Below is a summary of the process for a typical department review. The process may vary from one engagement to the next depending on various factors.
The head of the department or area being audited is informed in advance that an audit has been scheduled. The planning phase will include gathering preliminary available background information, developing the audit approach, time budgeting, and sending a memo to the campus president to provide information about the coming audit.
- Entrance Meeting
An entrance conference is held to provide the opportunity for the audit team and department members to meet each other and discuss audit procedures and the overall purpose and objectives of the audit; including goals, schedule, scope, and any issues that management may have related to the audit. Tentative dates for fieldwork will be scheduled and issues or processes that members of the department would like included in the scope of work will be defined.
- Schedule Request
Internal Audit will usually request documentation from management prior to beginning fieldwork. Such items include: organizational charts, financial information, policy and procedure manuals, flow charts, promotional literature, contracts, grant documents, etc.
This is the stage characteristically thought of as the audit. During this stage, Internal Audit staff will regularly consult with and/or be present at the auditee’s location. Through meetings with management and other personnel, we will make inquiries and observations to understand risks and document the control environment and internal controls over areas defined by audit objectives and scope. This can include revenue and expenditures, budget and inventory processes, information systems, and/or other areas as defined by audit. We select samples of transactions to test controls identified through the process mentioned above to assess if they are functioning adequately and to look for any areas of inefficiency. We discuss all observations with, and provide weekly status reports to, departmental management during the fieldwork phase. Our discussions are intended to provide the opportunity for management to ask questions, correct any misinterpretations, and provide further details and/or documentation to make pertinent clarifications.
- Draft Report
After completing fieldwork we will develop a draft report to include a background and scope of the audit, a summary of the positive findings and areas for improvement that were identified during the audit, and recommendations for management’s response. This draft report should contain no surprises for the managers with whom Internal Audit has been working. The observations and recommendations are detailed in approximate order of priority. The draft report will be distributed to management prior to the exit conference to provide an opportunity for their review and preparation of responses.
- Exit Conference
Comments regarding the audit and observations noted in the draft report will be discussed at this meeting. Attendees are typically those who also attended the entrance conference. During the exit meeting we will obtain and discuss management’s preliminary comments/responses to Internal Audit’s observations and recommendations.
- Final Draft
After the exit conference the final draft is written to incorporate management’s responses and action plans, taking into consideration Internal Audit’s recommendations. This draft is sent to management and provides the opportunity for management to correct wording of their responses and action plans or provide any necessary clarifications.
- Final Report Issued
A final report, including any revisions to management responses, is presented to the Audit Committee of the USNH Board of Trustees for review and acceptance.
Part of our audit process includes feedback from our auditees. We want and encourage your evaluation of our work. Your recommendations provide valuable insight and can help us improve.
We will contact you at least semi-annually prior to the Audit Committee meetings regarding the implementation of management actions indicated in the audit report. For some audits, a formal follow-up audit occurs 12-18 months after the original audit’s Final Report. Follow-up audits are typically shorter in duration than original audits and involve inquiry of management and some limited test work. Follow-up audit reports outline the findings that have been completely resolved, those that are partially resolved, and any outstanding items that have not been sufficiently addressed.