Frequently Asked Questions
- How did we get selected?
- What can we expect during an audit?
- How can we prepare for the audit?
- Why do you need to have a working area within our offices?
- How much time will you require to complete your review?
- Who else will see our audit report?
- Who audits the auditors?
There are several ways a department could be chosen for an audit. Internal Audit uses a risk-based approach in the determination of which departments to audit during a given fiscal year. Factors are evaluated and assigned a value, added together, and then compared to other areas of the University. These scores are ranked for an overall risk value and the audits are scheduled accordingly. Some of the factors that are used in the evaluation are as follows:
- Last time the department was audited
- Complexity of the department, volume of transactions, etc.
- Cash income of the department each year
- Other types of income
- Quantity of grants and contracts
- Percentage of turnover of key personnel in the last year
- Federal regulations related to the department
- Management concerns
In addition, University management may request an audit for various reasons, such as suspicion of fraud, review of operational procedures, or assessment of key controls in specific departments. These special requests are usually worked into our annual audit plan as soon as practical.
There are several steps in performing an audit. First, Internal Audit will send an introductory letter to the director of the department. The letter states that an audit will be forthcoming and that we will be in touch shortly. Next, we set up an entrance meeting where the key members of the department are introduced to the audit team. This meeting is usually a forum for Internal Audit to gain an understanding of key processes in the department and go over how much time the audit may take, whether or not we will need space provided for us during the audit, and to go over any additional concerns of department management. Once the entrance meeting has been held, the audit team will be in contact with the key personnel for interviews. The interview process is to allow us to gain an understanding of each key process in the department. Once the processes have been defined and documented, we will perform test work to ensure controls are in place to adequately safeguard University assets, etc. After all test work has been completed, the results of the audit are communicated to the key personnel for discussion. Finally, a draft report will be prepared and sent to the department, along with a request for a response to specific findings. Once the findings have been addressed, a final report will be sent.
Before our office comes to perform an audit, an introductory letter is mailed. This letter requests some information that will help the audit go smoothly. Specifically, we request:
- an organization chart
- job descriptions for key personnel
- literature on the department, if available
- list of employee names
- phone numbers and e-mail addresses
In addition, it is helpful if the staff in the department can be notified of the impending audit and informed that we come in as a business partner to help assess the operating controls in the department. Let the staff know they should be available to talk with us and to cooperate in getting information, etc. This will ensure the audit will go smoothly and wrap up in a timely manner.
When we conduct an audit, it is generally beneficial to both parties if we can have some office space set aside for our staff during our review. Having office space on-site allows for greater interaction with the office and grant administrators with whom we will be interfacing and obtaining financial and departmental information. The close proximity of the two staffs also allows easier transfer of data and ease of asking questions that may require detailed explanations. Lastly, when our staff is located within your offices, we are better able to understand how your staff operates and communicates with each other on a daily basis. Good communication and interaction between staff members can enhance an office’s overall performance and we are always eager to understand how the staff works with each other.
Our length of stay and review can vary with every project. Things that may factor into the duration of our review of your department can include the following: 1. the amount of resources we are able to supply to a project; 2. the amount of resources your office can supply to us during our visit; 3. the nature of the review; and 4. the complexity of departmental operations. There is no standard time frame for a project; however, for example, a standard operational review which includes grant activity, generally is expected to last approximately six weeks.
The audit report is first sent to the department director in draft format for review and response. Once the draft is agreed upon, the final report is sent to the department director and generally anyone to whom he or she reports directly (e.g., deans, vice presidents, department chairs, etc.). In addition, all reports are sent to the Vice President for Financial Affairs and the Executive Vice President, along with other appropriate members of University management.
Internal Audit has been established to offer an independent and objective view of the different University operations. As a department, we report to the Vice President for Financial Affairs & Treasurer, the Executive Vice President, the President, and directly to the Audit Committee of the Board of Trustees. The Associate Vice President for Internal Audit, in developing the yearly Audit Plan, works with these and other groups to ensure that the University is operating in an efficient manner. In addition to the constant communication with University management, we participate in peer reviews with our fellow audit departments at comparable colleges and universities, during which we audit each other’s work, to ensure objectivity and that we remain in line with prescribed audit standards and generally accepted accounting principles.