Internal Audit Guide Update Presentation - AASHTO

Report
Internal Audit Guide Task
Force Members
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Alice Wilson, Kentucky, Co-Chair
Stephen Kirk, Illinois, Co-Chair
Sandra Healy, Idaho
Benito Ybarra, Texas
Kristen Burkhart, Wyoming
Wayne Rogers, North Carolina
David Bruce, FHWA
Daryl Splichal, North Dakota
John Cotter, Michigan
Becky Greenway, Georgia
Wayne Cobb, Alabama
Agenda
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Task Force Composition
Ground Rules
Why Change the Guide?
Areas Covered in the new Internal Audit Guide
Practice Aids
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Benefits
Content
Development Plan
Developed
In Progress
Possible List
• Feedback and Contact Information
Task Force
• We have had a very busy year. We spanned 3 Time
Zones, which added to the difficulties in scheduling times
for 11 extremely busy people to meet.
• We have representatives from 10 states and 1 Federal
Partner from FHWA.
• We represent both small and large Internal Audit shops.
• We represent states with both combined as well as
separate Internal and External Audit functions.
• We represent audit shops that follow GAGAS, IIA
Standards or a combination of both.
• The Co-Chairs would like to thank the members of the
Task Force for their extensive time commitment and
contributions to this effort over the last year.
Ground Rules
• We recognized that audit shops are set up
differently at the various State Transportation
Departments. Some separate Internal and External
Audit work and some utilize the same auditors for
both functions.
• Regardless of who is conducting the Internal Audit
function, we decided to focus exclusively on
Internal Audit work. External Audit activities are
already addressed in a separate guide and are
therefore not covered in this guide.
Why Change the Guide?
• Many expressed a need to have a reference tool that
addressed Internal Auditing for all modes of Transportation.
The previous guide focused on Highway Construction. There
was also a desire to have more program specific audit
information.
• In order to better address everyone’s needs, the Task Force
changed the composition of the Internal Audit Guide. The
Guide itself now covers the basic guidance that cuts across all
modes of Transportation, rather than a specific program area.
• Program specific audit guidance will now be addressed in
individual Practice Aids that will focus on audits of specific
programs and activities. Practice Aids will be added over time
as they are developed and each Practice Aid can now be
updated separately whenever necessary rather than
modifying the entire Internal Audit Guide.
Areas Covered in the
New Internal Audit Guide
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Chapter 1: Introduction (Revised);
Chapter 2: Auditing Standards (Revised);
Chapter 3: Types of Engagements (Revised);
Chapter 4: Audit Risk Assessment and Audit Plan (Revised and
expanded into a separate chapter);
Chapter 5:Internal Control (Revised and expanded into a
separate chapter);
Chapter 6: USDOT Agencies and Descriptions (Added since the
original draft last year)
Chapter 7: Stewardship, Oversight, Laws and Regulations (Revised
and expanded into a separate chapter added Stewardship since
the original draft last year);
Chapter 8: Innovative Financing and Construction Delivery
Methods; (Added since the original draft last year);
Chapter 9: General Audit Program (Revised);
Glossary (Revised).
Chapter 1: Introduction
• Updated the introduction to address the changes
to the Guide
Chapter 1: Introduction
• Sections
 Overview
 Why a Guide? Provide Internal Auditors a reference tool that addresses
the following:
 Internal Controls
 Risk Assessment
 Compliance with Applicable Laws and Regulations
 Federal Programs
 Innovative Financing
 Effective Use of Resources
 Auditing Standards
 Engagements- Overview of Internal Audit responsibilities.
Chapter 2: Auditing
Standards
• Added a discussion of GAGAS and IIA requirements
and included a comparison between the
requirements
Chapter 2: Auditing
Standards
• Sections
 Generally Accepted Government Auditing Standards (GAGAS)
 International Standards for the Professional Practice of Internal Auditing,
Institute of Internal Auditors (IIA)
 Comparison of GAGAS and IIA Standards
Chapter 3: Types of
Engagements
• Updated the language
• Covers descriptions of types of engagements
• Added information pertaining to Information
Technology related audits
• Expanded Non-Audit Services and added
Consulting.
