INTERNAL AUDIT CHARTER

 

 


The internal audit function is established by the Board of Trustees, and its responsibilities are defined by the Audit Committee of the Board of Trustees.  The District’s internal auditor will report administratively to the Chancellor with an additional direct reporting line to the Audit Committee of the Board of Trustees.

 

Authorization and Responsibilities

 

A.  It shall be the duty of the internal auditor to:

  • Provide additional assurance that City College departments and employees, responsible for accounting and financial management activities, comply with statutory requirements and accounting standards;
  • Conduct internal audits of all fiscal transactions of City College including, but not limited to, the examination and analysis of fiscal procedures and examination, checking, and verification of accounts and expenditures;
  • Provide other analyses of financial and operating data as directed by the Board of Trustees; and
  • Other such duties as the Trustees may by resolution direct.

B.  The internal auditor shall conduct internal audits in accordance with a schedule approved by the Audit Committee of the Board of Trustees and may conduct other unscheduled audits from time to time with the Audit Committee’s approval.  The results of these audits shall be reported in writing to the Board of Trustees, Audit Committee, and the Chancellor.

 

C.  In addition to the audits conducted by the internal auditor, the Board of Trustees shall authorize a contract with an independent certified public accounting firm to conduct an annual independent financial audit, the results of which shall be delivered in writing to the Board of Trustees.

 

D.  The office of the internal auditor shall be under the direction of the San Francisco Community College District’s (the District) internal auditor who shall be accountable to the Audit Committee of the Board of Trustees.  The internal auditor shall:

  • Be knowledgeable in operational and financial auditing, public administration, and public financial and fiscal practices;
  • Be a licensed certified public accountant (CPA) and/or certified internal auditor (CIA); and
  • Recommend the organizational structure appropriate to carrying out the responsibilities and functions of this section.

E.  The mission of the office of the internal auditor is to promote honest, efficient, effective, and fully accountable City College operations.  To fulfill this mission, the office of the internal auditor may conduct audits and examinations of any City College department, program, service or activity.  The purpose of these audits and examinations is to provide the Board of Trustees and the Chancellor with information and evaluations regarding the effectiveness and efficiency with which City College resources are employed, the adequacy of the system of internal controls, and compliance with City College policies and procedures and regulatory requirements.  Specifically:

  • The internal auditor shall conduct operational and financial audits and other audit work as requested by the Audit Committee.  This will include independently determining and evaluating:

- The soundness, adequacy, and application of accounting, financial, and other operating controls towards promoting effective control at a reasonable cost.
- The extent of compliance with applicable laws and regulations and with established policies and procedures.
- The extent to which
City College assets are accounted for and safeguarded from losses of any kind.
- The sufficiency, validity and reliability of accounting and statistical data developed within the organization.
- The economy, efficiency, and effectiveness of
City College departments, programs, services, and activities.

F.  In addition to the aforementioned responsibilities, the internal auditor shall:

  • Assist with the coordination of an annual external financial audit for the City College with the independent certified public accounting firm authorized by the Board of Trustees.
  • Provide consulting services to City College operating departments as requested by the Audit Committee or the Chancellor in their efforts to re-engineer their operating practices and processes.
  • Provide consulting services to the Board of Trustees, as requested, regarding the accuracy and financial impact of information provided to the Board of Trustees.
  • Perform other auditing functions consistent with the provisions of this section.

G.  At the first Board meeting of each fiscal year, the internal auditor shall submit an annual audit plan to the Audit Committee for approval.  The plan shall identify the preliminary objectives of each audit to be performed, reflecting the purpose of the engagement and a preliminary description of the areas which may be addressed.  The internal auditor will review the plan and consult with the Chancellor prior to submitting it to the audit committee for approval.  The Board of Trustees, Audit Committee, and/or the Chancellor shall identify areas where City College will benefit from operational and financial audits.  The internal auditor will review the plan with and seek the advice of the City College’s General Counsel prior to submitting it to the Audit Committee for approval.  The internal auditor will issue quarterly reports to the Audit Committee describing the status and progress towards completing the audits.  The annual audit plan may be amended during the year with the approval of the Audit Committee or the Board of Trustees.

 

H.  The internal auditor shall prepare a written report of the results of each audit conducted and will be responsible for retaining a copy as a permanent record.  Each audit report shall include:

  • A statement of audit objectives and a description of the audit scope and methodology.
  • A full discussion of audit findings and conclusions.
  • Recommendations for necessary or desirable action.
  • A written response from the appropriate vice chancellor in charge of the audited activity, except as described below.

I.  Upon completion of the preliminary draft of an audit report, and prior to submission of the report to the audit committee, the internal auditor shall transmit a copy of the report to the Chancellor and the City College’s General Counsel for review and comment, including legal advice relating to disclosure of information contained in the report.  A final draft of the audit report is then presented to the appropriate vice chancellor in charge of the audited activity, and to other appropriate officials as determined by the internal auditor.

  • Within three weeks of receiving the final draft report, the vice chancellor in charge of the audited activity will prepare an official written response to the findings and recommendations contained within the report and transmit the response to the internal auditor.  The final report will be issued to the Audit Committee and the Board of Trustees within three weeks of receipt of the management response.
  • The official written response will be included verbatim in the audit report issued to the Audit Committee and the Board of Trustees by the internal auditor.
  • If a response is not received within the established three weeks, as described above, the audit report will be issued to the Audit Committee and the Chancellor without management response.
  • The audit report may be placed on the agenda of the Board of Trustees after the audit report is reviewed by the Audit Committee.

J.  The internal auditor will prepare and issue an annual report on the status of recommendations made in completed audits.  The report will reflect the status as reported by the department head or the highest official of the audited entity.  The report will be issued to the Board of Trustees in the first quarter of the fiscal year for review by the Audit Committee.  Further follow-up audits will be conducted as determined and recommended by the internal auditor and approved by the Audit Committee.

 

K.  The internal auditor will have unrestricted access to all sources of information, property, and personnel relevant to the performance of a board-approved audit, unless prohibited by law.  Documents and information will be handled with the same prudence exercised by those normally accountable for them and consistent with the standards established by the Institute of Internal Auditors.  To the extent possible, the internal auditor will accommodate an area's daily operations in scheduling and conducting such audits.

 

Audit Committee of the Board of Trustees Relations

 

The internal auditor is employed by the San Francisco Community College District and reports administratively to the Chancellor with an additional direct reporting line to the Audit Committee of the Board of Trustees.  The Audit Committee approves the annual audit workplan, reviews audit report findings and recommendations, and monitors the implementation of recommendations.