Process for Selecting Audit Projects

The Office of the City Auditor is responsible for discharging the duties set forth in Article IV of the City of Tulsa 1989 Amended Charter, as follows:

• Examine the accounts of all offices, divisions, departments, boards, authorities, commissions, and agencies of the City of Tulsa
• Make appraisals, comments, and recommendations on the systems and procedures for keeping and maintaining the financial records, accounts, and inventories
• Report results to the Mayor and Council

Internal Auditing develops and executes an annual audit program to carry out these duties. The program is designed to allocate limited audit resources to the most beneficial purposes.

To help maintain confidence and trust in the professionalism and integrity of our audit work, the City Auditor's Office follows the International Standards for the Professional Practice of Internal Auditing (Standards) of the Institute of Internal Auditors. The Standards specify that selection of audit projects for application of limited audit resources should be based on a sound risk assessment.

FOCUS process - Internal Auditing has developed a risk assessment model to help ensure a systematic, thorough and objective approach for prioritizing selection of projects for the Internal Audit Plan. Entitled FOCUS (representing Factors Operating to Create Ultimate Success), the risk model considers six factors. Each of these risk factors has defined evaluation criteria.

These six risk factors help focus audit projects on important city issues

Size- What is the dollar value of the assets, budget or revenues of the activity?

Security - How safe are the assets from conversion to private use?

Trust - How much impact does the activity have on customers - the citizens of Tulsa?

Simplicity - How complicated is the activity?

Stability - Has there been significant change in operations?

Responsibility - Are employees competent, committed, and ethical? Are there established objectives, clearly defined procedures, good information and communication, and management monitoring?

Considering these factors and weighing them in respect to more than 150 potential projects, we create our audit plan. Each year, we publish the plan and distribute it to the Mayor and Council. Accomplishment of the audit plan is funded through the Internal Auditing Department's budget approved by the City Council.

Allocation of audit resources - Internal Auditing estimated the number of staff hours available in the fiscal year. These hours were allocated first to complete the audit projects in process and the ongoing audit functions carried out each year. Hours were reserved to respond to requests from management and elected officials for unplanned special projects. The remaining time was available for allocation to new audit projects.

Selection of new audit projects - The remaining hours available for new projects allowed the addition of four projects. Selection of the new audit projects was based primarily on FOCUS evaluations. Other factors affecting project selection included previous audit date, audit coverage in particular departments, management requests and auditor judgment.