53-24-1: INTERNAL AUDIT PROCESS:

These steps are general guidelines. Deviation from the guidelines would depend on the individual audits and circumstances. The following steps should be followed once an Auditor receives an assignment and the auditee is notified. The time frame for completing an audit depends on the scope and complexity of the assignment. Audit reports are usually distributed quarterly.

Audit Committee	Audit Staff	Auditee
1. Review and approve annual audit plan and department requests. Provide expertise and insight on audit issues.	1. Conduct risk assessment of critical City operations. Compile each department request. Prepare Annual Audit Schedule. Submit the audit schedule and department requests to the Audit Committee.	1. Transmit Internal Audit service request to the Audit Manager.
	2. Based on the approved Audit Schedule, contact department manager or designated audit contacts and inform them that Internal Audit is planning a review. Agree on a feasible start date. Also, at this time, documents, such as operating procedures, strategic plans, etc., could be requested to expedite the preliminary audit survey step.	2. Provide Auditor with any requested information within an agreed upon time frame.
	3. Conduct the preliminary audit survey to gain an overall understanding of the operation or function.	3. Same as 2 above.
	4. Prepare formal audit opening letter and distribute to Department Director, Manager and all other relevant parties.	4. Confirm meeting.
	5. Schedule opening meeting and send out a confirmation notice.	5. Department Directors and Managers attend opening meeting to understand the audit approach and acknowledge responsibilities for meeting time frame and providing requested data.
	6. Perform audit fieldwork. Have ongoing verbal and written communications with line manager to present findings that need immediate attention and update on the progress of the audit.	6. The line manager is responsible to keep the Department Directors informed on the audit's progress. Department management could request to meet with the Auditor or Audit Manager at any time, as needed.
	7. Report orally and in writing, using the Internal Audit Discussion Point Sheet (DPS). All preliminary audit findings are listed on the DPS and given to the line supervisor, Department Director or designated audit liaison.	7. Line management confirms Auditor's documentation or provides an alternate response to each DPS within 10 days. A reasonable extension may be granted for bona fide reasons only. Extensions should be requested within the original 10 day period. Note: Response to DPS needs to be direct and concise addressing: agreement or disagreement with finding, action planned and target date for completion.
	8. Evaluate management's responses to the DPS. Obtain proper clarification for any unclear issues in the response.	8. Provide clarification or additional information as requested by the Auditor within the agreed time frame.
	9. Compile audit work papers to approved audit standards, incorporating management's responses. Prepare Draft Audit Report and submit it along with completed audit work papers to the Audit Manager for review and approval.	9. Same as 8 above.
	10. Distribute Draft Audit Report to Department Director and all applicable managers.	10. Receive Draft Audit Report and prepare department responses for discussion at scheduled exit conference and inclusion in the report.
	11. Contact Department Director and Managers via e-mail and schedule an exit meeting.	11. Participate in exit conference to clarify any factual discrepancies and management's response to audit findings and recommendations.
2. Discuss Draft Audit Report with audit staff. Determine if management responses are properly addressing the findings and recommendations.	12. Send Draft Audit Report to Audit Committee and provide additional information, as requested.	12. Provide any data requested by Auditor.
3. Determine if department management should attend next committee meeting.	13. Extend an invitation to department to attend the next scheduled Audit Committee meeting, if applicable.	13. RSVP on the attendance to the Audit Committee meeting, if applicable.
	14. Prepare Final Audit Report as approved by the Audit Committee.	14. Provide any additional information, if requested by Auditor.
	15. Audit Manager approves and issues the Final Audit Report electronically no later than 5 days after the Audit Committee meeting date.	15. Receive the Final Audit Report.
	16. Update work papers, file final report with the Recorder's Office. Place a signed hard copy in the audit file.	16. Implement audit recommendations within target dates in report.
4. Monitor implementation of audit recommendations; determine final resolution, including enforcing compliance.	17. Provide the Audit Committee with periodic updates on any outstanding audit recommendations.	17. Provide Auditor with any requested information.
5. Review the follow up report with department management, if needed.	18. Perform audit and follow up in 6 months or as directed by Audit Committee. Distribute follow up audit report electronically to Audit Committee and department management. Close audit file.	18. Provide Auditor with information needed to perform audit follow up. Receive electronic copy of follow up report.

 

(2019 Compilation)