Charter

The Office of Internal Audit charter is decreed in Chapter 30 of Louisville Metro's ordinances. The charter establishes the internal audit activity's position within the organization, authorizes access to records, personnel, and physical properties relevant to the performance of engagements, and defines the scope of internal audit activities. To review the Office of Internal Audit's charter click on the section headings listed in the table of contents.   


Table of Contents:

§ 30.30 Establishment

§ 30.31 Appointment

§ 30.32 Qualifications

§ 30.33 Vacancy

§ 30.34 Audits; scope

§ 30.35 Audit plan

§ 30.36 Audit reports

§ 30.37 Audit follow-up

§ 30.38 Audit records

§ 30.39 Annual report

§ 30.40 Irregularities; reporting of

§ 30.41 Consultants and experts; use of

§ 30.42 Quality Assurance Review

§ 30.43 Access to employees, records and property

§ 30.44 Removal for cause

§ 30.45 Financial impact statements

   

§ 30.30 ESTABLISHMENT.

(A) There is hereby established the Office of Internal Audit of Louisville/Jefferson County Metro Government.

(B) The Office of Internal Audit shall be separate from any other agency or department of Louisville/Jefferson County Metro Government and shall report directly to the Mayor and to the Council.

(C) The office shall be provided a separate budget sufficient to carry out the responsibilities and functions established in this subchapter.

(D) The Chief Audit Executive shall establish the internal organization of the office and shall divide it into such divisions as deemed necessary to perform the functions, powers, and duties of the office. The Chief Audit Executive shall have the power to appoint, employ, and remove such assistants, employees, and personnel as deemed necessary for the efficient and effective administration of the affairs of the office.

(E) The existing functions, personnel, funds, equipment, facilities and records of the Office of the Internal Auditor established as an executive office in the former City of Louisville shall be transferred to the Office of Internal Audit as established herein.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.31 APPOINTMENT; TERMS.

(A) The Chief Audit Executive shall be appointed by the Mayor and shall be approved by resolution of the Council.

(B) The Chief Audit Executive's term of office shall begin on January 10 in the second year of the Mayor's regular term and shall be for four years and until a successor is appointed and qualifies. The Chief Audit Executive may be reappointed to successive terms. The process of selection shall be completed by December 10 in the first year of the Mayor's regular term.

(C) The Chief Audit Executive shall be required to take the same oath of office as is required by the Mayor and members of the Council before performing official duties. The Chief Audit Executive shall receive a salary set by ordinance, subject to applicable ordinances and resolutions concerning classification and compensation of Metro Government employees.

(D) The current Internal Auditor shall serve in that position until a Chief Audit Executive has been appointed by the Mayor and approved by resolution of the Council under the terms of this subchapter.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.32 QUALIFICATIONS.

(A) The Chief Audit Executive shall be knowledgeable in governmental auditing, public administration, and government financial and fiscal practices.

(B) The Chief Audit Executive shall possess adequate professional proficiency for the job, demonstrated by relevant certification such as a CIA (Certified Internal Auditor), or an advanced degree in a relevant field with at least five years experience in the field of government auditing, evaluation, or analysis.

(C) The Chief Audit Executive shall have a bachelors degree in business administration, public administration, or a related field.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.33 VACANCY.

If a vacancy occurs in the Office of Internal Audit, a Chief Audit Executive shall, within 45 days, be appointed for the remainder of the term.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.34 AUDITS; SCOPE.

