Types of Internal Audits
Internal Auditing at USNH
USNH maintains a small professional internal audit department to develop and carry out an annual plan of activities that is approved and monitored by the Audit Committee of the USNH Board of Trustees. Each year’s plan includes approximately thirty audits and consultation projects as well as hundreds of hours of assistance to the external auditors. Audits and other projects are selected for the plan on the basis of financial, regulatory, and operational risks and management priorities, with input from senior officers throughout USNH and USNH’s external auditors.
Operational Audit – An operational audit evaluates performance of a particular function or department to assess its efficiency and effectiveness. Operational audits typically combine elements of financial, IT, and compliance audits, and focus on risks pertinent to the specific responsibilities of the audited unit.
Compliance Audit – A compliance audit evaluates an area’s adherence to established laws, standards, regulations, policies, and/or procedures.
Financial Audit – A financial audit assesses the validity and appropriate statement of budgeting and accounting information in USNH financial records and the adequacy of related internal controls.
Follow-Up Audit – The purpose of a follow-up audit is to revisit a past audit’s recommendations and management’s action plans to determine if corrective actions were taken and are working, or if situations have changed to warrant different actions.
Investigations – An investigation is an inquiry into circumstances surrounding suspected incidents of fraud, misuse of University assets, or violations of USNH policies. Investigations are conducted to determine the extent of loss, assess weaknesses in controls, and make recommendations for corrective actions. The University will conduct these investigations in a manner that protects the civil rights of those who may be the subject of allegations.
IT Audit – An Information Technology (IT) audit evaluates controls related to the institution’s automated information processing systems. IT audits include an assessment of data, networks, hardware, applications, databases, servers, contracts, software/hardware licensing, security, business continuity, access authorization, and compliance with the institution’s objectives, policies, and procedures. The goal is to ascertain that IT systems are safeguarding assets, maintaining data integrity, and efficiently operating to achieve business objectives.
External Auditing at USNH
Annual External Financial Statement Audit – The annual financial statement audit covers all the accounts of the System, its institutions, and entities ultimately under the USNH Board of Trustees’ control such as the UNH Foundation. This audit is referenced in State law, Title XV, Section 187-A:25-a. It requires the engagement of an external audit firm. USNH undertakes a competitive proposal and bid process every 5-7 years to select the best qualified independent accounting firm at most reasonable cost to recommend to the governor for appointment to perform this audit. KMPG, LLP is currently engaged for this function.
Annual External Audit of Federal Expenditures – The federal government requires organizations that receive significant federal funding to have their federal fund expenditures separately audited in conjunction with the annual financial statement audit. This USNH audit is currently performed by KMPG, LLP with assistance from USNH Internal Audit. The primary focus of this audit is on compliance with federal regulations associated with the research and student financial aid programs at all USNH institutions. Given UNH’s size and research mission, its programs dominate the annual USNH Schedule of Expenditures of Federal Awards.
Other Annual External Audits – External auditors are engaged to examine the financial statements of the UNH Foundation, which is a not-for-profit organization in its own right, and to perform agreed-upon procedures in relation to the UNH Athletics department’s statement of revenue and expenses.
Annual Agreed Upon Procedures Reporting on Athletics Financial Statement – The National Collegiate Athletics Association (NCAA) requires its Division I schools to develop an annual financial statement of all Athletics-related revenues and expenditures by major program/sport, including any funds of relevant outside organizations such as booster groups, and engage an independent accountant to perform and report to the institution’s president on certain procedures that have been agreed upon between the president and the independent accountant, including certain minimum procedures specified by the NCAA. UNH is USNH’s only NCAA Division I school.
Other Audits – USNH and its component units are subject to many other independent assessments from external agencies at the federal and State level, bond-rating agencies, and accrediting associations. Occasionally, one-time audit requirements arise, such as in association with a particular grant.