2005-1020-Ordinance No. 2005-014 Recorded 8/29/20054 :GAL
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CODE REVIEW COMMITTEE
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For Recording Stamp Only
BEFORE THE BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
An Ordinance Adopting Chapter 2.14, County
Internal Auditor, of the Deschutes County Code, * ORDINANCE NO. 2005-014
and Setting Forth the Conditions and Specifics
Under Which Said Appointment Shall Function.
WHEREAS, government auditing independently reviews, evaluates and reports on
the financial condition, the accuracy of financial record keeping, compliance with
applicable laws, policies, guidelines and procedures, and efficiency and
effectiveness of operations; and
WHEREAS, management and employees in the public sector are responsible for
taxpayer use of public resources and should be held accountable for their use; and
WHEREAS, it is vital that government exercise its power and perform its duties in
compliance with law, policy, and established procedures and apply good judgment
and sound management practices; and
WHEREAS, the independence and public accountability of the internal auditor can
be assured by provision of an independent, Commissioner ratified auditor; now,
therefore,
THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY,
OREGON, ORDAINS as follows:
Section 1. ADDING NEW CHAPTER. The Deschutes County Code is amended
by adding a new chapter, Chapter 2.14, County Internal Auditor, set forth in
Exhibit "A " attached hereto and by this reference incorporated herein.
PAGE 1 OF 2 ORDINANCE NO. 2005-014
DATED this day of 2005.
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
TOM DEWOLF, Chair
, Q'ommissioner
S R. LUKE, Commissioner
Date of 1" Reading: day of U11 -1-t 2005.
Date of 2nd Reading: O`Z� day of 2005.
Record of Adoption Vote
Commissioner Yes No
Tom DeWolf ✓
Michael M. Daly
Dennis R. Luke
Abstained Excused
Effective date: 9f," day of Nw 2005.
ATTEST:
JNVAA� (�)�
Recording Secretary
PAGE 2 OF 2 ORDINANCE NO. 2005-014
Chapter 2.14. COUNTY INTERNAL AUDITOR
2.14.010. Appointment of County Internal Auditor.
2.14.020.
Qualifications of County Internal Auditor.
2.14.030
Scope of Audits.
2.14.040.
Internal Audit Schedule.
2.14.050.
Funding.
2.14.060.
Access to Employees, Records and Property.
2.14.070.
Audit Reporting and Records.
2.14.080.
Contract Auditors, Consultants and Experts.
2.14.090.
Quality Assurance Review.
2.14.100.
Audit Committee.
2.14.010. Appointment of County Internal Auditor.
The County Internal Auditor shall be appointed by and serve at the pleasure of the County Administrator in
consultation with the Audit Committee and the BOCC.
2.14.020. Qualifications of County Internal Auditor.
The County Internal Auditor shall possess adequate professional proficiency, demonstrated by relevant
certification, such as CPA (Certified Public Accountant), CIA (Certified Internal Auditor), CGAP (Certified
Government Auditing Professional) or a combination of education and experience as would be desired by the
County.
2.14.030 Scope of Audits.
1. The County Internal Auditor shall conduct work in accordance with government auditing standards and
county policies. The County Internal Auditor shall establish internal auditing policies and procedures to
assure that audit work is completed in accordance with those standards. Any audit work that is undertaken
not in compliance with standards shall be disclosed in the County Internal Auditor's report.
2. The County Internal Auditor shall have authority to conduct financial, attestation, and performance audits
of all departments, offices, boards, activities and agencies of the County in order to independently and
objectively determine whether:
a. activities and programs being implemented have been authorized by County Code or adopted
policy, state law or applicable federal law or regulations;
b. activities and programs are being conducted as prescribed by management/governing body to
accomplish the objectives intended by County Code, state law or applicable federal law or
regulations;
c. activities or programs efficiently and effectively serve the purpose intended by County Code, state
law or applicable federal law or regulations;
d. activities and programs are being conducted and funds expended in compliance with applicable
laws;
e. revenues are being properly collected, deposited and accounted for;
Chapter 2.14 1 (09/2004)
f. resources, including funds, property and personnel, are adequately safeguarded, controlled and
used in an effective and efficient manner;
g. 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;
h. there are adequate operating and administrative procedures and practices, systems or accounting
internal control systems and internal management controls which have been established by
management; and
i. there are indications of fraud, abuse or illegal acts, which need further investigation.
3. The County Internal Auditor may also provide non -audit services (consulting) that are not covered by
governmental auditing standards. Non -audit services differ from audits in that the County Internal
Auditors may
a. Perform tasks requested by management that directly support the entity's operations;
b. Provide information or data to a requesting party without providing verification, analysis or
evaluation.
These non -audit services should be approved by the County Administrator. The County Internal Auditor
should continue to work independently (in fact and appearance) when performing non -audit services. The
County Internal Auditor will decide and advise the County Administrator if the non -audit work may
jeopardize independence and whether the work should be performed.
4. The County Internal Auditor needs to consider three general classes of impairments to independence—
personal, external, and organizational. If one or more of these impairments affects the County Internal
Auditor's capability to perform the work and report results impartially, that County Internal Auditor
should either decline to perform the work, or in those situations because of a legislative requirement or for
other reasons, cannot decline to perform the work, should disclose the impairment in their report.
The County Internal Auditor should not perform management functions or make management decisions.
Performing management functions or making management decisions might impair the County Internal
Auditor's ability to perform audits of that or a related subject matter.
