Internal auditing is an independent, objective assurance, and consulting activity established within Cypress-Fairbanks Independent School District, designed to add value and improve the operations of the District. It assists the District in accomplishing its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of the District's risk management, control, and governance processes.
The objective of internal auditing is to assist members of management and the board in the effective discharge of their responsibilities. To this end, internal audit will furnish them with analyses, recommendations, counsel, and information concerning the activities reviewed. The audit objective includes promoting effective control at reasonable cost.
The scope of internal auditing encompasses the examination and evaluation of the adequacy and effectiveness of the District's system of internal control and the quality of performance in carrying out assigned responsibilities and achieving established objectives. The scope of internal auditing includes:
Evaluating the reliability and integrity of financial, operating, and performance information and the means used to identify, measure, classify, and report such information.
Analyzing the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations that could have a significant impact on operations and reports, and determining whether the District is in compliance.
Reviewing the means of safeguarding assets and, as appropriate, verifying the existence of such assets.
Appraising the economy and efficiency with which resources are employed.
Assessing operations or programs to ascertain whether results are consistent with established objectives and goals.
Performing an investigation where evidence of fraud or a strong possibility of fraud has been determined.
Providing assurance services through the objective examination of evidence for providing independent assessment on risk management, control, or governance processes for the District.
Providing consulting services through advisory and related customer service activities to add value and improve the District’s governance, risk management, and control processes without the internal auditor assuming management responsibility.
Conducting special projects assigned by the superintendent or the board of trustees.
Internal audit activities should be performed with proficiency and due professional care. The internal auditors are responsible for continuing their education in order to maintain proficiency and technical competence. The auditors should be kept informed of improvements and current developments in internal auditing standards, procedures, and techniques.
The internal auditors should use reasonable audit skill and judgment and exercise due professional care in performing every audit. The auditors are required to conduct examinations and verifications of the activity under audit to a reasonable extent, but are not required to perform detail audits of all transactions. Accordingly, the internal auditor cannot give absolute assurance that noncompliance or irregularities do not exist. However, the possibility of material irregularities or noncompliance should be considered whenever the internal auditors plan and conduct an auditing assignment.
The internal auditors should be independent of the activities audited. Independence allows the auditor to render the impartial and unbiased judgments essential to the proper conduct of audits. Independence is achieved through organizational status and the auditor’s mental attitude in performing assigned audits. In order to retain the highest degree of independence and objectivity, internal audit has a reporting responsibility to the board of trustees.
To ensure internal audit is objective and independent, internal audit does not initiate or approve accounting transactions external to the internal audit department, does not develop and install procedures, and does not prepare records or engage in any activity that would normally be subject to its review. Moreover, internal auditors have no authority over, or responsibility for, any of the activities audited. Internal audit should not perform any operational duties for the District or its affiliates. Internal auditing is not intended to be a replacement for operating management's responsibility to implement and assure the adequacy, effectiveness, and efficiency of internal controls, but rather is an evaluator of those controls.
The internal audit department reports functionally to the board of trustees and administratively to the superintendent. The evaluation of the performance of the internal auditor shall be the responsibility of the superintendent with input from the board of trustees.
If the internal auditor needs to meet with the board on an emergency basis, the internal auditor shall request a meeting with the board of trustees through the superintendent or the general counsel. If the concern relates to the superintendent, the internal auditor may contact the president of the board of trustees directly. The board of trustees may request to meet with the internal auditor at any time it deems necessary.
Internal auditing is an integral part of the District and functions under the policies established by the superintendent and the board of trustees. The internal audit department is authorized to direct a broad, comprehensive program of internal auditing within the District. To allow the internal audit function to be discharged in an effective manner, internal auditors have the authority to audit all functions and have unrestricted access to all activities, records, property, and employees relevant to the performance of their work.
The responsibility of internal auditing is to serve the District in a manner consistent with the Institute of Internal Auditor's International Standards for the Professional Practice of Internal Auditing and the Code of Ethics. This responsibility includes coordinating internal audit activities with others so as to best achieve the audit objectives and the objectives of the District.
An annual audit plan using appropriate risk-based methodology will be prepared. The internal auditor shall provide a monthly status report to the board of trustees and the superintendent. A semi-annual status report of the audit plan will also be provided to the board of trustees and the superintendent.
The internal auditors shall be prudent in the review and handling of all District records and will keep all information acquired during their work confidential.
A written report will be prepared and issued by internal audit following the conclusion of each audit or review. The report will be issued to the board of trustees, the superintendent, and appropriate management. Should corrective action be indicated, as evidenced by specific recommendations contained in the internal audit report, the appropriate management shall include in their response specific steps taken or steps to be taken to effect the corrective action. Their response may also indicate that they assume the risk of not correcting the deficiency reported. For those areas in which management has indicated that corrective action has been taken or will be taken, internal audit will follow-up to determine if the action was taken.
Approved on Monday, August 13, 2007, by the Board of Trustees.