Internal Audit Documents

Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. As a partner with management, Internal Audit serves as an in-house consultant on many issues of concern.

In the City of Fort Smith, the internal audit department provides the Board of Directors and the City Administrator with independent analysis, appraisals, and recommendations concerning the adequacy and effectiveness of the City’s systems of internal control and the quality of performance of management in carrying out assigned responsibilities. The following guidelines are used to perform internal audit activities:

• The Standards for the Professional Practice of Internal Auditing, published by the Institute of Internal Auditors, Inc.
• Code of Ethics as set forth by the Institute of Internal Auditors, Inc.
• Government Auditing Standards, published by the United States General Accounting Office (GAO)

Authority

Internal Auditing is authorized to direct a broad, comprehensive program of examination within the City of Fort Smith. Authorization is granted for full and free access to any of the City’s records (either manual or electronic), physical properties, and personnel relevant to a review.

To ensure independence and objectivity, Internal Audit shall not develop and install procedures, prepare records, or engage in any activity that would normally be subject to its review. Auditors have no direct responsibilities or any authority over any of the activities or operations that they review. This does not preclude Internal Auditors from serving in an advisory capacity in the implementation of improvements or the establishment or re-designing of activities, policies, procedures, or information systems.

Reporting

The Internal Auditor reports functionally to the Board of Directors and administratively to the City Administrator.

Scope

The scope of Internal Auditing encompasses the examination and evaluation of the adequacy and effectiveness of the City’s system of internal control and the quality of performance in carrying out assigned responsibilities and achieving established objectives. The scope of Internal Auditing includes:

1. Evaluating the reliability and integrity of financial, operating and performance information and the means used to identify, measure, classify and report such information.
2. Analyzing the systems established to ensure compliance with those policies, plans, procedures, laws and regulations that could have a significant impact on operations and reports, and determining whether the City of Fort Smith is in compliance.
3. Reviewing the means of safeguarding assets and, as appropriate, confirming the existence of such assets.
4. Appraising the economy and efficiency with which resources are employed.
5. Assessing operations and programs to ascertain whether results are consistent with established objectives and goals.

Management Self-Assessment

Due to the size and complexity of the City’s operations and the limited resources of the Internal Audit Department, all areas cannot reasonably be covered within any given year. Internal Audit plans to use management self-assessment reviews in many areas to increase the coverage and also to provide the Department Directors with training on how to evaluate their own processes. These reviews also help the Department Directors to see where the potential weaknesses are in their own areas and to develop their own plan to strengthen controls.

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