125City of Anaheim Administrative Regulation
CHAPTER 1 - ADMINISTRATIVE
Subject: Internal Audit Procedure A.R. 125
Issue Date: Aug. 31, 1984
Revised: Sept. 17, 2003
Page (1) of (2)
Purpose:
The purpose of this regulation is to adopt professional standards and establish standard
procedures for the practice of internal auditor for the City. This administrative regulation
shall apply both to the City's audit staff and to their auditees.
On March 6, 1982, the California State Legislature adopted Assembly Bill No. 1229.
The bill requires that the internal audit function of government entities within the State
shall conform to the Standards for the Professional Practice of Internal Auditing
established by the Institute of Internal Auditors. As a government entity, the City of
Anaheim has adopted the IIA Standards as legislated.
Procedures:
Audit Plan:
The Audit Manager, subject to the approval of the City Manager's Office, will prepare a
fiscal year audit plan. The audit plan will encompass assignments determined through a
risk assessment plan and as requested by City departments. On an annual basis the Audit
Division will distribute audit service request letters, any department or office desiring to
be audited in the following fiscal year should submit their request at that time.
The Audit Manager will make a determination as to the priorities of the audits requested
for scheduling, if the extent and number of audits requested are beyond the capacity of
the audit staff to conduct within the requested time period.
The Audit Manager and the auditee will sign a letter of engagement defining the scope of
the audit assignment and the estimated cost of completion. Audit time spent on requested
audits will be billed to the auditee in accordance with the terms in the engagement letter.
Access to Records and Related Data:
The Audit Manager and his/her staff are to have, and shall be provided by their auditees,
full, free, and unrestricted access to all records, activities, property and cooperation of
personnel within the City of Anaheim or its agents. Access to the records of external
organizations shall be provided in accordance with applicable laws, regulations, or
contract provisions. Nothing in this administrative regulation shall mean or imply that
records, documents, or other media or information shall be unavailable for inspection by
the Audit Manager or his/her staff.
City of Anaheim Administrative Regulation 125
Page (2) of (2)
Exit Conferences:
Upon completion of an audit, the auditor in charge shall prepare a report in draft form for
the Audit Manager's approval. The approved draft report will be distributed to the
auditee for review.
It is the auditee's responsibility to make themselves available for an exit conference.
After a period of twenty (20) working days from the distribution of the preliminary draft
report for the auditee's review, if no exit conference has been conducted or scheduled, or
if other arrangements suitable with the Audit Manager have not been made, then the
Audit Manager shall proceed with the distribution of the final audit report as though the
auditee had participated in an exit conference. Department heads or auditees will be
given every opportunity to discuss the "draft copy" of the report and to prepare written
responses, if necessary. The written responses should include a description of the action,
taken or planned, to comply with the recommendations made by the Auditor. The
auditee's responses will be included in the final audit report.
Distribution of Audit Reports:
Audit reports shall be addressed to the City Manager. Copies of the report shall be
provided to the following:
Auditee's Department Head
Assistant City Manager
Audit reports may be distributed by the Audit Manager to others in connection with
recommendations made by the auditor in charge. Any reports documenting weaknesses
that impact the fiscal controls of the City will also be distributed to the Finance Director.
The report of a special audit required by the City Council will be filed also with the City
Council. In addition, a summary report will be prepared by the Audit Manager for filing
with the City Council and the Audit Committee on an annual basis. When a request is
directed to the City Manager, any audit report or portion of it will be made available to
the City Council subject to restriction imposed by law.
Follow-up of Audit Reports:
When necessary, the Audit Manager shall conduct a follow-up review. The results of
follow-up reviews may be reported in the manner established by the Audit Division.
Responsibility:
Attachments: None