Charter for the Office of Internal Auditing

Effective Date: December 14, 1999 - Resolution

INTRODUCTION

The Escambia County Superintendent of Schools and top management are responsible for the effective and efficient administration of the Escambia County School District.  This responsibility encompasses the requirements for sound financial management, adequate reporting, maintaining an effective system of internal controls, compliance with applicable rules and regulations, and maintaining the highest standards of ethical conduct.  The Escambia County School Board, herein after referred to as “School Board” directs the Superintendent in these matters through adoption of the budget and through establishment of School Board policy.  Together they are responsible for attaining the District’s Mission.  To aid them in fulfilling their responsibilities, the Internal Auditing Department has been established within the School District. 

 

MISSION

It is the mission of the Internal Auditing Department to assist the School Board and management of the District in the effective discharge of their responsibilities. The internal audit function serves to improve fiscal accountability and enhance the public’s perception of the management and operations of the Escambia County School District.  The Department’s activities serve as an independent objective assurance and consulting activity designed to add value and improve an organization’s operations.  It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. The Internal Auditing Department, through its work, provides the Superintendent, his top management, and the School Board with analysis, appraisals, recommendations, advice, and other information concerning the activities reviewed.  The internal audit function shall be considered an essential element in achieving the mission, goals, and objectives of the School District.

 

AUTHORITY

The School Board has designated the Audit Committee as its designee responsible for oversight of the District’s Internal Auditing Department. The Audit Committee, created pursuant to School Board Policy 6Gx17-1.07, serves to promote independence and objectivity of the internal audit function, to ensure broad audit coverage, adequate consideration of reports, and appropriate action on recommendations.

The Internal Auditor shall have the authority to conduct financial and performance audits or reviews of all departments, offices, activities, and programs under the control of the School Board. Financial audits include financial statement and financial related audits while performance audits include economy and efficiency and program audits.  As used herein, the various types of audits referenced above are defined by the General Accounting Office, Comptroller General of the United States in the most recent publication entitled Governmental Auditing Standards.

To properly carry out their responsibilities, the Internal Auditing Department shall be granted the following authority: 

  • Complete access to all District records, documents, and files in any form,
  • Authority to request reasonable assistance from appropriate personnel in acquiring requested records, documents, and files,
  • Inspection privileges to all assets owned, leased, or borrowed by the District,
  • Ability to request reasonable assistance from appropriate personnel in locating assets owned, leased, or    borrowed by the District,
  • Entry privileges to any and all facilities used by the District, and
  • Interview privileges, either written or oral, with all District management, staff, and employees.

The Internal Auditor shall have access to all records of the District and shall maintain confidentiality of those records in accordance with FS §119.07(6).

The Internal Auditing Department may have neither direct responsibility for, nor authority over, any of the activities under review.  Staff of the Internal Auditing Department shall maintain independence in attitude and appearance. Nothing herein, however, shall serve to prohibit the Internal Auditing Department from working in an advisory capacity with the Superintendent and staff in evaluating internal controls in new or existing systems as a service to them.

All reports, writings, and work products produced by the Internal Auditing Department shall be considered a public record as defined in Florida Statutes Chapter 119 except where otherwise exempt.  Audits, reviews, etc. shall become a public record upon presentation and discussion at Audit Committee meetings (Ref. FS §119.07(3)(y)).

 

RESPONSIBILITIES

An organizational risk assessment shall be conducted periodically by the Internal Auditor but not less than every five years as a means of establishing the long-range audit goals for the department.  The Director of Internal Auditing shall submit an annual work plan reflecting scheduled audits and non‑audit activities to the Audit Committee for review and approval. The work plan shall be developed in cooperation with the Superintendent and shall be based on the risk assessment of the School District. The Internal Auditor, in collaboration with the Superintendent, may initiate and conduct any other audit or review if deemed necessary for potential illegal acts, fraud, abuse, and misuse of District funds. Evidence of such irregularities shall be referred to the School Board attorney when appropriate.

Reasonable notice shall be given to appropriate personnel of intent to audit in their area except when conditions warrant an unannounced audit.  The Internal Auditing Department will carry out its responsibilities in accordance with this Charter and the Standards for the Professional Practice of Internal Auditing as promulgated by the Institute of Internal Auditors. The Internal Auditing Department shall follow other professional auditing standards such as Generally Accepted Governmental Auditing Standards as appropriate given the scope and objectives of the audit or assignment.  The Internal Auditing Department shall adhere to the code of ethics of the Institute of Internal Auditing.

The Internal Auditing Department will assist and coordinate their activities with the District's external auditors in order to eliminate duplication of effort, where possible. Audits will be performed by auditors who collectively possess the knowledge, skills, and disciplines necessary to properly complete the engagement.  The Internal Auditing Department shall have authority, when necessary, to employ the services of a consultant, in order to acquire appropriate audit expertise.

 

ORGANIZATIONAL REPORTING

The Audit Committee serves to promote, maintain, and enhance the independence and objectivity of the internal audit function of the District by ensuring broad audit coverage, adequate consideration of audit or review reports, and appropriate action on recommendations.  To this end, they shall review the annual work plan, budget, and staffing needs of the Internal Auditing Department and shall make recommendations to the School Board as necessary. The Audit Committee shall review reports of the Internal Auditing Department and make recommendations, where appropriate, for clarity, tone and technical matters prior to presentation to the School Board.  Such work/reports are not final until presented to the Audit Committee. 

