A Guide for Audits
The goal of the City Auditor's Office is to provide professional, independent auditing services to City agencies to promote:
- Full Financial Accountability
- Efficiency and Effectiveness of operations and programs
- Compliance with relevant laws and regulations
Selection of Audit Areas: The City Auditor alone selects programs or and departments to audit. Requests for audits may come from City Council, the Mayor, department heads, employees and citizens.
Entrance Conference: Initially the auditor and department director confer to discuss audit objectives. The auditor inquires about management's objectives and any areas management wishes to have examined. If staff time is available, we include those areas in the audit. If time does not allow, we will make every attempt to schedule a review of those areas at a later date.
Planning: In this phase the auditor gathers background information; obtains an understanding of the organization's mission, structure, goals, policies and procedures; and begins benchmarking other entities practices in the same area(s). The auditor must interview departmental staff regarding written and unwritten procedures followed.
Using this information and the stated goals of the program to be audited, the auditor performs a risk analysis to decide which elements of the program are most important to audit, and, finally, develops audit objectives (questions to be answered) and audit steps to achieve the objectives.
Field Work: Once the objectives and work plan are completed, the auditor(s) collects data, measures performance and analyzes data to accomplish the audit objectives. Often, the auditor will ask the organization's staff to help retrieve documentation from files or computer records and to provide schedules needed in the audit.
What does an auditor look for?
- The primary emphasis in our work is to evaluate the internal control system in
place; that is, we identify and test the procedures management has implemented
to ensure it reaches its objectives.
- Secondly, the auditor looks for ways of promoting efficiency and effectiveness
within the department/ program. At times the evaluation of a particular program
may be the focus of an entire audit.
- Finally, the auditor assesses financial reliability and compliance with
applicable laws and regulations.
The audit staff will make every attempt to accommodate departmental schedules and work load.
Audit Report: Even though one auditor may conduct an audit, other staff members assist that auditor. As a result, the Audit Report is not simply the product of one auditor's work. The report consists mainly of recommendations based on the auditor's 'findings'. When the auditor concludes that an action or condition existed that:
- was contrary to management's orders or City policies; or
- did not help a program reach it goals; or
- was not efficient or effective; or
- was not in compliance with laws and regulations, the auditor prepares an audit comment ("finding").
Our policy is to discuss each comment with the proper departmental staff, as well as with management. There will be no surprises in the final report.
We furnish a draft of the report to various members of the organization's management before publication to solicit written responses and comment. The Internal Auditor invites management to:
- correct factual errors or misinterpretations of what occurred,
- provide data showing why the comment is not valid, and
- create written responses (to be included in the report) to the recommendations, saying
- what will be done about the comment,
- who is responsible for implementing the recommendation and
- when it will be completed.
Publication: We include Management's comments within the audit report. After publication, the report finds its way to City Council, the City's Audit Committee, City Administration and the appropriate Department Director. City Charter insists that published reports, once issued, become public information. At its quarterly meetings, the Auditor Committee reviews each report issued that quarter. Department officials are invited to attend.
Confidentiality: Similar to other professional relationships, confidentiality governs the report prior to issuance; audit results are not disclosed outside City management before issuance of the audit report.
Fraud, Illegal Acts: The Internal Auditor is required to notify the appropriate authorities when uncovering probable fraud or illegal activity.
Although the audit process can be an intrusion in a department's schedule, we believe that both auditor and management ultimately share the same goals: to improve the operations of the City and make the best use of City resources.
If you have any questions regarding the audit process,
please do not hesitate to call (804) 646-5616.