Chapter 3: Types of
Engagements
• Sections
 Types of Engagements Overview
 Types of Engagements- Financial, Performance, Program Effectiveness
and Results, Internal Control, Compliance, Information Technology,
Follow-Up
 Attestation Engagements- Examination, Review, Agreed Upon Procedures
 Non-Audit or Consulting Services
Chapter 4- Risk Assessment and
Development of an Audit Plan
• Risk Assessment was made into its own Chapter
• previously part of an Appendix and the content
was expanded to cover the whole risk assessment
process through the development of a work plan.
Chapter 4- Risk Assessment and
Development of an Audit Plan
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Agency Risk Assessment Overview
Identify Audit Universe or Auditable Units
Benefits of Auditable Units
Permanent Files
Risk Assessment
Risk Assessment Criteria
Consideration of Internal Controls and Common Threats
Internal Control Weaknesses
Analysis of Internal Audit Resources
Developing The Audit Work Plan
Chapter 5: Internal
Control
• Updated to reflect the 2013 COSO changes and
expanded the discussion.
• Added Information Technology Related Controls
with a focus on Control Objectives for Information
and Related Technology (COBIT) Standards.
Chapter 5: Internal
Control
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Internal Control Overview
COSO Categories
Five Components of COSO
COBIT Framework and COBIT Domains
Understanding an Auditee’s Internal Controls
Documenting Internal Controls
Internal Controls Over Financial Reporting
Evaluation of Internal Controls
Classifying Internal Control Weaknesses
Chapter 6 USDOT
Agencies
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USDOT Agencies and Descriptions General Overview
Office of the Secretary
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Federal Railroad Administration
Federal Transit Administration
Maritime Administration
National Highway Traffic Safety Administration
Office of Inspector General
Pipeline and Hazardous Materials Safety Administration
Research and Innovative Technology Administration
Saint Lawrence Seaway Development Corporation
Surface Transportation Board
Chapter 7: Stewardship,
Oversight, Laws and
Regulations
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Made this a separate chapter.
Previously part of an “Essentials” chapter.
Expanded the chapter and listings.
Added Stewardship and Oversight.
Chapter 7: Stewardship,
Oversight, Laws and
Regulations
• Stewardship and Oversight Agreement between
the FHWA and State Transportation Agencies
• Hierarchy
• Federal Requirements (2 CFR 200)
• Audit Requirements (Part of 2 CFR 200)
• Catalog of Federal Domestic Assistance (CFDA)
• State Law
Chapter 8: Innovative
Financing and Construction
Delivery Methods
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Grant Anticipation Revenue Vehicle (GARVEE)
Transportation Infrastructure Finance Innovation Act (TIFIA)
Section 129 Loans (23 U.S.C. 129 (A) (7)
Tax Increment Financing (TIF)
Private Activity Bonds (PABS)
Public-Private Partnerships (P3s)
Design- Build (DB)
Construction Manager/General Contractor (CMGC)
Chapter 9: General Audit
and Attestation Programs
• Expanded the previous General Audit Program to
include more detailed steps
• Added a General Attestation Audit Program
Chapter 9: General Audit
Program
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 Audit Program Purpose and Scope
 Phases
 A. Preliminary Survey (Planning) Phase
 B. Execution (Fieldwork) Phase
 C. Closing (Reporting) Phase
 Attestation Program Purpose and Scope
Glossary:
• The glossary was expanded to address additional
terms.
Benefits of Practice Aids
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Only an individual Practice Aid has to be amended rather than
the whole Internal Audit Guide if there are changes made to a
specific program.
When there is a new program, a new Practice Aid addressing
that program can be developed without amending the whole
Internal Audit Guide.
Having separate Practice Aids by subject provides easier use.
Each Practice Aid will focus exclusively on one program or
activity.
Allowed the Task Force to break this project into manageable
pieces through various projects rather than take on one huge
project at once. Therefore, allowing us to provide usable
products to AASHTO members more quickly.
To expedite this process, we would like to suggest having
members submit audit programs to the Task Force for review and
approval to be added to the site.
Practice Aid Content
• Program Description;
• Statutes and Regulations;
• Catalog of Federal Domestic Assistance (CFDA#) (if
applicable);
• Audit Scope and Objectives;
• Audit Program.