Changes in the annual work plan may be made only with the approval of the Audit Committee. The annual work plan and budget shall not serve to restrict or impede the Superintendent and the School Board from utilizing the services of the Internal Auditing Department for special requests.

Operationally, the Internal Auditing Department shall report to the Board and administratively to the Deputy Superintendent for coordination and authorization of leave, approval of payrolls, travel authorization, etc.  Employees of the Internal Auditing Department shall be granted all benefits and rights offered to other employees of the District.

The appointment or removal of the Director of Internal Auditing shall be based on a non-binding recommendation of the Audit Committee subject to confirmation by the School Board.  In addition, the Audit Committee shall annually make a non-binding recommendation for the length of contract for the Director of Internal Auditing.  The annual performance review of the Director of Internal Auditing shall be performed by the Chair of the Audit Committee after conversing with each of the five School Board Members.

The Director of Internal Auditing is prohibited from participating in the campaign for election of the Superintendent and Board Members or make political contributions to any such campaign. Nothing in the preceding shall serve to deny the Director’s constitutional rights.

Every effort should be made to adequately staff the Internal Auditing Department, within financial constraints; in order to perform its auditing activities.  Auditors shall maintain their technical competence through continuing education.  Provisions shall be made in their departmental budget to assist them.

 

THE AUDIT PROCESS

The Director of Internal Auditing will have direct communication with the Audit Committee in the performance of his/her work. Audits or reviews will be conducted within the following guidelines:  

  • Each audit or review will be initiated with an engagement letter issued to the department or activity being audited. The letter shall indicate the objectives and scope of the work to be done.

  • Each audit or review will result in a written report. Reports will be numbered sequentially by year and will be cross-referenced by department or office and program or subject.  The Director of Internal Auditing will schedule a meeting with the auditee to review any tentative findings.  In addition, the auditee shall receive a draft copy of the entire report.  The auditee shall be given reasonable time to prepare a written response to the report addressed to the Director of Internal Auditing.  The response shall contain a list of actual or proposed corrective actions and an estimated time line to complete each.  The auditee may include other comments they feel are appropriate.  The final report shall contain the written response of the auditee as an integral part of the report when published.  The Director of Internal Auditing shall advise the Superintendent of the findings, and schedule the report for presentation at the next available meeting of the Audit Committee.

  • To enhance the independence, objectivity, and effectiveness of the auditing process the final audit report will be issued to all members of the School Board, the Superintendent, and affected department heads at the same time, after the report is presented to the Audit Committee.  Additional copies of the reports will then be made available upon request.

  • The report will contain the professional conclusions of the Director of Internal Auditing regarding the activities audited or reviewed.  The report shall be objective, clear, concise, constructive, and timely.  Reports shall include:

  • the objectives and scope of the audit,

  • a statement indicating the standards used in performing the audit,

  • a statement that an examination for compliance with applicable laws, policies, and regulations was conducted and presentation of the findings associated with that examination, when appropriate,

  • a summary of findings, including a statement of underlying cause, when appropriate, evaluation criteria used, the current and prospective significance of the findings, and the auditors recommendations,

  • a statement that internal control systems were examined and a report of any material weakness found in the internal control systems, when appropriate,

  • statements  of response submitted  by the audited  department or office relevant to the audit findings,

  • a concise statement of the corrective actions already taken by the auditee, and

  • recommendations for additional necessary or desirable action.

The Director of Internal Auditing may request periodic status reports from audited departments, offices, and divisions regarding actions taken to address reported deficiencies and audit recommendations. The Internal Auditing Department shall perform a follow-up to findings and recommendations contained in the report and publish a written report addressing them. During the course of audit work, the Director of Internal Auditing and his staff shall be alert to any indications of fraud or illegal acts. 

If, during the course of work, evidence of apparent violations of law or instances of malfeasance or misfeasance by an employee is detected, the Director of Internal Auditing shall consult with the Superintendent and attorney for the School Board. If the activity is deemed to be criminal in nature, the investigation shall be turned over to local law enforcement based on recommendations of the School Board attorney.

 

QUALITY ASSURANCE

The audit activities of the Internal Auditing Department shall be subject to an external quality assurance review at least once every  five years.  Such review shall be conducted by individuals possessing appropriate professional knowledge and abilities and must be independent of the Escambia County School District. The review shall determine the level of compliance with this Charter and the Standards for the Professional Practice of Internal Auditing. A copy of the written report of this independent review shall be furnished to the Director of Internal Auditing, the Audit  Committee, each member of the School Board, and the Superintendent.  The report shall contain recommendations to enhance the work of the Internal Auditing Department.  The District shall provide for the cost of the review as part of the budget for the Internal Auditing Department.

In an effort to continually improve the internal audit function, the Internal Auditing Department shall be encouraged to maintain professional relationships with other internal auditing departments.  In addition, they shall be encouraged to maintain membership in and attend meetings of local, state and national organizations that serve to promote the modern practice of auditing and internal auditing.

History: New 12/14/99. Amended 06/13/00; 07/24/00; 06/28/05

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