Internal Audit Function, Strategic Evaluation and Internal Controls

According to the Yellow Book produced by the U.S Government Accountability Office, the concept of accountability for use of public resources and government authority is key to our city’s governing processes. Management and Elected Officials entrusted with public resources are responsible for carrying out public functions and providing service to the public effectively, efficiently, economically, and ethically within the context of the statutory confines of the specific government program.  The Government Finance Officers Association recommends that “…every government should consider the feasibility of establishing a formal internal audit function to help management maintain a comprehensive framework of internal controls.”  Additionally, GOA declares that “effective use of enterprise architecture (EA) is a hallmark of successful organizations and an essential means to achieving the desired end: having operations and technology environments that maximize institutional mission performance and outcomes. Among other things, this includes realizing cost savings through consolidation and reuse of shared services and elimination of antiquated and redundant mission operations, enhancing information sharing through data standardization and system integration, and optimizing service delivery through streamlining and normalization of business processes and mission operations. Not using an EA can result in organizational operations and supporting technology infrastructures and systems that are duplicative, poorly integrated, unnecessarily costly to maintain and interface, and unable to respond quickly to shifting environmental factors.”

The Internal Audit Function for the City of Bondurant is the use of enterprise architecture as the framework and model for systematic evaluation, analysis, and communication of operation execution, resource allocation, and policy and procedure compliance.  It is a perpetual cycle; that at regular intervals focuses on a different facet of the organization and a mechanism used during daily tasks and procedures.  The Federated Model is the approach the city will use/uses to achieve the framework for the Internal Audit Function.  The model looks at the City as an organization of coherent but distinct member architectures that conform to an overarching corporate or parent architecture.  The City of Bondurant implements this model in the way that the central administration of government is the parent architecture and the various departments are the member architectures.  This structure recognizes that each federation member (department) has unique goals, needs, and services provided in addition to common roles and responsibilities with fellow members.  While relatively autonomous from each other, the departments also inherit certain rules, policies, procedures, and services from the parent architecture (central administration of government).  A federated architecture allows each department the autonomy needed to fulfill its mission while ensuring enterprise-wide connectivity and alignment where appropriate.        

The City Administrator is the director of the City.  As such, the Administrator is the designee responsible for maintaining the internal audit function for each City Department as a whole.  The City Administrator will prepare and present performance reports to the Elected Officials with recommendations as necessary.  The individual Director of each Department is responsible for the process in their respective departments.  The Department Directors will prepare and present performance reports to the City Administrator and Elected Officials.  The internal audit function of the central administration government falls under the purview of the Finance Director.

The process to perform the continuous cycle of the organizational review that leads to the strategic evaluation and strong internal controls through internal auditing is as follows:  

1. Identify the mission statement of the City and each of the departments. Examine and review each to ensure they are aligned with the City’s mission statement.
2. Identify the goals of the City and each of the departments.  Examine and review each to ensure they are aligned with the City’s goals.
3. Develop performance measures to evaluate if the City and departments within it are achieving the goals.
4. Audit the roles, resources, and responsibilities of each person as well as policies, processes, and procedures within the departments to evaluate if they are able to achieve the goals.
5. Analyze the data from the audit
6. Produce recommendations for improvement and efficiencies.

To achieve the process to perform the continuous cycle of the organizational review that leads to the strategic evaluation and strong internal controls through internal auditing following is required:

1. Investment in technology and software to create dashboards for department heads, generate automation to reduce errors and create capacity in the workflow.
2. Cross-training members to create a more cooperative environment, allow for audit delegation, and depth in the personnel roster.   

Hypothetical Department Examples of Process in Action

Public Works

Library

Central Administrative Government

Driven by the efforts of the Central Administration, the City will continually audit its internal control framework and practices. The City will pursue the implementation of best practices and report progress and findings to elected officials on a regular basis.