§ 10A. Independent internal audit.  


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  • (a)

    (1)

    It is essential to the proper administration and operation of the DeKalb County government that public officials, government managers, and private citizens know not only whether government funds are handled properly and in compliance with laws and regulations but also whether public programs are achieving the purposes for which they were authorized and funded, and whether they are doing so efficiently, effectively, and equitably. An independent internal audit function can provide objective information on the operations of government programs, assist managers in carrying out their responsibilities, and help ensure full transparency and accountability to the public. Internal auditing is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization's operations by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

    (2)

    The public interest requires that the general assembly provide for the proper administration and operation of the DeKalb County government by establishing by law an independent internal audit function to assist the governing authority to accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

    (b)

    The office of internal audit is hereby established which shall consist of the chief audit executive ("auditor") and those assistants, employees, and personnel as deemed necessary by such auditor for the efficient and effective administration of the affairs of the office, and over whom the auditor shall have the sole authority to appoint, employ, and remove.

    (c)

    The office of internal audit shall be completely independent and shall not be subject to control or supervision by the chief executive, the commission, or any other official, employee, department, or agency of the county government.

    (d)

    The auditor shall be appointed by a majority vote of the DeKalb County Board of Commissioners from a list of not fewer than two (2) nor more than three (3) candidates provided to the board by the audit oversight committee. Such appointment shall be made within thirty (30) days of receipt of the list of nominees by the board. In the event that the commission fails to appoint a nominee within thirty (30) days, the auditor shall be appointed by a majority vote of the audit oversight committee.

    (d)

    The term of office of the auditor shall be five (5) years and until his or her successor is qualified and appointed. The auditor shall be limited to a maximum of two (2) terms in office. A vacancy in the position of auditor shall exist by reason of expiration of term, resignation, death, removal from office by the vote of a supermajority of the members of the commission, or if the auditor becomes ineligible to hold civil office within the meaning of O.C.G.A. § 45-2-1 and that ineligibility is established by decision of a court of competent jurisdiction which declares the office vacant because of such ineligibility. A vacancy shall be filled within sixty (60) days by a majority vote of the audit oversight committee for the remainder of the term of office.

    (e)

    The auditor must have adequate professional proficiency for the job and shall:

    (1)

    Be a certified public accountant or a certified internal auditor;

    (2)

    Have a bachelor's degree in public policy, accounting, business administration, economics, or a related field; and

    (3)

    Have at least five (5) years of experience in government auditing, evaluation, or analysis.

    (f)

    The position of the auditor shall be nonpartisan. Qualifying for election to a public office shall constitute a resignation from the position as of the date of qualifying.

    (g)

    The auditor shall have authority to conduct financial and performance audits of all departments, offices, boards, activities, agencies, and programs of the county in order to independently and objectively determine whether:

    (1)

    Activities and programs being implemented have been authorized by this Act, Georgia law, or applicable federal law or regulations and are being conducted and funds expended in compliance with applicable laws;

    (2)

    The department, office, board, or agency is acquiring, managing, protecting, and using its resources, including public funds, personnel, property, equipment, and space, economically, efficiently, effectively, and in a manner consistent with the objectives intended by the authorizing entity or enabling legislation;

    (3)

    The entity, programs, activities, functions, or policies are effective, including the identification of any causes of inefficiencies or uneconomical practices;

    (4)

    The desired results or benefits are being achieved;

    (5)

    Financial and other reports are being provided that disclose fairly, accurately, and fully all information required by law, to ascertain the nature and scope of programs and activities, and to establish a proper basis for evaluating the programs and activities including the collection of, accounting for, and depositing of, revenues and other resources;

    (6)

    Management has established adequate operating and administrative procedures and practices, systems or accounting internal control systems, and internal management controls; and

    (7)

    Indications of fraud, abuse, or illegal acts are valid and need further investigation.

    (h)

    All officers and employees of DeKalb County shall furnish to the auditor unrestricted access to employees, information, and records including electronic 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 auditor to inspect all property, equipment, and facilities within their custody. If such officers or employees fail to provide or produce such access and information, the auditor may initiate a search to be made and exhibits to be taken from any book, paper, or record of any such official or employee or outside contractor or subcontractor, except as governed by statute. Further, all contracts with outside contractors and subcontractors shall contain a "right-to-audit" clause and provide for auditor access to the contractors' employees and to all financial and performance related records, property, and equipment purchased in whole or in part with governmental funds. For the purpose of this subsection, the auditor shall have the authority to issue subpoenas and may apply to the Superior Court of DeKalb County for the enforcement of any subpoena issued by the auditor.

