unm and health system internal audit departments internal audit department orientation manu patel,...
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UNM and Health System Internal Audit Departments
Internal Audit DepartmentOrientation
Manu Patel, Internal Audit Director
Purvi Mody, Executive Director, Compliance and Internal Audit, Health System
June 5, 2015
UNM and Health System Internal Audit Departments
Audit and Compliance Committee
(RPM 1.2, 7.3)• A standing committee of the Board of
Regents
• One member should be “financial expert”
• Meets four or more times a year
• Follows Open Meetings Act
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UNM and Health System Internal Audit Departments
Audit and Compliance Committee(RPM 7.3)
• Oversight Responsibilities for University’s: • Financial reporting• Internal controls• Risk management• Performance of external financial and internal auditors • Compliance with laws and regulations• Compliance program• Federal, state agencies audits and compliance reviews
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UNM and Health System Internal Audit Departments
Authority of Internal Audit Dept. (IA)
(RPM 7.2)• Was established to perform a comprehensive internal audit function
• Has unrestricted access to all functions, records, property, and personnel
• Obtains the necessary assistance of personnel
• Communicates with personnel of internal, external, law enforcement agencies, etc.
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UNM and Health System Internal Audit Departments
Independence
• IA reports functionally to the Audit and Compliance Committee
• Free from interference in determining the scope of internal auditing
• Empowered to obtain the information needed
• IA reports administratively to the University President
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UNM and Health System Internal Audit Departments
Independence (cont.)
• Health System Internal Audit reports administratively to the Chief Executive Officer and Administrator of Hospital Operations
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UNM and Health System Internal Audit Departments
UNM Internal Audit Reporting Lines
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Internal AuditUNM Board of Regents
HS Internal Audit(Purvi Mody)
UNM Main Campus
Audit Committee of Each Entityand COO of the Health System
(Steve McKernan)
• UNM Internal Audit• Health System Internal Audit
UNM Internal Audit
(Manu Patel)
Health Sciences Center
School of Medicine, College of
Nursing and Pharmacy
Research (Cancer
Center and HSC)
Branch Campuses, Affiliated entities (Foundation and
Lobo Development, etc)
Health System
UNM Hospitals and 57 Clinics
UNM Cancer Center Clinics
UNM Medical Group and 7 clinics
UNM SRMC
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UNM and Health System Internal Audit Departments
Report Functionally to the Committee
The Committee reviews and approves UNM Internal Audit’s:– Risk based internal audit plan – Budget and resource plan– Work product: audit, consulting reports, etc. – Follow up report on management’s responses to audit
recommendations– Health System IA reports functionally to Board of
Trustees’ Audit and Compliance Committee9
UNM and Health System Internal Audit Departments
Purpose and Scope of Work
• Improve the University's operations
• Determine whether the University's systems of controls, risk management, and governance, are adequate, and functioning properly to ensure:
• Risks are identified and managed
• Employees' actions are compliant with policies etc.
• Resources are acquired economically, used efficiently, and adequately protected, etc.
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UNM and Health System Internal Audit Departments
Investigation of Fraudulent Activity
• University policy requires Internal Audit to conduct investigations of fraud and employee misconduct if financial
• Will coordinate investigations of suspected fraudulent activities within the University
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UNM and Health System Internal Audit Departments
Relevant UNM Policies
• Policy 2200: Whistleblower Protection and Reporting Suspected Misconduct and Retaliation
• Policy 7205: Dishonest or Fraudulent Activities
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UNM and Health System Internal Audit Departments
Definition of Internal Auditing
“…an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.
It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.” The Institute of Internal Auditors
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UNM and Health System Internal Audit Departments
Assurance Services
• We provide an independent assessment on governance, risk management, and control processes
• Examples of assurance engagements: – management and performance
– compliance
– information technology
– special requests
– fraud14
UNM and Health System Internal Audit Departments
Types of Assurance Engagements
• Special Request from senior management or the Board of Regents– may result from concerns about a program,
function or account
• Fraud examination– initiated from irregularities identified during
routine audit work, management who find fraud in their organizations, and complaints from various sources including the Hotline
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UNM and Health System Internal Audit Departments
Risk Based Auditing
• Focus on – risk of occurrences that could prevent the University
from achieving its goals
– areas with high risk where controls are not in place or are weak
• Risk based audit plan – developed with input from across the University
– based on available man hours
– A university-wide 5-year plan is revisited annually
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UNM and Health System Internal Audit Departments
IA Process of Audit Report
• Management responds to the report with 3 required elements within 10 days
• Management obtains its EVP’s approval
• President approves management’s responses
• Committee reviews and approves
• Report is made public except exempted information
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UNM and Health System Internal Audit Departments
Standards and Ethics
• Adhere strictly to the Code of Ethics as established by the Institute of Internal Auditors (IIA)
• Abide by applicable standards made by IIA and the American Institute of Certified Public Accountants (AICPA)
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UNM and Health System Internal Audit Departments
Quality
• IA must have a peer review at least once every five years
• Last quality assessment was approved in March 2013
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