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Imagine you have just received a clean financial audit. Then another audit reveals: $1 million in vendor overpayments and the potential loss of funding.

You start asking questions. “How did this happen?”

The answer: “We’ve been following the same process we’ve always used.”

You ask for policies and procedures and find none.

What appears to be a single issue reveals a broader problem. Outdated and undocumented processes with no independent mechanism to identify risks before they escalate.

Issues like this do not emerge overnight, but without proactive oversight, they can go undetected for years. How can this be fixed? This is where internal audit matters.

It’s worth considering how internal audit can deliver even greater value.

According to the Institute of Internal Auditors (IIA):

“Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.”

In short, internal audit is not merely a support function.

It is designed to add value, improve operations, and strengthen your organization from within.

Without a proactive internal audit function, organizations become reactive and lose the independent perspective that management self-assessments alone cannot provide.

Internal audit has become synonymous with coordination—acting as a bridge between management and external auditors, organizing documentation, and responding to requests.

Some organizations lack an internal audit function at all, often due to limited resources or competing priorities.

Both signal that a critical strategic asset is underutilized or missing altogether.

Whether underutilized or absent, evaluating the current state of internal audit can reveal meaningful opportunities. Ask yourself:

• Are we using internal audit for forward-looking insights, or primarily for historical reporting?
• Are we relying too heavily on external oversight instead of internal, proactive evaluation?
• Where might we be missing opportunities to improve efficiency and strengthen controls?

Elevating internal audit does not require a large team or complex structure. It starts with recognizing the potential to enhance accountability and performance.

The Office of the State Comptroller’s External Audit Coordination and Oversight (EACO) function is here to guide and support entities in advancing their internal audit capabilities by:

• Sharing best practices and industry standards
• Connecting organizations facing similar challenges
• Helping entities enhance the value of internal audit

Internal audit is not an afterthought or a liaison function. It is a value driver that strengthens governance and helps organizations navigate risk.

As you evaluate the path forward, EACO is available to provide the guidance and support you need.

To strengthen your internal audit capabilities, contact EACO at EACO@osc.nj.gov.