INTERNAL%20AUDIT%20FRAMEWORK

1
INTERNAL AUDIT FRAMEWORK

• January 25, 2016
• Audit Committee Meeting
• Presented by Ruthe Holden, Internal Audit
  Manager

2
BACKGROUND

• Internal Audit Framework
• Defines Internal Audits purpose, authority
  responsibility
• Establishes position within Citys organizational
  structure
• Authorizes access to personnel and physical
  properties needed to complete audits
• Defines the scope of Internal Audit activities
• Requires approval by City Manager and Audit
  Committee Chairman

3
Requirements for Framework

• California Government Code Section 1236 requires
  Citys that conduct audits to follow either
• Institute of Internal Auditors (IIA)
  International Professional Practices Framework
  (standards), or
• Government Auditing Standards issued by
  Comptroller General of the United States
• City will adopt the IIAs standards
• Input from Internal Controls Audit Subcommittee
  from prior Citizen Task Force

4
IIA Standards Requirements

• IIA Standards requires
• The City adopt and Audit Committee approve a
  written Framework for Internal Audit
• Framework at a minimum include the Definition of
  Internal Audit, IIA Code of Ethics and IIA
  Standards
• Independence of Internal Audit

5
Elements of Internal Audit Framework

• Mission
• Scope of Services
• Commitment to Quality
• Authority and Accountability
• Independence
• Responsibilities

6
Standards Required Communications

• IIA Standards required communication to Senior
  Management and Audit Committee
• Independence
• Internal Audit Framework
• Definition of Internal Audit, Code of Ethics
  Standards
• Quality Self-Assessment
• Annual Internal Quality Self-Assessment
• External Quality Self-Assessment required every 5
  years

7
Standards Required Communications

• Periodic Communication (Quarterly)
• Significant audit issues
• Status and results of Audit Plan
• Status of progress on Open Audit Recommendations
• Summary of status on Issues reported through
  Fraud Hotline

8
Next Steps

• Complete Annual Audit Plan (February)
• Quarterly Communication (April)
• Progress of Audit Plan
• Summary of Fraud Hotline
• Status of Open Audit Recommendations
• Year End Report to Audit Committee (July)
• Progress of Audit Plan
• Summary of Fraud Hotline
• Status of Open Audit Recommendations