Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since September 1, 2018, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R277. Education, Administration.
Rule R277-116. Audit Procedure.
As in effect on September 1, 2018
Table of Contents
- R277-116-1. Authority and Purpose.
- R277-116-2. Definitions.
- R277-116-3. Audit Director Authority and Responsibilities.
- R277-116-4. Superintendent Authority and Responsibilities.
- R277-116-5. Agency Authority and Responsibilities.
- R277-116-6. Audit Process.
- R277-116-7. Audit Reports.
- Date of Enactment or Last Substantive Amendment
- Notice of Continuation
- Authorizing, Implemented, or Interpreted Law
(1) This rule is authorized by:
(a) Utah Constitution Article X, Section 3, which vests general control and supervision of public education in the Board;
(b) Subsection 63I-5-201(4) which requires the Board to direct the establishment of an internal audit department for programs administered by the entities it governs;
(c) Subsection 53E-3-401(4), which allows the Board to make rules to execute the Boards duties and responsibilities under the Utah Constitution and state law;
(d) Subsection 53E-3-501(1)(e), which directs the Board to develop rules and minimum standards regarding school productivity and cost effectiveness measures, school budget formats, and financial, statistical, and student accounting requirements for the local school districts;
(e) Section 53E-3-602, which allows the Board to approve auditing standards for school boards;
(f) Section 53E-3-603, which makes the Board responsible for verifying audits of local school districts;
(g) Subsection 53F-2-204(2), which directs the Board to assess the progress and effectiveness of all programs funded under the State System of Public Education; and
(h) Subsection 53E-3-401(9), which gives the Board authority to audit the use of state funds by an education entity that receives state funds as a distribution from the Board.
(2) The purpose of this rule is to:
(a) outline the role of the Audit Director, Superintendent, and agency in the audit process; and
(b) outline the Board's procedures for audits of agencies.
(1) "Agency" means:
(a) an entity governed by the Board;
(b) an LEA; or
(c) a sub-recipient.
(2) "Audit committee" means a standing committee of members appointed by the Board in accordance with Board bylaws.
(3) "Audit Director" means the person who:
(a) directs the audit program of the Board in accordance with Title 63I, Chapter 5, the Utah Internal Audit Act and Board policies;
(b) is appointed by and reports to the audit committee; and
(c) is independent of the agencies subject to Board audit.
(4) "Audit plan" means a prioritized list of audits with associated resource requirements to be performed by the audit program that is reviewed, approved, and adopted at least annually by the Board.
(5) "Audit program" means a department that provides internal audit services for the Board that is directed by the Audit Director.
(6) "Draft audit report" means a draft audit report compiled by the Audit Director that is classified as protected under Title 63G, Chapter 2, Part 3, Section 305, Protected records.
(7) "Education entity" means the same as that term is defined in Section 53E-3-401.
(8) "Final audit report" means a draft audit report that is approved by the audit committee and the Board as a final audit report that is classified as public under Title 63G, Chapter 2, Part 3, Section 301, Public records.
(9) "Local administrator" means the district superintendent or charter school director.
(10) "Sub-recipient" means any entity that receives funds from an entity governed by the Board.
(1) The Audit Director shall:
(a) manage the audit program and facilitate the audit process:
(i) as approved and directed by the Board and audit committee;
(ii) in accordance with the current International Standards for the Professional Practice of Internal Auditing; and
(iii) in accordance with the USBE Internal Audit Department Policy and Procedure Manual.
(b) act as the liaison for external audits of the Board;
(c) maintain the classification of any public record consistent with GRAMA;
(d) be subject to the same penalties under GRAMA as the custodian of a public record;
(e) publish final reports on the Internal Audit department webpage if appropriate; and
(f) make a copy of the USBE Internal Audit Department Policy and Procedure Manual to the general public upon request.
(2) The Audit Director may contract with an LEA or other education entity to provide internal audit services to the LEA or other education entity if the contract is approved by the audit committee in accordance with Board contract policies.
