Chapter 4.02
INTERNAL AUDITS

Sections:

4.02.010    Purpose.

4.02.020    Use of audit assistants.

4.02.030    Authority of the county council and responsibilities of the audit assistant.

4.02.040    General process.

4.02.050    Scope of examinations.

4.02.060    Responsibilities of agency under review.

4.02.070    Scheduling of audits.

4.02.080    Special audits.

4.02.090    Use of audit assistants and technical experts.

4.02.100    Filing of audit reports.

4.02.010 Purpose.

The purpose of this chapter is to establish the role of the county council and its audit assistants in performing internal audits. The internal audit function is an independent and objective assessment activity for the review of operations within Snohomish county government which enables the county council to continue fulfilling its responsibility under Section 2.90 of the charter.

(Added Ord. 86-039, April 23, 1986).

4.02.020 Use of audit assistants.

One or more persons may be retained by the county council to assist in performing the internal audit function. Such person or persons shall hereinafter be referred to as the audit assistant. Such person or persons shall have passed the uniform CPA examination and/or possess an equivalent level of knowledge and experience concerning governmental auditing and accounting.

(Added Ord. 86-039, April 23, 1986).

4.02.030 Authority of the county council and responsibilities of the audit assistant.

(1) The county council shall be authorized to utilize the audit assistant to examine an office, department, or organization which receives appropriations from the county. Such office, department, or organization shall hereinafter be referred to as an agency. The council, in exercising this authority, shall develop policies and procedures that provide for an orderly review and evaluation of governmental activities being examined.

(2) The audit assistant, in assisting the county council, shall have access to all of the records, properties, and personnel relevant to the subject under examination.

(3) The audit assistant shall be charged with the responsibilities as follows:

(a) To conduct his examination in an impartial and professional manner.

(b) To adhere to generally accepted governmental auditing standards and procedures as adopted by the comptroller general of the United State.

(c) To discuss findings and recommendations with management of the agency under review.

(d) To conduct an "exit interview" with the executive and the management of the agency under review during which a preliminary draft of the audit report is presented and discussed.

(e) To request from the executive and the management of the agency under review a written response to each finding or recommendation stating either agreement or disagreement with each finding.

(f) To conduct a post-audit interview with the management of the agency under review.

(g) To submit a final audit report on each examination to the county council, county executive, and to the management of the agency under review. Such report shall incorporate both the executive’s and agency’s response to each of the findings and recommendations.

(h) Ensure that the ongoing activities of agencies being examined are not unreasonably interrupted during the audit.

(i) Facilitate cooperation and coordination of audit efforts with the executive in order to achieve maximum benefit of findings and recommendations.

(Added Ord. 86-039, April 23, 1986).

4.02.040 General process.

The following describes the annual process by which audit projects are selected and the steps to be followed in conducting internal audits:

(1) The internal auditor shall provide the council and the executive with a list of potential audit projects no later than August 1, each year.

(2) The executive may provide written comments to the council regarding the list of potential audit projects or recommend additional audit projects. Such written comments and/or recommendations shall be submitted by the executive to the council no later than two weeks after delivery of the list of potential audit projects.

(3) The council shall review any written comments submitted by the executive. The council shall prioritize potential audit projects.

(4) The internal auditor will obtain the council’s prioritized list and establish a preliminary statement of scope and objectives for each project.

(5) Preliminary time budgets shall be prepared by the internal auditor for each potential project. From this, an annual workplan will be developed for the ensuing year.

(6) The council shall review the annual workplan with the internal auditor and may make amendments thereto.

(7) Upon approval of the annual work plan by the council, the internal auditor shall be authorized to proceed with any audit project included in the workplan.

(8) Prior to commencing with field work on any specific audit project, a preliminary review/survey shall be performed by the internal auditor.

(9) The internal auditor shall prepare and present to the council a proposed scope of services to be performed.

(10) The council shall review the proposed scope of services and may suggest amendments to the proposal.

(11) Under the direction of the council, the internal auditor shall prepare a letter describing the scope of services to be performed. Copies of the letter shall be delivered to the council, executive and management of the agency under review.

(12) The internal auditor shall perform the examination pursuant to SCC 4.02.070.

(13) At the conclusion of his field work, the internal auditor shall prepare a preliminary draft of the audit report.

(14) The internal auditor shall conduct an exit interview to discuss the contents of his preliminary audit report with the executive and the management of the agency under review.

(15) The internal auditor shall revise his report as deemed appropriate and request a written response to each finding from the executive and management of the agency under review which states either agreement or disagreement with each finding.

(16) Written responses shall be obtained from the executive and the management of the agency under review within 20 working days of the exit interview and shall be incorporated in the final audit report. If no response is received within the time frame specified, the audit report may be issued without executive or agency responses.

(17) The internal auditor shall conduct a post-audit interview with the management of the agency under review.

(18) A final audit report shall be delivered to the council, executive, and the management of the agency under review.

(Added Ord. 87-116, § 3, December 9, 1986).

4.02.050 Scope of examinations.

The audit assistant, in assisting the county council, is authorized to perform analytical reviews and examinations including but not limited to the following: Review and evaluation of internal controls; detailed audit procedures associated with financial, performance or compliance types of audits and special projects requested by the county council.

(Added Ord. 86-039, April 23, 1986).

4.02.060 Responsibilities of agency under review.

The management of the agency under review is charged with responsibilities as follows:

(1) Provide the audit assistant timely access to all records, properties, and personnel relevant to the subject under review.

(2) Provide adequate work space for the audit assistant.

(3) Participate in an exit interview and a post-audit interview with the audit assistant to objectively consider each recommendation as presented.

(4) Respond to each audit recommendation within 20 working days of the exit interview. Recommendations will be "responded to" by delivery of a written response to the audit assistant, stating either agreement or disagreement with the findings and recommendations.

(Added Ord. 86-039, April 23, 1986).

4.02.070 Scheduling of audits.

The audit assistant shall schedule examinations in accordance with directions received from the county council.

(Added Ord. 86-039, April 23, 1986).

4.02.080 Special audits.

(1) The executive may recommend to the county council that the internal auditor perform special audits. Special audits shall be requested by the executive in writing and identify the anticipated objectives of the audit. Requests for special audits shall be reviewed by the county council and prioritized in relationship to other potential projects.

(2) In the event that such special audits are performed by the audit assistant subsequent to being authorized by the county council, a report of the special audit shall be submitted to the executive and to the county council.

(Added Ord. 86-039, April 23, 1986; Amended Ord. 87-116, December 9, 1987).

4.02.090 Use of audit assistants and technical experts.

When deemed necessary, the audit assistant may present a written request to the county council for additional personnel or technical experts to assist in the performance of the examination.

(Added Ord. 86-039, April 23, 1986).

4.02.100 Filing of audit reports.

Each final audit report filed as a matter of public record with the county council.

(Added Ord. 86-039, April 23, 1986).