INTERNAL AUDIT 2015 ANNUAL REPORT Internal Audit Assurance Independent Objective Collaborative Compliance Controls Efficiency Accountability Transparency Value

Table of Contents Highlights We have had a successful year with many achievements Message from the Director Internal Audit 4 The Director provides a review of the Internal Audit Department from inception Overview 5 This outlines what we do, our structure and the scope of work we perform 2015 Achievements 6 Overview of the engagements completed 2016 Look Ahead and Plan 7 Overview of 2016 This annual report describes the functions and operations of Internal Audit at TRU. This is not a report on the results of the audits conducted, those are shared separately with the Audit Committee.

Highlights 2015 OBJECTIVE INDEPENDENT ASSURANCE VALUE COLLABORATOR Made Process improvement recommendations for 2 audits Continuous audit of T&E transactions improved error rate from 30% to 10% compliance errors Successfully Completed 12 Audit or Consulting engagements Assisted New Audit Committee Chair with onboarding and familiarization with TRU 90% acceptance rating on recommendations. 25 recommendations made The internal audit department (1.35 FTE) staff have a combined 45 years of audit and finance experience Performed 3 consulting engagements for Finance Assisted Audit Committee in 3 whistle blower investigations with over 15 allegations Collaborations with Finance Pcard Compliance info sharing Eligibility and approval of Research expenditures Collaborations with Information Technology Department Pilot project of data analytic software Invited to assist with annual department internal review of IT general controls TRU’s IA staff have 2 university degrees, and 4 designations (2 CPA,CA, CRMA, CFE)

In July 2014, TRU’s Vice President Admin & Finance made the decision to have Internal Audit exclusively perform Internal Audit work and be completely independent of the VP Admin & Finance division. He recognized that TRU was at a stage where it merited focused monitoring of internal controls, assurance and increased transparency and accountability. TRU’s small Internal Audit (IA) Department with a high level of professional practice experience, strives to deliver value added, customer focused service to our stakeholders. IA establishes a solid internal audit framework and makes meaningful contributions to TRU. IA follows the International Standards for the Professional Practice of Internal Auditing. IA partners with departments to provide consulting services which helps deliver on both strategic and operational objectives. TRU administration and the Audit Committee has demonstrated a commitment to establishing TRU IA as an independent and objective department. We appreciate this support. It has not been completely problem free, but we have made significant progress. While the bulk of our actual to budget overage of hours on engagements this year have been investigations, I am pleased with the progress on the continuous T&E auditing and collaborations we have achieved this year, and our ability to simultaneously address the audit plan engagements within the investigations. IA looks forward to 2016, with more experience and confidence. Sincerely Christina Duquette, Director Internal Audit, Thompson Rivers University OBJECTIVE INDEPENDENT ASSURANCE VALUE COLLABORATOR Message from the Director Internal Audit

OBJECTIVE INDEPENDENT ASSURANCE VALUE COLLABORATOR Overview of Internal Audit at TRU Controls, Assurance and Compliance Audits Information Systems Audits Special Investigations Consulting Follow Up Audits “The mandate of the University’s Internal Audit Department (‘Internal Audit”) is to provide independent, objective assurance and consulting activity designed to the university’s operations. It helps the university accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.” Per TRU IAD Charter – November 2012

2015 Performance Overview 2015 was a busy and successful year for the Internal Audit Department with activities including continuous auditing of T& E and Pcard compliance, HR process mapping, Grant process review, consulting and special investigations. In particular, we have changed from a decentralized divisional audit plan to a centralized process driven audit plan. In particular the continuous audit of T& E and Pcard was a great success, and we hope to build on this success by using data analytic software Key Performance Indicators for Internal Audit show positive performance in most measures. Specifically: 90% of Recommendation Acceptance Rate 57% planned engagement completion. Internal Audit completed or have started 4 out of the 7 engagements from the 2015 plan. Of the 3 which were not done, 2 of these 3 engagements were partially addressed along with a specific request from management or the audit committee. Internal audit was able to scope out a dual purpose for some of the specific requests so that it addressed aspects of these 2 engagements from the original plan. There were a significant number of special investigations and requests from management and the audit committee. Internal Audit balanced these requests while still addressing the 2015 audit plan. (Grant Processes, FAST Controls) This resulted in one engagement being carried forward from the 2015 plan. (Accounts Payable monitoring) OBJECTIVE INDEPENDENT ASSURANCE VALUE COLLABORATOR 2015 Performance Overview

TRU IA looks forward to an exciting and challenging year for We will continue to focus on HR, Finance and IT processes. Efficiencies will be gained by using data analytics software for accounts payable and T& E and Pcard expenditures. This will require significant resources to properly be trained in using the software. TRU has leveraged assistance from IT services, Finance and colleagues at another institution. Our 2016 plan is a good mix of controls, compliance, assurance and consulting engagements. We look forward to 2016 where we hope to focus on continuing to establish TRU Internal Audit by creating a web site which will provide our annual work plan and the audits we do. This will show our commitment to transparency and accountability. We also plan to do a quality assurance self assessment which compares the IIA standards to our current practices and includes reviewing our charter. Christina Duquette B.Comm., CPA-CA,CRMA,CFE Cathy Elliot B.Comm., CPA-CA OBJECTIVE INDEPENDENT ASSURANCE VALUE COLLABORATOR 2016 Look Ahead and Plan