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CalSTRS audit services reviews new global internal audit standards; external quality assessment due in 2026
Summary
CalSTRS' Audit Services presented the new global internal audit standards and Domain 3 responsibilities for the board; the committee discussed independence, documentation requirements and the external Quality Assurance Review scheduled for 2026.
The chief auditor presented an education item on the global internal audit standards, explaining the standards' structure (five domains, 15 principles, 52 standards) and focusing on Domain 3, which outlines governance responsibilities for the audit committee.
The chief auditor said the standards introduce "essential conditions" that require active ARM Committee oversight, including approval of the audit charter, audit plan, resources and the audit services budget, and ensuring the chief auditor has unrestricted access to records and personnel. The chief auditor asked the board for input on a strategic plan and performance measures that will inform the audit services' priorities and reporting.
Member comments emphasized the board's role in ensuring audit independence and readiness for the external Quality Assurance Review (QAR). The chief auditor said CalSTRS has an internal assessment program and that the external assessment is required every five years; the last external review was in April 2021 and the next is due in 2026. Board members asked about adaptation to the public sector; the chief auditor said the standards allow flexibility but require documentation and a procedures manual, and that CalSTRS considers itself largely compliant with many requirements already in place.
The committee will receive a proposed strategic plan, performance measures and the QAR contracting timeline at the May meeting next year.
