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How Do We Preserve the Integrity of Our Programs?
Posted By Rachel Moye On July 7, 2010 @ 1:07 am In Employees and Culture,For New Sponsors,Sponsors and Donors | 7 Comments
With programs in 26 countries, many people wonder how we maintain the excellence and good stewardship of our operations around the world. In addition to annual external audits , we ensure the highest integrity in our programs through internal auditing.
Internal auditing, both in the development centers and country offices, is designed to determine how well our operations are running and to identify weaknesses that are causing goals and objectives to go unmet.
The first type of audit is known as a Center/Partnership Audit. Its primary purpose is to ensure that development centers are complying with our standards.
“These are conducted by a Partnership Auditor who resides in the country office,” says Walt Hintz, Compassion’s Field Audit Manager. There are about 50 Partnership Auditors worldwide. Partnership Auditors look at both financial and operational issues.
The center audits cover areas such as management, structure, budget, Christian development, finances and program communications. The focus is to make sure that the kids are communicating with their sponsors, that they are attending the centers, that funds are being used for their intended purposes, and that the program is being implemented the way it should be.
The first step of the auditing process is planning. The Partnership Auditors coordinate the auditing schedule with the Partnership Facilitators (who are the link between the country offices and the child development centers) and the directors of each center.
Before any audit takes place, the Partnership Auditors review past information from each center. This includes previous auditing results, Monthly Financial Reports, and Complementary Intervention (CIV) Fund proposals and reports. The Partnership Auditors assess this information before arriving at the center so that they can have a clear understanding of the potential risks and issues.
Finally, the Partnership Auditors may interview country office staff, such as the accountant, the CIV administrator, and the communications staff who have experience working with the center, prior to visiting the center. Then it’s time to visit the centers.
On average, a Partnership Auditor spends eight to ten hours in each center. While there, the auditor conducts interviews with the teachers and students and goes through financial records, child attendance records, child files and organizational documents.
A typical risk auditors look to assess involves proper documentation of expenses. Many of the countries we work with are cash societies, and receipts are not typically given. Center workers often have to ask the vendor to hand write a receipt, and it is up to the auditor to emphasize the importance of proper financial documentation to the center leaders.
After the audit takes place, the auditor communicates the findings with the center leadership, the Partnership Facilitator and the Country Management Team. Communicating the risk areas will ultimately lead to improving the partnership between Compassion and the local church.
Post audit, the auditor conducts an exit meeting to discuss the findings from the audit with the church partner and the Partnership Facilitator who is responsible for the relationship between the center and the country office.
During this meeting, the Partnership Facilitator and Partnership Auditor will document “Action Items,” — the important issues that need to be dealt with — and rate the items according to the level of risk. The Partnership Facilitator will work with the Implementing Church Partner to develop a plan to address the risk areas.
Afterward, the completed audit report will be sent to the Country Director, the Partnership Facilitator, and Program Implementation Manager.
Our corporate standard is that 60 percent of centers must be audited each year with no more than 30 months between audits. This audit frequency prevents centers from going unaudited for more than two-and-a-half years. Also, it ensures that higher risk centers will be visited more frequently.
In between audits, the centers are frequently communicated with and visited by the Partnership Facilitators to ensure all is well.
Similar to the Partnership Audits, the second category of internal audits is the Country Office Audit.
Country Office Audits are holistic reviews of the operations and administration of our country offices. In order to improve business processes, these audits cover areas such as organizational management, human resources, payroll, financial reporting and program communications.
Typically, this includes four to eight center visits, and unlike center audits, these visits look for larger trends that reveal management, country or process issues.
Country Office Audits are conducted by four Senior Field Auditors, who are responsible for performing audits within a geographic area.
Like the Partnership Audits, the Country Office Audits are primarily risk based. Country offices are audited approximately every 24 months.
Once in the field, the auditor has an initial meeting with the Country Management Team (CMT) of that country office. This is followed by a series of individual interviews and center visits. For a period of about two weeks, the auditor conducts interviews and reviews documentation in both the country office and the centers.
Based on what the Field Auditor finds, certain issues will become “Action Items.” At the conclusion of the audit, the Auditor provides a list of these action items to the country office and the CMT during the exit meeting. The office staff determine how to address and resolve those items. The plan is then approved and it comes back to our Global Ministry Center in Colorado for filing. Internal Audit staff receive updates as the plans are completed.
Most issues are resolved within 90 days. Sometimes, action items are dealt with immediately, and sometimes complex issues may take years. Even though the issues range in severity, the vast majority of issues are considered low risk. Very few are considered high risk.
In the end, our goal in internally auditing both our centers and country offices is to uphold our core values and provide accountability for the goals and objectives we have set out to achieve.
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