Why do we need the Office of Audit Services? Is this function a regulatory requirement?
The Oregon Revised Statutes and Oregon Administrative Rules require OSU to have an audit function due to the size of the agency. In addition, it is strongly recommended that OSU and all the Oregon research universities retain a function to align with industry as well as state best practices.
External stakeholders that impact our funding (including federal inspector general offices, external auditors, credit agencies, state legislature, taxpayers, and donors) expect some level of assurance services that the university control structure is running properly and that assets are safeguarded. This assurance reduces the overall cost to OSU by:
- establishing stronger internal controls and streamlining practices;
- finding and fixing problems before they become costly;
- identifying the root cause of issues and recommending ways to fix them, thus maintaining creditability with key stakeholders; and
- helping OSU work towards achieving an unmodified audit opinion on federal compliance and financial statement audits. Clean external audit reports can reduce our cost of borrowing and help retain our ability to receive federal student aid and research funding.
The Office of Audit Services (OAS) operates the university Accountability & Integrity Hotline and provides oversight over all complaints received. Having this objective function also demonstrates OSU’s commitment to due diligence. In the event a crime is committed that is beyond OSU’s control, due diligence is a key element to preserve the university’s reputation and prevent criminal charges.
How do we know we are getting value for these services?
The OAS is audited every five years by an expert audit team selected by the president and the OSU Executive & Audit Committee of the Board of Trustees (Committee). The audit makes sure the office complies with generally accepted auditing standards and provides value-added services. This audit of the auditors will also involve a 360-degree review involving all key stakeholders, allowing them the opportunity to provide input on improving the function.
The office will be evaluated annually by the president and the Committee. The review will include an analysis of key performance matrices identified as part of industry best practices, as well as an analysis of progress towards established office goals.
The campus community also has the ability to request services or provide input on where the services would be most beneficial. The annual planning process consists of a formal risk assessment, which will also serve as an advisory service to inform units of areas that may be over- or under-controlled.
What is the difference between the audit and compliance office functions?
The Office of Audit Services and the Office of University Compliance work closely together. The compliance office is an operational function that helps the campus compliance community implement best practices. Given that the compliance office helps facilitate the building and maintaining of programs, the president and the board of trustees need an independent assessment. The audit function provides independent assurances that the compliance function is working. The OAS renders an opinion on whether or not the compliance functions are operating effectively and efficiently. The OAS also provides recommendations for improvement and requires clear management action plans.
The compliance function:
- Engages the campus in creating and ensuring key compliance offices are providing adequate tools, standards, policies, and procedures over key risk areas
- Ensures high-risk items are brought to the attention of the Compliance Executive Committee and champions the need for prioritization of action and sufficient resources
- Provides students, staff, and faculty with educational tools and guidance to foster success and avoid non-compliance pitfalls
- Ensures the establishment and assists with the design of routine monitoring programs such as periodic lab inspections
- Responds to high-risk issues that arise, and elevates issues to the Office of General Counsel and the Office of Audit Services to evaluate
- Informs the Compliance Executive Committee of issues and resolutions
The audit function:
- Conducts audits (internally or outsourced to subject matter experts) of the key compliance risk areas
- Manages the university hotline to ensure issues noted are elevated and addressed in a timely manner
- Ensures consistent treatment, follow-up action, and preventative measures are taken for all audit recommendations and when serious instances of non-compliance occur
- Reports on due diligence efforts over compliance risks to the president and the Executive & Audit Committee of the Board of Trustees