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Government Agencies Need to Rethink Their Approach to Audits (Opinion)

By developing positive relationships and building trust with auditors, you can solve problems simultaneously.

In 2005, the Michigan Department of Information Technology had just passed its three-year mark, and the service upgrades, cost savings and other benefits that came from consolidating all government IT into a single department were becoming clearer. Although early results were impressive, scary storm clouds were on the horizon for our young department.

Auditors were stopping by more often than they ever had. We didn’t have anything to hide, but these well trained pros from the federal government and our state legislative branch had a whole new set of questions that we’d never been asked. One enterprisewide security audit took more than a year to complete.

And as new laws surrounding compliance emerged, we were required to implement new internal controls to protect systems that had Social Security numbers, health records, credit cards and other sensitive data.   

Our agency clients also were seeking help in addressing their audit issues. Several major new systems were planned, but we still needed to remediate existing system vulnerabilities or explain to the auditors why we were holding off. The agency sentiment became, “You manage the people and systems — so you own the audit findings.”

The breadth and depth of these challenges covered multiple agencies, programs and business areas. The scope seemed overwhelming and expensive. Staff complained that they couldn’t keep up with audits and day-to-day tasks. We needed a new strategic approach to legal and policy compliance. 

Why bring up this compliance topic in 2011? This strategic audit/compliance issue is surfacing nationally, and we’re getting many calls asking for advice. We like to convey an age-old adage for agencies partnering with the private sector or using the cloud: You can outsource the system, but you can’t outsource the responsibility.

From payment card industry requirements to new health information exchange laws, business project survival often relies on an ever-changing, complicated checklist of controls. “Our new consolidated IT department had a big red target on its back,” said one respected state CIO. “We’ve never dealt with this level of scrutiny before from the auditors.”

Compliance is a part of the new normal. Your agency is now on center stage, so you’d better get used to crowds showing up. What’s to be done? Here’s our advice: Build an internal audit team to navigate the process. You need certified auditors who can speak the techie and auditor languages and translate as necessary. 

Assign one senior person who understands the enterprise compliance requirements to coordinate strategy. Your list of systems, audit findings, remediation plans and timetables must be a priority. Ensure this person has the right players at the table with proper executive authority.

Establish a measurable and repeatable internal controls framework, such as the Control Objectives for Information and Related Technology. Our team has templates for internal controls assessments, audit communication plans, business process controls, responsible parties, corrective action plans and more.

Get team buy-in. Discuss requirements and expectations with your internal and external partners to ensure that they are meeting compliance regulations in each critical area. Ensure contract wording is in place, business areas have points of contact, and technology infrastructure and software development managers are accountable for results.

Remember that although it may not feel like it, auditors can be helpful to your organization. Early audit findings surrounding cyber-security helped steer enterprise priorities. This audit action data allowed us to obtain funding for key security and infrastructure initiatives during difficult budget times. We even gave our auditor general the results of internal security assessments. By developing positive relationships and building trust with auditors, you can solve problems simultaneously — like obtaining compliance and strengthening security.

Leaders must follow through with audit remediation plans. Corporate memory is often lost with staff turnover, but remember compliance because the auditors won’t forget.

Dan Lohrmann is Michigan’s CTO and previously served as the state’s first chief information security officer. He has 25 years of worldwide security experience, and has won numerous awards for his leadership in the information security field.


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