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Audit Protocols

Policy Number T92-062
Effective Date August 05, 1992
Responsible Office/Person Board of Trustees
Related Policies
Additional History
Additional References

Doc. T92-062
Passed by the BoT
8/5/92
Revised 10/6/93

AUDIT PROTOCOLS
I. Purpose

The purpose of this policy is to define the role of the Office of the University Auditor
including its duties and responsibilities, authority and procedures. This policy makes the
Office of the University Auditor the University's liaison for all audits of the University.

II. General Policy

The Office of the University Auditor reports to the President and the Audit Committee of the Board of Trustees. Administratively, the office is part of the Office of the Vice President for Management and Fiscal Affairs and University Treasurer. The office is charged with the responsibility of planning and performing financial, operational and information systems audits of all departments or all operating units on all campuses of the University to evaluate the adequacy of internal controls, accuracy of financial records and compliance with University policies and procedures, standard accounting practices and governmental regulation. The office is also responsible for monitoring and reporting the results of all audits conducted by other audit agencies of the University or of any campus, department, operation or fund.

III. General Protocol

A. Planning

    1. Each campus and the President's Office will develop an annual audit request
    detailing requested audits and general scope for the next fiscal year, specifying
    any preference for internal or external staffing.
    2. Annual audit requests will be sent to the chief university auditor by March 31
    of each year. The chief university auditor will review and include as appropriate
    in the University-wide Annual Audit Plan. The plan will be contingent upon
    adequate. funding and staffing.
    3. The Annual Audit Plan will be submitted to the next scheduled meeting of the
    Audit Committee for evaluation and presentation to the Board of Trustees, once
    accepted.
    4. From time to time, as necessary, the Audit Committee may request that specific
    audits be performed.
B. Liaison
  • 1. The chief University auditor will be the University liaison for all internal and
    external audits, i.e. the State Single Audit, state and federal auditors, Inspector
    General, Legislature, etc.
    2. The Vice President for Management and Fiscal Affairs and University
    Treasurer will appoint a central administrative audit liaison. The central
    administrative audit liaison will function as the principal audit contact and
    coordinator for all internal and external audits of the President's Office or other
    central administrative organization.
    3. Each campus Vice Chancellor for Administration and Finance will appoint a
    campus audit liaison to function as the principal campus audit contact and
    coordinator for all internal and external audits.
C. Scbeduling

1. Within the context of the Annual Audit Plan, the chief University auditor will
schedule the timing and staffing of internal audits. Normally, internal reviews will
be scheduled to minimize adverse impact on campus operations.
2. As required, the chief university auditor, working with the central
administrative audit liaison and/or campus audit liaison, will develop schedules
and specifications for external audits.
3. The chief university auditor, in consultation with the Vice President for
Management and Fiscal Affairs and University Treasurer, the central
administrative audit liaison and the campus audit liaisons as appropriate will
develop schedules and specifications for system- wide audits.

D. Reporting

1. The Audit Committee will receive periodic reports from the chief university
auditor on internal and external audits and campus responses. The reports may be
periodic status reports or full audit reports.
2. The Audit Committee will receive an annual audit report on the results of the
office's operations for the fiscal year. The report should include summaries of
completed audits and other operations and other information as requested by the
Trustees.

E. Confidentiality

1. All University draft audit reports, both internal and external, including work
papers, notes and all other partial or whole documents will be considered
confidential until such time as they are accepted by the Board of Trustees.
2. After Board acceptance, reports or other documents will not be publicly
disclosed except as directed by law or other regulation, the chief university
auditor, the University General Counselor the President.

IV. Internal Audits Protocol

A. The chief university auditor will send a statement of scope and specification - prior to
the start of an audit - to the campus audit liaison, the central administrative audit liaison
and the Vice President for Management and Fiscal Affairs and University Treasurer as a
means of providing them with information on proposed internal audits.

B. An entrance conference will be held immediately prior to the start of an audit if so
requested by the responsible audit liaison. The purpose of the entrance conference is to
outline the purpose, scope, timing and process of the audit. The conference should be
attended by the chief university auditor, the responsible audit liaison and a representative
of the department, operation or fund being audited.

C. Certain audits may be carried out - at the discretion of the chief university auditor -
without prior notice or an entrance conference as described in A. and B., above. Audits in
this category include those where the element of surprise is necessary or where surprise is
in the best interests of the University. All other provisions of these protocols apply.

D. The chief university auditor will insure that the audit is performed according to
applicable professional standards and is objective and unbiased.

E. Upon completion of field work, a point listing and/or preliminary draft should be
reviewed and discussed with the responsible audit liaison and the representative of the
department, operation or fund being audited. F. An initial review draft audit report will be
sent to a representative of the audited entity, the campus audit liaison, the campus Vice
Chancellor for Administration and Finance and the central administrative audit liaison.

G. If requested by the responsible audit liaison, an exit conference may be held, primarily
to discuss content and wording of the draft report. The conference should be attended by
the chief university auditor, the auditor in charge of the work, the responsible audit
liaison and a representative of the audited entity.

H. If appropriate, a revised review draft audit report, incorporating any changes resulting
from F., above, will be sent to a representative ofthe audited entity, the campus audit
liaison, the campus Vice Chancellor for Administration and Finance and the central
administrative audit liaison.

I. The campus will then have thirty (30) days from the date of E. or G., above, whichever
is later, to comment on fact or interpretation and to develop and send a written campus
response to the report to the chief university auditor. Any extension beyond the thirty
(30) day period requires written approval from the chief university auditor.

