PURPOSE:  To define the Internal Auditor’s function, role, authority, and responsibility at Trident Technical College and to provide guidelines for reporting and evaluation.

I.    INTERNAL AUDITING DEPARTMENT OBJECTIVE

The Internal Auditor’s objective is to assist all members of the College administration in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations, and pertinent comments concerning the activities reviewed.

II.   AUTHORITY

The General Counsel/Senior Vice President is responsible for providing general direction to the Internal Auditor and the activities he/she will audit. The Internal Auditor’s responsibility involves going beyond the accounting and financial records to obtain a full understanding of the operations under review. The Internal Auditor will have access to all of the College's records, properties, and personnel relevant to the subject under review. He/she will have the authority to review and appraise policies, plans, procedures, and records. He/she will also have the authority to require a written response to report comments.

The Internal Auditor has no direct responsibility or authority over any of the activities that he/she reviews. His/her review and appraisal process does not relieve College administration of the responsibilities assigned to it.

III.   RESPONSIBILITIES          

A.  To meet his/her objectives, the Internal Auditor engages in such activities as:

1. reviewing and appraising the soundness, adequacy, and application of accounting, financial, and other operating controls and promoting effective control at reasonable cost;
2. assessing/evaluating risk factors associated with the operations and functions of the College;
3. ascertaining the extent of compliance with established policies, plans, procedures, laws, regulations, and accreditation standards;
4. ascertaining the extent to which the College accounts for and safeguards assets from losses of all kinds;
5. reviewing and appraising the economy and efficiency with which the College employs resources;
6. ascertaining the reliability of management data developed within the College;
7. addressing the quality of performance in carrying out assigned responsibilities;
8. recommending operating improvements; and
9. responding to concerns and inquiries from the Area Commission, Vice Presidents, and other appropriate College personnel.

The Internal Auditor submits the recommendations outlined in his/her reports as constructive suggestions to assist in strengthening controls and procedures.

B.  The Internal Auditor does not develop or implement procedures, prepare records, or engage in any other activity that would impair his/her objectivity. However, recommending standards of control for systems or reviewing procedures before implementation does not adversely affect the Internal Auditor’s objectivity. College personnel should consult the Internal Auditor on the adequacy of controls incorporated into systems and procedures or any revisions to existing systems.

C.  The Internal Auditor must exercise due professional care. Due professional care calls for the application and skill expected of a reasonably prudent and competent internal auditor in the same or similar circumstances. The Internal Auditor should be alert to conditions and activities where irregularities are most likely to occur. Due professional care does not require detailed audits of all transactions. Consequently, the Internal Auditor cannot give absolute assurance that noncompliance or irregularities do not exist. Audit procedures alone, even when carried out with due professional care, do not guarantee that the Internal Auditor will detect fraud. Therefore, one must not regard the Internal Auditor as an insurer (guarantor) against the existence of fraud in the college.  

IV.  PLANNING

A.  In accordance with the College's Strategic Plan, the Internal Auditor will survey the President’s Cabinet asking each Vice President to identify areas where a review by the Internal Auditor could add value to the College’s operations.  Based upon this survey, and such factors as risk, previous audit coverage, significance of prior exceptions, time constraints, and external audit reports, the Internal Auditor develops an audit plan. The Internal Auditor will present the annual audit plan to the President’s Cabinet for approval each year.  Incomplete audits will remain on the audit plan until the Internal Auditor completes them.  The President's Cabinet  will have an opportunity to request new audits each April.  The number of audits accepted will be based on the number of audits completed and removed from the audit plan.  The Internal Auditor will inform the Area Commission of the audit plan status no later than the commission's November meeting.

B.  Each routinely scheduled audit includes some, or all, of the following elements:

1.  Financial and compliance: evaluates (a) whether the unit properly conducts financial operations, (b) whether the unit presents financial reports fairly, and (c) whether the unit has complied with applicable laws and regulations.

2.  Economy and efficiency: evaluates whether the unit is managing or utilizing its resources in an economical and efficient manner and the causes of any inefficiencies or uneconomical practices, including inadequacies in the management information systems, administrative procedures, or organizational structure.

3.  Program results: evaluates whether the unit is achieving the desired results, whether the unit is meeting the objectives established by Management, and whether the unit has considered alternatives that might yield desired results at a lower cost.

The Internal Auditor will state the audit scope as part of the audit report.

V.  PROCEDURE AND REPORTING

The Internal Auditor will normally follow these procedures when auditing an organizational unit:

A.  For routine examinations, the Internal Auditor will send advance written notification of the audit to the appropriate vice president of the division, with copies to the appropriate unit supervisor(s). The Internal Auditor will perform surprise audits in the case of revenue/receipts audits, petty cash audits, payroll payoff audits, and those cases where circumstances deem a surprise audit necessary. Additionally, the Internal Auditor will respond to questions and concerns regarding controls and other matters where an independent view may be helpful.

B.  The Internal Auditor will contact the unit supervisor to arrange for an initial entrance conference. The purpose of this conference is to meet with the people involved, to communicate the objectives and purposes of the audit, and to obtain input into the audit process from unit members.

C.  The Internal Auditor will perform the audit fieldwork.

D.  General Counsel/Senior Vice President will review the Internal Auditor’s work product and preliminary draft reports, and will interact as appropriate with College management as audit progresses.

E.  The Internal Auditor will discuss any preliminary findings informally with the supervisor of the unit under audit as the audit progresses.

F.  The Internal Auditor will prepare a preliminary draft report and send it to the unit supervisor for review.

G.  The Internal Auditor will hold a formal exit conference with the unit supervisor, at which time they will discuss the draft of the audit report. Members of the supervisor's administrative channel may attend this formal exit conference at their discretion. The unit supervisor is responsible for inviting the appropriate administrators. The Internal Auditor will modify the audit report, as he/she considers necessary as the result of this conference.

H.  The Internal Auditor will prepare a final draft report and send it to the unit supervisor. The unit supervisor will respond to the report, in writing, within 30 working days from the date he/she receives the final draft report. The responses should adequately address each individual finding/recommendation and state the unit supervisor’s concurrence or disagreement with the finding/recommendation. Additionally, the unit supervisor should give a time-line for implementation of the recommendation.

I.  After receiving the response, the Internal Auditor will prepare the report in final form. He/she will make the unit supervisor’s response a part of the final report. The Internal Auditor will send the final report to the unit supervisor, with a copy to appropriate members of supervisor’s administrative channel, and a copy to the General Counsel/Senior Vice President, who will distribute the report to the appropriate members of management.  The Internal Auditor or the General Counsel/Senior Vice President may distribute excerpts of selected report comments to other appropriate areas of the College.

VI.  POST-AUDIT REVIEW

The Internal Auditor will perform a follow-up review or audit, as appropriate, to review the effectiveness of any actions taken to implement recommendations. The Internal Auditor will issue a memorandum or report reflecting the results of this follow-up.

VII.  RELATIONSHIP WITH EXTERNAL AUDITORS

The Internal Auditor will make every effort to cooperate with appropriate external agencies to furnish information and support in order to minimize duplication of effort and maximize service and value to the College.

^{Updated March 27, 2008}