Sec. 1 Purpose
An effective internal audit program helps an organization accomplish its objectives by providing a systematic, disciplined approach to evaluate and improve governance, risk management, and control processes.
Sec. 2 Principles
Internal Audit (IA) at U. T. System Administration and the U. T. institutions shall be guided by the following principles:
a) Service to Organization – IA will assist the U. T. System Board of Regents and executive leadership enhance and protect U. T. organizational value by providing risk-based assurance, advice, and insight.
b) Professionalism – IA will perform its work with integrity, competence, and due professional care in conformance with The Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing and in accordance with generally accepted government auditing standards (GAGAS).
c) Independence – IA functions and the chief audit executives will be positioned and supported to ensure freedom from conditions that would threaten the performance of internal audit responsibilities in an unbiased manner.
d) Objectivity – IA will perform its responsibilities with an impartial, unbiased attitude and avoid conflicts of interest.
Sec. 3 Governance and Structure
IA effectiveness and independence are ensured and supported through a unique three-element oversight/reporting structure:
a) Functional oversight – the U. T. System Board of Regents’ Audit, Compliance, and Risk Management Committee (ACRMC) and institutional audit committees provide strategic oversight and direction of all IA activities.
b) Institutional oversight – the presidents manage the operational and administrative matters of IA, including performance evaluation of the chief audit executives. Employment and termination of the chief audit executive by the president must have concurrence from the ACRMC Chairman.
c) Professional oversight – the U. T. System Chief Audit Executive provides oversight and support related to conformance with professional standards, promulgates guidance to ensure a consistent, Systemwide approach to internal audit activities, and provides advice to the ACRMC Chairman during employment and termination decisions of institutional chief audit executives.
Sec. 4 Internal Audit Guidance
Consistent with Texas Government Code, Chapter 2102 (Texas Internal Auditing Act), Regents’ Rule 20401 (Sec. 1.2) outlines the charge from the ACRMC and Chancellor to the U. T. System Chief Audit Executive for ensuring an effective internal audit function is in place Systemwide. This includes establishing standards and methodologies for risk assessments and audit plans, internal audit work papers, reporting, resources, and quality assurance and improvement. Such standards, methodologies, and approaches for implementation will be developed collaboratively with chief audit executives, sensitive to essential areas requiring clear conformance and other areas where flexibility is appropriate given the diversity of the institutions. This also includes coordination of administrative items. The guidance will be maintained in an online format, accessible to all U. T. System institutional auditors.
Definitions
Internal Audit – independent functions at U. T. System Administration and each U. T. institution that provide independent, objective assurance and consulting activities designed to add value and improve an organization's operations.
