Some questions which usually arise when an area is to be audited are addressed here.
How was my area selected to be audited?
Areas are selected for audit based on various criteria. The Internal Audit Department uses data from the annual risk assessment which considers all faculties, schools, divisions and key centralized processes of the university. The Internal Audit Department also adopts a rotational plan so that every area of the university will be audited within a five year cycle. Further interviews are held with Vice Presidents and other key university personnel to identify any additional areas of concern. Audits are also conducted based on special requests for a variety of reasons.
What is the process of “being audited”?
Planning: You will be contacted by the Internal Audit Department notifying you that you will be audited and to discuss an agreeable timing for the audit. Pcard audits will be performed as part of a division audit or will be selected and performed throughout the year. There is no notification for Pcard audits as the annual audits are part of the Pcard holder agreement.
Initial Interview: You may be asked to provide specific information regarding your area so that the Internal Audit Department can better understand the processes in your area. The audit team will discuss the scope of the audit, availability of key staff in your area and time commitment of the audit.
List of Information to Gather: Before fieldwork begins, the Internal Audit Department will supply you with a list of information to gather to aid in the work phase of the audit.
Fieldwork: This is the work phase of the audit and may include interviews, testing of internal controls or policies, review and analysis of financial and other records.
Closing meetings: Meeting will be held with key personnel of the faculty, school or division to discuss the audit results. Some audit results may not be significant enough to become part of the final audit report but will be shared with key personnel in these meetings.
Presentation of the Draft Audit Report: Once the fieldwork is completed, a draft audit report will be written and shared with management. The report will summarize significant observations noted during the audit and provide recommendations. A meeting may be scheduled in which the draft audit will be reviewed with key personnel of the faculty, school or division. This is an opportunity for discussion regarding the audit observations and recommendations to ensure that everyone is in agreement with the content of the report.
Responses to Audit Report: Once we have come to agreement on the draft audit report, the auditee has the responsibility to respond individually to each of the observations. This is an opportunity to provide an action plan for improvement. The responses will be reviewed and approved by all appropriate levels of management.
Final Audit Report: Once the responses have been reviewed and approved by the Internal Audit office and appropriate levels of management, the final audit report will be issued to the Audit Committee.
Follow-Up: The Audit Committee has directed the Internal Audit Department to follow-up with all auditees and provide an update on the progress of the recommendations and action plans. The timeframe for follow up will be determined by the internal audit department and the auditee. The timeframe typically is 6-12 months following presentation of the audit report to the Audit Committee.
What happens if the auditor identifies issues or areas for improvement?
The auditor will discuss any issues identified with the key personnel of the faculty, school or division at the time of the audit. Our approach to auditing is very open and we will always keep the auditee informed of all matters throughout the audit.
Who receives copies of the final audit report?
The audit is presented to the Audit Committee of the Board of Governors. The Internal Audit Department reports to the Audit Committee. The Vice President Administration and Finance & AVP Finance receive all reports and Vice President Academic & Provost will receive a copy if the engagement is in their portfolio. In addition, a copy is provided to the Dean, AVP or Director of the area audited.
What areas are typically tested as part of an internal audit?
The areas to be tested are dependent on the activities of the department. The most common areas to be tested are:
- Cash handling
- Time approval
- PCard transactions
- Travel expense claims
- Disbursements (purchase orders, payment requests, IDIs)
- Computer access
- Policies and procedures
Is there any information that is confidential from the internal auditors?
Per TRU Internal Audit Terms of Reference: “The Director Budget Development and Internal Audit is authorized to have full, free and unrestricted access to all University records (paper and electronic), systems, information, property and personnel.”