Practice Aid Development
Plan
• The Internal Audit Task Force will have ongoing
responsibilities to develop Practice Aids. As you will
see from the list we began to develop, there is an
extensive number of topics. Therefore, we need
your assistance in providing drafts so the project
can move forward more effectively. Please take the
time to look at the various audits you have
conducted. If you have an existing Audit Program
for one of the areas or one you think should be
included, please provide it for review by the Task
Force. Working on this project together we will be
able to accomplish more and arrive at a better
product.
Completed Practice Aids
• Disadvantaged Business Enterprise (DBE) Initial
Certification Process
• Metropolitan Planning Organizations (MPOs)
Practice Aids Currently
Under Development
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Federal Aid Billing
Procurement Cards
Materials
Highway Planning and Construction (CFDA 20.205)
Professional Services Consultants
Airport Improvement Program, (CFDA #20.106)
Transit Grants
Subrecipient Monitoring
Possible Practice Aids
• Disadvantage Business Enterprise (DBE) Labor &
Workforce Utilization Monitoring
• Value Engineering
• Liquidated Damages
• Recreational Trails Program
• Ferry Boat Program
• Congestion Mitigation and Air Quality Program
(CMAQ)
Possible Practice Aids
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Bridge Inspection Program
Bridge Project Design & Review
Bridge Analysis and Load Capacity Determinations
Bridge Maintenance & Repair
Oversize Overweight Permits
Outdoor Advertising (Billboards)
Motor Pool and Vehicle Fleet Operations
Federal Funding Accountability & Transparency Act
(FFATA) Reporting
Possible Practice Aids
Land Acquisition
Highway Construction Project Funds Management
Highway Construction Project Cost Estimation
Highway Construction Project Planning and
Preconstruction Activities
• Highway Construction Public Involvement
• Highway Construction Procurement- Bidding &
Awarding Construction Contracts
• Highway Construction Contractor Payments
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Proposed Practice Aids
Continued
• Highway Construction Contractor Change Orders
• Highway Construction Site Audits
• Highway Construction Contract Administration and
Closeout
• Highway Construction Consultant Selection
• Highway Construction Consultant Contract
Modifications
• Highway Construction Consultant Payments
• Highway Safety Improvement Program
• Highway Rail Crossing Safety Program
Possible Practice Aids
Continued
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Operational Safety Inspections of Airports
Operational Safety Inspections of Heliports
Aircraft and Pilot Registration
Aircraft Maintenance of State Fleet
Airport Construction Project Funds Management
Airport Construction Project Cost Estimation
Airport Construction Project Planning and
Preconstruction Activities
Possible Practice Aids
Continued
• Airport Construction Procurement- Bidding &
Awarding Construction Contracts
• Airport Construction Contractor Payments
• Airport Construction Contractor Change Orders
• Airport Construction Site Audits
• Airport Construction Contract Administration and
Closeout
• Airport Construction Consultant Selection
• Airport Construction Consultant Contract
Modifications
• Airport Construction Consultant Payments
Proposed Practice Aids
Continued
• Capital Assistance Program for Elderly Persons with
Disabilities (CFDA#20.513)
• Transit Capital Investment Grants (CFDA#20.500)
• Transit Formula Grants (CFDA#20.507)
• Formula Grants for Other than Urbanized Areas,
(CFDA#20.509)
• Transit State Planning & Research (CFDA#20.515)
Possible Practice Aids
Continued
• Motor Carrier Safety (CFDA#20.218)- Truck and Charter
Bus Inspections;
• Motor Carrier Safety (CFDA#20.218)- Truck and Charter
Bus Compliance Reviews of New Entrants;
• Motor Carrier Safety (CFDA#20.218)- Safety Audits of
Trucking and Charter Bus Companies;
• State Traffic Safety Improvement Grants (CFDA#20.600).
• National Priority Safety Programs (CFDA#20.616).
• High-Speed Rail Corridors and Intercity Passenger Rail
Service – Capital Assistance Grants (CFDA#20.319)
Railroad Agreements;
Feedback- The Task Force
Needs Your Input
• Provide ideas for Practice Aids
• Submit Audit Programs to the Task Force pertaining
to the various topics for screening and formatting
into Practice Aids by the Task Force
Where do I send my
Feedback?
• Alice Wilson, CPA- Co-Chair (Kentucky)
[email protected]
(502) 782-4041
• Stephen Kirk, CIA, CGAP- Co-Chair (Illinois)
[email protected]
(217)557-1258

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