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RFP: EXTERNAL QUALITY ASSESSMENT OF INTERNAL AUDIT RECOMMENDATION FOLLOW UP PROCESS

The Los Angeles County Employees Retirement Association (LACERA) Audit Committee invites proposals from experienced professionals in response to this Request for Proposals (RFP) to provide the Committee with an external quality assessment of the Internal Audit Division's recommendation follow-up process for compliance with the International Standards for the Professional Practice of Internal Auditing (Standards) and the Code of Ethics issued by the Institute of Internal Auditors (IIA).

At LACERA, the CAE maintains a recommendation follow-up process under the Standards, and presents periodic reports to the Audit Committee. The CAE arranges for a periodic external peer review of the entire internal audit activity in compliance with the external assessment requirement of the Standards and Internal Audit's QAIP. The peer review includes the recommendation follow-up process, as part of overall divisional operations. Under the Internal Audit Charter, the peer review shall be conducted every five years. The last peer review was completed January 15, 2016. Internal Audit intends to arrange for a peer review in fiscal year 2020-2021. In the past, separate review of specific internal audit activities, such as the recommendation follow-up process, was not conducted, but rather such review was part of the overall divisional peer review.

Scope of Services

Given the core importance of the recommendation follow-up process to the effectiveness of Internal Audit, the Audit Committee determined to obtain an external assessment of the process for compliance with the IIA's Standards and Code of Ethics, to be conducted separately from the peer review. It is expected that, to gauge the effectiveness of the follow-up process, the assessment will include review or sampling of the process and records for some period of time in the past; the length of that period will be discussed and determined with the successful respondent in accordance with professional standards and the Committee's desire for a comprehensive review. The external assessment team will submit a report detailing its findings and recommendations. The assessment will be conducted as soon as reasonably possible so that findings may be reviewed by the Committee and any necessary changes made. The assessment will be overseen by the Committee, separate from Internal Audit and outside of the CAE or Internal Audit's supervision and oversight, to ensure independence and avoid the appearance of conflicts.

Qualifications

Interpretation contained in the Standards states that a qualified external assessment team shall have the following minimum qualifications:

1. Competence in the professional practice of internal auditing and the external assessment process. Competence can be demonstrated through a combination of years of experience and theoretical learning. Experience in similar organizations is more valuable than less relevant experience. The competencies of an assessment team are judged based on the team as a whole.

2. Independence, in that the assessment team does not have either an actual or potential conflict of interest and is not part of or under the control of the organization to which the internal audit activity belongs.

In addition, the IIA's Implementation Guide for external assessments recommends the following additional preferred qualifications:

1. The team includes a competent certified internal audit professional.

2. The team has current in depth knowledge of the IIA's International Professional Practices Framework (IPPF) for the Standards.

3. The team has knowledge of leading internal auditing practices.

4. Team members have at least three years of recent experience in internal auditing at a management level that demonstrates a working knowledge and application of the IPPF.

5. The assessment team leader has:

  1. An additional level of competence and experience from previous external quality assessment work and/or completion of the IIA's quality assessment training or similar training.
  2. Chief audit executive or comparable senior internal audit management experience.
  3. Relevant technical expertise and industry experience, which in the case of this project would specifically include the recommendation follow-up process and pension, governmental, benefits, and/or financial experience.

Submission Requirements

Submissions must be delivered in PDF format via email to srice@lacera.com by the due date stated above in the RFP Schedule. In addition, respondents have the option to send hard copies of their submissions for delivery by the due date, addressed to:

LACERA
Attention: Steven P. Rice
Chief Counsel
300 North Lake Avenue, Suite 620
Pasadena, CA 91101

See the Notice Regarding the California Public Records Act and Brown Act in Section VIII.B of this RFP for information regarding redactions and disclosure.

Deadline For Response

The completed proposal must be delivered by July 24, 2020. Any proposal delivered after the proposal deadline will not be considered.

Tenative Timetable

The following is a tentative schedule for this search. The evaluation and staff recommendation phases are subject to modification by LACERA.

Task Date
Issuance of RFP July 1, 2020
Written Questions and Requests for Clarification Due July 16, 2020
Responses to Questions Posted July 20, 2020
Proposals Due July 24, 2020
Finalist Interviews July/August 2020
Estimated Final Selection and Approval by the Audit Committee August 19, 2020

RFP Materials

RFP: External Quality Assessment of Internal Audit
Responses to Questions