City Council Receives 2006 Annual Audit Plan
As a result of the Expanded Audit conducted by KPMG on the "Establishment of Internal Audit Function," City Council received the plan to address the six recommendations and took action on the City's 2006 Audit Plan. Chief Internal Auditor, Edmundo Calderon, shared the Internal Audit activities that have been implemented to address the issues identified by the Expanded Audit requested by City Manager Joyce Wilson in September 2004. The Internal Audit Department has prepared the City's 2006 Audit Plan based on the "assignment of risk." The process of preparing the audit plan included identifying the areas that are considered the most important and ensuring that activities with the greatest risk are audited. The areas included in the plan that will be audited were measured according to the following risk factors: management interest in having an area audited, budget risk, strategic risk, reputation risk, compliance risk, high level of decentralization, legal claims, time last audited, and change in management. The scope of the audit will review:
The Audit plan has been broken down into four quarters and will be conducted by the City's Internal Audit department. At the present time, the newly reorganized department consists of the Chief Internal Auditor, a Senior Internal Auditor and 2 staff members. Plans are to increase the department to a total of ten members.
- Integrity of financial operation and information
- Compliance with policies, procedures, laws and regulations
- Safeguarding Assets
- Effectiveness and efficiency of operations
- Consistency of operations (Do they meet established goals? Are programs being implemented as intended?)
Six Areas Addressed in 2004 Expanded Audit
Recommendations & Actions Taken:
- Create an Internal Audit Charter
- Draft has been written and is pending approval
- Establish Internal Audit Committee
- A Legislative Review Committee for Fiscal Affairs/Internal Audit has been created; Membership includes Rep. Steve Ortega (chair), Rep. Melina Castro, Rep. Eddie Holguin and Rep. Presi Ortega.
- Create reporting structure for Chief Internal Auditor (CIA)
- A 3-tiered reporting structure has been established
- CIA reports functionally to City Manager
- CIA reports administratively to Deputy City Manager for Finance & Administration
- CIA reports legislatively to the LRC for Fiscal Affairs/Internal Audit
- This creates a form of checks and balances
- Establish a formal set of Policies & Procedures
- Set of Policies & Procedures has been established and will be posted on the City website in the near future
- Establish a "Risk-based" Audit Plan annually
- The "Risk-based" audit plan has been completed and is pending approval
- All audit reports must be presented to City Council and/or the Audit Committee (LRC)
- The Internal Audit Department has completed its first report and will present to the LRC for Fiscal Affairs/Internal Audit at the next meeting
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