    (i)

    The auditor may obtain the services of certified public accountants, qualified management consultants, or other professional experts necessary to perform audit work. An audit that is performed by contract must be conducted by persons who have no financial interests in the affairs of the governmental entity or its officers. The auditor shall coordinate and monitor auditing performed by certified public accounting firms or other organizations employed under contract by the governing authority to assist with audit related activities. Contracting for the external audit will follow the normal contracting processes of the governing authority of DeKalb County except for the participation and oversight by the audit oversight committee and auditor. The selection of a certified public accounting firm for the annual financial audit must be approved by the commission.

    (j)

    (1)

    Audits shall be conducted in accordance with recognized government auditing standards.

    (2)

    At the beginning of each fiscal year, the auditor shall submit a one- to five-year audit schedule to the audit oversight committee and the commission for review and comment. The schedule shall include the proposed plan, and the rationale for the selections, for auditing departments, offices, boards, activities, programs, policies, contractors, subcontractors, and agencies for the period. This schedule may be amended after review with the audit oversight committee and the commission, but the auditor shall have final authority to select the audits planned.

    (3)

    In the selection of audit areas and audit objectives, the determination of audit scope and the timing of audit work, the auditor shall consult with federal and state auditors and external auditors so that the desirable audit coverage is provided and audit efforts are properly coordinated.

    (4)

    A final draft of the audit report shall be forwarded to the audit oversight committee, the chief executive, the commission, and the audited agency for review and comment regarding factual content prior to its release. The agency shall respond in writing, specifying the agreement with audit findings and recommendations or reasons for disagreement with findings and recommendations, plans for implementing solutions to issues identified, and a timetable to complete such activities. The response shall be forwarded to the auditor within sixty (60) days. The auditor shall review and report on information included in the agency's response. If no response is received, the auditor shall note that fact in the transmittal letter and shall release the audit report.

    (5)

    Each audit shall result in a final report, in written or some other retrievable form. The report shall contain relevant background information and findings and recommendations and shall communicate results to the audit oversight committee, the audited agency, and the governing authority.

    (6)

    The auditor shall submit an annual report to the audit oversight committee, chief executive, and the commission indicating audits completed, major findings, corrective actions taken by administrative managers, and significant issues which have not been fully addressed by management. The annual report, in written or some other retrievable form, shall be made available to the public through the county website within ten (10) days of submission to the commission.

    (k)

    If, during an audit, the auditor becomes aware of abuse or illegal acts or indications of such acts that could affect the governmental entity, the auditor shall report the irregularities to the audit oversight committee, the chief executive, and the commission. If a member of the governing authority is believed to be a party to abuse or illegal acts, the auditor shall report the acts directly to the audit oversight committee, the chief executive, and the commission. If it appears that the irregularity is criminal in nature, the auditor shall notify the district attorney in addition to those officials previously identified in this subsection.

    (l)

    The auditor shall follow up on audit recommendations to determine if corrective action has been taken. The auditor shall request periodic status reports from audited agencies regarding actions taken to address reported deficiencies and audit recommendations.

    (m)

    (1)

    The audit activities of the office of internal audit shall be subject to a peer review in accordance with applicable government auditing standards by a professional, nonpartisan objective group utilizing guidelines endorsed by the Association of Local Government Auditors (ALGA).

    (2)

    The peer review shall use applicable government auditing standards to evaluate the quality of audit effort and reporting. Specific quality review areas shall include staff qualifications, adequacy of planning and supervision, sufficiency of work paper preparation and evidence, and the adequacy of systems for reviewing internal controls, fraud and abuse, program compliance, and automated systems. The peer review shall also assess the content, presentation, form, timelines, and distribution of audit reports. The commission shall pay for the costs of the peer review.

    (3)

    A copy of the written report of such independent review shall be furnished to each member of the governing authority and to the audit oversight committee.

    (n)

    (1)

    To ensure independence of the audit function, an audit oversight committee is hereby established. The audit oversight committee shall consist of five (5) voting members.

    (2)

    All members of the audit oversight committee shall:

    a.

    Be residents of DeKalb County;

    b.

    Have expertise in performance auditing; and

    c.

    Have a minimum of five (5) years' experience as a certified public accountant, a certified internal auditor, a certified performance auditor, a certified management accountant, or ten (10) years of other relevant professional experience.

    (3)

    Not later than October 31, 2015, the members of the audit oversight committee shall be selected as follows:

    a.

    One (1) member shall be appointed by the chairperson of the DeKalb County delegation in the Georgia House of Representatives;

    b.

    One (1) member shall be appointed by the chairperson of the DeKalb County delegation in the Georgia Senate;

    c.

    One (1) member shall be appointed by the Chief Executive of DeKalb County; and

    d.

    Two (2) members shall be appointed by the commission.

