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Regents committee reviews proposed updates to Office of Internal Audit charter, discusses reporting lines and audit‑plan approval
Summary
Chief Auditor presented proposed charter updates to align with the Institute of Internal Audit’s January 2025 standards, including a formal audit‑plan approval process, revised issue ratings, combined executive summary/audit report and consideration of the chief auditor’s reporting lines; final approval is planned for June.
The University of Minnesota Board of Regents’ Audit and Compliance Committee reviewed proposed amendments to the Office of Internal Audit (OIA) charter and related process updates during its May 2025 meeting.
Chief Auditor Galswyck told the committee the changes respond to a November 2024 external Quality Assurance Review and to updated Institute of Internal Audit standards issued in January 2025. Material proposals highlighted included adding clearer language about ethics and professional expectations, new committee reporting and approval requirements, and greater transparency about any operational duties that might affect audit independence.
Significant procedural proposals: Galswyck said the office intends to require formal approval of the annual audit plan (the IIA now references such approvals) while retaining flexibility to adjust the plan for emerging risks. To balance that flexibility with governance, he proposed a Tier 1/Tier 2 approach—Tier 1 audits would be prioritized for the coming year, while Tier 2 items could be adjusted with prior consultation with committee leadership.
Other proposed changes include standardizing issue ratings to “high, medium and low” (replacing older terminology), combining the audit report and executive summary into a single document for usability, revising metrics and schedules shown to the board, and pursuing a technology review and potential RFP in FY26 for modern audit‑workpaper and follow‑up systems.
On reporting lines, Galswyck said best practice in the IIA standards supports a functional reporting relationship to the audit committee and an administrative reporting relationship to the president. Regents debated tradeoffs: a provost told the committee that when the chief auditor previously reported directly to the president and participated in cabinet meetings, that structure provided early visibility into institutional risk; others supported committee oversight but noted that some policy or board delegation would be required to formalize committee approval of the audit plan.
Committee members also discussed Quality Assurance Review credentials for external reviewers, alignment across audit, compliance and enterprise risk management, and the audit‑liaison program (a pre‑pandemic approach assigning audit staff to units to improve awareness) which the office plans to reconstitute.
The Chief Auditor encouraged feedback and said proposed charter text and process changes will be returned to the committee for action at the June meeting. The committee did not vote on the charter at the May session.
Information items presented for committee awareness included the administration’s FY24 evaluation of external auditor CliftonLarsonAllen—rated positively for higher‑education experience and reasonable fees—and the completion of a comprehensive review of the board internal‑controls policy (COSO framework) identifying one technical correction and no major changes.
What’s next: the charter amendments, audit plan approval approach and related document changes will come back to the committee in June for formal consideration and any vote.
