FY INTERNAL AUDIT ACCOMPLISHMENTS REPORT AND ANNUAL STRATEGIC WORK PLAN

Transcription

1 COAST COMMUNITY COLLEGE DISTRICT FY INTERNAL AUDIT ACCOMPLISHMENTS REPORT AND ANNUAL STRATEGIC WORK PLAN Internal Audit Department Rachel A. Snell, MPA Internal Audit Director CIA, CFE, CRMA, CICA June 2015 Providing value-added services in an independent, ethical, and collaborative environment

2 LEADERSHIP BOARD OF TRUSTEES Above From Left to Right: Jim Moreno, Area 1; Jerry Patterson, Area 2; Lorraine Prinsky, Area 3; Mary Hornbuckle, Area 4; David Grant, Area 5; Left: Alex Parkin, Student Trustee INTERIM CHANCELLOR INTERNAL AUDIT DIRECTOR Left: Richard Jones, Ed.D Right: Rachel A. Snell, MPA

3 FY INTERNAL AUDIT ACCOMPLISHMENTS REPORT AND ANNUAL STRATEGIC WORK PLAN Interim Chancellor Jones: What s Inside Accomplishments..1 Strategic Audit Plan & Activity Approach... 2 Annual Strategic Audit Plan & Activities Secondary Audit Plan Board Reporting..4 In accordance with Board Policy and Administrative Procedure 6400, and the International Professional Practices Framework (IPPF), I am pleased to present the FY Internal Audit Accomplishments Report and Annual Strategic Work Plan. During FY , Internal Audit completed several projects and participated in professional organizations. Internal Audit keeps abreast of industry trends, which Internal Audit applies to its Strategic Work Plan (Plan) and other projects. The Plan identifies projects that facilitate Internal Audit in providing value adding services District-wide, while maintaining the flexibility to adapt to changes at our constantly evolving institution. Projects no longer considered high risk may be replaced with other projects listed in the secondary plan, or with new projects that arise in response to an unanticipated event. Internal Audit must remain independent and objective, and free from interference in determining the scope of our work. We must be free to perform our work and communicate results to necessary parties, including the Board of Trustees. In accordance with IPPF 1110, we attest that Internal Audit was not hindered in performing its work during FY If you have any questions, I can be contacted at (714) or rsnell1@mail.cccd.edu. Rachel Snell, MPA Internal Audit Director

4 Accomplishments Internal Audit made several contributions to the District and the audit community over the year. Below is the FY Strategic Work Plan, as amended. Those projects which were either started and not completed, or not started will be carried to FY Audit Plan & Activities To determine whether transactions associated with the aviation program are recorded accurately and completely. OCC Recycling Center Investigation (Replaced initial Plan project) OCC Recycling Center Assistance Project (Added to plan) To assist auxiliary organizations with BP/AP 3600 compliance. To determine whether selected departments comply with cash handling policies, procedures, and best practices. To determine whether Coastline College s ABI practices are consistent with established criteria and best practices, and transactions are recorded accurately. OCC Architecture Club Fraud Investigation (Replaced initial Plan project) To evaluate internal audit policies and procedures and ensure consistency with best practice and industry standards, and complete action items as noted in the Initial Assessment. To review current practices for reporting and investigating allegations in order to ensure compliance with policy, best practices, and industry standards. To evaluate District s risk management strategies and determine the extent to which on-the-job injuries are mitigated. (Replaced initial Plan project) Prepare the FY Internal Audit Annual Strategic Work Plan External Auditor Liaison, Boards, Committees, and Other District Meetings CCID Anonymous Allegation (Added to Plan) OCC Swap Meet Investigation (Added to Plan) OCC Community Education Investigation (Added to Plan) Status Completed. Report Issued. Completed. Completed. Completed. Report issued related to petty cash. Carryover. Not started. In progress. 9 out of 11 action items are complete on Initial Assessment. Carryover. Delays in obtaining information. Ongoing. Completed. Allegation Unfounded. Carryover. In progress. In addition to the projects listed above, Internal Audit contributed to the District by participating in various committees and training events, as well as participating in various audit industry related events. (See table below). In the upcoming year, the Internal Audit Director will serve as the Second Vice President of the IIA Board of Directors for the Orange County Chapter, and is invited to speak at the ACUA annual conference. Internal Audit staff will also serve as Assistant Treasurer for the IIA s Orange County Chapter. Internal Audit will also implement a working paper management tool that will increase workload efficiency and enhance quality control, which improves the ability to comply with audit standards and produce high quality, value adding outputs in a timely manner. 1

5 District Services Professional Organizations Publications/Other District Wide Process Improvement Task Force CCLC-RFP Review Committee Training events at OCC and GWC Add Right to Audit Clause to standard contracts CCIA: Fall Conference Speaker ALGA: Education Committee- Academic Relations & Webinar Subcommittees; Annual Conference: Panelist on Mentoring IIA: Beach Cities Luncheon Speaker; Orange County Symposium Speaker; Orange County Academic Relations Committee ACFE: Member ACUA: Member ALGA Quarterly Article OCC Accounting Class Presentation Internal Audit recognition in Chancellor s News Brief (Jan 16, 2015 and Apr 6, 2015) CCLC: Community Colleges League of California ALGA: Association of Local Government Auditors IIA: Institute of Internal Auditors ACFE: Association of Certified Fraud Examiners CCIA: Community College Internal Auditors RFP: Request for Proposal ACUA: Association of College and University Auditors Strategic Audit Plan & Activity Approach Internal Audit provides value adding services to assist the Board of Trustees (Board) and the District in creating an environment of continuous improvement. Operating within a culture of accountability and transparency, Internal Audit performs work with independence and objectivity. In order to ensure our independence, staff signs a statement of independence for each project. According to the International Professional Practices Framework (IPPF), IPPF 2010 states that the chief audit executive must establish risk-based plans to determine the priorities of the internal audit activity, consistent with the organization s goals. IPPF also requires an annual planning process that includes input from senior management and the Board. Audit standards allow for Internal Audit to provide a wide variety of services to the District. In general, these services fall into three main initiative areas, and we use the Plan to schedule and perform projects that address the various risk areas within the organization. Investigations are unplanned, and staff performs this work as the need arises. AUDIT CONSULTING INSPECTION INVESTIGATION In depth assessment of programs, operations, business processes. Examples: Financial, compliance, performance, system security, business process analysis. High level review of, advice on or training related to policies, risk, fraud, system implementation. Examples: Advisory services and business process reviews. Proactive, impromptu review of everyday transactions aimed to identify control weaknesses. Examples: Purchase orders, payroll changes, change orders, petty cash. Planned or impromptu reviews into allegations of wrongdoing, including fraud, waste, and/or abuse. Examples: Asset misappropriation, questionable transactions and purchases, using job position beyond allowable authority. 2

