What is the Internal Audit Department

By Joseph Knight,2014-05-19 01:36
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What is the Internal Audit Department



    The University of Texas System (UTS) Policy129, Internal Audit Activities,

    authorizes the establishment of an institutional audit committee. Appendix A,

    System-wide Internal Audit Charter, states “Each component institution will organize and maintain an institutional audit committee.”


    The University of Texas Medical Branch (UTMB) Audit Committee is an essential

    part of the risk management and internal control infrastructure of the institution and

    of the UT System. Its primary responsibilities are to assist the President in the:

    ? Oversight and direction of the internal auditing activity

    ? Oversight of and responsibility for UTMB’s financial statement preparation

    process and awareness of UTMB related issues that may arise from the UT

    System financial audit

    ? Oversight of institutional engagements that may be performed by the

    external public accounting firm also conducting the UT System financial


    ? Reporting of risk management and audit activity to the UT System,

    including the Audit, Compliance, and Management Review (ACMR)

    Committee of the Board of Regents


The President shall appoint the members of the Audit Committee, which will


    ? The President, EVP and Provost, EVP and CEO of the Health System, EVP

    and Chief Business and Finance Officer, Chief Legal Officer, Chief

    Physician Executive, and Chief Information Officer, by nature of their

    positions, and

    ? Other key members of the institution, as appropriate, and

The University of Texas Medical Branch

    Audit Committee Charter

    ? At least two members from outside the institution

    ? The Chairman is the President or the President’s designee.

    ? Non-voting members of the committee who serve as resources to assist the

    committee in carrying out its responsibilities shall include:

    ? Associate Vice-President, Audit Services (Chief Audit Executive)

    ? UT System Chief Audit Executive or his/her designee Education ? Representative of the UT System Office of Health Affairs Audit Services, the System Audit Office, and the System Controller’s Office are

    responsible for providing Audit Committee members with educational resources

    related to accounting principles and procedures, business and financial risk

    management, internal auditing standards and best practices, and other information

    necessary to discharge their responsibilities.


    The Audit Committee should meet periodically (at least quarterly) as determined by

    necessity and at the request of the President. The meetings should provide for direct

    communication between the members and the chief audit executive. Evidence of

    the discussions and the actions taken by the committee should be reflected in

    recorded minutes of the meetings. A majority of members constitutes a quorum and

    attendance should be recorded in the minutes.


    The Audit Committee’s specific responsibilities in carrying out its oversight and

    reporting roles are delineated in the Audit Committee Responsibilities

    Checklist. The responsibilities checklist will be updated annually by the Audit

    Committee to reflect changes in regulatory requirements, authoritative guidance,

    UT System guidance, and best practices in business and financial risk management.

    As the compendium of Audit Committee responsibilities, the most recently updated

    responsibilities checklist will be considered an addendum to this charter.

Approved by President David L. Callender, M.D., and the Institutional Audit

    Committee on September 2, 2009.




    ? Meet at least four times per year (more frequently as circumstances require

    or at the request of the President)

    ? Have meeting agenda prepared by Chief Audit Executive in consultation

    with the Chairman of the Audit Committee

    ? Have approved minutes of meetings maintained by Chief Audit Executive ? Annually review the Audit Committee Charter and assess performance of

    the responsibilities delineated in that charter

    ? Perform such other functions as assigned by the Audit, Compliance, and

    Management Review Committee of the Board of Regents


    ? Approve an Internal Auditing Charter that is consistent with the Texas

    Internal Auditing Act and the Standards of the Professional Practice of

    Internal Auditing

    ? Periodically review the Internal Audit Charter to ensure it encompasses any

    required revisions

    ? Review the risk assessment methodology used to develop the Audit

    Services Annual Work Plan to ensure that all applicable business and

    financial risks have been identified

    ? Review the Annual Work Plan to ensure appropriate coverage for risks

    identified in the risk assessment, including coverage of significant financial

    and information systems

    ? Approve the Annual Work Plan and all changes thereto

    ? Review quarterly the status of completion of the Annual Work Plan ? Receive the results of all completed internal audit engagements ? Receive reports of hotline activity related to internal controls, financial

    management, internal auditing, or external auditing

    ? Review all significant recommendations and management action plans to

    address those recommendations

    ? Monitor the status of management action plans for significant



    The University of Texas Medical Branch

    Audit Committee Responsibilities Checklist

? Approve the utilization of Internal Audit resources outside the Annual

    Work Plan

     ? Review staffing and organization of the internal audit activity for

    appropriateness in relation to the institution and its identified risks and

    make recommendations to the President if necessary

    ? Request an annual self-assessment by the internal audit function and review

    the results

    ? Ensure that an external quality assessment is performed at least once every

    three years and review the results

    ? Provide input to the President for the annual evaluation of the Chief Audit


    ? Provide input to the President on the hiring and dismissal of the Chief Audit




? Determine that UTMB management has assumed responsibility for

    identifying (i.e., performing a risk assessment) and managing (i.e.,

    implementing internal controls) the business and financial risks.

    ? Oversee the preparation of UTMB’s financial statements through the review


    ? The closing process used by UTMB

    ? The certification process outlined in UTS Policy 142 titled

    Accounting Policies

    ? Financial and internal controls information provided by internal

    audit documents

    ? Financial and internal control information provided by external

    public accounting firm audits

    ? Analytical information provided by institution management, internal

    audit, and/or external auditors

    ? The methodology used to identify, assess, and manage possibilities

    for fraud in business and financial processes


? Monitor contracting with the external audit firm to ensure compliance with

    the requirements of UTS 142.1, Annual Financial Report, and the operating

    rules of the ACMR Committee


The University of Texas Medical Branch

    Audit Committee Responsibilities Checklist

    ? Review the reports of any external audit firms contracted by the institution

    to perform financial, reporting, accounting, or audit services

     ? Monitor all UTMB related activity by the State Auditor’s Office and the

    State Comptroller’s Office.



Provide the following to the System Audit Office for use by the ACMR Committee

    in discharging its oversight duties for the UT System:

    ? Annual work plan and changes thereto

    ? Status of the Annual Work Plan and completed engagements

    ? Report of hotline activity related to internal controls, financial management,

    internal auditing, or external auditing

    ? Significant recommendations

    ? Status of significant recommendations

    ? Contracts with external public accounting firms for financial related activity

    ? Other matters as requested by the ACMR Committee

    ? Contracts with external public accounting firms for financial related


    ? Other matters as requested by the ACMR Committee


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