The mission of the internal audit function is to provide the Board of Trustees with independent analyses, appraisals and recommendations concerning the adequacy and effectiveness of the District's systems of internal control, accuracy of financial records and efficiency of operations.
Purpose of this Charter
The purpose of this charter is to provide a general understanding of the role and responsibilities of the Internal Auditor within Waco ISD.
The objective of internal audit is to assist members of the District in the effective discharge of their responsibilities. To this end, Internal Audit furnishes them with analyses, recommendations and information concerning the activities reviewed. The audit objective includes promoting effective control at reasonable cost.
The scope of internal audit 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.
The internal audit activity must be independent and objective. Independence permits the auditor to render the impartial and unbiased judgments essential to the proper conduct of audits. Independence is achieved through organizational status and the auditor's mental attitude in performing assigned audits. In order to retain the highest degree of independence and objectivity, the internal auditor shall have direct and unrestricted access to the Audit Committee of the Board of Trustees.
The internal audit activity must be free from interference in determining the scope of internal audit, performing work, and communicating results. (International Standards for the Professional Practice of Internal Auditing 1110.A1).
The internal auditor should be independent of the activities audited. The internal auditor should be free of all operational and management responsibilities that would impair the internal auditor's ability to review independently all aspects of the school district's operations.
The internal audit function is established by the Board of Trustees and its responsibilities are defined by the Audit Committee of the Board. The internal auditor will report functionally to the Audit Committee of the Board and administratively to the Superintendent. Consequently, goals for the internal Auditor shall be set by the Audit Committee.
Per the Institute of Internal Auditors "Examples of functional reporting to the board involve the board:
- Approving the internal audit charter
- Approving the risk based internal audit plan
- Receiving communications from the chief audit executive on the internal audit activity's performance relative to its plan and other matters
- Approving decisions regarding the appointment and removal of the chief audit executive
- Approving the remuneration of the chief audit executive
- Making appropriate inquiries of management and the chief audit executive to determine whether there are inappropriate scope or resource limitations.
The internal audit department is authorized to:
- Have unrestricted access to all functions, records (manual or electronic), physical properties and personnel of Waco ISD, relevant to any function under review
- Have full and free access to the Audit Committee of the Board
- Allocate resources, set frequencies, select subjects, determine scopes of work, and apply the techniques required to accomplish objectives listed in Services Provided
- Obtain the necessary assistance of personnel in WISD
The internal auditor is not authorized to:
- Perform operational duties for the district outside the Internal Audit Department
- Initiate or approve accounting transactions external to the Internal Audit Department
- Have direct responsibility or any authority over any of the activities or operations that they examine
- Develop and install policies and procedures, prepare records, perform managerial or operational responsibilities, or engage in activities that would normally fall under the scope of their procedures
Professional Proficiency and Due Professional Care
Internal Audit activities should be performed with the proficiency and due professional care. The internal auditor is responsible for continuing her education in order to maintain proficiency and technical competence. The internal auditor should be kept informed of improvements and current developments in internal auditing standards, procedures and techniques and should be provided continuing education through membership and participation in professional societies and peer groups; attendance at conferences and seminars; and participation in self-study programs.
The internal auditor should use reasonable audit skill and judgment and exercise due professional care in performing assurance and consulting services. The internal auditor is required to conduct examinations and verifications of the activity under audit to a reasonable extent but is not required to perform detail audits of all transactions. Accordingly, the internal auditor cannot give absolute assurance that noncompliance or irregularities do not exist. Nevertheless, the possibility of material irregularities or noncompliance should be considered whenever the internal auditor undertakes and audit assignment.
It is the responsibility of the department manager or campus administrator to make available to the auditor all financial records, documentation, and access to key individuals that are related to the audit being conducted. The auditor cannot be expected to be completely knowledgeable about all activities, systems, procedures and programs within the organization. The auditor cannot perform the auditor's duties effectively and within a limited time without full cooperation from the department or area under review.
The audit schedule will be submitted to the Audit Committee for review and approval annually. The schedule will list all departments, programs, and activities subject to review within the next audit year. The schedule will be established based on a documented risk assessment, undertaken at least annually. The input of senior management will be considered in the risk assessment process. Changes to the schedule or the assignment of special projects shall be made only with the written approval of the Audit Committee.
This charter is intended to serve as a guidance to the internal auditor in accomplishing responsibilities. The internal auditor will assess, on an annual basis, whether the purpose, authority, and responsibilities, as defined in this charter, continue to be adequate in enabling the Internal Audit Department to accomplish its objectives and to be applicable as the auditing profession and the structure and operations of Waco ISD changes.