Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, internal control, and governance processes.
During the performance of any audit, Compliance and Audit shall maintain objectivity and integrity, shall be free of conflicts of interests, and shall not knowingly misrepresent facts, or subordinate their judgment to others.
The Compliance and Audit department performs compliance, operational, and financial audits.
- Compliance and operational audits conducted by the department generally relate to economy and efficiency of operation, whether resources are being used economically and efficiently, whether good management practices are being followed, and whether there has been compliance with applicable policies, laws, and regulations. Such audits, for example, may consider whether a unit:
- Is following sound procurement practices.
- Is properly utilizing its personnel to achieve a high level of performance and is avoiding duplicated effort, overstaffing, and ineffective management practices.
- Is complying with institutional policies.
- Is complying with applicable laws and regulations that may affect the acquisition, protection, and use of institutional resources.
- Is achieving satisfactory results in the performance of its assigned functions.
- Segments of financial statements
- Statement of Net Assets
- Statement of Revenues, Expenses and Changes in Net Assets
- Statement of Cash Flows
- Expenditures for specific programs or services
- Internal control systems as they relate to accounting, reporting, and transaction processing
- Computer-based systems and EDP controls.
- Specific processing systems such as cash collections, payroll, and accounts payable.
- Special investigations involving fraud or serious violations of policy.
The mission of the Compliance and Auditing Department is to promote the most economical and efficient use of resources; to ensure compliance with institutional policies, as well as, federal and state laws and regulations; to protect the institution’s assets; to deter and detect fraud, theft, and abuse; to promote accountability throughout the institution, and to promote the reliability and integrity of the institution.
The Compliance and Auditing Department reports directly to the District Board of Trustees, with the authority to review and appraise all policies, processes, systems, and operations and to recommend any corrective actions necessary. The department has no direct authority or responsibility for the activities it audits. The department works independently, so that its work can be carried out freely and objectively, with impartial and unbiased judgments – essential to the proper conduct of audits.
Compliance and Auditing personnel shall have full, free, and unrestricted access to all institutional systems, functions, operations, records, activities, properties and personnel. In the performance of audits and with full consideration of safekeeping and confidentiality, all appropriate arrangements shall be made when examining and reporting on confidential items.
Although a common courtesy, Compliance and Auditing staff is not required to give notice prior to performing an audit.
In compliance with the Generally Accepted Government Auditing Standards set forth by the United States General Accounting Office and the Standards for the Professional Practice of Internal Auditing set forth by the Institute of Internal Auditors, the Compliance and Auditing Department does not have the authority to implement or insist on the implementation of its recommendations. Implementation is ultimately the decision of management.
It is the responsibility of the Compliance and Auditing Department to develop and execute a comprehensive risk based audit plan for the institution. All audits conducted by the department will be performed with the highest of standards including honesty, objectivity, diligence and loyalty, as required by the District Board of Trustees.
One of the primary responsibilities of Compliance and Auditing is to evaluate the adequacy of the systems of internal control to ensure that the systems established provide reasonable assurance that the institution’s objectives and goals will be met efficiently and economically. The Compliance and Auditing Department will identify those activities subject to audit coverage, based upon their significance and the degree of risk inherent in the activity in terms of cost, special requests by the Board of Trustees and Administration of the institution, and areas where non-compliance with guidelines could result in severe penalties to the institution.
The Compliance and Auditing Department will produce the results of audit examinations, including recommendations for improvement via audit reports. The department will appraise the adequacy of the action taken by Management to correct reported deficiencies. The Compliance and Auditing Department will report to the District Board of Trustees several times during each fiscal year. During this time, interim reports will be provided to the Board regarding the status of “Audits in Progress” and “Completed Audits.”
The Compliance and Auditing Department also has the responsibility of facilitating internal and external audit efforts. This is done to ensure adequate audit coverage and to minimize duplicate efforts.