| Internal Audit Frequently Asked Questions|
What is the purpose of the Frequently Asked Questions (FAQ)?
The FAQ are here to help make the Norfolk State University community more comfortable with our office and the work being completed by our staff. The Internal Audit Department will always try to make the audit experience less fearful and more helpful to the Auditee. A department being reviewed should look at an audit as a learning experience and an opportunity to enhance their operations as a department and the University as a whole.
How does my department get selected?
There are several ways a department could be chosen for an audit. The Internal Audit Department uses a risk-based approach in the determination of which departments to audit during a given fiscal year. The fiscal year runs from July 1 of a current year to June 30 of the following year.
The risk-based factors are evaluated and assigned a value, added together, and then compared to other areas of the University. These "scores" are ranked for an overall risk value and the audits are scheduled accordingly. Some of the factors that may be used in the evaluation are as follows:
- Last time the department was audited
- Complexity of the department, volume of transactions, etc.
- Cash income of the department each year
- Other types of income
- Quantity of grants and contracts
- Percentage of turnover of key personnel in the last year
- Federal regulations related to the department
- Management concerns
In addition, University senior management and/or the Board of Visitors may request an audit for various reasons, such as suspicion of fraud, review of operational procedures, or assessment of key controls in specific departments. These special requests are usually worked into our annual audit plan as soon as practical.
What can I expect during an audit?
There are several steps in performing an audit. First, the Internal Audit Department will send an Audit Notification letter to the Director of the department, with a copy provided to the Vice-President of the division. The letter states that an audit will be forthcoming and that we will be in touch shortly. Next, we set up an entrance meeting where the key members of the department are introduced to the audit team. This meeting is usually a forum for Internal Audit to gain an understanding of key processes in the department and go over how much time the audit may take, whether or not we will need space provided for us during the audit, and to go over any additional concerns of department Management.
Once the entrance meeting is completed, the audit team will be in contact with the key personnel for interviews and guided walkthrough of the work area. The interview process and walkthrough will allow us to gain an understanding of each key process in the department. Once the processes have been defined and documented, we will perform some test work to ensure controls are in place to adequately safeguard University assets, etc. After all test work has been completed, the results of the audit are communicated to the key personnel for discussion. Finally, a draft report will be prepared and sent to the department, along with a request for a response to specific findings. Once the findings have been addressed, a final report will be sent.
How can I prepare for the audit?
Before Internal Audit comes to perform an audit and introduction letter is mailed. This letter requests some general and specific information that will help the audit go smoothly. Generally, we request:
- an organization chart
- job descriptions for key personnel
- list of employee names
- department goals and objectives
- department budget code(s)
- department operating policies and procedures manual
- user access lists with information system authorizations approvals
- inventory listings for both equipment and software
- cell phone usage list with approved authorizations
- small purchase charge card documentation
In addition, it is helpful if the staff in the department can be notified of the impending audit and let them know that we are here as a business partner to help assess the operating controls in the department. Let the staff know they should be available to talk with us and to cooperate in getting information, etc. This will ensure the audit will go smoothly and wrap up in a timely manner.
Why do you need to have a working area within our offices?
When we conduct an audit, it is generally beneficial to both parties if we can have some office space set aside for our staff during our review. Having office space on site allows for greater interaction with the office and key personnel with whom we will be interfacing and obtaining financial and departmental information.
The close proximity of the two staffs also allows easier transferal of data and ease of asking questions that may require detailed explanations. Lastly, when our staff is located within your offices, we are better able to understand how your office operates and communicates with each other on a daily basis. Good communication and interaction between staff members can enhance an office's overall performance and we are always eager to understand how the staff works with each other.
How much time will you require to complete your review?
Our length of stay and review can vary with every project. Things that may factor into our stay and review of your department can include the following:
- The amount of resources we are able to supply to a project
- The amount of resources your office can supply to us during our visit
- The nature of the review
- The complexity of departmental operations.
- There is no standard time we can put on a project.
- Who else will see my audit report?
The audit report is first sent to the department Director in draft format for review and response. Once the draft is agreed upon, the final report is sent to the department Director and generally anyone to whom he or she reports directly (e.g. Deans, Vice Presidents, Department Chairs, etc.). In addition, all reports are sent to the Executive Vice President, University President, Chair of the Audit Committee of the Board of Visitors along with other appropriate members of University management.
Who audits the auditors?
The Internal Audit Department has been established to offer an independent and objective view of the different University operations. As a department, we report to the Executive Vice President, the President, and directly to the Audit Committee of the Board of Visitors. The Director of Internal Audit, in developing the yearly Audit Plan, works with these and other groups to ensure that the University is operating in an efficient manner. In addition to the constant communication with University management, we participate in quality assurance review of the internal audit function.The Internal Audit Department will solicit assistance from qualified external sources on a periodic basis, not to exceed every five (5) years. The quality assurance reviewer "audit" our work, to ensure objectivity and that we remain in line with prescribed audit standards and generally accepted accounting principles.