Session 4: Internal Audit engagement protocols

Presented by: Lee Ward

Monash University

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Internal Audit Engagement Protocols

Presenter: Lee Ward Director Audit and Risk Management

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Internal Audit process

Scope: Effective systems Compliance Probity in procurement Grant acquittals Investigations Approach: Collaborative Agreed actions Risk based Constructive
Reporting: Heads of Dept Audit committee

Outcomes: Identify and resolve weaknesses Awareness and accountability Holistic overview

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Innovation in Internal Audit

Compliance audits Systems Departmental

Scoping & fieldwork

Recommendations & Agreed Actions

Reporting

Follow-up

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Scoping & fieldwork

Discuss scope with Dean Review financial position of Depts cf budget Reliance on controls in systems Risk assessment - Conclusions and documentation Sample sizes Electronic work papers Sign-off

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Recommendations & Agreed Actions

Validation of findings Strategies to address risk Agreeing actions

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Reporting

Preliminary report - recommendations Final report agreed actions Risk ratings Negative or positive assurance Scoring Benchmarking Better practice comparison Audit Committee

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Risk Finding
1. Splitting of Purchase Orders Purchase orders from the same vendor were split to form multiple orders for like goods on the same day to circumvent SAP authorisation limit of $20k for the Managers.

Risk Implication
Unauthorised expenditure

Risk Rating
High

Agreed Action
Responsible Officer: Faculty Manager The ZZ Officer had previously been warned about order splitting.

Purchase Order No. 45648981

Date

Amount

27.08.09

$19,560

45648983

27.08.09

$3,782

Descrip tion/ Vendor Acme Building Co. Acme Building Co.

PO Preparer ZZ Officer

Approved by

Target Date: Complete

XX Operations Manager

ZZ Officer

XX Operations Manager

Total

$23,342

2.

Inappropriate use of corporate card Use of corporate card contrary to policy: 1. The 80% business calls for Professor Felix Cats mobile phone were charged to corporate card rather than reimbursed as per the Conduct and Compliance policy; and 2. A computer license of $741 was charged to a Research Fellows Corporate Card in May 2009.

FBT liabilities and penalties

Medium

Responsible Officer: Head of Department Hold the Professor accountable to ensure appropriate use of corporate card. Target Date: 30 September 2010

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Follow-up

Register of outstanding actions Evidence of actions completed Reporting of overdue actions Audit committee response

Status Key

Overdue

Not Due

Complete

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Report No 201003

201003

Report Title School of Song and Dance School of Song and Dance School of Song and Dance School of Song and Dance

Ref # 1.1

Risk Finding Splitting of Purchase Order

Risk Rating High

Agreed Actions Refer Deputy HoS to HR to consider disciplinary action Establish a protocol to manage delegations and financial authorities in the absence of the Dean Hold Deputy HoS accountable to submit corporate cards statements to his SAP nominated approver Review level of understanding of Faculty Executive to ensure compliance with Financial Authorities and Delegations Policies Review training and experience of SAP processors to ensure compliance with Policy and Procedures and to report exceptions to Deputy HoS Hold Deputy HoS accountable to complete performance reviews for the professional staff Review induction processes and staff training to ensure that corporate card holders comply with Corporate Card Policy

Target Date Complete

Resp. Dean

1.2

High

01/08/2010

Dean

201003

201003

Corporate Card statements not properly approved License agreements

Medium

Complete

Dean

Medium

30/10/2010

Dean

201003

School of Song and Dance

Failure to obtain tax invoices

Medium

30/10/2010

Deputy Head of School

201003

201003

School of Song and Dance School of Song and Dance

Performance reviews not conducted for professional staff Inappropriate purchases by Corporate Card

Medium

15/09/2010

Dean

Low

Complete

Deputy Head of School

Status Key

Overdue

Not Due

Complete