Rule 20401: Audit and Compliance Programs

Sec. 1 Audit Program

The Chancellor, as chief executive officer of the U. T. System, is responsible for ensuring the implementation of appropriate audit procedures for the U. T. System. Accordingly, the U. T. System Chief Audit Executive (CAE) prepares an executive summary of all internal audit activity by the U. T. System internal auditors and the institutional internal auditors for the Chancellor. 

1.1 U. T. System Chief Audit Executive's Responsibilities

The U. T. System CAE is charged with assuring that an effective internal audit function is in place Systemwide. The U. T. System CAE accomplishes this through oversight of the following activities at U. T. System Administration and all U. T. System institutions:

(a) Proposing a charter for the Audit, Compliance, and Risk Management Committee (ACRMC) to be reviewed and approved by the Committee.

(b) Developing a Systemwide internal audit plan based on a comprehensive risk assessment and coordinating the implementation of the audit plan with the chief audit executives at all U. T. System institutions.

(c) Providing support and advice to each institution’s internal audit committee. This includes:

(i) interviewing all candidates for an open institutional CAE position,

(ii) participating in the annual performance review for each institution’s CAE, and

(iii) participating, with the institution’s president and chair of the institution’s audit committee, in any decision to terminate the employment of an institution’s CAE.

(d) Establishing the standards and methodology to be followed by all U. T. System internal auditors in:

(i) preparation of the annual institutional audit plan, 

(ii) documentation required for all internal audit work papers,

(iii) establishment of a standard internal audit reporting format, and

(iv) provision of direction concerning findings that must be reported to the ACRMC.

(e) Establishing a quality assurance and improvement program that includes monitoring and assessments, to the extent considered necessary by the CAE, to evaluate the internal auditors’ conformance with prescribed standards.

(f) Providing audit assistance to the Chancellor, the Deputy Chancellor, the Executive Vice Chancellors, and the Vice Chancellors in the exercise of their responsibilities.

(g) Providing information to the ACRMC in Executive Session concerning personnel matters relating to appointment, employment, evaluation, assignment, duties, discipline, or dismissal of individual U. T. System employees involved in internal audit functions.

1.2 Appointment and Evaluation of the CAE.

The CAE shall be appointed by the ACRMC after nomination by the Chancellor. The CAE shall hold office subject to the pleasure of the ACRMC and the Chancellor. The Chancellor's actions regarding the CAE are subject to review and approval by the ACRMC.

1.3 

The U. T. System internal auditors are the internal auditors for the U. T. System and augment the audit work of the institutional internal auditor and the State Auditors at the institutions of the U. T. System.

Sec. 2 Compliance Program

The Chancellor, as chief executive officer of the U. T. System, is responsible for ensuring the implementation of a compliance program for the U. T. System. U. T. System Administration shall adopt a policy further implementing the Systemwide compliance program.

The Systemwide compliance program shall be headed by a Chief Compliance and Risk Officer (CCRO) and is a fundamental part of the management structure of U. T. System Administration. The primary responsibility of the CCRO is developing the infrastructure for the effective operation of the Systemwide compliance program. The CCRO is also responsible for apprising System Administration and the ACRMC of the compliance functions and activities at System Administration, The University of Texas/Texas A&M Investment Management Company (UTIMCO), and each institution.

Definitions

None

Amended Log

Editorial amendment made May 25, 2017, per Board action on May 9-10, 2017
Editorial amendments to Sections 1.1(f) and 2.1 made July 13, 2015
February 12, 2015
December 6, 2012
Editorial amendments made March 17, 2008
December 10, 2004