UNM and Health System Internal Audit Departments
Internal Audit Department
Orientation
Manu Patel, Internal Audit Director
Purvi Mody, Executive Director, Compliance and
Internal Audit, Health System
June 5, 2015
UNM and Health System Internal Audit Departments
Audit and Compliance Committee
(RPM 1.2, 7.3)
• A standing committee of the Board of
Regents
• One member should be “financial expert”
• Meets four or more times a year
• Follows Open Meetings Act
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UNM and Health System Internal Audit Departments
Audit and Compliance Committee
(RPM 7.3)
• Oversight Responsibilities for University’s:
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Financial reporting
Internal controls
Risk management
Performance of external financial and internal auditors
Compliance with laws and regulations
Compliance program
Federal, state agencies audits and compliance reviews
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UNM and Health System Internal Audit Departments
Authority of Internal Audit Dept. (IA)
(RPM 7.2)
• Was established to perform a comprehensive
internal audit function
• Has unrestricted access to all functions,
records, property, and personnel
• Obtains the necessary assistance of personnel
• Communicates with personnel of internal,
external, law enforcement agencies, etc.
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UNM and Health System Internal Audit Departments
Independence
• IA reports functionally to the Audit and
Compliance Committee
• Free from interference in determining the scope of
internal auditing
• Empowered to obtain the information needed
• IA reports administratively to the
University President
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UNM and Health System Internal Audit Departments
Independence (cont.)
• Health System Internal Audit reports
administratively to the Chief Executive
Officer and Administrator of Hospital
Operations
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UNM and Health System Internal Audit Departments
UNM Internal Audit Reporting Lines
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Internal Audit
UNM Board of Regents
UNM Internal
Audit
(Manu Patel)
UNM Main Campus
Branch Campuses,
Affiliated entities
(Foundation and
Lobo Development,
etc)
Audit Committee of Each Entity
and COO of the Health System
(Steve McKernan)
HS Internal Audit
(Purvi Mody)
Health Sciences
Center
School of
Medicine,
College of
Nursing and
Pharmacy
Research
(Cancer
Center and
HSC)
Health System
UNM
Hospitals
and 57
Clinics
UNM
Cancer
Center
Clinics
UNM
Medical
Group
and 7
clinics
UNM
SRMC
• UNM Internal Audit
• Health System Internal Audit
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UNM and Health System Internal Audit Departments
Report Functionally to the Committee
The Committee reviews and approves UNM
Internal Audit’s:
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Risk based internal audit plan
Budget and resource plan
Work product: audit, consulting reports, etc.
Follow up report on management’s responses to
audit recommendations
– Health System IA reports functionally to Board of
Trustees’ Audit and Compliance Committee
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UNM and Health System Internal Audit Departments
Purpose and Scope of Work
• Improve the University's operations
• Determine whether the University's systems
of controls, risk management, and
governance, are adequate, and functioning
properly to ensure:
• Risks are identified and managed
• Employees' actions are compliant with policies etc.
• Resources are acquired economically, used efficiently,
and adequately protected, etc.
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UNM and Health System Internal Audit Departments
Investigation of Fraudulent Activity
• University policy requires Internal Audit to
conduct investigations of fraud and
employee misconduct if financial
• Will coordinate investigations of suspected
fraudulent activities within the University
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UNM and Health System Internal Audit Departments
Relevant UNM Policies
• Policy 2200: Whistleblower Protection and
Reporting Suspected Misconduct and
Retaliation
• Policy 7205: Dishonest or Fraudulent
Activities
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UNM and Health System Internal Audit Departments
Definition of Internal Auditing
“…an independent, objective assurance and
consulting activity designed to add value and
improve an organization's operations.
It helps an organization accomplish its objectives
by bringing a systematic, disciplined approach to
evaluate and improve the effectiveness of risk
management, control, and governance processes.”
The Institute of Internal Auditors
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UNM and Health System Internal Audit Departments
Assurance Services
• We provide an independent assessment on
governance, risk management, and control
processes
• Examples of assurance engagements:
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management and performance
compliance
information technology
special requests
fraud
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UNM and Health System Internal Audit Departments
Types of Assurance Engagements
• Special Request from senior management or
the Board of Regents
– may result from concerns about a program,
function or account
• Fraud examination
– initiated from irregularities identified during
routine audit work, management who find fraud
in their organizations, and complaints from
various sources including the Hotline
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UNM and Health System Internal Audit Departments
Risk Based Auditing
• Focus on
– risk of occurrences that could prevent the University
from achieving its goals
– areas with high risk where controls are not in place or
are weak
• Risk based audit plan
– developed with input from across the University
– based on available man hours
– A university-wide 5-year plan is revisited annually
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UNM and Health System Internal Audit Departments
IA Process of Audit Report
• Management responds to the report with 3
required elements within 10 days
• Management obtains its EVP’s approval
• President approves management’s responses
• Committee reviews and approves
• Report is made public except exempted
information
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UNM and Health System Internal Audit Departments
Standards and Ethics
• Adhere strictly to the Code of Ethics as
established by the Institute of Internal
Auditors (IIA)
• Abide by applicable standards made by IIA
and the American Institute of Certified
Public Accountants (AICPA)
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UNM and Health System Internal Audit Departments
Quality
• IA must have a peer review at least once
every five years
• Last quality assessment was approved in
March 2013
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