Attachment A: Proposed Performance Audit Charter

 

Mission and Scope of Work

The mission of the performance audit function is to promote honest, efficient, effective, and accountable City government. The goal of performance auditing is to provide objective assurance and consulting services designed to improve the City’s operations and accountability. This is achieved by reviewing and evaluating the accuracy of performance reporting as well as compliance with policies, guidelines and procedures, and assessing the efficiency and effectiveness of operations.  The performance audit function helps the City accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of City operations and performance reporting systems.

 

The scope of work of the performance audit staff is to determine whether the City’s operations and performance reporting processes, as designed and represented by management, are adequate and effective.  The scope of performance audit therefore includes:

 

·         Ensuring that performance information is accurate, reliable, valuable and transparent;

 

·         Ensuring that work processes and performance reporting procedures are in compliance with applicable policies, standards and reasonableness;

 

·         Consulting with city departments as requested by city management to help ensure that performance results are accurate and reliable;

 

·         Evaluating whether program objectives were achieved;

 

·         Making recommendations that enhance the accuracy of performance results as well as recommendations that improve the city’s operations.

 

 

Accountability

The performance audit function shall report to the Director of Finance and be accountable to City management. The City Council shall approve the annual performance audit work plan. The work plan will include the performance audits for the fiscal year, scheduled follow-up audits, and any planned implementation and/or consulting assistance. Final performance audit reports shall be given to management and the City Council and made available to the public.  The performance audit report shall include the audit findings and recommendations, the department or auditee’s response, and the City Manager’s comments regarding implementation of recommendations. Attachment C describes the workflow process of performance audits.

 

At least once every three years, the performance audit function shall undergo a peer review coordinated by the National Association of Local Government Auditors (N.A.L.G.A) to determine whether the performance audit function is adhering to established policies and procedures and that applicable auditing standards are being followed. This charter specifies that funds sufficient to cover reasonable expenses associated with this review shall be included in the performance audit budget for the year of the review.

 

Responsibility

The performance audit staff have the responsibility to:

 

·         Develop a flexible annual performance audit plan using an appropriate risk-based methodology, including any risks or concerns identified by management, and submit that plan and any amendments to Council for review and approval;

 

·         Implement, as staffing permits, the annual performance audit plan, as well as any special tasks or projects requested by management;

 

·         Provide an assessment through audit reports and/or other evaluations of the adequacy and effectiveness of the City’s processes for controlling its reportable performance results and managing its risks in the areas set forth under the mission and scope of work;

 

·         Report significant issues as identified during audits, including recommending potential improvements;

 

·         Periodically provide information on the status and results of the annual audit plan to City management;

 

·         Maintain a professional audit staff with sufficient knowledge, skills and experience to meet the requirements of this charter. It is preferable, although not required, that performance audit staff hold professional certification such as the Certified Internal Auditor (CIA) certification;

 

·         Evaluate and assess, as staffing permits, significant restructuring or changes in operations;

 

·         Provide appropriate opportunity for input and feedback from the management of the audited function.

 

Authority

To provide management an objective report of the City’s operations and evaluate the accuracy of performance reporting, the performance audit function must have access to information. Performance audit staff are invested by the Council with the authority to:

 

·         Have unrestricted access to all City and employee functions, records, property and personnel;

 

·         Determine the scope of work and apply the techniques required to accomplish audit objectives;

 

·         Obtain the necessary assistance of personnel related to any audit, as well as other specialized internal or external services.

 

 

Performance audit staff are prohibited from preparing reportable performance results for any function other than the performance audit function. This prohibition shall not preclude the provision of advice or consulting services related to preparation of reportable results or any other function.