Audit Reports Affecting Multiple Agencies
A Report on Evaluating the Effectiveness of Internal Audit
Report Number 95-024
Overall, board members and agency heads indicate that their internal audit departments are effective. More than 90 percent agreed they would have an internal audit department even if not required to by law. However. board members did not consider internal auditors as effective in communicating with them as agency heads did.
A wide disparity exists in allocating resources to internal audit. Agencies should reassess allocation of resources to internal audit to ensure sufficient and cost-effective audit coverage.
Most internal auditors did not submit performance measures. Agencies should develop and use performance measures to evaluate internal audit effectiveness.
Some internal audit departments need to improve compliance with professional standards and the Texas Internal Auditing Act. These areas include independence, peer review, and audit scope.
The State invested an estimated $23 million in internal auditing during fiscal year 1994. Between fiscal years 1991 and 1993, internal auditors reported recommendations with a cumulative five-year fiscal impact of $175 million. Other internal audit recommendations with little or no fiscal impact resulted in improved controls, which safeguard valuable assets.
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