(A) The Office of Internal Audit shall have authority to conduct audits of all departments, offices, boards, activities and agencies of the Louisville/Jefferson County Metro Government in order to independently and objectively determine whether:

(1) Risk management, control, and governance processes are effective;

(2) Activities and programs being implemented have been authorized by government charter or ordinance, state law or applicable federal law or regulations;

(3) Activities and programs are being conducted to accomplish the objectives intended by government charter or ordinance, state law or applicable federal law or regulations;

(4) Activities or programs efficiently and effectively serve the purpose intended by government charter, ordinance, state law or applicable federal law or regulations;

(5) Activities and programs are being conducted and funds expended in compliance with applicable laws;

(6) Revenues are being properly collected, deposited and accounted for;

(7) Resources, including funds, property and personnel, are adequately safeguarded, controlled and used in an effective and efficient manner;

(8) Financial and other reports are being provided that disclose fairly and fully all information that is required by law, that is necessary to ascertain the nature and scope of programs and activities and that is necessary to establish a proper basis for evaluating the programs and activities;

(9) Adequate operating and administrative procedures and practices, systems, and/or internal control systems have been established by management;

(10) There are indications of fraud, abuse or illegal acts which need further investigation.

(B) To perform such other audit-related functions as determined necessary by the Chief Audit Executive, the Mayor, or the Council.

(C) The Office of Internal Audit shall conduct work in accordance with government auditing standards promulgated by the Comptroller General of the United States (General Accounting Office) and with the Standards for the Professional Practice of Internal Auditing promulgated by the Institute of Internal Auditors.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.35 AUDIT PLAN.

(A) Annually, the Chief Audit Executive shall submit a one to five year audit schedule to the Council for review and comment. The schedule shall include the proposed plan for auditing departments, offices, boards, activities, and agencies for the period.

(B) The Chief Audit Executive may spontaneously initiate and conduct any other audit deemed necessary, or as requested by the Mayor or the Council.

(C) In the selection of audit areas and audit objectives, the determination of audit scope and the timing of audit work, the Chief Audit Executive may consult with external auditors, federal, or state auditors so that the desirable audit coverage is provided and audit effort is properly coordinated.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.36 AUDIT REPORTS.

(A) Audit reports will contain relevant background information, observations, conclusions, and recommendations (if necessary).

(B) A final draft of the audit report will be forwarded to the audited agency for review and comment regarding factual content before it is released. The agency must respond in writing and specify agreement with audit conclusions and recommendations, or reasons for disagreement, along with an action plan for implementing solutions to issues identified and a timetable to complete such activities. The response must be forwarded to the Office of Internal Audit within 15 days of the exit conference, or no longer than 30 days of receipt of the draft report.

(C) The response will be included in the report. If no response is received within the stated timeframe, the Chief Audit Executive may note that fact in the transmittal letter and release the audit report.

(D) The reports shall be distributed to the Mayor and the Council. The report shall also be available for public examination. The Chief Audit Executive shall retain a copy as a permanent record.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.37 AUDIT FOLLOW-UP.

The Chief Audit Executive shall follow-up on major audit recommendations, as practical, to determine if corrective actions have been implemented and are effective. The Chief Audit Executive may request periodic status reports from audited entities regarding actions taken to address audit recommendations.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.38 AUDIT RECORDS.

The Chief Audit Executive shall retain a complete file of each audit report and each report of other examinations, investigations, surveys, and reviews performed. The file should include audit work papers and other supportive material directly pertaining to the audit report. The file should be retained in accordance with state archive laws.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.39 ANNUAL REPORT.

The Chief Audit Executive shall submit an annual report to the Mayor and Council within 30 days after the calendar year-end indicating audit activity, major observations/recommendations, corrective actions taken, and significant observations which have not been fully addressed for the preceding year.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.40 IRREGULARITIES; REPORTING OF.

(A) If during an audit, the Office of Internal Audit becomes aware of abuse or illegal acts or indications of such acts, the Chief Audit Executive shall report the irregularities to the appropriate law enforcement authorities.

(B) Notification to the Mayor and/or Council will not be made until authorized by the law enforcement authorities.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.41 CONSULTANTS AND EXPERTS; USE OF.

(A) The Office of Internal Audit may obtain the services of external consultants, auditors, or other professional experts necessary to perform its duties through the procurement process.

