WHAT IS INTERNAL AUDITING?
Internal auditing is an independent, objective assurance and advisory activity designed to evaluate and improve the effectiveness of an organization’s operations, including risk management, internal controls, and governance processes.
Internal auditing strengthens the California Department of Social Services’ (CDSS or Department) ability to create, protect, and sustain value by providing management with independent, risk-based, and objective assurance, advice, insight, and foresight. Internal auditing is most effective when:
- It is performed by competent professionals in conformance with the Global Internal Audit Standards (Standards), issued by the Institute of Internal Auditors.
- The internal audit function is independently positioned with direct accountability to the board.
- Internal auditors are free from undue influence and committed to making objective assessments.
MISSION STATEMENT
The Internal Audit Bureau (IAB) operates within the Office of Audit Services (OAS), whose mission is to assist CDSS management and staff in the effective and efficient discharge of their responsibilities by adding value and bringing a systematic and disciplined approach through independent, objective, and assurance services.
ROLE AND RESPONSIBILITIES
The IAB works closely with CDSS management to promote sound stewardship of public resources and to enhance the department’s:
- Successful achievement of its objectives.
- Governance, risk management, and control processes.
- Decision-making and oversight.
- Reputation and credibility with its stakeholders.
- Ability to serve the public interest.
Additionally, IAB assists OAS in developing an annual risk-based audit plan to ensure that internal audit coverage adequately examines areas with the greatest exposure to the key risks (i.e., financial, reputational, and/or compliance) that could affect the Department’s ability to achieve its objectives.
TYPES OF SERVICES
To further support OAS’ mission, IAB provides the following services:
- Assurance – Perform objective assessments to provide assurance, which may include compliance, financial, operational/performance, and technology engagements.
- Internal Controls Evaluations – Evaluate the design and effectiveness of internal controls and provides recommendations to prevent fraud, theft, or misuse of resources.
- Follow-Up Evaluations – Revisit prior audit recommendations to evaluate whether management has implemented corrective action plans and whether those corrective actions have effectively addressed the findings.
- Department-wide Risk Assessments – The risk assessment includes the development of a questionnaire, discussions with executive leadership and management regarding risks affecting their areas of responsibility, identification of risks, and areas of audit interest.
- Advisory Services – Provides advice to programs and/or stakeholders without providing assurance or taking on management responsibilities. The nature and scope of advisory services may include advising on the design and implementation of new policies, processes, systems, and facilitating discussions about risks and controls.
AUTHORITY
Government Code (GC) § 1237 states, “All state and local agencies with an aggregate spending of fifty million dollars ($50,000,000) or more annually shall consider establishing an ongoing audit function.” Additionally, GC § 13885-13888 requires state agencies that have their own internal auditors or that conduct internal audits or internal audit activities, shall conduct internal audit activity under the general and specified standards of internal auditing prescribed by the Institute of Internal Auditors or the Government Auditing Standards.”
PROFESSIONAL AUDIT STANDARDS
The IAB adheres to the CDSS Office of Audit Services’ internal audit methodology, and aligns where appropriate with the Standards.
INDEPENDENCE AND OBJECTIVITY
To ensure independence, objectivity, and to align with the Standards, IAB internal auditors will maintain professional objectivity when performing all aspects of internal audit services. Additionally, auditors will apply an impartial and unbiased mindset and make determinations based on balanced assessments of all relevant circumstances.
REPORTS