Revision Date:

Field Manual
09/03/2013
Procedure 3.3: Internal Financial Audits Revision Number:3.0

1. Purpose and Scope:

1.1. This procedure implements the policies related to internal financial audits
stated in Policy 3: Compliance and Internal Audit .
1.2. The purpose of an internal audit is to evaluate a project ’s business practices,
provide objective assurance of internal control systems , and ensure that the
project is in compliance with DAI policies and procedures as well as client
regulations.
1.3. All DAI-funded internal financial audit reports are confidential and
proprietary information , for internal use only. DAI projects may be audited at
any time.
1.4. For information and actions in regard to external financial audits , please
review Procedure 7.7: Handling External Financial Audits .

2. Roles and Responsibilities:

2.1. The DAI/W Office of Internal Audit is responsible for developing an annual
risk-based audit plan and conducting audits .
2.2. All project staff are responsible for cooperating with the internal auditors ,
providing any information requested , and following audit recommendations .
2.3. The Deputy Chief of Party (DCOP) ensures that all logistics related to the field
portion of the audit are coordinated .
2.4. The Chief of Party (COP) is responsible for ensuring compliance to this
procedure and training staff .

3. Process:
Responsibility Action
DAI/W Internal 1. Notify the COP and DAI/W technical and management team in writing of
Auditor an upcoming audit. Indicate the audit objectives , projected time frame ,
and information required from the project .
COP 2. Confirm audit schedule and notify all field staff of the pending internal
review.
3. Request project staff to collect information requested by the Internal
Auditor prior to their arrival in -country.
DCOP 4. Ensure that arrangements are made by project staff to assist in the audit .
Some logistics include:

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 • In-country travel and lodging ;
• Staff available during the audit period (no leave); and
• Adequate office space reserved for auditors .

COP 5. Forward all requested information to the Internal Auditor by the due date .
DAI/W Internal 6. Begin field work by conducting an entrance conference with the project to
Auditor discuss the purpose, scope, and process of the audit .
COP/DCOP 7. Request a specific function or area of concern to be reviewed , if desired.
DAI/W Internal 8. Review and evaluate the soundness , adequacy, and effectiveness of
Auditor accounting, financial, and operation policies , procedures, and controls of
the field projects .
9. Verify the existence of assets and proper safeguards for their
protection .
10. Review the reliability and integrity of accounting , financial, and
operating information .
11. Determine the extent of compliance with policies , plans, and
government regulations .
12. Evaluate the accuracy and validity of contractual costs .
13. Discuss any proposed recommendations with project management in a
closing conference.
14. Draft audit report within 15 days of completion of fieldwork.
15.1. Include an executive summary, scope of audit, approach and
findings, and recommendations in the report .
15. Send draft report to the project for discussion and review of final
recommendations.
COP/DCOP 16. Review the draft audit report , respond to any questions raised and
document project management actions in the internal audit report by
the requested deadline .
17. Meet with staff to plan how the project will implement the
recommendations.
18. Send implementation plan and clarifications to the Internal Auditor by
the date requested .
DAI/W Internal 19. Issue final audit report and distribute to the following DAI /W staff: Chief
Auditor Financial Officer, Controller, Vice President of Financial Planning &
Analysis, Head of Internal Audit & Compliance, Regional Managing
Director, Project Team Director, Project Manager, and Project Senior
Management (COP and DCOP). Do not further distribute to outside
parties.
20. Follow up on the implementation of internal audit report

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 recommendations to ensure that all issues have been addressed .
COP/DCOP 21. Keep internal audit reports confidential and do not distribute to other
staff or outside parties . If requested by the client , contact the DAI /W’s
Office of Internal Audit for instructions on how to proceed .

4. Guidance
4.1. Projects with the greatest risk exposure are prioritized for the annual audit .
However, the audit plan may be amended at any time to include requested
audits, special projects, or changes in priorities .
4.2. The Office of Internal Audit will commonly look at the following risk factors
in creating its annual audit plan :
• Quality of internal controls
• Competence of field project management
• Liquidity of assets
• Size of the project
• Complexity of operations
• Length of project life
4.3. Project audits vary in length . The amount of time required depends on the
audit scope and the ease in obtaining the required information . A typical
audit will require five to seven days of field work. However, a project might
require more time if an issue is discovered during the initial gathering of
information.
4.4. Project management is encouraged to present any questions or concerns
about the audit during the entrance conference and throughout the audit .
4.5. Projects can prepare for the audit or conduct their own self -assessment at
any time using the following tool :
Form 3.1: Audit Checklist
4.6. List of definitions and acronyms : No definitions or acronyms in this
procedure.

5. Recordkeeping
The following records must be maintained in executing this procedure . Requirements
for the management of these records (including responsibility , location, form, filing
method, and retention ) are provided in the Project Record Map .

6. Tools and References

The following tools and references (work instructions, guides, templates, DAI/W
Operations Manual documents , and so on) are referenced throughout this procedure :

Proprietary and confidential information for use by DAI and project staff only. Not for outside distribution.
The electronic version of the manual on a project's TAMIS is the official version and takes precedence over any other copy.
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UID for this form: 7A00733218
Associated Change orderCO-0125
Inherited UID From the draft: C60066E053
Section Name: Project Compliance

Proprietary and confidential information for use by DAI and project staff only. Not for outside distribution.
The electronic version of the manual on a project's TAMIS is the official version and takes precedence over any other copy.
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