2.14.040. Internal Audit Schedule.
At the beginning of each calendar (or fiscal) year, the County Internal Auditor shall submit a one to five-
year audit work schedule to the Board of County Commissioners for approval. This audit work schedule
should incorporate information from multiple sources including the County Internal Auditor's assessment
of significant risks to the organization and input from Management, Audit Committee, and the Board
of County Commissioners. The schedule shall include the proposed plan for auditing departments, offices,
boards, activities, subcontractors and agencies for the period. The schedule may be amended. Additionally,
the County Internal Auditor (for cause) may spontaneously initiate and conduct any other audit deemed
necessary. Any significant audit or non -audit projects (greater than 100 hours) should be approved by the
County Administrator.
In the selection of audit areas and audit objectives, the determination of audit scope and the timing of audit
work, the County Internal Auditor should consult with external auditors so that the desirable audit coverage
is provided and audit effort is properly coordinated.
Chapter 2.14 2 (09/2004)
2.14.050. Funding.
The County shall provide sufficient funds to enable the County Internal Auditor to carry out the
responsibilities specified herein subject to annual appropriation by the County Budget Committee.
2.14.060. Access to Employees, Records and Property.
1. All officers and employees of Deschutes County shall furnish the County Internal Auditor with
unrestricted access to employees, information and records (including electronic/computerized data)
within their custody regarding powers, duties, activities, organization, property, financial transactions,
contracts and methods of business required to conduct an audit or otherwise perform audit duties. In
addition, they shall provide access for the County Internal Auditor to inspect all property, equipment
and facilities within their custody. A discussion of appropriate access should occur with County
Counsel if access to documents is restricted by applicable law.
2. Further, all contracts with outside contractors and subcontractors shall provide the County Internal Auditor
access to the contractually related financial and performance -related records; property, equipment and
services purchased in whole, or in part, with governmental funds
3. If such officers, employees or contractors fail to produce the aforementioned access and/or information,
the County Internal Auditor with the aide of County Legal Counsel may initiate a search (or obtain a
subpoena) to obtain exhibit copies (physical or electronic) from computerized systems, book, paper or
record of any such official or employee, or outside contractor or subcontractor, in accordance with state
law or the applicable contract.
4. Subject to public records laws, the County Internal Auditor shall not publicly disclose any information
received during an audit that is considered confidential by any local, state or federal law or regulation.
2.14.070. Audit Reporting and Records.
1. Each audit will result in a report containing relevant background information and findings and
recommendations, and shall communicate results to the Board of County Commissioners, Audit
Committee, and appropriate management. Subject to applicable public records laws, the report shall
also be available for public examination. If certain pertinent information is prohibited from general
disclosure, the audit report should state the nature of the information omitted and the requirement that
makes the omission necessary.
2. The County Internal Auditor should follow state archive guidelines (currently - a retention schedule of
7 years).
3. The County Internal Auditor should periodically report to the Audit Committee (and Board of County
Commissioners) on the work performed and any significant findings, which have not been fully
addressed by management.
4. The County Internal Auditor shall follow-up on audit recommendations, as practical, to determine if
management is implementing corrective action as identified in their response to the audit report
findings and recommendations. The County Internal Auditor may request periodic status reports from
auditees regarding actions taken to address reported deficiencies and audit recommendations.
Chapter 2.14 3 (09/2004)
2.14.80.Contract auditors, consultants and Experts.
Within budget limitations and approval by the County Administrator, the County Internal Auditor may
obtain the services of Certified Public Accountants, qualified management consultants, or other
professional experts necessary to perform auditor duties. An audit that is performed by contract must be
conducted by persons who are independent of the governmental unit and its officers. The County
Internal Auditor will coordinate and monitor auditing performed by public accounting, professional
experts, or other organizations employed under contract by Deschutes County.
2. The County Internal Auditor may participate with the Audit Committee in the selection of qualified
finalists for the provider of Deschutes County's annual financial audit. The Audit Committee shall
select a provider from the finalists. This selection shall be presented to the Board of County
Commissioners for review and approval. The process will follow Deschutes County's contracting
processes. This contract may extend for up to five years.
2.14.090. Quality Assurance Reviews.
1. The audit activities of the County Internal Auditor's office shall be subject to quality review in
accordance with applicable government auditing standards by a professional, non-partisan objective
group (such as the National Association of Local Government Auditors (VALGA)). A copy of the
written report of this independent review shall be furnished to the Audit Committee and the Board of
County Commissioners. This report shall be available to the public.
2. The quality control review shall determine compliance with government auditing standards and the
quality of the audit effort and reporting, including:
a. general standards such as competence, professional judgment, and quality assurance;
b. fieldwork standards such as planning, supervision, and evidence; and
c. reporting standards such as report content, timeliness and distribution.
3. The County shall reimburse the costs of the quality control review team from funds budgeted in the
County Internal Auditor's budget. Within available time constraints, the County Internal Auditor may
reciprocate with other organizations by participation in quality control teams.
2.14.100. Audit Committee.
The Board of County Commissioners has established (by separate policy) a working relationship between the
County Internal Auditor and the Audit Committee. The County Internal Auditor will work with the Audit
Committee on the selection, planning, and results of audit activities to assure maximum coordination with the
needs of the County Administrator, the Board of County Commissioners and external auditors. The Board of
County Commissioners shall appoint Audit Committee members and a majority of the appointees shall be
independent of the local government's management.
Chapter 2.14 4 (09/2004)