Audit Services Charter

THE CORPORATION OF MERCER UNIVERSITY
OFFICE OF AUDIT AND COMPLIANCE CHARTER

Article XI of the By-Laws for The Corporation of Mercer University states that The Audit Committee shall consist of not less than three (3) members of the Board of Trustees.  The Committee shall: recommend to the Board of Trustees the selection of independent public accountants for the University and prior to the end of the University's fiscal year shall review the scope and timing of the work to be performed and the compensation to be paid to the accountants selected by the Board of Trustees; review with the independent public accountants the financial accounting and reporting principles appropriate for the University, the policies and procedures concerning audits, accounting and financial controls, and any recommendations to improve existing practices, and the qualifications and work of the University's internal auditing staff; review with the University's independent public accountants the results of their audit and their report, including any changes in accounting principles and any significant amendments; and, at least annually, shall meet with the Vice President for Finance and Treasurer of the University and the University's internal auditing staff and review their work.  The Committee may require any officer of the University to appear before it to report on the financial condition of the University and to answer any questions.  The Committee shall require of the independent public accountants an annual management letter which shall be addressed to the President, the Vice President for Finance and Treasurer with copies to the Chairman of the Finance Committee and members of the Audit Committee.  The Committee shall make such reports to the Board of Trustees as it deems appropriate.  The Committee shall draft and maintain a written set of Committee procedures so that successor members may be fully informed of and adhere to the scope and purpose of the responsibilities of the Committee.

Mission

The mission of the Office of Audit and Compliance is to assist management in the effective discharge of their responsibilities to establish an appropriate control environment and to make decisions concerning The Corporation of Mercer University (University) resources, both financial and non-financial.  By performing audits in accordance with internal auditing professional standards, management is provided with objective and independent information about University activities, effectiveness of procedures and the adequacy of internal controls.  This office also acts as a consultant when new systems or procedures are introduced to ensure appropriate controls are incorporated.

Authority

The Office of Audit and Compliance is a function separate and distinct from that of the external auditors, has a direct reporting relationship to the Audit Committee of the Board of Trustees and administrative reporting relationship to the University President.  It is authorized by the Board of Trustees and senior management to perform audits approved by the Audit Committee and to engage in other independent reviews and activities as required in support of its mission.  To assist in performing these duties, this office shall be afforded unrestricted access to all University information, activities, records, property, and employees.

The Internal Auditor has the authority to hire and terminate Audit and Compliance staff employees.  The Internal Auditor's actions in this regard are closely coordinated with the University President, the Office of Human Resources and the Audit Committee.  The Internal Auditor can hire a new employee only when there is an existing approved position.  Positions for the Office of Audit and Compliance are created by the University President with approval of the Audit Committee.

The Internal Auditor does not have authority to initiate or approve accounting transactions of any nature other that those directly related to the operations of the Office of Audit and Compliance, nor does the Internal Auditor administer or supervise any University operations without specific direction and approval of the Audit Committee.

Responsibilities

The responsibilities of the Office of Audit and Compliance include but are not limited to the following:

  • Develop and conduct a continuing comprehensive program of review for all University operations.  This program shall include: appraisal of the adequacy of existing internal control systems; assisting in the review of new control systems prior to their implementation; evaluation of the reliability and integrity of accounts, financial records and related reports; appraisal of compliance with established University policies and procedures, applicable laws and regulations; examination and assessment of the procedures for controlling and safeguarding University assets against loss through inefficiency, waste, negligence or fraud; and contribution to the economic and efficient use of resources.
  • Coordinate with external auditors as a source of general information and possible reduction of the external audit scope due to the reliance placed on the work of the Office of Audit and Compliance.
  • Report to executive management and the Audit Committee of the Board of Trustees on the results of audits, special projects and investigations.
  • Hire, train and recommend competent individuals within the Office of Audit and Compliance for key financial management positions throughout the University.
  • Discharge professional responsibilities with due care, competence and diligence in accordance with the standards established for the profession.
  • Advise on appropriate systems of controls and other accounting and operational matters in a consulting capacity.
  • Carry out ad hoc appraisals, inspections, investigations, examinations or reviews requested by the Audit Committee or senior management.
  • Keep informed of University issues by attending Board of Trustees and appropriate standing committee meetings.
  • Maintain technical competence through continuing education and active participation in professional activities.
  • Participate in, or conduct evaluations, financial and management studies, special audits and fraud investigations as directed.

The responsibilities of senior management include but are not limited to the following:

  • Communicate the mission and charter of the Office of Audit and Compliance with consistency and clarity to units for which they are responsible.
  • Participate in the audit process in order to make the Auditing function most effective.
  • Provide effective, consistent and thorough written procedures for all matters of a fiscal nature.
  • Advise the Office of Audit and Compliance of all matters affecting the fulfillment of their responsibilities, including the distribution of new and amended approved policies and procedures.
  • Provide adequate resources to the Office of Audit and Compliance to fulfill the responsibilities placed upon the Auditor by the Board of Trustees and senior management.
  • The University President and senior management are responsible for designing, implementing and maintaining the accounting systems, internal controls and University Policies and Procedures.

The responsibilities of entities being audited include but are not limited to the following:

  • Support the role of the Office of Audit and Compliance and cooperate with their efforts.
  • Provide the Auditor unrestricted access to all facilities, records and information as well as key managers for discussion purposes to facilitate completion of the audit.
  • Notify the Office of Audit and Compliance immediately of all matters concerning the fulfillment of its responsibilities.
  • Respond timely to audit findings and recommendations in writing indicating the time frame for taking corrective action.
  • Undertake corrective action programs to resolve deficiencies brought to their attention by the Office of Audit and Compliance.
  • Comply with all applicable policies and procedures of the operating unit.

Protocols

General procedures to be followed in carrying out the Internal Audit function include:

  • Fulfill the mission of the Office of Audit and Compliance by fostering teamwork between audit staff and university personnel.
  • Determine the nature and existence of environmental issues during discussion with appropriate management prior to the start of each audit in order to be sensitive and adapt the audit process accordingly.
  • Provide advance notice to each location to be audited, when possible.
  • Conduct an opening meeting with the managers of the unit being audited to discuss the nature of the audit, length of engagement and to coordinate the timing of the review.  Review the scope of the audit with functional managers to ensure proper and thorough coverage.
  • Conduct an exit meeting in order to recap all findings and recommendations and present the auditor's method of reporting results.
  • Present written audit draft findings and recommendations to auditee management for their written response.
  • Present written audit draft report, including management's responses, to senior management and the Audit Committee for issuance approval.