    (4)

    The members shall serve for terms of five (5) years; provided, however, that the initial term of the first appointee of the commission shall be one (1) year and until his or her respective successor is appointed and qualified; the initial term of the appointee of the chairperson of the DeKalb County delegation in the Georgia House of Representatives shall be two (2) years and until his or her respective successor is appointed and qualified; the initial term of the appointee of the chief executive shall be three (3) years and until his or her respective successor is appointed and qualified; the initial term of the second appointee of the commission shall be four (4) years and until his or her respective successor is appointed and qualified; and the initial term of the appointee of the chairperson of the DeKalb County delegation in the Georgia Senate shall be five (5) years and until his or her respective successor is appointed and qualified.

    (5)

    Successors to all members of the audit oversight committee and future successors shall be appointed by the respective appointing authorities not less than thirty (30) days prior to the expiration of each such member's term of office, and such successors shall take office on January 1 following such appointment and shall serve terms of five (5) years and until their respective successors are appointed and qualified.

    (6)

    If a member of the audit oversight committee ceases to be a resident of DeKalb County, that member's position on the board, by operation of law, shall become vacant upon the establishment of the fact of such nonresidency, if contested, by a court of competent jurisdiction. A vacancy on the audit oversight committee shall exist by reason of death, resignation, incapacity to serve for ninety (90) days or longer, or loss of residency as described in this subsection. A member of the audit oversight committee may also be removed from office during a term if the member becomes ineligible to hold civil office within the meaning of O.C.G.A. § 45-2-1 of the O.C.G.A. and that ineligibility is established by decision of a court of competent jurisdiction which declares the office vacant because of such ineligibility or by a vote of two-thirds ( 2/3 ) of the members of the legislative delegation. A vacancy shall be filled within sixty (60) days by the legislative delegation for the remainder of the unexpired term.

    (7)

    The members of the audit oversight committee shall elect from their own membership a chairperson and otherwise provide for their own internal organization.

    (8)

    The audit oversight committee shall consult with the auditor regarding technical issues and work to assure maximum coordination between the work of the auditor's office and external audit efforts.

    (9)

    The audit oversight committee shall meet as needed to perform its duties but shall not meet less than once quarterly and shall be responsible for:

    a.

    Selecting not fewer than two (2) nor more than three (3) nominees for the position of auditor who meet the requirements outlined in subsection (e) of this section which shall be submitted to the commission for selection and appointment of one (1) of the nominees to the position of auditor;

    b.

    Performing regular evaluations of the DeKalb County audit function;

    c.

    Providing suggestions and comments for the annual audit plan;

    d.

    Ensuring that audit reports are transmitted to the governing authority and to the public;

    e.

    Monitoring follow-up on reported findings to assure corrective action is taken by management;

    f.

    Reporting to the governing authority on problems or problem areas at such times as deemed appropriate;

    g.

    Conducting or overseeing the requests for proposal and selection process for the firm conducting the annual financial statement audits, and ranking and recommending in order of preference no fewer than three (3) firms deemed to be the most highly qualified to perform the required services. If fewer than three (3) firms respond to the request for proposal, the audit oversight committee shall recommend such firms as it deems to be the most highly qualified;

    h.

    Evaluating the firm providing annual financial statement auditing services and providing oversight of that audit, including ensuring transmission of reports and follow-up on corrective action by management;

    i.

    Evaluating the findings and recommendations of the peer review as required by recognized government auditing standards;

    j.

    Consulting with the auditor regarding technical issues with the external audit firm and working to assure maximum coordination between the work of the office of internal audit and contracted audit efforts and other consulting engagements;

    k.

    Maintaining the confidentiality of personnel matters while taking responsibility for appropriate disclosure to the governing authority, the legislature, or to the public; and

    l.

    Annually meeting with members of the commission to discuss controls, systems and risk, and performance of the audit firm, and to discuss other matters that the audit firm, the auditor, or staff desires or is required to bring to the commission's attention such as fraud, illegal acts, and financial and control weaknesses.

    (10)

    The audit oversight committee shall have the authority to hire outside experts, including legal counsel, when necessary.

    (11)

    The audit oversight committee shall have the authority to propose the budget of the office of internal audit, including the auditor's salary and staffing, and shall then recommend the budget to the commission for approval, who shall fund it as a priority.

    (12)

    Sufficient resources as requested by the audit oversight committee shall be provided by the commission to enable the audit oversight committee to carry out its responsibilities.

    (o)

    The provisions of this section are severable, and if any of its provisions shall be held unconstitutional or invalid by a court of competent jurisdiction, the decision of the court shall not affect or impair any of the remaining provisions.

( Acts 1915, p. 3826, § 2 )