University of Alabama at Birmingham
INTERNAL AUDIT POLICY
October 27, 1994 (Replaces charter of the "Office of Management Audits" as signed by the President on December 10, 1990, and included in the UAB AUDIT MANUAL.)
Rule 430, Auditing, in The Board of Trustees of the University of Alabama Board ManualRule 431, Internal Audit Policies and Standards, The Board of Trustees of the University of Alabama Board Manual
It is the policy of the University of Alabama System to support an internal auditing office as a staff function and as an independent appraisal function to examine and evaluate University business or administrative activities as a service to management and to the Board of Trustees. Toward that end, the Board of Trustees and UAB have established an Office of Internal Audit-UAB, which is under the supervision of the Director of the Office of Internal Audit-UAB. The Director has no responsibility other than internal auditing and reports to the General Auditor, who reports directly to the Audit Committee of the Board of Trustees and administratively to the Chancellor of the University of Alabama System.
Internal auditing is a management control which functions by measuring and evaluating the effectiveness of other managerial controls. UAB management is responsible for providing a system of internal control which assures the protection and safeguarding of the assets and good name of UAB. The Office of Internal Audit-UAB assists University management officials in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations, and pertinent comments resulting from audits. The Office of Internal Audit-UAB is responsible for appraising controls, activities, operations, or transactions of the University in order to ensure compliance with applicable policies and laws and for evaluating effectiveness and methods of operation of the University's departments and units.
All UAB activities are subject to audit. Furthermore, the Office of Internal Audit-UAB shall have full access to, and necessary use of, all records, properties, and personnel relevant to any subject under review. An annual audit plan is to be systematically developed by the Director of the Office of Internal Audit-UAB, in conjunction with UAB officials, and is to be presented to the Audit Committee of the Board of Trustees. The objective of the plan is to ensure that all subjects of material significance to UAB are given audit consideration on an appropriate basis.
The scope of each audit shall be sufficient to express an informed opinion about the audit subject. An audit report will be issued within ninety days of the completion of the field work. The audit report will be issued by the Director of the Office of Internal Audit-UAB and will be directed to the Office of the President, with copies to the relevant vice president and other individuals as appropriate. All levels of management in the chain of oversight of the area audited, as well as the Vice President for Financial Affairs and Administration, will be given an opportunity to review and comment on the draft audit report. In the case of audits involving the UAB University Hospital, the Chief Financial Officer of the Hospital will be given the opportunity to review, and comment on, the draft audit report.
When appropriate, and to the extent practicable, each audit report shall include management's written response indicating the corrective action to be taken and the expected completion date of each action. The Office of Internal Audit-UAB is to follow up on reported audit recommendations in order to ascertain that appropriate action has been taken. Implicit in management's response to audit recommendations is the responsibility to ensure that all actions, activities, and functions are conducted within established University policies and procedures and sound internal controls. Annually, the Office of Internal Audit-UAB will make a post-audit follow-up report to the President, the Vice President for Financial Affairs and Administration, and the Audit Committee of the Board of Trustees. The purpose of the report will be to describe the extent to which audit recommendations have been implemented.
The objectivity, and hence the effectiveness, of the internal audit function is predicated on its independence and its freedom from operational responsibility. Therefore, in performing its work, the Office of Internal Audit-UAB has neither direct authority over, nor responsibility for, any of the activities reviewed. Internal auditors will not develop and install procedures, prepare records, make management decisions, nor engage in any other activity that could be reasonably construed to compromise their independence. Consequently, decisions affecting recommended corrective action are the responsibility of the management in the area audited. However, the Office of Internal Audit-UAB has the responsibility for evaluating the proposed action or lack of action. If a material difference of opinion develops, the matter is to be referred to the appropriate management official for a decision. Therefore, internal audit review and appraisal do not in any way substitute for, or relieve persons in the University of, the responsibilities assigned to them.
The University of Alabama System is committed to the professional practice of internal auditing. Audits shall be conducted in conformance with the Board of Trustees Rule 431 and appropriate professional standards, such as the following:
Audit work will be conducted by a staff of professional auditors who possess a bachelor's degree plus experience in auditing techniques. Additionally, they may have a graduate degree in a relevant subject and/or certification as a Certified Internal Auditor, Certified Information Systems Auditor, Certified Public Accountant, or Certified Management Accountant.
In the case of an audit undertaken under the supervision and direction of legal counsel, the policy guidelines presented herein may be adjusted to accommodate legal constraints and processes. The Office of Internal Audit-UAB, in conjunction with the University of Alabama System General Auditor and the UAB Vice President for Financial Affairs and Administration, is responsible for procedures to implement this policy at UAB.