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• Accountability
• Purpose
• Authority
• Independence
• Governing Standards
• Responsibilities
• Quality Assurance

Accountability

The Office of Auditing and Advisory Services (A&AS) is a vital part of The University of Texas Health Science Center at Houston (UT-Houston) and functions in accordance with the policies established by the President and Audit Committee, University of Texas System (UT-System), the UT-System's Board of Regents, and the Legislature through the Texas Internal Auditing Act. The Chief Audit Officer reports directly and functionally to the President and the Audit Committee and reports administratively to the Executive Vice President of Administration and Finance. The organizational status and the support accorded A&AS are major determinants of the office's scope and value to the institution.

UT-Houston maintains an institutional audit committee. Membership on the audit committee shall be determined by the President with input from the Chief Audit Officer and should include key members of senior management. The audit committee should meet at least quarterly and provide for direct communication between the Chief Audit Officer and senior management. Essential functions performed by the audit committee shall include approval of the annual internal audit plan, consideration of audit plan completion and other audit activities, and discussion of audit results, including significant audit findings and recommendations. Evidence of these functions should be reflected in recorded minutes of the meetings.

Purpose

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.

The purpose of A&AS is to provide independent and objective appraisals of financial, operational and other relevant matters within UT-Houston in order to assist management and employees in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations, and pertinent comments concerning the activities reviewed. It is management’s responsibility to consider such information provided by A&AS and determine the acceptable risk related to the activities reviewed.

Authority

To accomplish these objectives the Chief Audit Officer and all A&AS personnel are authorized to have full, free, and unrestricted access to all functions, property, personnel, and records (including medical and electronic.) Although such access will be unlimited, the Chief Audit Officer and all audit personnel shall ensure the safekeeping and confidentiality of all records and information. Documents and information given to A&AS will be handled in the same prudent manner as by those employees normally accountable for them.

Independence

The auditors have a high degree of independence and are not authorized to perform operational duties outside of A&AS, initiate or approve accounting transactions external to A&AS, or direct the activities of any UT-H employee outside of A&AS, except to the extent that such employees have been appropriately assigned to A&AS or to assist the auditors. A&AS staff objectivity is not adversely affected, however, by recommending standards of controls to be applied in developing systems and procedures, or by evaluating existing or planned financial and operating systems and related procedures and making recommendations for modifications and improvements in order to improve controls and/or enhance operational effectiveness.

A&AS has complete independence with respect to UT-Houston schools, departments, programs or other functional areas under audit and, consequently, is not subject to restriction in the scope of its work by area management.

Governing Standards

Guidelines governing A&AS activities shall include the following: Standards for the Professional Practice of Internal Auditing, issued by the Institute of Internal Auditors; Standards of Professional Conduct, issued by the American Institute of Certified Public Accountants; the Texas Internal Auditing Act, and UT System rules, regulations and business procedures memorandum.

Responsibilities

A&AS’ responsibilities encompass the activities necessary to perform assessments of the adequacy and effectiveness of UT-Houston’s processes for controlling its activities and managing risks. A&AS responsibilities and activities include:

(a) Maintaining a Mission Statement, supported by explicit objectives for achieving the mission, which shall be consistent with UT-Houston's vision and mission;

(b) Developing and implementing annual and long range audit plans subject to the approval of the President and the Audit Committee, using detailed risk analyses, to ensure proper prioritization of audits, with emphasis on the most significant risks to UT-Houston;

(c) Reviewing and appraising the soundness of controls and the reliability and integrity of financial, managerial and operating data;

(d) Evaluating asset safeguards and accountability;

(e) Ascertaining compliance with UT-Houston and UT System policies and procedures, and state and federal laws and regulations;

(f) Conducting inspections and audits of institutional compliance programs in order to determine whether they are operating as designed;

(g) Reviewing operations or programs to assess whether they are being carried out as planned and whether results are consistent with established objectives;

(h) Evaluating the economy and efficiency with which resources are employed;

(i) Conducting special projects at the request of the President, the Audit Committee, and senior management;

(j) Providing consulting and advisory services as appropriate;

(k) Educating and training the UT-Houston community to effectively control risks within their areas of operation and responsibility;

(l) Investigating reported occurrences of fraud, embezzlement, theft, waste, or other acts of alleged wrongdoing and recommending controls to prevent and/or detect such future occurrences;

(m) Performing and/or coordinating regular follow-up activities as considered necessary to determine whether corrective actions have been taken by management to address audit recommendations;

(n) Maintaining sufficient knowledge, skills, experience, and professional certifications to meet the requirements of the Texas Internal Auditing Act;

(o) Issuing periodic reports of audit results to the President, Audit Committee, and other University management as needed;

(p) Providing information to the UT System Director of Audits as required or requested to fulfill the System-wide audit oversight and reporting responsibilities;

(q) Considering the scope of work of external auditors and regulators, as appropriate, for the purpose of providing optimal audit coverage to the University as at a reasonable overall cost; and

(r) Filing reports concerning internal audit activities in a timely manner with various state oversight entities as required by state law.

Quality Assurance

The Chief Audit Officer shall establish and maintain a program of quality assurance designed to evaluate the operations of the office. The purpose of this program is to provide reasonable assurance that all work performed by audit staff conforms to the guidelines under which the office operates. This program shall include training, supervision, and internal and external reviews.

Internal reviews shall be on-going and performed by audit staff to appraise the quality of work performed. External reviews of the office shall be performed in accordance with the Texas Internal Auditing Act and the Professional Standards of Internal Auditing, by qualified persons who are independent of UT-Houston.

The Chief Audit Officer shall periodically review this charter and update it as changes occur in the audit environment.

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