Internal Audit Charter

Internal Audit Office

Purpose and Mission

The purpose of Fort Hays State University’s Internal Audit Office is to provide independent, objective assurance, and consulting services designed to add value and improve the organization’s operations. The mission of internal audit is to enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight. The Internal Audit Office helps Fort Hays State University accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

Standards for the Professional Practice of Internal Auditing

Internal Audit will serve the University in a manner consistent with the International Professional Practices Framework promulgated by the Institute of Internal Auditors (IIA) and with professional standards of conduct such as the IIA’s Code of Ethics. The IIA’s International Standards for the Professional Practice of Internal Auditing shall constitute the Office’s operating procedures. Additionally, Internal Audit will obtain resources, tools, and guidance through the Association of College and University Auditors and the Committee of Sponsoring Organizations.

Organization

The Internal Auditor reports directly to the President. The Internal Auditor shall report directly to the Kansas Board of Regents’ Fiscal Affairs and Audit Committee any situation wherein the auditor perceives a conflict of interest with or on the part of the President’s involvement with the subject of an audit.

Authority & Responsibility

Internal Audit shall have full and free access to any and all University and University-controlled affiliate corporation records, physical properties, and personnel relevant to an audit.

Internal Audit is to be advised of all external audits from firms and Federal or State agencies who are performing audits on University or University-controlled affiliated corporation records, systems, or procedures.

Independence and Objectivity

The Internal Auditor will ensure that the Internal Audit Office remains free from all conditions that threaten the ability of internal auditors to carry out their responsibilities in an unbiased manner, including matters of audit selection, scope, procedures, frequency, timing, and report content. If the Internal Auditor determines that independence or objectivity may be impaired in fact or appearance, the details of impairment will be disclosed to appropriate parties.

Internal auditors will maintain an unbiased mental attitude that allows them to perform engagements objectively and in such a manner that they believe in their work product, that no quality compromises are made, and that they do not subordinate their judgment on audit matters to others.

The Internal Auditor will have no direct operational responsibility or authority over any of the activities audited. Accordingly, he or she will not implement internal controls, develop procedures, install systems, prepare records, or engage in any other activity that may impair his or her judgment, including:

Assessing specific operations for which they had responsibility within the previous year.
Performing any operational duties for Fort Hays State University or its affiliates.
Initiating or approving transactions external to the Internal Audit Office.
Directing the activities of any Fort Hays State University employee not employed by the Internal Audit Office, except to the extent that such employees have been appropriately assigned to auditing teams or to otherwise assist internal auditors.

Where the Internal Auditor has or is expected to have roles and/or responsibilities that fall outside of internal auditing, safeguards will be established to limit impairments to independence or objectivity.

Internal auditors will:

Disclose any impairment of independence or objectivity, in fact or appearance, to appropriate parties.
Exhibit professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined.
Make balanced assessments of all available and relevant facts and circumstances.
Take necessary precautions to avoid being unduly influenced by their own interests or others in forming judgments.

Scope

The scope of Internal Audit shall be unrestricted and encompass the examination and evaluation of the adequacy and effectiveness of the University’s governance, risk management process, system of internal control structure, and the quality of performance in carrying out assigned responsibilities to achieve stated goals and objectives. It includes:

Reviewing the reliability and integrity of financial and operational information and the means used to identify, measure, classify, and report such information.
Reviewing the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which could have a significant impact on operations and reports, and determining whether the University is in compliance.
Reviewing the means of safeguarding assets and, as appropriate, verifying the existence of such assets.
Reviewing and appraising the economy and efficiency with which resources are employed.
Reviewing operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as intended.
Reviewing University-controlled affiliated corporations, including a review of the IRS Form 990 for each such corporation, with a focus on potential conflicts of interest and transactions between the University and University-controlled affiliated corporations.

Audit Planning

The Internal Auditor shall report annually to the Kansas Board of Regents’ Fiscal Affairs and Audit Committee, summarizing the prior year’s activities and plans for the coming year. The internal audit plan is to be developed based on a prioritization of the audit universe using a risk-based methodology. Internal auditors will handle documents and information received during the course of their duties in the same prudent and confidential manner as by those employees normally accountable for the information.

Reporting

The Internal Auditor shall prepare and issue a written report following the conclusion of each audit and will distribute as appropriate. The University shall submit each completed internal audit report identifying material financial weaknesses or fraud to the Kansas Board of Regents President and Chief Executive Officer who shall be responsible for recommending to the Fiscal Affairs and Audit Committee any specific findings that should be further reviewed by the Committee.

The internal audit report may include management’s response and corrective action taken or to be taken in regard to the specific findings and recommendations. Management’s response should include a timetable for anticipated completion of action to be taken and an explanation for any corrective action that will not be implemented.

The internal audit activity will be responsible for appropriate follow-up on audit findings and recommendations. All significant findings will remain in an open issues file until cleared.

Updated and approved 04/05/2018