Internal Audit

Internal Audit’s objective is to safeguard the City’s assets by ensuring adequate internal controls, and to assist in ensuring the efficient and effective delivery of services to the citizens of Chicago.  This is achieved by managing and providing oversight/guidance for reviews of delegate agency grant funding, high risk programs, policy/process improvement activities, risk assessments, and vendor contract compliance.

Internal Audit Objectives

• Mandated/Regulatory Audits

Single Audit Report Reviews

AVoucher Documentation Audits

• Critical High-Risk Audits

Risk Assessments

Payment Card Industry (PCI) Report on Compliance

American Recovery and Reinvestment Act (ARRA)

• Client Audits

Compliance

Expense Reduction

Revenue Generation

Process Improvement 

Agreed-Upon Procedures

Detection & Prevention

Training & Development         

Internal Audit 2011 Accomplishments

• A-133 Single Audit Report Reviews:   Internal Audit reviews the Single Audit Reports of approximately 500 of the City’s delegate agencies that expend $500,000 or more in Federal funds annually, in accordance with OMB Circular A-133 mandates, including review of their financial statements, internal controls, and major programs.

• Voucher Documentation Audits:  Internal Audit performs annual audits of reimbursement vouchers and supporting documentation for approximately 500 of the City’s delegate agencies, in accordance with OMB Circular A-122 mandates.  Vouchers/invoices are reviewed for compliance with the delegate agency contract budget and Federal cost regulations.  These audits cover over 75% of the City’s delegate agencies.

• Credit Card & Employee Reimbursement Review:   Internal Audit lead the review of City and Sister Agencies’ current policies and procedures, and past expenditures, related to Credit Cards, Petty Cash, and Employee Reimbursements in order to develop one City-wide Employee Reimbursement Policy to ensure that taxpayer dollars are used appropriately and in the best interest of the citizens of Chicago.

• Payment Card Industry (PCI) Report on Compliance:   Internal Audit provided project management and oversight for the annual PCI assessment to ensure that the City will be compliant with mandatory PCI data security standards.  The City was deemed fully compliant for 2011.

• Mileage & Travel Reimbursement Review:   Internal Audit lead the review of City and Sister Agencies’ current policies and procedures, and past expenditures, related to Mileage and Travel Reimbursements in order to develop one City-Wide Local Mileage Reimbursement & Other Local Transportation Policy to ensure that taxpayer dollars are used appropriately for City operations that require employee transportation. 

• Departmental Risk Assessments:   Internal Audit continues to evaluate and assess the City’s departmental risk and control environment as recommended in a prior year’s Single Audit Report of the City.  The 2011 focus is on the City’s infrastructure departments.

• Delegate Agency Agreed-Upon Audit Procedures:  In addition to the above mandated audits for delegate agencies, Internal Audit performed additional Agreed-Upon Audit Procedures on select agencies (based upon recent financial/operational deficiencies and/or instances of non-compliance) to assess an agency’s internal controls and fiscal operations.  Agreed-upon audit procedures have been performed on two delegate agencies in 2011.

• Compliance:  Internal Audit continues to conduct City infrastructure department audits of American Recovery and Reinvestment Act (ARRA) funding.  Departments of Aviation and Water have had audits completed in 2011.

Internal Audit/Process Improvement is currently working with City departments on the American Recovery and Reinvestment Act (ARRA) initiative.

American Recovery and Reinvestment Act (ARRA)

ARRA is an unprecedented effort to boost our economy, save and create of jobs, and address challenges that will allow our country to thrive in the 21st century.

The Act provides for levels of transparency and accountability so that you will be able to know how, when, and where your tax dollars are being spent.  The Act contains specific requirements to root out waste, inefficiency, and unnecessary spending.

Some of those requirements, such as auditing are being performed by the Office of Compliance.  For more information about ARRA audits contact the Office of Compliance at 312-747-7778.

 Learn more about  how ARRA funds are being used:

• The United States
• The State of Illinois
• The City of Chicago