Policies & Procedures
Purpose
Internal Auditing is an independent, objective assurance and consulting function designed to add value and improve the District’s operations. The Internal Audit function provides the Board of Trustees and Superintendent with independent analyses, appraisals, and recommendations. It helps the District accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. As a partner with management, Internal Audit serves as an in-house consultant on many issues of concern.
Authority
Internal Auditing is authorized to direct a broad, comprehensive program of examination within the District. Authorization is granted for full and free access to any of the District’s records (either manual or electronic), physical properties, activities, and personnel relevant to a review.
To ensure independence and objectivity, Internal Audit shall not develop and install procedures, prepare records, or engage in any activity that would normally be subject to its review. Auditors have no direct responsibilities or any authority over any of the activities or operations that they review. This does not preclude Internal Auditors from serving in an advisory capacity in the implementation of improvements or the establishment or re-designing of activities, policies, procedures, or information systems.
Responsibility
The auditor shall develop an annual comprehensive internal audit plan for the District. The audit plan shall be based on an assessment of the District’s risks. The Internal Audit plan should be submitted to the superintendent for approval and the Board of Trustees for review.
Reporting
The Internal Auditor reports functionally to the Board of Trustees and administratively to the Superintendent.
Scope
The scope of Internal Auditing encompasses the examination and evaluation of the adequacy and effectiveness of the District’s system of internal control and the quality of performance in carrying out assigned responsibilities and achieving established objectives. The scope of Internal Auditing includes:
Evaluating the reliability and integrity of financial, operating and performance information and the means used to identify, measure, classify and report such information.
Analyzing the systems established to ensure compliance with those policies, plans, procedures, laws and regulations that could have a significant impact on operations and reports, and determining whether the District is in compliance.
Reviewing the means of safeguarding assets and, as appropriate, confirming the existence of such assets.
Appraising the economy and efficiency with which resources are employed.
Assessing operations and programs to ascertain whether results are consistent with established objectives and goals.
In addition, Internal Audit will provide consulting services to assist management in identifying and assessing risks in their departments and to provide suggestions for improving and streamlining processes.
Standards of Internal Audit
The Internal Audit department shall adhere to the professional and ethical standards regarding Internal Auditing as stated in the Standards for Professional Practice of Internal Auditing established by the Institute of Internal Auditors.
Annual Risk Assessment
Due to the complexity of District operations and limited Internal Audit resources a risk assessment is prepared annually to determine the risk associated with each department or activity. All areas identified for audit coverage are evaluated against the criteria present below. A rating scale of 1 to 5, with 5 having the greatest risk, is applied to these criteria.
Materiality.
Audited/Reviewed by third party.
Risk of loss or diversion.
Previous problems reported.
Change in management, laws or procedures.
Complexity/Volume of transactions.
Management control environment.
Potential media interest.
After compiling this information, the audit areas are ranked according to the degree of risk. The audit plan is then developed from this assessment.
Internal Audit Programs
Internal Audit programs will be developed based on the nature and scope of the review being performed. Standard audit programs are also available within Humble ISD’s Internal Audit department.
Work Paper Retention
Audit work papers and audit reports will be kept for five and ten years, respectively. A longer retention period for special audits should be determined by the Internal Auditor’s professional judgment based on the unique circumstances involved.
Management Self Assessment
Due to the size and complexity of District operations and the limited resources of the Internal Audit Department, all areas cannot reasonably be covered within any given year. Internal Audit plans to use management self assessment reviews in many areas to increase the coverage and also to provide management with training on how to evaluate their own processes. These reviews also help managers to see where the potential weaknesses are in their own areas and to develop their own plan to strengthen controls.