6 As a higher education institution, the District faces many challenges and changes. By creating a strategic work plan that prioritizes projects for the upcoming fiscal year, as well as identifies projects for consideration should the initial priorities change (see Secondary Audit Plan), Internal Audit is better able to plan for and address challenges. We also use the Plan to ensure staff receives the training necessary to ensure competency objectives are met for each project. The Fiscal Year Internal Audit Annual Strategic Work Plan was created with input and assistance from various stakeholders throughout the District. It is our goal to continue receiving input on an on-going basis, but also to collaborate on new ways in which information can be collected to ensure the Plan is based upon the most up-to-date, reliable information as possible. Strategic Audit Plan & Activities Below is the FY Internal Audit Annual Strategic Work Plan & Activities. After careful consideration, the following areas were deemed of highest risk and value adding necessity to the District. District-Wide Operations Audit Requirements & Continuous Improvement Legal Fees - evaluate cost centers to see where majority of Follow up audit on selected recommendations issued by legal expenses are housed and evaluate proactive measures Internal Audit during Calendar Year 2013 and for reducing expenses, including risk management & worker Complete the 2014 Internal Audit Initial Assessment Action safety. Items. Cash transactions: Review of selected change funds Create District-wide Risk Universe throughout the District. This is Part 2 of a two-part project. Prepare Annual Audit Plan Part 1 was issued May 2015-Petty Cash. To evaluate the accuracy and completeness of employee Implement Teammate working paper tool and develop service time entries in Banner and determine the extent to internal policies and procedures relating to audit practices which longevity pay is calculated accurately. and investigations. Other District-Wide Initiatives Other Audit Initiatives Continue to participate in Boards, Committees, and working Continue to participate in professional organizations. groups, including External Audit Liaison & Retirement Board. Campus Operations To educate auxiliary organizations on changes to BP/AP 3600, To determine the extent to which parking is enforced and to develop tools that auxiliary organizations may use to throughout the District and whether fees are collected, comply with self-reporting requirements for good standing. deposited, and recorded accurately. To determine the extent to which athletic purchases are Student club expenditures - allowable vs. unallowable. allowable, approved, supported, and comply with policy. To determine whether CCC Acquired Brain Injury practices are consistent with established criteria and best practices, and transactions are recorded accurately. To investigate allegations of fraud, waste, and abuse and review internal controls at OCC Swap Meet. Assistance and consulting project at GWC. To determine whether student's submitting reimbursement for club related activities provide information that is supported, approved, and allowable per policy. To determine whether students submit and receive reimbursements timely. 3

7 Internal Audit also intends to oversee the Request For Proposal process and manage the resulting contract for a Quality Assurance Review of the Environmental Health and Safety division of the Risk Services department. This project is contingent upon the availability of one-time funding. Secondary Audit Plan As a matter of practice, Internal Audit realizes that priorities may change. On occasion we may find the risks associated with the Plan were mitigated prior to the start of an audit. In order to ensure that Internal Audit has a full work plan, we have developed a Secondary Plan, from which projects may be selected should a project on the Audit Plan be cancelled or postponed. These also represent areas that Internal Audit identified as key initiative areas within the upcoming years. District Operations To evaluate physical access to selected key facilities and determine whether controls are in place to protect physical assets and provide security. To conduct a district-wide contract management risk assessment To conduct a district-wide grant management risk assessment To determine the extent to which HR/personnel files are accurate and complete. To determine whether expenditures paid with foundation dollars are made in accordance with established criteria. Campus Operations To review selected purchases from ancillary fund transactions and determine whether purchases comply with District policies and procedures. To assist the Enterprise Corporation with evaluation of policies and procedures related to Swap Meet operations. To determine the whether Campus Safety conducts compliance reviews of Swap Meet vendors as required and enforces rules and regulations. To evaluate selected programs under the Associated Students and determine the extent to which internal controls are implemented to safeguard assets. To assist the Foundations with a review of processes and procedures to enhance efficiency of operations. Board Reporting Schedule In accordance with Board policy and auditing standards, Internal Audit is required to ensure the Board is apprised of internal audit activities. While the schedule may fluctuate in order to correspond with the meeting dates established by the Board, we submit the following as the anticipated Internal Audit Activity reporting dates. Internal Audit reserves the privilege of reporting to the Board should the need arise. The Board reserves the privilege to request updates more frequently than what is proposed in the table below. August 19, 2015 November 18, 2015 March 2016 June 2016 In some instances, Internal Audit may be required to present items in closed session, in accordance with the Brown Act. These reports will be scheduled as needed. 4