J. The central administrative audit liaison is responsible for insuring that the campus audit
response conforms to established University policy and procedure. If necessary, the
central administrative audit liaison will develop a separate, official University response to
the audit report.

K. The campus and/or University response will be sent to the chief university auditor for
inclusion into the final draft audit report. The final draft audit report will then be sent to
the President, the Vice President for Management and Fiscal Affairs and University
Treasurer, the University Controller, the central administrative audit liaison and the
campus Chancellor, the Vice Chancel-lor for Administration and Finance, campus audit
liaison and representative of the audited entity.

L. The chief university auditor, through the President, will forward the final draft audit
report, including responses to the Audit Committee. The Committee will either accept the
audit or ask that additional audit work be performed prior to submitting the audit to the
full Board for approval.

M. The central administrative audit liaison and/or campus audit liaisons - through their
chancellors - will provide reports on the status of actions taken in response to audit
findings included in final audit reports accepted by the Board of Trustees. Such status
reports will be provided to the chief university auditor within six (6) months from the
dates of issuance of final audit reports.

N. The chief university auditor will have follow-up audits performed to confirm and
evaluate actions taken in response to audits and status reports described in L. and M.,
above, in accordance with generally accepted auditing standards. Follow-up audits may
be included in the annual audit plan or scheduled at the discretion of the chief university
auditor.

V. External Audits Protocol

A. The Audit Committee has broad oversight responsibility for all audits initiated by the
University, including the selection of external audit firms engaged by the University.
Therefore, whenever it becomes necessary to engage an external audit firm, the chief
university auditor will:
1. Timely notify the chairperson of the Audit Committee of the proposed external
audit, its purpose, scope and specification and other matters of importance to the
subcommittee.
2. Request the chairperson to appoint a member of the Committee to represent the
subcommittee during the selection process, described below.
B. After the chairperson of the Audit Subcommittee has been informed of the proposed
external audit and the central administrative and campus audit liaisons have reviewed the
scope and specifications of external audits, the chief university auditor will have
proposals solicited from qualified external audit firms. A selection committee comprised
of one representative each from the University Auditor's Office (appointed by the chief
university auditor) as committee chairperson, the entity being audited, the campus
Controller's Office, Central Administration (appointed by the Vice President for
Management and Fiscal Affairs and University Treasurer) and a member of the Audit
Subcommittee (if appointed) will evaluate the proposals and recommend selection of a
firm. The selection committee's recommendation will include a list of all firms asked to
propose, firms actually proposing, the time schedules and prices proposed and any other
pertinent information. The chief university auditor will request the Audit Committee to
review and vote to approve the selection of the external audit firm.
C. Upon approval, the chief university auditor will have the appropriate contract executed
and act as the contract administrator.
D. All contracts must conform to applicable University policies and procedures and state
laws.
E. Each contract must be signed by the University Treasurer, the chief university auditor
and an authorized representative of the engaged firm.
F. The chief university auditor will conduct an entrance conference with a representative
of the audited entity, the campus audit liaison and auditors from the external audit firm.
G. Day-to-day coordination of the audit's progress and the final field conference are the
responsibility of the campus audit liaison and the representative of the audited entity. In
the case of a system-wide audit, coordination is the responsibility of the central
administrative audit liaison.
H. Prior to the issuance of the final report, the audit firm will meet with the chief
university auditor, the campus audit liaison and a representative of the audited entity for
an exit conference.
I. Within thirty (30) days after the receipt of the official external audit report, the campus
audit liaison will provide any required campus response to the chief university auditor.
J. The chief university auditor will review and evaluate the campus response and provide
the evaluation and response to the Vice President for Management and Fiscal Affairs.
The Vice President will consider the response and evaluation to make a final
determination on the audit. Once approved, the chief university auditor will forward the
response to the external audit firm for inclusion in the final audit report.
K. The final audit report by the external audit firm will be mailed directly to the
President. Additional copies of the final audit report will be sent to the chief university
auditor for campus and University distributions.
L. The chief university auditor, through the President, will forward the final audit report,
including responses to the Audit Committee. The Committee will either accept the audit
or ask that additional audit work be performed prior to submitting the audit to the full
Board for approval.
M. The central administrative audit liaison andlor campus audit liaisons - through their
Chancellors - will provide reports on the status of actions taken in response to audit
findings included in the external auditors' reports. Such status reports will be provided to
the chief university auditor within six (6) months from the dates of receipt of the external
auditors'reports.

VI. Other Audits Protocol

A. From time to time, various campuses, departments, operations or funds within the
University are subject to audit with little or no notice by agencies outside University
control. Examples include state, federal and legislative audit agencies. The Office of the
University Auditor is charged with the duty of monitoring and reporting the results of
these audits as well as assisting the campus or department, organization or operation
during the audit.
B. It is the responsibility of the central administrative audit liaison and/or the campus
audit liaison to timely notify the chief university auditor whenever an outside audit
agency is conducting an audit anywhere in the University.
C. The chief university auditor will provide assistance to the audited entity during the
audit as well as monitor and coordinate, as required, the audit.
D. Day-to-day coordination of the audit's progress and the final field conference are the
responsibility of the campus audit liaison and the representative of the audited en-tity. In
the case of a sys-tem-wide audit,- coordination is the responsibility of the central
administrative audit liaison.
E. Campus responses to outside audit agency findings will be submitted to the chief
university auditor, the central administrative audit liaison and the Vice President for
Management and Fiscal Affairs for review, approval and final transmittal to the outside
audit agency.
F. Copies of all reports received as the result of outside audit activities will be forwarded
to the chief university auditor.
G. The results of audits conducted by outside agencies will be summarized and included
in periodic reports to the Audit Committee.

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