SUBJECT:
title
Approval of a resolution approving changes to the Internal Audit Charter.
end
FISCAL IMPACT:
This action has no fiscal impact.
STRATEGIC PLAN:
Strategic Goal Alignment:
☒ 1. Internal/External Customer Service Excellence ☐ 2. Stakeholder Engagement
☐ 3. Financial and Environmental Sustainability ☐ 4. Staff Development ☐ 5. Agency Growth Management
Strategic Objectives:
☐ 1.1 Safety & Risk ☒1.2 Continuous improvement ☐ 1.3 Dynamic Change
☐1.4 Culture of Innovation ☐2.1 Be an Employer of Choice ☐2.2 Organization Development
☐2.3 Organization Culture ☐3.1 Resource optimization ☐3.2 Safety Culture
☐3.3 Environmental Leadership ☐4.1 Educate & Call to Action ☐4.2 Build Partnerships
☐4.3 Value of Transit ☐4.4 Project Connect
EXPLANATION OF STRATEGIC ALIGNMENT: The mission of the Internal Audit department is to enhance and protect organizational value by providing risk-based and objective assurance, advice, and insight. The internal audit activity helps CapMetro accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of governance, risk management, and control processes.
BUSINESS CASE: Does not apply.
COMMITTEE RECOMMENDATION: This item was presented and recommended for approval by the Finance, Audit and Administration Committee on February 12, 2025.
EXECUTIVE SUMMARY: The Internal Audit Charter identifies the purpose, authority, and responsibility of the CapMetro Internal Audit function, consistent with professional auditing standards, including those put forward by the Institute of Internal Auditors and the US Government Accountability Office through the Government Audit Standards.
The CapMetro Board of Directors asked that the Charter be reviewed periodically and updated as necessary. The last of these reviews was performed in November, 2023.
The most significant change proposed to the Charter is reflective of the Institute of Internal Auditors shift in framework to the Global Internal Audit Standards. The new Global Internal Audit Standards set forth principles, requirements, considerations, and examples for the professional practice of internal auditing globally.
The 53 standards are organized into five domains as follows:
1. Purpose of Internal Auditing.
2. Ethics and Professionalism.
3. Governing the Internal Audit Function.
4. Managing the Internal Audit Function.
5. Performing Internal Audit Services.
The Internal Audit function performs two types of engagements - Assurance Services and Advisory Services. One of IIA Standards Board’s goals for the update was to elevate the quality of internal auditing and enhance the function’s role as an essential business partner to Boards and senior management. Three key areas of change are as follows:
• Governance Mandate: 1) Board, senior management and the CAE agreement on the IA mandate is required; 2) On projects results, CAE must work with the board and senior management to educate on essential conditions and their impact; 3) CAE must coordinate with the other internal and external service providers and consider reliance on their work; 4) CAE must seek approval for the IA Department budget to achieve the mandate from the board.
• Strategy & Performance Objectives Alignment: 1) CAE must implement an IA function strategy to support the organization’s strategic objectives; 2) The strategy must include a vision, strategic objectives, and supporting initiatives with an explicit focus on long-range (3-5 years) improvement; 3) Must develop objectives to measure performance and an evaluation methodology, incorporating input from the board and senior management; 4) the CAE must regularly report to the board on improvement actions in addition to any non-conformance areas.
• Audit Engagement Findings & Conclusions: 1) Prioritization and rating system for all findings required for all engagements based on CAE-developed methodology and criteria; 2) Engagement level conclusion required for both assurance and advisory projects; 3) CAE must timely communicate themes identified to board and senior management which should be inclusive of both internal and external service providers.
DBE/SBE PARTICIPATION: Does not apply.
PROCUREMENT: Does not apply.
RESPONSIBLE DEPARTMENT: Internal Audit
body
RESOLUTION
OF THE
CAPITAL METROPOLITAN TRANSPORTATION AUTHORITY
BOARD OF DIRECTORS
STATE OF TEXAS
COUNTY OF TRAVIS
AI-2024-1370
WHEREAS, the Capital Metropolitan Transportation Authority Board of Directors has adopted an Internal Audit Charter that identifies the purpose, authority, and responsibility of the CapMetro Internal Audit function, consistent with professional auditing standards; and
WHEREAS, the Institute of Internal Auditors has moved from the 2017 IPPF Framework to the 2024 Global Internal Audit Standards, making updates to the current charter necessary; and
WHEREAS, The U.S. Government Accountability Office (GAO) has issued the 2024 revision of Government Auditing Standards; further necessitating additional language and updates.
NOW, THEREFORE, BE IT RESOLVED by the Capital Metropolitan Transportation Authority Board of Directors that the updates to Internal Audit Charter attached hereto are approved.
____________________ Date: ____________________
Secretary of the Board
Becki Ross