NORTH CAROLINA COUNCIL OF INTERNAL AUDITING

1. NORTH CAROLINA COUNCIL OF INTERNAL AUDITING October 31, 2007

2. Legislation • The North Carolina Internal Audit Act House Bill 1401 (SL 2007-424) • State Agencies covered • Annual operating budget exceeds $10 million, or • More than 100 full-time equivalent employees, or • Receives and processes more than $10 million in cash in a fiscal year • Internal Auditing requirements • State agencies establish a program of internal auditing • Safeguard public funds and assets • Ensure compliance with laws, regulations, and other requirements • Ensure effectiveness and efficiency of program operations

3. Legislation • The North Carolina Internal Audit Act House Bill 1401 (SL 2007-424) • Standards • Comply with current standards • Appointment and Qualifications • Minimum qualifications established • Agency head appoint Director of Internal Auditing who shall report to agency head

4. Legislation • North Carolina Internal Audit Act House Bill 1401 (SL 2007-424) Council of Internal Auditing Responsibilities • Promulgate guidelines for the uniformity and quality of State agency internal audit activities • Recommend number of agency internal auditors • Develop internal audit guides, technical manuals, and suggested best practices • Administer an independent peer review system • Provide central training sessions, professional development opportunities, and recognition programs • Administer program for sharing internal auditors • Maintain central database of all annual internal audit plans; topics for review; internal audit reports issued • Require agency reports and conduct hearings as necessary • Issue an annual report of service efforts and accomplishments of State agency Internal Auditors and propose legislation

5. Internal Audit Guidelines • Guidelines for State agencies internal audit activity. • Provide statewide uniformity and quality assurance.

6. Staffing Analysis • Recommend number of internal audit employees required by each State agency. • Initial Survey • Surveyed State agencies on current internal audit function. • Detailed Staffing Analysis • Conduct additional analysis of internal audit staffing levels. • Recommend appropriate number of State agency internal audit employees.

7. Guides, Manuals, Best Practices • Develop internal audit guides, technical manuals, and suggested best practices for Statewide Internal Audit program. • Ensure policies and procedures developed complement statewide internal controls efforts.

8. Peer Review System • Administer independent peer review system • Specify frequency of reviews • Assist agencies with selection of peer reviewers from other State agencies • Maintain database of qualified peer reviewers • Develop method for monitoring peer review system

9. Central Training • Provide central training sessions, professional development opportunities, and recognition programs for internal auditors. • Identify outside training opportunities • Develop Office of Internal Audit sponsored training sessions • Work with agency internal auditors to develop a recognition program

10. Staffing • Administer program for sharing internal auditors • Office of Internal Audit

11. Staffing • Establish team of interagency internal auditors • Develop protocol for service request • Schedule audit requests

12. Database • Maintain central database • Annual internal audit plans • Topics for review proposed in audit plans • Issued internal audit reports • Individual findings and recommendations

13. Reports and Hearings • Require reports in writing relative to any internal audit matter • Conduct hearings as necessary

14. Annual Report • Issue annual report • State agency internal auditors • Service efforts • Accomplishments • Propose legislation

15. Proposed Timeline