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Business Intel

February 2015


RISK MANAGEMENT

When Digital Signatures Make a Debut at Colleges and Universities

In today’s world, innovations emerge at a stunning rate and are often sparked by technology advances or capabilities. Such is the case with electronic and digital signatures, which have made their way into the business world and hold potential to make higher education processes more efficient as well. 

However, as with many new procedures, business officers must view the adoption of digital signatures against the canvas of overall risk and the level of authentication required for specific transactions. 

At this point, there is still debate in many universities about whether to accept digital signatures, continue the status quo of “wet ink” signatures, or develop hybrid signature methods. Digital signature transaction-management platform solutions can streamline and automate document signing, validate signed documents within business processes, and securely archive all signed documents to help accelerate transactions and reduce costs. 

The University System of Alaska Fairbanks has been researching and piloting the use of digital signatures in several areas, including the offices of bursars, admissions, procurement, and finance —with transactions ranging from internal approvals, tuition waivers, memos, and approvals on routine business communications. With our recent experiences in mind, we’ll share some advice on development and implementation of an effective digital signature process.

Definition and Differentiation

According to the Electronic Signatures in Global and National Commerce Act (ESIGN, 2000), an electronic signature is an electronic sound, symbol, or process attached to or logically associated with a record, and executed or adopted by a person with the intent to sign the record. A digital signature, on the other hand, refers to an encryption/decryption technology, on which an electronic signature solution is built. 

A digital signature (a) achieves the collection of evidence of the document (via metadata, IP address, etc.), (b) verifies the identity of a signer/receiver, and (c) provides an audit trail of the transactions. Digital signatures are part of the process of electronic authentication that uses unique features called public or private key infrastructure. The private key is known only to the signer, while the public key is for anyone who receives the signed document. In the digital signature process, the document is encrypted with a private key by the signer and is decrypted by the receiver using a public key. 

In layman’s terms, a digital signature, loosely referred to as an electronic signature, is a person’s electronic expression of his or her agreement to the terms of a particular document, with the intent to sign. Under the Uniform Electronics Transactions Act, the signatory is legally bound to the commitments made in the signed document. The electronic signature acts as an instrument of evidence regarding the authenticity of the electronic document in the same way as the handwritten signature does regarding paper-based documents.

Technical Details

While the technology requirements for creating the digital signature capability are fairly straightforward, it’s wise to conduct an infrastructure analysis and evaluation. The main areas to consider in the existing information technology environment include: 

Strategy and Implementation Steps

The institution’s culture change and process implementation can be just as important as the technical details.

Before adopting a digital signature solution (or any technology solution), we considered four key steps (see figure above for details). 

The draft can then be shared with the administrative heads of admissions, finance, budget, human resources, sponsored programs, and the registrar. The final draft policy, after approval by the legal, internal audit, and information security departments can then be adopted as university policy and published on the university website. 

At the University of Alaska, our policy guidelines are in final draft stage, with various stakeholder groups currently reviewing them. Since we are closely aligned with the Tennessee Board of Regents, much of our policy reflects key points included in its signature policies.

A key factor to consider in implementing digital signatures is to identify the level of risk tolerance and the associated risk for a particular business process. University risks may involve financial, reputational, and other key administrative communications. Based on the various types of business processes and the level of severity, the assurance (which is a combination of authentication and validation) and trust levels have to be established. Functional area managers and organizations need to assess the level of risk, and to the extent to which one should secure the digital signature platform.

This correlation poses a trade-off challenge to business managers and organizations willing to accept digital signatures, thereby compelling them to identify those business processes that require optimum levels of authentication to offset risks. 

Each functional area determines the type of process (or forms) that may be substituted with digital signatures, sometimes setting a threshold on the monetary value for financial transactions below which all approvals may be authorized by digital signatures. One way to pilot the plan is to conduct a phased implementation in low-risk functional areas in which transactions are monitored for proper usage, unauthorized access, and security breaches. 

With electronic transactions evolving at a rapid pace, digital signatures will become more acceptable. While the technology genie of digital signatures cannot be recaptured into the bottle, colleges and universities can balance the technology solution with the level of risk of acceptance to arrive at the best solution for their processes and practices.  

SUBMITTED BY Shiva Hullavarad, enterprise content and electronic records administrator; Russell O’Hare, chief records officer; and Ashok Roy, vice president for finance and administration and CFO, at the University System of Alaska Fairbanks.


INTERNATIONAL

Four-Pronged Approach to Travel Abroad Risks

A one-day conference hosted this month by the international office leadership of the University of Texas at Austin focused on the challenges of assessing, managing, and mitigating international travel risk associated with study abroad programs. “Uncertain political climates, natural disasters, and mental health issues create challenges for universities wanting to send students to all parts of the world,” said Janet Ellzey, vice provost for international programs and director of the UT-Austin international office.  “In addition, we have a greater number of students studying abroad than ever before.” 

Underscoring UT’s significant work in this area is the recent development of a full-time risk analyst position within the international office. Former Peace Corps volunteer Erin Wolf fills the role and emphasizes the need to view travel-abroad risks as encompassing four major areas: mitigation, preparedness, response, and recovery. “As a university … we must consider our role during every step of a student’s journey—from promoting individual preparedness before a student gets on the plane, to the support we can provide in-country, to the resources we have available in the event of an emergency or crisis situation.”

RESOURCE LINK For more information about the conference and the UT-Austin international office, go to https://world.utexas.edu/about.


Share “intel” From Your Institution

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Send your ideas to editor@nacubo.org, and you may see them in print!


“For many families, private loans are much cheaper than federal loans, which is a reversal from even a year ago.”
Wall Street Journal blog, September 2014

Fast Fact

Quick Clicks

Report Card on Distance Learning

The 2014–15 National Online Learners Priorities Report shows three key ratings that illustrate student perceptions on the instruction they receive: importance, satisfaction, and gap (the difference between the importance and satisfaction scores). On instruction-related items, this year’s study indicated high gap scores in several areas. For example, students report significant gaps between importance and satisfaction in two related issues—faculty being responsive and faculty providing timely feedback. While also important to students in traditional programs, these issues take on even greater priority for students taking online courses. For instance, the nature of the 24/7 environment may create an expectation of constant availability of faculty, making it a priority for faculty to communicate responsiveness guidelines that manage expectations—and then sticking to the promised schedule.

Top Education Issues for 2015

The Council of State Governments published its series of “Top 5” issues in areas such as transportation, health, and workforce preparation, outlining related state activities in the coming year. For education, CSG identified these top five issues: school readiness for all; experiential and work-based learning; academic success for at-risk populations; innovative state accountability systems; and advance attainment of degrees, certificates, and high-quality credentials.


By The Numbers

Financial Aid FY12 Facts

Source: Financial Aid in FY12 (from the newly released NCES Web Tables, 2018 Student Financial Services Benchmarking Report.)