Internal Audit Charter

Purpose

The Office of Internal Audits (the Office) is an independent internal examination function of the Baltimore City Board of School Commissioners (the Board), which reviews, evaluates and reports on the performance of the Baltimore City Public School System (the System) activities. The primary objective of the Office is to assist the Board and executive management in effectively discharging their duties and responsibilities over the System’s activities.  To accomplish its objective, the Office provides independent analyses, appraisals, recommendations, counsel and other pertinent information in order to properly inform the Board and executive management on matters that may significantly impact the System.

Authority

The authority and responsibilities of the Office are established by the Board.  The Director of Internal Audits reports directly to the Board Executive and has access to the Chairman of the Board and the Chief Executive Officer.  To ensure independence and objectivity, Board approval is required for the removal or replacement of the Director of Internal Audits.

On behalf of the Board, the Office has been granted, but is not limited to the following authority in order to effectively carry out its duties and responsibilities:

1. Complete access to all System’s records, documents, and files in any form;
   
   
2. Authority to request assistance and receive full cooperation from appropriate personnel in obtaining records, documents, and files in any form or other pertinent information concerning the activities that are being reviewed;
   
   
3. Access and inspection privileges to all assets and properties owned, leased, or borrowed by the System; and the authority to request assistance from appropriate personnel in locating such assets and properties;
   
   
4. Interview privileges, either written or oral, with all levels of management, staff and employees of the System.

Responsibility

The Office has been charged with the responsibility to inform and/or advise the Board and executive management of any significant deficiencies, undue risks or other substantive issues noted in the course of its auditing activities. 

Independence

At all times, the Office shall maintain its independence and objectivity.  The Office shall avoid conflicts of interest, and maintain impartial and unbiased attitudes.Therefore, in performing its duties, the Office shall have no direct responsibility or authority over any of the activities audited.  It shall not design and implement procedures, prepare records, or engage in any other activity that it would normally review and evaluate, which would be construed as compromising its independence and objectivity.

Objectivity is not considered adversely affected when the Office recommends standards for internal controls to be applied when designing and/or implementing procedures, or modifying or changing existing or planned systems.

Scope of Work

The Office activities encompass:

1. Evaluating the System operations, programs, activities and information systems in order to assess and report the extent to which the System objectives are being achieved;
   
   
2. Evaluating the reliability and integrity of financial and operational information and the means used to identify, measure, classify, and report such information;
   
   
3. Ascertaining proper compliance with established policies, procedures and applicable laws and regulations, which could have a significant impact on the System operations;
   
   
4. Recommending improvements to the System operations, programs, activities and  information systems to prevent, reduce or eliminate deficiencies in order to ensure that the System objectives are achieved;
   
   
5. Evaluating the security and accountability over the System assets and resources; and as appropriate, verifying the existence of such assets and resources;
   
   
6. Evaluating the economy and efficiency in which the System resources are obtained, allocated and utilized;
   
   
7. Conducting special reviews and investigations as directed by the Board with the assistance of General Counsel.

Since the Office has complete independence with respect to the operations, programs, activities or systems under review, it is not subject to restriction in the scope of its work. It is recognized that the Board provides guidance as to the scope of work performed by the Office, and thereby may request the Office to conduct special reviews, audits or investigations in addition to the annual audit plan.

Reporting

A draft audit report will be prepared and issued by the Director of Internal Audits to appropriate management following the conclusion of each audit.

Management will be required to respond within 10 business days to the report’s findings and recommendations. This response should indicate what actions would be taken to properly address each audit finding and recommendation.  If appropriate, a timetable for the anticipated completion of these actions will be included.

A final audit report will be prepared and issued by the Director of Internal Audits that will include management’s written responses.  Copies of the final audit report will be forwarded to the Chief Executive Officer, Board Executive, General Counsel and the appropriate supervising officer. 

Periodic follow up audits will be conducted by the Office to ensure corrective measures relating to prior audit findings and recommendations were implemented by responsible management. Quarterly, a summary of significant audit findings, with recommendations and management responses are provided to the Board and the Chief Executive Officer.

An annual internal audit activity report providing the status of the implementation of the audit plan, the compilation of the quarterly summaries of significant audit findings and an update of corrective measures relating to prior audit findings and recommendations will be presented to the Board and the Chief Executive Officer.

Approved by: Chairman of the Board of School Commissioners