Internal Audit Policy

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Prepared by: Karen Mills, Finance Director

Adopted by Council: 6/12/2008

Effective: 6/12/2008

Supersedes: N/A

I. Objective

To maintain a strong system of internal controls to ensure effective and efficient operations, complete, timely, reliable financial reporting and compliance with laws and regulations

II. Internal Audit Policy

The Town will establish and maintain its accounting systems according to the North Carolina Local Government and Fiscal Control Act.  Financial systems will be maintained to monitor expenditures and revenues.

A.      The Town will establish and maintain an internal audit function to review and evaluate internal controls that guide daily operations and programs. 

B.      A risk assessment will be conducted periodically to document risk exposures and internal control environment.  The results of the risk assessment will be used to determine the priorities and focus of internal audit activity.  Staff may use contractors to assist with this process.       

C.      Prior to implementation of new financial systems and significant system changes, a review of the controls is required by the Finance department. Financial systems are a combination of applications and processes used to collect, process, maintain, accumulate information used to budget, plan, or report financial data.                   

D.      Special facilities, projects, contractual arrangements and notable transactions may be reviewed at any time to ensure proper internal controls are in place and functioning to mitigate risk.        

E.      Periodic, random operating reviews will be conducted to ensure internal controls are functioning as they are designed.  

F.      Special reviews may be conducted at the request of management or council.

III. References

Other financially related Town Policies include:

Financial Operations and Reporting Policy

Finance Policy (#112)