Jeffery S. Burgh Assistant Auditor-controller Auditor-controller Joanne McDONALD County of Ventura*

Conclusions 2

• CL1 Page 3
  C-01. There is no written evaluation or reporting available on the cost savings or revenue enhancing opportunities derived from audits conducted. These items are not routinely discussed with the CEO or the BOS. Budget requests for additional Internal Audit Division resources, including personnel, are rarely, if ever, presented as potential cost savings for the County. (FA-01, FA-02, FA-03, FA-07, FA-08) Response: Disagree. The Internal Audit Division has been tracking and documenting its performance measurement results, including cost savings and revenue enhancements, every quarter for over 20 years. Over the past 5 years, for example, the Internal Audit Division identified an average of $375,000 in cost savings per year. Cost savings and revenue enhancements are identified in audit reports, which are provided to the CEO and BOS. Our latest budget request for additional Internal Audit Division resources explicitly included potential cost savings and revenue enhancements as a basis for the request. C-02. The purpose and intent of the Internal Audit Plan's list of Future Potential Audit Subjects is unclear. The understanding varies among stakeholders and within the Internal Audit Division. The number of Future Potential Audit Subjects has escalated each fiscal year to the point where it is not realistic or achievable. (FA-04, FA-05) Response: Disagree. The introduction to Internal Audit Plan's list of Future Potential Audit Subjects states: "The following have been identified as potential audit subjects to be pursued in future years as Internal Audit Division staff resources allow." The list serves a variety of purposes, mainly to assist the Auditor-Controller in identifying audit subjects to bring forward to the current year's planned engagements. C-03. The sheer size of the number of Future Potential Audit Subjects suggests there could be high risk audits that are not being addressed. (FA-04, FA-05, Att-01) Response: Agree. During our annual audit planning process, we judgmentally assess which audit subjects are higher risk to bring forward to the current year's planned engagements. C-04. The goals, objectives, and performance measurements of the Internal Audit Division have been essentially unchanged for the past five fiscal years. (FA-06, FA-07, FA-09) Response: Agree. However, we re-assess our goals, objectives, and performance measurements at least annually for continuing relevance and value. C-05. The Internal Audit Division does designate some, but not all audits, for follow-up. Follow-up has not been a primary concern. Its performance measurement stating "100% of corrective action: has been initiated 1
• CL2 Page 4
  by management during the course of the audit" cannot be confirmed by the number of follow-up audits conducted. (FA-09, FA-10) Response: Partially Disagree. While true that some audits are designated for follow-up, the Internal Audit Division must weigh the cost/benefit of conducting follow-up audits. Designating all audits for follow-up would divert staff resources away from higher risk audits that should be prioritized. C-06. Providing the Auditor-Controller with the CEO's evaluations of an audited department's corrective actions would assist the Internal Audit Division in determining the need and scope of follow-up audits. (FA- 10, FA-11, FA-12) Response: Agree. The CEO's evaluations would help us prioritize follow-up audit areas that are higher risk. C-07. The Auditor-Controller's Internal Audit Division does not issue an annual report. In the Internal Audit Plan, there is no evaluation of the Internal Audit Division's performance. (FA-06, FA-13, FA-14, FA-15) Response: Disagree. The Internal Audit Plan reports on the current status of the prior year Internal Audit Plan under the section entitled "Status of Prior Year Internal Audit Plan". In this section, we identify which of the prior year engagements were completed and in progress, along with the number of audit findings. We also report several other accomplishments of the Internal Audit Division, including the number of Employee Fraud Hotline issues handled. Within the County Adopted Budget, we state the number of audit reports issued.