FM-1 Internal Audit & Management Advisory Services Department Charter

Mission

The mission of the Internal Audit & Management Advisory Services (IAMAS) Department is twofold: to support the vision, mission and values of the Maricopa County Community College District (MCCCD) and its colleges and centers by providing independent, objective assurance and consulting services designed to add value and improve the organization's operations; and to help ensure the efficient and effective use of resources, program operations, and stewardship over assets. The IAMAS department helps the MCCCD accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

Authority 

As established within MCCCD administrative regulation (1.13.1 Internal Audit Authority), the IAMAS Department is granted authority to:

• Assess all MCCCD functions, programs and control systems, and is responsible to advise the Audit & Finance Committee and management concerning the condition of reviewed functions, programs, and systems.
• Allocate resources, set frequencies, select subjects, determine scope of work, and apply the techniques required to accomplish audit objectives.
• Obtain the necessary assistance of personnel in units of the organization where they perform audits, as well as other specialized services from within or outside the organization.

Access

As established within MCCCD administrative regulation (1.13.2 Internal Audit Access) in the performance of audits, members of the IAMAS team are granted unlimited accessibility to all MCCCD activities, records, property, and employees, within the limits of the law, and are charged with maintaining stringent accountability of safekeeping and confidentiality.  They are granted unrestricted access to the Chancellor, all Vice Chancellors, all college presidents and provosts, the MCCCD Governing Board, and the Audit & Finance Committee.

Scope of Work

The scope of work includes assurance services to determine whether the organization’s network of risk management, control and governance processes, as designed and represented by management, is adequate and functioning in a manner to ensure:

• Risks are appropriately identified and managed.
• Interaction with the various governance groups occurs as needed.
• Significant financial, managerial, and operating information is accurate, reliable and timely.
• Employees’ actions are in compliance with policies, standards, procedures and applicable laws and regulations.
• Resources are acquired economically, are used efficiently and are adequately protected.
• Programs, plans and objectives are achieved.
• Quality and continuous improvement are fostered in MCCCD’s control process.
• Significant legislative or regulatory issues impacting the organization are recognized and addressed properly.

Accountability

The Director of IAMAS (Director), in the discharge of his/her duties, shall be accountable to management and the Audit & Finance Committee to:

• Report significant issues related to the processes for controlling the activities of the MCCCD, including potential improvements to those processes, and provide information concerning such issues through resolution. This would include informing and advising the Audit & Finance Committee of the Governing Board and management on the areas examined, and discharging the responsibilities in a manner that is consistent with the Institute of Internal Auditors (IIA) Code of Ethics.
• Provide copies of completed audits to the Audit & Finance Committee and Governing Board Members. The Director and IAMAS staff will lead the discussion on audit reports with the Audit & Finance Committee. IAMAS follow-up on audit recommendations will occur three months after the audit is completed. This will serve to ensure timely implementation of findings. If progress on findings is unclear as to a plan of action to address the findings within six months, the Audit & Finance Committee may request the auditee to attend the next Audit & Finance Committee meeting to review the status of the audit findings. Significantly delinquent audit finding progress may also be referred to the appropriate Vice Chancellor for follow-up with the auditee.  If the Audit & Finance Committee does not find that the auditee’s response is adequate, it will so notify the Chancellor and Governing Board.

Reporting Relationships and Independence

Reporting relationships will be maintained in a manner that supports departmental independence and promotes comprehensive audit coverage. To provide for the independence of IAMAS, its personnel report to the Director, who reports administratively to the Vice Chancellor for Business Services while operating under the direction of the Audit & Finance Committee. The Director  will periodically report to the Audit & Finance Committee in a manner outlined in the section on accountability and will provide  a regular report on Internal Audit personnel. As necessary, the Director may  meet  with the MCCCD  Chancellor to discuss the status of the audit plan and matters of concern.

The Director of IAMAS Has Responsibility To:

• Develop a flexible annual audit plan using appropriate risk-based methodology, including any risks or control concerns identified by management, and submit that plan to the Audit & Finance Committee for review and approval.   At the beginning of each fiscal year, the Audit & Finance Committee formally authorizes the three-year audit plan. This plan is used in planning and budgeting audit assignments and is annually re-evaluated using a risk assessment process. Input obtained from senior management, college administrators, and the Auditor General’s Office is instrumental in developing this plan. The audit plan is considered a guide to distribute internal audit coverage across MCCCD but remain flexible enough to accommodate unexpected changes.
• Implement the annual audit plan, as approved, including, and as appropriate, any special reviews or projects requested by members of the Chancellor’s Executive Council (CEC) and the Governing Board. Any special reviews will be initiated through an audit intake form, completed by a CEC or Governing Board Member, and submitted to IAMAS for review. The Director and Vice Chancellor for Business Services will evaluate these special review requests.  In consultation with the Vice Chancellor for Business Services, the Director  will schedule special reviews requested during the year while attempting to limit the impact to the audit plan.  It is understood that the audit plan should remain flexible enough to accommodate such special reviews and the audit plan may be adjusted as necessary during the year.   In the event a determination cannot be reached as to the scheduling of a special review, the Audit & Finance Committee shall be consulted and make a recommendation as to whether an audit should be conducted and the audit plan adjusted accordingly.
• Maintain a professional audit staff with sufficient knowledge, skills, experience, objectivity, and professional certifications to meet the requirements of this Charter.
• Establish a quality assurance program by which the Director  assures the operations of internal auditing activities and periodically reports to management and the Audit & Finance Committee on its conformance with the International Standards for the Professional Practice of Internal Auditing.
• Perform consulting services, beyond IAMAS’ assurance services, to assist management in meeting its objectives. Examples may include facilitation, process design, training, and advisory services.
• Evaluate and assess significant new functions, changing services, processes, operations and control processes coincident with their development, implementation and/or expansion.
• Issue periodic reports to the Audit & Finance Committee and management summarizing results of audit activities.
• Keep the Audit & Finance Committee informed of emerging trends and successful practices in internal auditing.
• Provide a list of significant measurement goals and results to the Audit & Finance Committee.
• Assist in the investigation of significant suspected fraudulent activities within the organization and notify management and the Audit & Finance Committee of the results.
• Consider the scope of work of the Auditor General’s Office and regulators, as appropriate, for the purpose of providing optimal audit coverage to the MCCCD at a reasonable overall cost.
• Periodically discuss the Mission, the Core Principles for the Professional Practice of Internal Auditing, the Definition of Internal Auditing, the Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing with management and the Audit & Finance Committee.
• Confirm to the Audit & Finance Committee, at least annually, the organizational independence of the internal audit activity.
• Periodically review this Charter and obtain Audit & Finance Committee approval for any updates.

Standards of Audit Practice

The IAMAS department recognizes the mandatory nature of the Core Principles for the Professional Practice of Internal Auditing, Definition of Internal Auditing, the Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing of The Institute of Internal Auditors.

Note: below is a formal sign-off of the Internal Audit Charter by the Audit & Finance Committee Chair, Chancellor, Vice Chancellor for Business Services and the Director of Internal Audit.

Chair of the Audit & Finance Committee    Date

Chancellor                                                  Date

Vice Chancellor for Business Services      Date

Director of Internal Audit                            Date