Authority and Mission
The operational/performance audit function in the City of Cincinnati is accomplished through an Internal Audit Division reporting to the Audit Committee and the Finance Director. Internal Audit was established by Council in 1982 and its authority specified by Article II, Section 15 of Cincinnati’s Administrative Code. The establishing legislation stipulates that the Division, “...examine and evaluate the effectiveness and efficiency of management controls in all city departments, independent boards and commissions.” The Division shall identify and recommend to appropriate units of management relevant opportunities to reduce cost, improve performance, and increase productivity of personnel and assets.
Access to all City functions, records, property and personnel necessary to achieve operational/performance audit objectives are also granted by the Administrative Code.
Goals
Identify, schedule and conduct operational/performance audits with emphasis on identifying recommendations that strengthen management controls and reduce the costs of operations.
Report significant audit findings and recommendations to the entity under audit, the Audit Committee, the Finance Director and City Council in written report.
Establish follow-up procedures and schedule projects to ascertain that appropriate action is taken on audit recommendations accepted by management.
Maintain a professionally competent audit staff; provide training and professional development opportunities.
Maintain policies and procedures for the conduct of operational/performance audits consistent with applicable laws and professional standards.
Coordinate operational audit efforts with city and other agencies to achieve desired audit coverage without duplication.
Background and History
The Internal Audit Division was established within the Office of the City Manager on February 18, 1982. The Division was developed as a result of three major efforts. First, a special ad hoc investigative team was formed by former City Manager William V. Donaldson in 1975. Its mission was to investigate various allegations of criminal and ethical misconduct on the part of city employees. In addition to periodically discovering such misconduct, the team also often found weaknesses in internal managerial controls. Review of managerial control issues were solved on an ad hoc “as-needed” basis. Review on an “as needed” basis was not sufficient.
Second, City Manager Donaldson (1977) initiated an assessment of the City’s financial management system. The Cincinnati Business Committee (CBC) performed the assessment in conjunction with a series of initiatives undertaken by management to improve fiscal accountability and performance. In 1979 the Committee recommended the establishment of an internal audit function reporting to the Director of Finance. It recommended that this new unit provide full-scope operational auditing, which includes the scope of management control. An internal audit unit was recommended in the City Manager’s 1980 program budget; however, the unit was not implemented.
Third, in 1981 City Manager Sylvester Murray completed an administrative reorganization plan for the City. The plan recommended an internal audit unit reporting directly to the City Manager. The functional scope of the new unit was to be limited to operational and management controls and systems. Thus, Internal Audit was established.
Fourth, in 2003 City Manager Valerie Lemmie reorganized the City Manager’s Department. As part of this reorganization, the Internal Audit Division was moved to the Finance Department. The Internal Audit Division currently reports directly to the Finance Director.
