Areas to be audited are selected in either of the following ways:

• Based on the annual audit schedule developed from a 3 year audit plan prepared by the Audit Director, as a result of risk assessments conducted.
• Administrative requests from upper management or the management of the area to be audited.
• Tips or complaints of fraud, waste or abuse from management, employees or outside sources.

The Bureau of  Internal Audit is different from the Legislative Auditor because it is an independent unit established within DHH.  The staff is considered internal auditors.  The Legislative Auditors are not a part of the DHH organizational structure therefore are considered external auditors.  As internal auditors, we work with management to identify areas where internal controls need to be improved or to identify instances where agencies are not complying with laws and regulations.  Our objective is to improve operations before the external auditors cite weaknesses.

The DHH Bureau of Internal Audit is responsible for auditing all agencies, programs, and facilities within DHH.  This includes  DHH headquaters' operations, as well as program offices, 24 hour facilites, outpatient clinics, health units, and other facilities located across the State.

All activities, programs, functions, and operations under the Department are subject to review by the Internal Audit staff.

Once an area if selected to be audited, the audit process will involve the following steps :

• Audit planning - The audit staff assigned will review background information, contracts, prior audit files, policies, laws, regulations, etc. applicable to the audit area and prepare an audit program that includes procedures to be performed during the audit.
• Entrance conference - A meeting will be held between the audit staff and the managers of the audit area.  The audit staff will discuss the purpose of the audit, the time period included in the audit, and the resources needed.  Management is given the opportunity to discuss any concerns or questions about the audit.
• Fieldwork - During fieldwork the auditors will interview personnel concerning their duties and responsibilities, observe day to day operations, flowchart processes, perform various tests of transactions, review supporting documentation, and document issues of concern and areas of non-compliance.
• Report draft - Once the fieldwork is completed, the auditor will write a report that reflects what was done, what was found, and any recommendations for improvement.
• Exit conference - A meeting is held with management of the audited area to discuss the audit findings before findings are officially released.  Management is allowed the opportunity to concur or not concur with the findings and to present evidence to support any nonconcurrence with the auditors.  Any recommendations by the auditors for improvement or corrective action are also discussed at this time.
• Management's response - An official written response is obtained from management which outlines proposed corrective actions, where applicable.
• Follow up - After a reasonable period of time, the audit staff will conduct a follow up review of areas previously audited, to determine if corrective action has been effectively implemented.

Internal auditing is an administrative process designed to assist management in carrying out their responsibilities, by providing independent and objective reviews of operations.

Internal auditors review the books and records of the department to make sure agencies comply with departmental policies and State and Federal laws.  The primary objective of the internal audit function is to help management improve operations and strengthen any internal control weaknesses before the areas are reviewed by the external auditors (Legislative Auditors).  internal auditors also serve as consultants to help management with policy development and the correct interpretation and implementation of policies and regulations.

Examples of work performed by the internal audit staff include review of time and attendance records to make sure employees are properly paid, review of purchasing practices for compliance with State Purchasing Regulations, verifying agencies' compliance with Federal grant regulations, etc.  Internal auditors also investigate reported thefts or other fraudulent activity within the department.

The DHH Bureau of Internal Audit may be contacted to request an audit, for advice or consultation on a particular issue, to report fraudulent activities, for interpretation of policy, etc.  All requests made to the Internal Audit staff remain confidential to the extent allowed by departmental policy and State and Federal laws.