Internal Audit Charter

 
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INTRODUCTION

The Utah Department of Health Office of Internal Audit (Internal Audit) was established by the Utah Internal Audit Act (UCA §63i-5).

PURPOSE

The purpose of Internal Audit is to provide an independent, objective assurance and consulting activity designed to add value and improve the operations of the Utah Department of Health (UDOH) risk management efforts. It assists UDOH and its governing board accomplish their objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of processes and controls designed to manage risk.

INDEPENDENCE

To help ensure independence and objectivity, Internal Audit reports to the UDOH Executive Director (Executive Director). The Executive Director appoints the Director of Internal Audit, who controls and supervises the Office of Internal Audit. The Executive Director, with input from executive leadership, defines the internal audit activity’s responsibilities.

PROFESSIONALISM

The internal audit activity will govern itself by adherence to The Institute of Internal Auditors’ mandatory guidance including Definition of Internal Auditing, The Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing (Standards). This mandatory guidance constitutes principles of the fundamental requirements for the professional practice of internal auditing and for evaluating the effectiveness of the internal audit activity’s performance.

The Institute of Internal Auditors’ Practice Advisories, Practice Guides, and Position Papers will also be adhered to as applicable to guide operations. In addition, the internal audit activity will adhere to UDOH and State of Utah relevant policies and procedures, as well as the internal audit policies and procedures.

AUTHORITY

The Utah Internal Audit Act (UCA §63i-5) identifies the Executive Director with authority to direct the efforts of internal audit. The Chief Audit Executive (Audit Director) reports functionally and administratively to the Executive Director. The Executive Director has the powers and duties as listed in UCA §63i-5-301.

The Executive Director approves:

  • the internal audit charter;
  • the annual risk-based audit plan;
  • the internal audit budget and resource plan;
  • the internal audit policies; and
  • appointment, removal, and remuneration of the Audit Director.

The Office of Internal Audit (OIA) is authorized to:

  • have unrestricted access to all personnel, physical properties, and records pertinent to carrying out any engagement, with strict accountability for confidentiality and safeguarding records and information;
  • have full and free access to the Executive Director;
  • allocate resources, set frequencies, select subjects, determine scope of work, and apply the techniques required to accomplish audit objectives; and
  • obtain the necessary assistance of divisions where audits are performed, as well as other specialized services from within or outside the organization.

To maintain an independent status, Internal Auditors are not authorized to:

  • Perform any operational duties for the Entity or its boards and committees.
  • Initiate or approve accounting policies and procedures or transactions external to the Internal Audit department.
  • Direct activities of any UDOH employees not employed by Internal Audit department, except to the extent such employees have been appropriately assigned to auditing teams or to otherwise assist the internal auditors.

SCOPE AND RESPONSIBILITIES

Internal Audit will:
  1. Develop an annual audit plan using appropriate risk-based methodology and considering risks or concerns identified by management to be submitted to the Executive Director for approval. The annual audit plan shall include at a minimum, the following information:
    1. A summary of the scope of each proposed audit to be conducted.
    2. Identification of the division, bureau, service, program, function, or policy to be audited.
    3. Each potential audit objective to be addressed.
  2. Implement the annual audit plan as approved, including any requested special projects as approved by the Executive Director.
  3. Conduct investigations of alleged or suspected impropriety, fraud, misappropriation, or other misuse of UDOH funds, and seek advice from the department’s attorney as appropriate and provide required reports to appropriate authorities.
  4. Act as an audit liaison for the UDOH with external auditors and monitor the implementation of corrective actions recommended by external audits as appropriate.
  5. Submit reports to the Executive Director indicating audits completed, major findings, corrective actions taken by management, and significant findings which have not been fully addressed by management.
  6. Maintain a qualified, competent audit staff having the necessary knowledge, skills and disciplines to perform this function.
  7. Request adequate resources necessary to accomplish audit objectives.
  8. Coordinate with the State Auditor and external auditors to minimize duplication of efforts and maximize efficient audit coverage.
  9. Receive, track, and report hotline complaints to the Executive Director.
Internal Audit may:
  1. Subject to the approval of the Executive Director, conduct special reviews and programmatic reviews at the request of the governing board, finance officer, department heads, boards and committees.
  2. Subject to the approval of the Executive Director, provide advisory assistance to departments, boards, and committees for evaluation of financial controls and other audit related matters.
  3. Subject to approval of the Executive Director, perform consulting engagements contracted and paid for by the requesting program. All consulting engagements must add value to UDOH, be included on the approved annual audit plan, and have a memorandum of understanding outlining the agreed upon procedures.
  4. Amend the annual audit plan, subject to the approval of the Executive Director.
  5. Initiate, conduct, or expand the scope of an audit or investigation if a finding requires expansion of the scope, or if a determination has been made that fraud, abuse, or an unlawful act may have occurred.

QUALITY AND ASSURANCE IMPROVEMENT PROGRAM

The internal audit activity will maintain a quality assurance and improvement program that covers all aspects of the internal audit activity. The program will include an evaluation of the internal audit activity’s conformance with the Definition of Internal Auditing and the Standards and an evaluation of whether internal auditors apply the Code of Ethics. The program also assesses the efficiency and effectiveness of the internal audit activity and identifies opportunities for improvement.

The Audit Director will communicate to the Executive Director on the internal activity’s quality assurance and improvement program, including results of ongoing internal assessments and external assessments conducted at least every five years.