Audit and Consulting Services

Purpose and Scope

Internal auditing at the University of Tennessee is an independent appraisal activity established to examine and evaluate the activities of the university as a service to management and the Board of Trustees. Internal Audit assists management in effectively carrying out their duties and responsibilities by examining financial and operational internal control systems, including administrative information systems, to evaluate the extent that:

• Financial, property, and information assets are safeguarded;
• Information is accurate and reliable;
• University policies and external laws and regulations are followed;
• Resources are employed efficiently and economically; and
• Operations and programs are being carried out as planned, and their results are consistent with university objectives.

Internal auditors shall be authorized full and complete access to all university records (either manual or electronic), physical properties, and personnel relevant to a review. The corresponding responsibility of internal auditors is to handle documents and information obtained during a review in the same prudent manner as by those employees normally responsible for them.

In fulfilling their responsibilities, internal audit departments at each campus or unit will:

• Develop and implement audit plans and programs that respond to both risk and cost-effectiveness criteria;
• Suggest policies and procedures where appropriate;
• Provide audit reports that identify internal control issues (among others) and make cost-effective recommendations to strengthen controls;
• Facilitate the resolution of audit issues with administrators who have the most direct involvement and accountability;
• Maintain auditing standards, consistent with those established by the Institute of Internal Auditors, Inc., to ensure the effectiveness and quality of the internal audit effort; and
• Investigate allegations involving theft or misuse of university assets.

In their staff functions, internal auditors have no direct responsibility or authority over any of the operating activities examined, and their review shall not relieve others of their responsibilities. Furthermore, the independence of the internal auditors should not be compromised by their implementing procedures, preparing records, or engaging in activities that internal auditors would normally review.

Reporting Structure

The internal audit function reports to the Audit Committee of the Board of Trustees with supporting responsibilities to the chief financial officer. Campus/institute internal auditors report to the Knoxville audit office with supporting responsibilities to the campus/institute chief executive and respective chief business officers. When requested, internal auditors may attend senior-level staff meetings and serve on various university committees. Their role at such meetings should be limited to rendering advice and staying abreast of strategic, governance, and risk issues.

At the conclusion of each audit, Internal Audit will issue timely reports to audited parties, senior management, the State of Tennessee Division of Internal Audit, and the Audit Committee.

Approved by the Audit Committee on March 3, 2004.
Revised November 30, 2005