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System Audit Office Internal Audit Activity Charter

INTRODUCTION

The University of Texas (UT) System Audit Office (System Audit Office) provides independent, objective assurance and consulting services designed to add value and improve UT System Administration’s operations. It helps UT System Administration accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

MISSION AND SCOPE OF WORK

The mission of the System Audit Office is to:

provide to management and the Board of Regents independent, objective evaluations of the operations, policies, procedures, and controls at UT System Administration
provide to the internal audit departments of mid-size and small campuses supplemental assistance and resources so that they can provide institutional management and the Board of Regents with independent, objective evaluations of their institutional operations, policies, procedures, and controls
provide for UT System management and the Board of Regents oversight of all internal audit departments in the UT System to assure that an effective internal audit function which includes a risk-based annual and long-range audit plan, a reporting mechanism, and a quality assurance program, is in place system-wide

The scope of work of the System Audit Office is to determine whether UT System Administration’s network of risk management, control, and governance processes, as designed and represented by management, is adequate and functioning in a manner to ensure that:

risks are appropriately identified and managed
interaction with the various governance groups occurs as needed (i.e. Office of the Governor, Legislative Budget Board, State Auditor’s Office, etc.)
significant financial, managerial, and operating information is accurate, reliable, and timely
employee’s actions are in compliance with policies, standards, procedures, and applicable laws and regulations
resources are acquired economically, used efficiently, and adequately protected
programs, plans, and objectives are achieved
quality and continuous improvement are fostered in UT System Administration’s control process
significant legislative or regulatory issues impacting UT System Administration are recognized and addressed properly

Opportunities for improving management control may be identified during audits. They will be communicated to the appropriate level of management.

ACCOUNTABILITY

The Chief Audit Executive (CAE), in the discharge of his/her duties, shall be accountable to the Chancellor of UT System, the UT System Administration Internal Audit Committee (Internal Audit Committee) and the Audit, Compliance, and Management Review Committee of the Board of Regents (ACMR) to:

provide assessments on the adequacy and effectiveness of UT System Administration’s processes for controlling its activities and managing its risks in the areas set forth under the mission and scope of work
report significant issues related to the processes for controlling the activities of UT System Administration and its affiliates, including potential improvements to those processes, and provide information concerning such issues through resolution
provide information periodically on the status and results of the annual audit plan and the sufficiency of System Audit Office resources
coordinate with other control and monitoring functions (risk management, compliance, security, legal, ethics, environmental, and external auditors)

INDEPENDENCE

To provide for the independence of the System Audit Office, the CAE reports administratively to the General Counsel to the Board of Regents and functionally to the ACMR and Chancellor.

The CAE of UT System Administration is also the CAE for UT System.

RESPONSIBILITY

The CAE and staff of the System Audit Office have responsibility to:

develop a flexible annual audit plan using an appropriate risk-based methodology, including any risks or control concerns identified by management, and submit that plan to the Internal Audit Committee and ACMR for review and approval
implement the annual audit plan, as approved, including, and as appropriate, any special tasks or projects requested by management, the Internal Audit Committee, or ACMR
develop a System-wide internal audit plan based on a System-wide risk assessment and coordinating the implementation of this plan with institutional internal auditors
maintain a professional audit staff with sufficient knowledge, skills, experience, and professional certifications to meet the requirements of this charter
establish a quality assurance program by which the CAE assures the operational quality of internal auditing activities
provide consulting and advisory services as appropriate
evaluate and assess significant merging/consolidating functions and new or changing services, processes, operations, and control processes coincident with their development, implementation, and/or expansion
issue periodic reports to the ACMR, the Internal Audit Committee, and management summarizing results of audit activities
prepare a summary of all internal audit activities by UT System Administration internal auditors and the institutional internal auditors for management, the Internal Audit Committee, and the ACMR
keep the Internal Audit Committee and the ACMR informed of emerging trends and successful practices in internal auditing
maintain a significant findings tracking system for the monitoring of the findings which are significant at the institutional level
assist in the investigation of significant suspected fraudulent activities within UT System Administration and institutions as requested by management, the Internal Audit Committee, or the ACMR
consider the scope of work of the external auditors and regulators, as appropriate, for the purpose of providing optimal audit coverage to UT System Administration at a reasonable overall cost
file internal audit reports and related responses or action plans with the budget division of the Governor’s Office, the State Auditor, and the Legislative Budget Board within two weeks after their presentation to the Internal Audit Committee
prepare the annual report required by the Texas Internal Auditing Act (Section 2102, Texas Government Code) and submit the report to the Chancellor, Internal Audit Committee, the Office of the Governor, the State Auditor’s Office, the Sunset Advisory Commission, and the Legislative Budget Board

AUTHORITY

The CAE and staff of the System Audit Office are authorized to:

have unrestricted access to all functions, records, property, and personnel. Have full and free access to the Internal Audit Committee and ACMR
allocate resources, set frequencies, select subjects, determine scopes of work, and apply the techniques required to accomplish audit objectives
obtain the necessary assistance of personnel in units of UT System Administration where they perform audits, as well as other specialized services from within or outside UT System Administration

The CAE and staff of the System Audit Office are not authorized to:

perform any operational duties for UT System Administration or its affiliates
initiate or approve accounting transactions external to the System Audit Office
direct the activities of any UT System Administration employee not employed by the System Audit Office, except to the extent such employees have been appropriately assigned to auditing teams or to otherwise assist the internal auditors

STANDARDS OF AUDIT PRACTICE

The System Audit Office will meet or exceed:

International Standards for the Professional Practice of Internal Auditing and Code of Ethics issued by The Internal Auditing Standards Board of The Institute of Internal Auditors
Generally Accepted Governmental Auditing Standards of the Government Accountability Office
Texas Internal Auditing Act

Internal Audit Activity Charter_March2008.pdf

Approved by the UT System Administration Internal Audit Committee on March 27, 2008