WILLIAM DONALD SCHAEFER, Governor

S.B. 205

(1)      REPORT DIRECTLY TO THE AGENCY HEAD;

(2)      DEVELOP AN ANNUAL AUDIT PLAN TO CARRY OUT INTERNAL
AUDITS;

(3)      PROVIDE WRITTEN POLICIES AND PROCEDURES TO GUIDE THE
PERFORMANCE OF INTERNAL AUDITS;

(4)      ESTABLISH AND MAINTAIN AN ONGOING INTERNAL QUALITY
ASSURANCE PROGRAM TO EVALUATE THE OPERATION OF INTERNAL AUDITS;

(5)      PARTICIPATE IN PERIODIC EXTERNAL PEER REVIEW;

(6)      BE FREE OF ALL OPERATIONAL AND MANAGEMENT
RESPONSIBILITIES THAT WOULD IMPAIR THE ABILITY TO MAKE INDEPENDENT
REVIEWS OF ALL ASPECTS OF THE AGENCY'S OPERATIONS;

(7)      PREPARE INTERNAL AUDIT REPORTS THAT SHALL:

(I)       BE SUBMITTED TO THE AGENCY HEAD; AND

(II)     EXCEPT FOR ANY PART OF A REPORT THAT IS
CONSTITUTIONALLY PRIVILEGED, BE AVAILABLE TO THE LEGISLATIVE AUDITOR;

(8)      CONDUCT FOLLOW-UP REVIEWS OF INTERNAL AUDIT FINDINGS TO
ASCERTAIN THAT APPROPRIATE ACTION HAS BEEN TAKEN ON FINDINGS
CONTAINED IN INTERNAL AUDIT REPORTS; AND

(9)      MAKE AVAILABLE AND COORDINATE A CONTINUING
PROFESSIONAL EDUCATION PROGRAM:

(I)       TO ENSURE THAT THE AGENCY'S INTERNAL AUDITORS HAVE
ACCESS TO CURRENT INFORMATION CONCERNING INTERNAL AUDIT POLICIES,
PROCEDURES, AND TECHNIQUES; AND

(II)     TO PROVIDE GENERAL TECHNICAL AND AUDIT ASSISTANCE
TO THE AGENCY'S INTERNAL AUDITORS.

10-1004.

EACH AGENCY THAT PERFORMS INTERNAL AUDITS SHALL ESTABLISH A
PROGRAM THAT INCLUDES:

(1)      AN ANNUAL INTERNAL AUDIT PLAN THAT:

(I)       USES MATERIALITY AND RISK ASSESSMENT TECHNIQUES; AND

(II)     IDENTIFIES THE INDIVIDUAL AUDITS TO BE CONDUCTED
DURING EACH YEAR; AND

(2)      PERIODIC AUDITS OF THE AGENCY'S CONTROL ENVIRONMENT,
INCLUDING ALL MAJOR ELECTRONIC AND MANUAL DATA PROCESSING SYSTEMS.

10-1005.

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