NCDOT, Internal Audit, Charter

POLICY

The North Carolina Department of Transportation (NCDOT) supports Internal Audit as an independent appraisal function to examine and evaluate the Department activities as a service to management. The objectives of internal auditing are to assist members of the organization in the effective discharge of their responsibilities by furnishing them with analyses, appraisals, recommendations, counsel, and information concerning the activities reviewed and by promoting effective control at reasonable cost.

MISSION
Internal Audit has the responsibility of providing comprehensive audit coverage of all divisions within the NCDOT; and, by a written commitment to the Federal Highway Administration (FHWA), as a condition for continued funding, performs audits on all areas of FHWA appropriations within the NCDOT.

ORGANIZATION
The Chief Internal Auditor will report to the Secretary of the Department of Transportation, through the Deputy Secretary for Administration, and is responsible for the development, review and modification of audit policies, procedures, and goals for the conduct of audits. Where appropriate, the Chief Internal Auditor will coordinate audit operations with Federal and State agencies.
Annually, the Chief Internal Auditor will submit to the Deputy Secretary for Administration a report on the internal audit activity during the preceding fiscal year.

AUTHORIZATION AND RESPONSIBILITIES
Internal Audit has the authority to audit all parts of the NCDOT and shall have full and complete access to any of the organization's records, physical properties, and personnel relevant to the performance of an audit. Documents and information given to internal auditors during a periodic review will be handled in the same prudent manner as by those employees normally accountable for them. Internal Audit will make special efforts to accommodate the Department's daily operations in scheduling and conducting reviews.
Internal Audit will have no direct responsibility or authority for any of the activities or operations they review. They should not jeopardize their independence by developing and installing procedures, preparing records, or engaging in activities that would normally be reviewed by internal audit. Furthermore, an internal audit does not in any way relieve other persons in the NCDOT of the responsibilities assigned to them.

DEFINITION OF AUDIT SCOPE
The scope of internal auditing encompasses the examination and evaluation of the adequacy and effectiveness of the organization's system of internal control and the quality of performance in carrying out assigned responsibilities. The scope of internal auditing includes:

Reviewing the reliability and integrity of financial and operating information and the means used to identify, measure, classify, and report such information.
Reviewing the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations that could have significant impact on operations and reports, and determining whether the organization is in compliance.
Reviewing the means of safeguarding assets and, as appropriate, verifying the existence of such assets.
Reviewing and appraising the economy and efficiency with which resources are employed.
Reviewing operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned.

REPORTING RESPONSIBILITIES
A written audit report will be prepared and issued by the Chief Internal Auditor following the conclusion of each audit and will be distributed as appropriate. The manager of the activity or department receiving the report will respond to any recommendations within thirty days and forward a copy of the response to those included on the distribution list. The response will indicate what actions were taken regarding specific report findings and recommendations. If a response is not received within thirty days, the Chief Internal Auditor will contact the Deputy Secretary of Administration for assistance in resolving the matter.

CODE OF ETHICS
Internal Audit staff have a responsibility to conduct themselves so that their good faith and integrity are not open to question. Standards of professional behavior are based upon the Code of Ethics issued by the Institute of Internal Auditors as follows:

Exercise honesty, objectivity, and diligence in the performance of their duties and responsibilities.
Exhibit loyalty in all matters pertaining to the affairs of NCDOT and not knowingly be a party to any illegal or improper activity.
Refrain from entering into any activity which may be in conflict with the interest of NCDOT or which would prejudice their ability to objectively carry out their duties.
Decline to accept fees or gifts from auditees or from internal sources.
Be prudent in the use of information acquired in the course of their duties and not use confidential information for any personal gain or in a manner that knowingly would be detrimental to the welfare of NCDOT.
Use reasonable care to obtain sufficient, factual evidence to support the conclusions drawn and, in reporting, reveal such material facts known to them which, if not revealed, could distort the report of the results of operations under review or conceal an unlawful practice.
Continue to strive for improvement in the proficiency and effectiveness of their service.

Approved by the Secretary of the Department of Transportation on 6/8/98.

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For any questions about this page, please contact:
Deborah Jernigan -- djernigan@mail.dot.state.nc.us -- (919)733-2755