§ 2-398. Audits.

(a)

When authorized by the city commission or audit committee, the internal auditor shall have authority to conduct audits of all departments, offices, boards, activities and agencies under the control of the city commission or funded by the city subject to any contractual limitations. The internal auditor may receive requests for audits from any person or entity. Upon determination by the internal auditor that such request for audit is valid and should be considered, the internal auditor shall submit such audit request for approval to the audit committee or the city commission, whichever is practicable under the circumstances. Such audits may include operational, compliance, performance, management, investigative, and other audits which are intended to independently determine whether:

(1)

Activities and programs being implemented have been authorized by the city commission.

(2)

Activities and programs are being conducted in a manner that will effectively accomplish the goals and objectives adopted by the city commission.

(3)

Activities or programs serve the intended purpose in an efficient and effective manner.

(4)

Activities and programs are operated in compliance with applicable laws, policies and procedures.

(5)

Revenues are being properly collected, deposited and accounted for.

(6)

Resources, including funds, property and personnel, are adequately safeguarded, controlled, and used in a faithful, effective, and efficient manner.

(7)

Financial and other reports are being provided that disclose fairly and fully all information that is required by law, that is necessary to ascertain the nature and scope of programs and activities, that is necessary to establish a proper basis for evaluating programs and activities.

(8)

There are indicators of fraud, abuse, or illegal acts.

(9)

There are adequate operating and administrative procedures and practices, systems, or accounting internal control systems and internal management controls which have been established by management.

(10)

There has been adequate fiscal evaluation of all large purchases of real property by the city or sale of city property.

(b)

In addition to formal audits approved by the audit committee and scheduled in the normal audit plan, the internal auditor is authorized to directly respond to audit related issues where expediency is essential and audit committee approval is not practical. These issues should subsequently be presented to the audit committee for their information.

(c)

The internal auditor or any of the employees of the internal auditor's office shall not, if possible, conduct or supervise an audit of an activity for which an employee was responsible or employed during the preceding two years.

(d)

By July 1 of each calendar year, the internal auditor shall submit an annual audit plan for the next fiscal year to the audit committee. The plan shall include the departments, offices, boards, activities, and programs scheduled for audit during the year and will include any additional duties to be performed in accordance with section 2-401 of this article.

(e)

In the selection of audit areas, the determination of audit scope and the timing of the audit work, the internal auditor should consult with the appropriate auditors and/or agencies to ensure that all applicable laws, rules and regulations are complied with, that desirable audit coverage is provided and audit efforts may be properly coordinated.

(f)

The annual audit plan may be amended by the city commission or the audit committee, as deemed necessary.

(g)

The internal auditor shall submit audit reports to the audit committee for approval prior to issuance.

(h)

Each audit will result in a written report. Audit reports will be numbered sequentially by year, and the internal auditor will maintain a cross reference of audit reports by department and/or program.

(i)

The internal auditor will provide a draft of the audit report to the auditee for review and comment regarding factual information before the report is finalized and released. The auditee shall respond in writing specifying agreement with audit findings and recommendations or reasons for disagreement, plans for implementing solutions to identified problems, and a timetable to complete such activities. The response shall be forwarded to the internal auditor within ten working days. The internal auditor shall include the full text of the response in the final report.

(j)

The internal auditor shall submit copies of the final audit report to the auditee after approval by the audit committee and shall retain a copy as a permanent record.

(k)

The internal auditor shall include in the audit reports:

(1)

A precise statement of the scope of the audit.

(2)

A statement that the audit was performed in accordance with generally accepted government auditing standards, if appropriate.

(3)

A statement that an examination for compliance with applicable laws, policies, and regulations was conducted and presentation of the findings associated with that examination, if appropriate.

(4)

A summary of findings, including a statement of the underlying cause, evaluative criteria used, professional conclusions and the current and prospective significance of the findings.

(5)

A statement that internal control systems were examined and a report of any material weaknesses found in the internal control systems, if appropriate.

(6)

Statements of response submitted by the auditee relevant to the audit findings.

(7)

A concise statement of the corrective actions already taken as a result of the audit findings or on the auditee's own initiative.

(8)

Recommendations for additional necessary or desirable action.

(Code 1979, § 2-181)