(B) The Office of Internal Audit may assist in the selection of the Louisville/Jefferson County Metro Government's external auditors. The Chief Audit Executive may assist in coordinating and/or monitoring audit work performed by other organizations under contract by the Metro Government.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.42 QUALITY ASSURANCE REVIEW.

(A) The audit activities of the Office of Internal Audit shall be subject to quality assurance reviews in accordance with applicable standards. A professional, non-partisan objective group shall perform the review. The quality control review shall determine compliance with standards and be performed within the timetable prescribed by applicable standards.

(B) A copy of the written report of this review shall be furnished to the Mayor and the Council. This report shall be available to the public.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.43 ACCESS TO EMPLOYEES, RECORDS AND PROPERTY.

(A) All officers and employees of Louisville/Jefferson County Metro Government shall cooperate with and furnish the Office of Internal Audit unrestricted access to employees and information regarding powers, duties, activities, organization, assets, financial transactions, contracts, and methods of business.

(B) The Office of Internal Audit shall have access to, and authority to examine any and all records (including automated data) including but not limited to books, accounts, internal memoranda, writings and tapes, reports, vouchers, correspondence files and other records, bank accounts, money and other property of any Louisville/Jefferson County Metro Government agency, department, or office. This includes access for the Office of Internal Audit to inspect all assets, property, equipment, and facilities.

(C) All contracts with outside contractors and subcontractors shall provide for the Office of Internal Audit to have access to all financial and performance related records, property, and equipment related to the Louisville/Jefferson County Metro Government contracts.

(D) The Office of Internal Audit shall not publicly disclose any information received during an audit that is considered proprietary (confidential) in nature by any local, state or federal law or regulation.

(E) The Chief Audit Executive shall report to the Mayor and Council, in writing, of any failure by an officer or employee to cooperate with the Office of Internal Audit's requests. Disciplinary action shall be taken in accordance with personnel regulations by the appointing authority.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.44 REMOVAL FOR CAUSE.

The Chief Audit Executive may be removed for cause by the Council, sitting as a court, under oath, upon charges preferred by the Mayor or by any four members of the Council. No Councilmember preferring a charge shall sit as a member of the Council when it tries that charge.

(Lou. Metro Ord. No. 45-2003, approved 3-17-2003)

§ 30.45 FINANCIAL IMPACT STATEMENTS.

(A) Statements. Except as provided in subsection (B), any ordinance or resolution, which requires the acceptance or expenditure of unbudgeted monies by the Metro Government, shall be accompanied by a financial impact statement, as provided in Exhibit A attached to Ordinance No. 11-2004, approved 2-9-2004, before the ordinance or resolution may be introduced before the Metro Council. Any amendment to an ordinance or resolution that modifies the financial impact statement shall require a corollary modification to such statement.

(B) Exception for annual operating and capital budget ordinances and acceptance of donations or grants. This section shall not apply to the Metro Government's annual operating and capital budget ordinances nor any resolution or ordinance, which provides for a donation or grant to the Metro Government.

(C) Review by the Office of Internal Audit. Any Council Member may request in writing or orally to have the Metro Government's Office of Internal Audit conduct a review of the reasonableness of a financial impact statement. However, this request will not be granted if two-thirds of Council Members in attendance at a Committee meeting or meeting of the entire Council vote against such request. Any request made pursuant to this section must be made prior to there being a call to vote on such ordinance or resolution in Committee. However, a request may also be made prior to there being a call to vote on an ordinance or resolution that is amended at a meeting of the entire Metro Council where such ordinance or resolution is being considered for passage. If such a request is made in Committee or at a meeting before the entire Metro Council, the ordinance or resolution shall automatically be tabled until either the review is complete or the expiration of the 30-day period as described below in this section, whichever occurs first, unless two-thirds of the Council Members in attendance at such Committee meeting or Council meeting vote against such request. The Council may take no action regarding such ordinance or resolution until the lapse of 30 days from the date such request is made and granted.

(Lou. Metro Ord. No. 11-2004, approved 2-9-2004)