My audit committee has asked that I propose methods to incent management to
complete audit findings in a timely fashon. The audit committee suggested
linking completion of audit findings to performance reviews.
Does anyone have any suggestions or ideas?
I work for a public university, and this is our system:
1. Audit report is issued (to the board of control and all university executive officers), and we include a written response from the manager for each finding. The response is supposed to state if they agree or disagree, and what action they've taken or plan to take to address the issue.
2. Three-six months after the audit report is issued, we perform a follow-up review of the audit findings. We issue a report to the board of control and all university executive officers outlining the current status and whether the situation has been (a) corrected; (b) corrective action is planned; (c) no action is planned; (d) the situation was corrected during the audit; or (e) it is something that must be tested in a subsequent audit to be certain of it's status.
3. About twice each year, we perform follow-up reviews of areas that have uncorrected situations from audit reports. A report is delivered orally to the board of control outlining the situation. If findings remain uncorrected, they will be included in this oral report every six months until they are corrected.
Variation - for annual audits, we generally do not perform the follow-up reviews unless the situation warranting the finding posed significant risk to the university. For annual audits we generally wait until the next audit and carefully review the current situation. If things remain uncorrected, we will include a finding in the current audit report stating "...in the X/X/XX audit report we recommended ... we AGAIN recommend ..." We have even once used all capital letters and red ink.
Is our system effective? Let's say I'd be interested in hearing what system others use. While most of our managers would willingly implement necessary changes without an audit report even being issued, we still have our share of sticking points.
Sharon
Sharon J. Haapala, CIA, Auditor
Michigan Technological University
906-487-1994
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