Determining which areas to audit and allocating scarce audit resources to those areas is key to a successful internal audit function. The City Auditor submits an annual plan to the City Council’s Rules and Open Government Committee for review and approval. As part of our annual review of potential audit subjects, we solicit audit suggestions from City council members, members of the public, and staff.
We also use information from the City’s adopted operating and capital budgets and financial statements to prepare a spreadsheet model of potential audit subjects. Our methodology for determining the work plan compares the following seven factors: proposed expenditures, estimated revenue, fund type, number of staff (budgeted full time equivalents), fund balance, audit requests, and date of last audit. The results of the model are outlined in our risk matrix. Through this model, we promote fairness and ensure that audit resources are focused on those areas with the highest audit potential. The results of our model inform our annual audit work plans.