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HomeMy WebLinkAbout14-189RESOLUTION NO. 14-189 A RESOLUTION ACCEPTING THE INTERNAL AUDIT CHARTER TO IMPROVE THE OPERATIONS OF THE ST. LUCIE COUNTY CLERK OF THE CIRCUIT COURT (CLERK) AND THE ST. LUCIE COUNTY BOARD OF COUNTY COMMISSIONERS (BOARD) AND AUTHORIZING THE CHAIR TO EXECUTE THE AGREEMENT AND FURTHER AUTHORIZING THE COUNTY ATTORNEY TO EXECUTE THE AGREEMENT BY APPROVING IT AS TO FORM AND CORRECTNESS WHEREAS, the Board of County Commissioners of St. Lucie County, Florida, has made the following determinations: Acceptance of the Internal Audit Charter presented by the St. Lucie County Clerk of the Circuit Court will assist the Clerk and the Board in accomplishing its objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of the organizations' governance, risk management, and internal controls. NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of St. Lucie County, Florida: 1. The Board hereby accepts and approves the Internal Audit Charter to promote efficient and effective controls (attached as Exhibit "A"). 2. The Board hereby authorizes the Chair to execute the above-referenced agreement and further authorizes the County Attorney to execute the agreement by approving it as to form and correctness. 3. The approval shall be effective upon adoption and shall continue unless rescinded by a subsequent action of the Board. After motion and second, the vote on this Resolution was as follows: Chair Frannie Hutchinson AYE Vice-Chair Paula A. Lewis AYE Commissioner Chris Dzadovsky AYE Commissioner Tod Mowery AYE Commissioner Kim Johnson AYE PASSED AND DULY ADOPTED this 21ST day of October, 2014. ATTEST: / Deputy Clerk BOARD OF COUNTY COMMISSIONERS ST. LUCIE COUNTY, FLORID BY Chair APPROVE S TO FORM CORRECTNESS: County Attor ey St. Lucie County Clerk of the Circuit Court Internal Audit Charter Effective October 21, 2014 Introduction Internal Auditing is an independent, objective assurance and consulting activity that is guided by a philosophy of adding value to improve the operations of the St. Lucie County Clerk of the Circuit Court (Clerk) and the St. Lucie Board of County Commissioners (Board). It assists the Clerk and the Board in accomplishing its objectives by bringing a systematic and disciplined approach to evaluating and improving the effectiveness of the organizations' governance, risk management, and internal controls. Mission The mission of Internal Audit (IA) is to ensure that the operations of the Clerk and the Board are conducted according to the highest standards of accountability to build upon and preserve the citizens' trust in their government. Internal Audit will provide an independent, objective assurance and consulting function and will also advise management on best practices to improve existing operations. Through a systematic and disciplined approach, IA will help the Clerk and the Board to accomplish their governance objectives by evaluating and improving the effectiveness of risk management, control, and governance processes while adding value to the organization. Orcanizational Authority Internal Audit seeks to promote efficient and effective controls. To achieve this goal, IA is authorized, in the course of its activities, to enter all areas of the Clerk and the Board and have access to all documents, electronic records, and files considered necessary for the performance of its functions. The Internal Audit staff shall be held to strict accountability for confidentiality and safeguarding records and information according to the same laws that control the original EXHIBIT d ~ ~ a i~ D n custodians. All employees acid management must supply IA with such information and explanations as necessary in the performance of auditing functions. Management should also inform IA, without delay, of any significant incident that occurs concerning security, funds, and compliance with regulations and procedures. Internal Audit shall make recommendations to refer illegal matters, identified during an audit, to the Clerk. Internal Audit may conduct joint investigations and projects with other oversight or law enforcement agencies. Article VIII, Section 1(d) of the Constitution of the State of Florida states that the Clerk shall serve as ex officio Clerk of the Board of County Commissioners, auditor, recorder and custodian of all County funds. Pursuant to the legal authority cited above, the Clerk has established IA to fulfill these responsibilities. The Clerk and the Board will: • Approve the Internal Audit Charter. • Jointly appoint the Internal Audit Advisory Committee (Committee). The Clerk will: • Approve the Internal Audit charter. • Approve the risk based Internal Audit plan. • Approve the Internal Audit budget and resource plan. • Receive communications from IA on the Internal Audit activity's performance relative to its plan and other matters. • Approve decisions regarding the appointment and removal of the internal auditor with input from the Committee. • Approve the remuneration of the internal auditor. • Make appropriate inquiries of IA to determine whether there is appropriate scope and resources to perform audits and reviews. Independence and Obiectivitv To ensure independence, IA serves at the pleasure of, and is directly accountable to the Clerk. In addition, the internal auditor reports regularly to the Committee who is jointly appointed by the Clerk and the Board. Internal Audit shall be responsible to keep itself free from activities that may hinder IA in carrying out its responsibilities in an unbiased manner. An unbiased mental attitude must be applied in matters of audit selection, scope development, audit procedures, frequency, timing, and communicating results. To maintain objectivity, IA is not involved in the day-to-day control procedures of any auditable organizational unit. Instead, each business unit is responsible for their own efficiency and internal controls. Internal Audit will have no direct operational responsibility or authority over any of the auditable activities and will not engage in any other activity that may impair the internal auditor's judgment. Internal Audit shall exhibit and maintain the highest level of professional objectivity in gathering, evaluating and communicating information about the activity or process being examined. The internal auditor shall make a balanced assessment of all the relevant circumstances and shall not be unduly influenced by personal interests or by others in