(A) Internal review functions. The following describes the functional operation of the Internal Review Division and the requirements for accomplishing its mission:
(1) Definition and objective of internal review. Internal review is an independent objective assurance activity designed to add value and improve operations of the county as a service to management and elected officials. The fundamental objective of internal review is to assist all members of management to discharge their responsibilities. This objective is met by furnishing management with periodic reviews and recommendations concerning the federal grant related activities.
(2) Scope of operations. The Internal Review Division's scope of operations encompasses revenues and expenditures of federal grant awards. This requires going beyond the accounting and financial records to obtain a full understanding of the operations under review and involves such activities as, but is not limited to:
(a) Perform a periodic review of the financial statement(s) for the federal program in accordance with generally accepted government auditing standards issued by the Comptroller General of the United States (GAGAS);
(b) Obtain an understanding of internal control and perform tests of internal control over the federal program consistent with the requirements of §___.500(c) for a major program;
(c) Perform procedures to determine whether the county department has complied with laws, regulations, and the provisions of contracts or grant agreements that could have a direct and material effect on the federal program consistent with the requirements of §___.500(d) for a major program; and
(d) Follow up on prior SBOA audit findings, perform procedures to assess the reasonableness of the summary schedule of prior audit SBOA findings prepared by the county department §___.500(e).
(3) Responsibility and authority.
(a) The Internal Review Division has no direct responsibility for, or authority over any activity under review.
(b) Any review performed by the Internal Review Division does not relieve the county department or Auditor employees of their assigned responsibilities.
(c) The Internal Review Division is comprised of the Grant Committee, the Grant Supervisor and the Budget Liaison Director.
1. The Grant Committee is comprised of three members of the Lake County Council. Pursuant to Lake County ordinance, all county departments prior to submission and/or award of the grant application shall schedule a meeting with the Grant Committee in order to review previous and ongoing compliance.
2. Where internal control and contractual compliance is involved with federal grants, the Grant Supervisor and Budget Liaison Director will:
a. Review and evaluate policies, plans and procedures, but have no responsibility for establishing same; and
b. Review the existing and proposed procedures and make recommendations and/or comments regarding acceptable standards.
(4) Responsibility of county department. The county department shall:
(a) Identify, in its accounts, all federal awards received and expended and the federal programs under which they were received. Federal program and award identification shall include, as applicable, the CFDA title and number, award number and year, name of the federal agency, and name of the pass-through entity.
(b) Maintain internal control over federal programs that provides reasonable assurance that the county department is managing federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on each of its federal programs.
(c) Comply with laws, regulations, and the provisions of contracts or grant agreements related to each of its federal programs.
(d) Prepare appropriate financial statements, including the schedule of expenditures of federal awards in accordance with §___.310.
(e) Ensure that the audits required by this part are properly performed and submitted when due. When extensions to the report submission due date required by §___.320(a) are granted by the cognizant or oversight agency for audit, promptly notify the federal clearinghouse designated by Office of Management and Budget and each pass-through entity providing federal awards of the extension.
(f) Follow up and take corrective action on review recommendations, including preparation of a summary schedule of prior review recommendations and a corrective action plan in accordance with §___.315(b) and §_.315(c), respectively.
(B) Independence, objectivity and ethics.
(1) The Internal Review Division is responsible directly to the Auditor for the performance of internal review activities and for the reporting of recommendations. The Internal Review Division is therefore considered to be independent of the county departments operations being reviewed.
(2) Objectivity is essential to the review function. Therefore, the Internal Review Division should not devise or install procedures that will be later reviewed. In the installation of new systems, the Internal Review Division can offer suggestions for minimum controls and program implementation without impairing objectivity.
(3) The Internal Audit Division shall maintain high standards of conduct, honor and character so that credibility and integrity are not open to question. The Internal Review Division will subscribe to the Codes of Professional Ethics and Standards as promulgated by the county's personnel and ethics policies.
(C) Review planning, conduct and communication.
(1) The Internal Review Division shall, on a periodic basis, develop a plan of review with respect to internal control and compliance requirements. The annual review plan shall include identification of each review to be conducted in terms of the financial records and activities to be reviewed.
(2) Reviews shall be conducted in compliance with generally accepted government auditing standards issued by the Comptroller General of the United States (GAGAS). These standards are contained and detailed in the Circular A-I33, issued pursuant to the Single Audit Act of 1984, P.L. 98-502, and the Single Audit Act Amendments of 1996, P.L. 104-156. It sets forth standards for obtaining consistency and uniformity among federal agencies for the audit of states, local governments, and non-profit organizations expending federal awards.
(3) The Internal Review Division shall notify the appropriate county department management of the nature and purpose of the review. During the course of the review, the Internal Review Division will inform the Auditor and department management, to the fullest extent practicable, of any significant recommendations.
(Ord. 1376A, passed 9-24-2014)