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CalPERS audit office reviews new global internal-audit standards; board briefed on governance role
Summary
Office of Audit Services and external advisors briefed the board on recent revisions to the Institute of Internal Auditors’ standards, with emphasis on governance, independence, and public‑sector requirements; staff said CalPERS already is aligning its charter and quality program to the new guidance.
Office of Audit Services (OFAS) presented an education session to the board on the revised Global Internal Audit Standards issued by the Institute of Internal Auditors. The session included external advisors: Mike Peppers (former chair of the IIA Standards Board), and Weaver partners Alisa Martin and Bruce Mills.
Speakers summarized that the 2024/2025 update reorganizes the guidance into five domains (purpose, ethics & professionalism, governance, management of the audit function, and performing engagements) and attaches 15 principles to those domains. The update emphasizes governance arrangements, explicit charters and mandates, organizational independence, and public-sector considerations.
OFAS Director Belize Chapuy told the board that CalPERS follows the IIA standards and that OFAS has completed a gap analysis and quality assurance planning to align the office’s charter, strategy and practices with the new requirements. Weaver and Peppers described the standards’ public‑sector implementation notes and recommended that the board and the audit function document the internal audit mandate, update the audit charter, and maintain periodic independent quality assessments (required at least every five years).
Board members asked questions about how best to structure board–audit communication, the role of the audit committee, and whether additional internal audit resources would be required. Chapuy said current staffing and outside technical consultants will cover the immediate alignment needs and that OFAS will return with proposed charter revisions and an implementation timeline. External audit advisors said the new standards formalize “essential conditions” for governance and will require clearer, documented interactions between the board, senior management and the audit function.
The board directed staff to continue the alignment and to return with proposed charter and strategy updates for committee review.
