University of Wisconsin-Stout Policy
Policy No. 96-60
Date: 2/17/97
INTERNAL/EXTERNAL FINANCIAL MANAGEMENT AUDIT
POLICY
1.0 INTRODUCTION
The University of Wisconsin-Stout is a public, state-assisted institution which
participates in a variety of activities funded by state, federal and private funds.
The institution's financial records, internal control procedures, and regulatory
compliance procedures require review by an internal auditor and are subjected
to review by external auditors.
2.0 STATEMENT OF POLICY
It is the policy of the University of Wisconsin-Stout:
2.1 To ensure independence of the audit process, promote comprehensive audit
coverage, and ensure adequate consideration of audit recommendations.
2.2 To provide an independent appraisal of university activities through an
internal audit process that ensures:
(a) the existence of operational internal controls;
(b) fiscal management within the university that adheres to State statutes
and UW System and institutional policies; and
(c) university practices that operate efficiently and effectively.
2.3 To establish guidelines for the conduct of external audit reviews conducted
on the campus.
3.0 OBJECTIVES FOR ACCOMPLISHING A QUALITY AUDIT PROCESS
3.1 To evaluate financial transactions for accuracy and compliance with
internal policies and procedures, UW System policies, state and federal laws,
and governmental regulations.
3.2 To evaluate financial and operational procedures for adequacy of internal
controls and provide advice and guidance on control aspects of new policies,
systems processes and procedures.
3.3 To verify existence of institutional assets and ensure that proper safeguards
are maintained to protect them from loss.
3.4 To determine the level of compliance with institutional policies and
procedures, UW System and Board of Regents policies, and state and federal
laws and regulations.
3.5 To evaluate the accuracy, effectiveness and efficiency of the institution's
electronic information and processing systems used in financial management.
3.6 To determine the effectiveness and efficiency of operational areas in
accomplishing their mission and to identify operational opportunities for cost
savings and revenue enhancements.
3.7 To ensure reporting of any fiscal misconduct or conflicts of interest, in
accordance with UW System policy.
3.8 To participate in the review of new financial systems, policies, processes
and procedures to provide advice and guidance on internal controls and the
reliability and integrity of data.
4.0 INTERNAL AUDITOR
4.1 Authority
4.1.1 The Internal Auditor has the authority to audit all parts of the
institution and has full and complete access to any of the institution's
records, physical properties, and personnel relevant to the performance
of an audit. Documents and information given to the internal auditor
during a periodic review will be handled in the same prudent and
confidential manner as by those employees normally accountable for
them.
4.1.2 The Internal Auditor functions as the campus audit liaison with
external auditors to facilitate university cooperation with external
auditors in the performance of their duties and to avoid duplication of
campus effort.
4.1.3 The Internal Auditor's review and appraisal of activities in no way
relieves other persons in the University of any of the responsibilities
assigned to them. The Internal Auditor cannot be solely responsible for
the detection and prevention of all errors and irregularities which occur
within the university. This is a continuing responsibility of the
university management team. Management is responsible for ensuring
that appropriate actions are taken to address audit recommendations.
4.2 Responsibilities
4.2.1 Develop an annual and 5-year audit plan in consultation with the
Chancellor and key administrators. The approved plan will be submitted
to the UW System Administration Director of Internal Audit.
4.2.2 Conduct audits, including entrance and exit conferences, and
prepare and distribute written audit reports which direct the auditee and
management to respond to the audit report with a corrective action
plan.
4.2.3 Present the audit report to the Chancellor and Vice Chancellor for
Administrative & Student Life Services, with a copy to the UW System
Administration Director of Internal Audit.
4.2.4 Perform follow-up audits on all financial aspects of UW System
Administration internal audits and institutional internal audits, as
required.
4.2.5 The Internal Auditor has no direct responsibility for any of the
operations or activities which are reviewed. He/She makes
recommendations for new or additional controls and/or procedures, but
does not develop or install them, nor prepare records or engage in any
activities which the Internal Auditor is required to review.
4.2.6 In all Internal Audit activities, the auditor adheres to the
Standards for the Professional Practice of Internal Auditing and the
Code of Ethics adopted by the Institute of Internal Auditors, both of
which are available upon request from the Administrative & Student
Life Services office.
4.3 Reporting Structure
4.3.1 The Internal Auditor has direct access to the Chancellor, but
reports to the Vice Chancellor for Administrative & Student Life
Services for day-to-day coordination or assistance in the mediation of
audit scope and scheduling, or budgeting and personnel concerns.
5.0 EXTERNAL AUDIT PROCESS
5.1 All notifications of impending external audits should be forwarded to the
Vice Chancellor for Administrative & Student Life Services.
5.2 The internal auditor in his/her role as campus audit liaison makes
arrangements for the entrance and exit conferences of the external auditors with
appropriate university officials. Minutes will be taken at both conferences.
5.3 The campus audit liaison identifies key university personnel with whom
the external auditors will have primary contact. External auditors are assured
full cooperation in contacts with university employees who are university
spokespersons in the area being audited.
5.4 External auditors will have display-only computer access to systems being
audited.
5.5 External auditors will be given access to photocopiers, FAX machines, and
telephones.
5.6 External auditors will not be given keys to buildings or rooms.
5.7 All materials provided to the external auditors by the university should be
documented and forwarded to the campus audit liaison.
5.8 University personnel should notify the campus audit liaison if an auditor's
work appears to be beyond the defined scope of the audit.
5.9 The campus audit liaison will meet weekly with the external audit
supervisor.
5.10 The campus audit liaison will coordinate the campus response to the
interim audit memos and other requested campus responses.
5.11 The campus audit liaison will maintain the central file of all audit reports,
responses and related correspondence.
5.12 External auditors are to provide the university with the full scope of the
audit.
5.13 External auditors are to work standard office hours (7:45 a.m. to 4:30
p.m.) unless otherwise arranged with the campus audit liaison.
5.14 External auditors' request for information should be directed to the
campus audit liaison or to key personnel identified by the university. Requests
should be made as early in the audit process as feasible. Information will
normally be provided within 24 hours of the request. The external auditors will
be notified if information cannot be provided within 24 hours.
5.15 Post-site data requests of external auditors are to be directed to the
campus audit liaison.
5.16 A schedule of both formal and informal interview appointments involving
external auditors is to be provided to the campus audit liaison at least four hours
prior to the meetings.
5.17 At the weekly meeting with the campus audit liaison, external auditors
will be asked to discuss preliminary findings and audit progress. When
discussing preliminary findings, the external auditor will be asked to provide
sufficient information, including reference to specific sponsor regulation and
identification of source information.
If you have questions or comments, email bpa@uwstout.edu
Updated July 2000