The Superintendent shall:
(1) provide resources necessary to conduct the audit program including adequate funds, staff, tools, and space to support the audit program;
(2) facilitate communications with those charged with governance, management, and staff as requested by the Audit Director or the audit committee to ensure the access necessary to perform an audit;
(3) ensure access to all personnel, records, data, and other agency information that the Audit Director or staff consider necessary to carry out their assigned duties;
(4) notify the Audit Director of external audits of entities governed by the Board;
(5) notify the agency that the Audit Director shall be the liaison for an external audit;
(6) support the audit program as otherwise requested by the audit committee or Audit Director; and
(7) facilitate appropriate action by the Board on issues identified in audits by:
(a) sending the final management response letter and form to the governing board and local administrator of an audited agency in response to the final audit report;
(b) following up on final management response forms sent to the governing board and local administrator of an audited agency in accordance with timelines outlined in the management response letter, as monitored by the Audit Director, to ensure either:
(i) the audited agency took appropriate action;
(ii) the audited agency's lack of action is acceptable; or
(iii) implementation of a corrective action plan in accordance with R277-114; and
(c) sending the closure letter to the governing board and local administrator of an audited agency when the Board accepts the audited agency's management response.
The agency shall wholly cooperate and provide the Audit Director and the internal audit staff all:
(1) necessary access to those charged with governance, management, and staff; and
(2) personnel, records, data, and other agency information that the Audit Director or staff consider necessary to carry out their assigned duties in a timely manner.
(1) The Audit Director shall develop and recommend an audit plan to the Board and the audit committee based on the results of periodic risk assessments and audits.
(2) Once approved and adopted by the Board, the Audit Director shall implement the audit plan.
(3) At the initiation of an audit, the Audit Director shall, as necessary:
(a) send an engagement letter to the governing board and local administrator of the agency subject to the audit; and
(b) hold an entrance conference with the agency's governing board.
(4) After conducting an audit, the Audit Director shall:
(a) submit a preliminary draft audit report directly to:
(i) the audit committee;
(ii) the Superintendent; and
(iii) the governing board of the audited agency;
(b) hold an exit conference, if necessary, with the governing board and local administrator of the audited agency and administration to discuss the preliminary draft audit report; and
(c) edit the preliminary draft audit report, as appropriate, based on feedback received.
(5) The Audit Director shall submit a revised draft audit report directly to:
(a) the audit committee;
(b) the Board;
(c) the governing board and local administrator of the audited agency; and
(d) the Superintendent.
(6) Within fourteen days of the Audit Director's submission of the revised draft audit report to the audited agency governing board, and after the exit conference, if applicable, the auditing agency's governing board shall:
(a) provide a written response or comment on the draft audit report to the Audit Director and audit committee; or
(b) file a written request for an extension to the audit committee setting forth:
(i) the justification for the extension request; and
(ii) the extension time necessary to provide the response;
(7) Upon receiving written response and comment from the audited agency governing board, the Audit Director shall:
(a) incorporate into the draft audit report the written response, if any, received from the audited agency governing board;
(b) prepare Audit concluding remarks, if appropriate; and
(c) submit the amended draft audit report to the audit committee for recommendation.
(8) The audit committee may:
(a) recommend an amended draft audit report for approval and adoption; or
(b) send the amended draft audit report back to the Audit Director with instructions for additional review.
(9) Upon recommendation from the audit committee on the amended draft audit report, the Board may:
(a) approve and adopt an amended draft audit report as the final audit report; or
(b) send the amended draft audit report back to the audit committee with instructions for additional review.
(1) An audit report prepared by the Audit Director and staff shall be based upon audits of agency programs, activities, and functions.
(2) An audit report prepared by the Audit Director shall include identification of any:
(b) illegal acts;
(d) omissions; or
(e) conflicts of interest.
(3) The Audit Director shall provide, upon written request, a copy of an audit report to the Office of Legislative Auditor General or the Office of the State Auditor.
(4) The Audit Director shall ensure that public release of a final audit report complies with the conditions specified by the state laws and rules governing the audited agency.
April 9, 2018
September 15, 2016
Art X Sec 3; 53E-1-401; 53E-3-501(1)(e); 53E-3-603; 53F-2-204; 63I-5-101 through 401
For questions regarding the content or application of rules under Title R277, please contact the promulgating agency (Education, Administration). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.