklist of evaluation criteria and questions. The system also supports self-assessments and surveys related to IT controls in a consistent, reliable, and predictable manner. Audit managers can track the status of the audit, and measure its progress against milestones to ensure timely execution. A time tracking capability captures the time spent in auditing for optimal resource utilization.6 CaseWare IDEA

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Charles Pearson.(2012) Types of Audit Software | eHow.com http://www.ehow.com/list_7151929_types-audit-software.html#ixzz2R2ciaMKN http://www.metricstream.com/solutions/it_audit_management.ht

http://www.metricstream.com/solutions/it_audit_management.htm

Kaplan Higher Education 12 Company : KAPLAN CaseWare IDEA is a computer-based file interrogation tool used by auditors, accountants, investigators, and IT staff. It analyzes data in many ways and allows extraction, sampling, and manipulation of data in order to identify errors, problems, specific issues, and trends. CaseWare IDEA, can lower a companys cost of analysis, add more quality and meet the new professional requirements regarding fraud and internal control. CaseWare IDEA can read, display, analyze, manipulate, sample or extract from data files from almost any source i.e. mainframe to PC, including reports printed to a file but at the same time, IDEA would protect the source data by allowing read-only access to your clients' data to avoid any unwanted changes and maintain data integrity. This functionality, in conjunction with the automatic audit trail creation, allows you to easily document and review your work. 7 Audit Command Language (ACL) Audit Command Language (ACL) software is one of the computer assisted audits tools that auditors, Accountants, finance executives and other data analysts can use for independent data extraction and analysis for the detection and investigation of frauds in a computerized x environment. As corporate transactions data grow astronomically amounting to terabytes on daily basis, the audit command language (ACL) software is an efficient tool to analyze such voluminous data to detect exceptions.ACL is used to view, explore, and analyze data efficiently and cost-effective. ACL enables accessibility of data in diverse formats and on various types of storage devices.8 With ACL, our auditors, accountants can effectively conduct a variety of analysis on systems, including payroll, employee expense accounts, accounts payable, and accounts receivable. We have found this tool extremely valuable in enabling audit teams to mine large volumes of data conclusions that never could have been reached through traditional manual approaches.

Of the three auditing software that I was able to review, I choose ACL as a suitable software for my place of work as it provides most of the reports and assesses risks that the business is usually concerned of and more. ACL has also realized the significant of audits to a company and how CFOs and management rely on the results and information received to base their decisions on and also assure investors of the companys sound financial standing. Since it recognizes that companys auditors are not necessarily IT training or knowledge, their software is created with this in mind so as to capture all issues that need to analyze in a companys AIS system. ACL is known for its top performance in areas of data extraction and analysis which is
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ACL Transforming Audit and Risk. (2009) Retrieved from http://www.acl.com/educationfutures/

Kaplan Higher Education 13 Company : KAPLAN

important to my organization specifically as we deal with student accounts, vendor information all this data needs to extracted and analyzed to detect fraud or errors therefore this software fits perfectly. The software is also able to look for control weaknesses, the ease and breadth with which users can evaluate data, and its ability to provide exception reports. Having such a big organization with different chain of commands different reports are needed and this software is able to cater to this. Furthermore the software not only recognizes that companies conduct most of their business online in terms of requests and payments processing and therefore there is a need for software that can analyze all this information, most importantly at a cost effective rate.

Conclusion Accounting information systems

Kaplan Higher Education 14 Company : KAPLAN

Appendix Fig. 1
Admissions Office Student Academics office
Business Office

Student Inquiry of program in admissions office

Receive admissions Requirement checklist

Payment & student files

Process Student Receipt of completed application form Complete Admissions Application and A Payment

Request Transcript

Decision to use Financial

Contact Financial Aid office

Financial aid processed documents B

A
Contact Academic support

See Advisor

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Campus Virtual Tour

Register for classes

Place order at online bookstore Bookstore

Payment

Receive ID card

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Appendix 2

TABLE 1 Third-Party Continuous Auditing Solutions

Functionality
Pre-defined audit steps Automatic notification of violations Compatibility with ERPs Audit of business transactions Audit of user access rights Dashboard reporting

ACL
Yes Yes Yes Yes Yes No

CaseWare IDEA
add-on Yes Yes Yes Yes No

MetricStream
Yes Yes Yes Yes Yes Yes

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Reference:
Kaplan, Inc.,( 2011) - Company Profile, Information, Business Description, History, Background Information on Kaplan, Inc .Retrieved from http://www.referenceforbusiness.com/history2/98/Kaplan-Inc.html#ixzz2PpV0CiIU

Daniel de Vise and Paul Kane. GAO: 15 for-profit colleges used deceptive recruiting tactics. Washington Post Staff Writer .Thursday, August 5, 2010. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2010/08/04/AR2010080403816.html

MetricStream website on July 7, 2009. Available at Retrieved from http://www.metricstream.com/solution_briefs/Automated_Testing_Internal_%20Controls.htm

ACL Transforming Audit and Risk. (2009) Retrieved from http://www.acl.com/educationfutures/

Charles Pearson.(2012) Types

of Audit Software Retrieved from

| eHow.com http://www.ehow.com/list_7151929_types-audit-software.html#ixzz2R2ciaMKN

Network News X PROFILE

Kaplan Higher Education 18 Company : KAPLAN

Kaplan Higher Education 19 Company : KAPLAN