forming judgments. Any real or perceived impairment to organizational independence and individual objectivity shall be immediately discussed with the Clerk and the Committee. Impairments to independence and objectivity may include personal conflicts of interest both in fact or appearance, scope limitations, resource limitations, and restrictions on access to records, personnel, and property. Internal Audit will confirm to the Clerk and the Committee, at least annually, the organizational independence of the IA activity. Scone of Work and Responsibilities The scope of the Internal Audit work includes the review of risk management procedures, internal control systems, information systems and governance processes. This work also involves periodic testing of transactions, best practice reviews, special investigations, compliance reviews, and measures to help prevent and detect fraud. Internal Audit may engage in prevention activities including, but not limited to, the review of rules, regulations, policies, procedures and transactions. Internal Audit may conduct training and fraud education and awareness activities. To fulfill its responsibilities, IA shall: 1. Identify and assess potential risks to operations of the Clerk and the Board including activities financed by or contracted with the Clerk and the Board. 2. Review the adequacy of controls established to ensure compliance with policies, plans, procedures, administrative rules, business objectives, and best practices. 3. Asses the reliability and security of financial and management information and the systems and operations (in-house or outsourced) that produce this information. 4. Asses the means of safeguarding assets. 5. Review established procedures and systems and propose improvements. 6. Make assessments of projects, selected according to the risk involved, by confirming that the Clerk and the Board's project methodology are followed and that, in particular, adequate controls are incorporated. 7. Monitor and follow up on the implementation of corrective actions and report to the Clerk, Board, and Committee on the assessment of whether effective remedial action is taken. 8. Carry out ad hoc appraisals, consulting services, investigations, and reviews requested by the Clerk, Board, and/or the Committee. 9. Coordinate with external auditors to ensure proper audit coverage and to avoid duplication of effort. 10. Report the results of the audit work to the Clerk, Board, and the Committee. Internal Audit Plan Internal Audit shall prepare an annual work plan in collaboration with the Clerk and the Board. The plan will be based on a risk model that identifies business risks, with input from the Clerk and Board managers. The annual work plan provides information about the risk assessment, the current order of priority of audit projects and how they are to be carried out. The plan shall be presented to the Clerk and the Committee for review and approval. In case of need, adjustments will be made to the plan during the year. Such changes will be approved by the Clerk and communicated to the Committee for approval. Internal Audit is responsible for planning, conducting, reporting, and following up on audit projects included in the audit plan and deciding on the scope and timing of audits. Internal Audit may also initiate additional studies, investigations, or reviews as deemed appropriate in the normal discharge of their duties. Such additional work will generally result from requests made by the Clerk or the Board, or may arise from information obtained by citizens. The Clerk and the Committee shall be kept informed of all additional activities. Reporting and Monitoring Audit fieldwork shall be conducted in a professional and timely manner. The reporting of results will include an open process between the internal auditor and the auditee to agree on the facts and the validity of audit recommendations. Adetailed audit report will generally be issued that summarizes the objectives and scope of the audit as well as observations and recommendations to overcome or correct control deficiencies noted. The report shall contain a response from management to the finding noted in the report. Internal Audit shall assure appropriate report distribution and consideration of findings contained in the report. In all cases, follow-up work will be undertaken to ensure adequate response to audit recommendations. Under Florida law, unless specified as exempt by an applicable governing authority such as Chapter 119, Florida Statute, all reports and work papers of IA become a public record when final. A report is final when it is reviewed for comment by the Clerk and the Committee and it is distributed as a final report by IA to the Clerk, Board, acid County Administrator as appropriate. Audit Standards Internal Audit will adhere to The Institute of Internal Auditors, Inc.'s Definition of Internal Auditing, Code of Ethics, and the International Standards for the Professional Practice of Internal Auditing. These documents constitute the fundamental requirements for the professional practice of internal auditing. The Institute of Internal Auditors, Inc.'s Practice Advisories, Practice Guides, and Position Papers will also be used as applicable to guide the operations of IA. In addition, IA will follow relevant St. Lucie County Clerk of the Circuit Court policies and procedures and Internal Audit's Policy and Procedures Manual. If IA finds that it is more appropriate, IA can apply and adhere to the Government Auditing Standards promulgated by the Comptroller General of the United States. Oualitv Assurance and Improvement Program Internal Audit will maintain a quality assurance and improvement program that covers all aspects of the IA activity. The program will include an evaluation of the Internal Audit activity's conformance with the Definition of Internal Auditing and the Standards and an evaluation of whether IA applies the Code of Ethics. The program also assesses the efficiency and effectiveness of the Internal Audit activity and identifies opportunities for improvement. Internal Audit will communicate to the Clerk and the Committee on the IA activity's quality assurance and improvement program, including results of ongoing internal assessments and external assessments that are conducted at least once every five years. Approved this 21S` day of October, 2014. mith,~Clerk of the~rcuit Court _/ ~f'c:?iYr~"J,' Q~ Chair, Board of aunty ommissioners_ A ~A~~~9 AS TO ANI~ c