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Adoption of the Internal Audit Charter
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DESCRIPTION: Office of Internal Audit and Compliance adoption of the Internal Audit Charter |
AGENDA NO: Click or tap here to enter text. |
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ACTION REQUEST: ☒ Approval ☐ Review Comment ☐ Information Only ☐ Other |
RECOMMENDATION:
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Authorization for the Chief Executive Officer to implement the agency’s Internal Audit Charter.
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ISSUE/BACKGROUND:
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The purpose of the Office of Internal Audit and Compliance (OIAC) is to provide independent, objective assurance and consulting services designed to add value and improve the organization’s operations.
As the governing body of the RTA, the Board of Commissioners determines agency policy and oversees the funding, operation, and expansion of public transportation in the City of New Orleans and the metro area. This oversight function includes establishing accountability for senior management as they seek to accomplish its mission and objectives.
Operating synergistically with the Board’s mission is the Office of Internal Audit and Compliance’s mission and purpose to provide assurance to the Board that RTA is operating effectively and efficiently in carrying out its mission. Internal Audit provides this assurance by assessing and reporting on the effectiveness of governance, risk management, and control processes designed to help the organization achieve strategic, operational, financial, and compliance objectives.
As such, the Internal Audit Charter, as a formal document, defines and sets the parameters for how the internal audit will operate and includes the scope, delegated authority, independence, objectivity, and responsibilities of internal audit. The charter also serves as a reference point to measure the effectiveness of the internal audit activity. Additionally, the charter defines the OIAC’s functional and reporting relationship with the Board. Acceptance of the charter by the Board provides the support, value, and independence vital to the success of the Office of Internal Audit and Compliance.
The charter was drafted and presented to the Board by the previous Director of OIAC, but authorization via signature was not requested. The charter has been updated and is now being presented to the Board for acceptance and approval via signature to be in conformity with professional auditing standards and best practices.
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DISCUSSION:
The Office of Internal Audit and Compliance will operate in accordance with the guidelines established in the charter. The charter highlights nine key areas central to the internal audit activity. They include mission and purpose, auditing standards, authority, independence and objectivity, scope and responsibility, annual audit plan, audit reporting, compliance monitoring, and quality assurance and improvement program.
As a public-facing and public-serving agency, internal and external stakeholders rely on the assurances provided by the internal audit activity to ensure that efficient, effective, and equitable use is being made of RTA resources and that RTA is operating in the public interest. Adherence to and implementation of the charter provides all stakeholders assurance that the RTA is operating transparently and ethically in carrying out its mission.
The Office of Internal Audit and Compliance (OIAC) is dedicated to assisting the New Orleans Regional Transit Authority (RTA) meet its mission. To this end, the assurances provided by the OIAC encompass the examination and evaluation of the adequacy and effectiveness of RTA’s governance, risk management, policies, procedures, and internal controls as well as the quality of performance in fulfilling assigned responsibilities to achieve RTA’s goals and objectives.
To assess and report on the quality of the internal audit activity, the OIAC will establish and maintain a quality assurance and improvement program that covers internal and external assessments of the internal audit activity. The program will assess the efficiency and effectiveness of the internal audit activity and identify opportunities for improvement. Additionally, the OIAC will conduct end-of-audit client surveys to assess its performance.
FINANCIAL IMPACT:
While there is no direct financial impact in approving the internal audit charter, potential indirect financial and other risks may exist as a result of not approving the charter. These potential risks include but are not limited to the following: reputational risk resulting in loss of integrity and goodwill; noncompliance with regulatory agencies resulting in potential penalties and loss of funding; operational risks of inefficiency resulting in increased labor, maintenance, and other costs; potential for fraud, waste or abuse of RTA resources, and misappropriation of assets.
NEXT STEPS:
With Board approval, the Internal Audit Charter will be placed on the RTA public drive for agency-wide access and placed on the website for public access.
ATTACHMENTS:
1. Resolution
2. Internal Audit Charter
Prepared By: Lynette M. Doyle, CFE, MBA
Title: Director of Audit and Compliance
Reviewed By: Gizelle Johnson-Banks
Title: Chief Financial Officer
6/5/2023
Lona Edwards Hankins Date
Chief Executive Officer