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Objective, Comprehensive Internal
Audit and Audit Committee Evaluation.
Does your internal audit department
adhere to the Standards of Professional
Practice as presented by the
Institute of Internal Auditors
(IIA)? These standards state
that any internal audit function
should be assessed at least
once every five years. All internal
audit departments must be externally
assessed by January 2007.
Capabilities
A comprehensive assessment
of the internal audit function,
focusing on compliance with
the IIA standards which include
the following:
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Managing of the Internal
Audit Activity. |
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Nature of Work. |
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Engagement Planning. |
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Performing the Engagement. |
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Communicating the Results. |
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Proficiency and due Professional
care. |
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Purpose, Authority and
Responsibility. |
We also assess the effectiveness
of the audit committee.
Quality assessments include:
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Interviews with board
members, auditors, management
and auditees. |
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In-depth reviews of processes,
working papers and reports
issued by |
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internal audit specialists. |
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Engagement Planning. |
Benefits
We provide you with recommendations
to:
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Improve the audit approach
to conform to best practices
and to add the |
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maximum value to the entity. |
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Improve the efficiency
of the audit process. |
We also provide assurance regarding
adherence to the standards of
Professional Practice of the
IIA. We also provide assurance
and guidance to the effectiveness
of the Audit Committee.
MFMA
Extracts from the:
Local Government :
Municipal Finance Management
Act
No 56, 2003
To secure sound and sustainable
management of the financial
affairs of municipalities and
other institutions in the local
sphere of government; to establish
treasury norms and standards
for the local sphere of government;
and to provide for matters connected
therewith.
Supervision over Local
Government Finance Management
General functions of
National Treasury and provincial
treasuries
(d) investigate any system
of financial management and
internal control in any municipality
or municipal entity and recommend
improvements;
78. (1) Each senior manager
of a municipality and each official
of a municipality exercising
financial management responsibilities
must take all reasonable steps
within their respective areas
of responsibility to ensure
–
(a) that the system of financial
management and internal control
established for the municipality
is carried out diligently;
General financial management
functions of accounting officers
95. The accounting officer
of a municipal entity is responsible
for managing the financial
administration of the entity,
and must for this purpose
take all reasonable steps
to ensure –
(b) that the entity has and
maintains effective, efficient
and transparent systems-
(i) of financial and risk
management and internal
control; and
(ii) of internal audit complying
with and operating in accordance
with any prescribed norms
and standards;
Internal audit unit
165. (1) Each municipality and
each municipal entity must have
an internal audit unit, subject
to subsection (3).
(2) The internal audit unit
of a municipality or municipal
entity must –
(a) prepare a risk-based audit
plan and an internal audit
program for each financial
year;
(b) advise the accounting
officer and report to the
audit committee on the implementation
of the internal audit plan
and matters relating to –
(i) internal audit;
(ii) internal controls;
(iii) accounting procedures
and practices;
(iv) risk and risk management
(v) performance management
(vi) loss control; and
(vii) compliance with this
Act, the annual Division
of Revenue Act and any other
applicable legislation;
and
(c) perform such other duties
as may be assigned to it by
the accounting officer.
(3) The internal audit function
reffered to in subsection (2)
may be outsourced if the municipality
or municipal entity requires
assistance to develop its internal
capacity and the council of
the municipality or the board
of directors of the entity has
determined that this is feasible
or cost-effective.
PFMA
Extracts from the:‘Guide
for Accounting Officers’
PFMA
The National Treasury is today
releasing the ‘Guide for
Accounting Officers’,
a publication designed to assist
those charged with the responsibility
for implementing the Public
Finance Management Act (PFMA).
• Establish effective
internal controls
Accounting officers must prioritise
the setting up of audit committees
and internal audit units, in
line with modern practice. They
must evaluate whether the ‘blanket’
controls are appropriate to
their particular circumstances,
by assessing the risk facing
their department.
• Clear up audit queries
Accounting officers must take
personal responsibility to address
any outstanding queriesraised
by the Auditor-General or audit
committee, or face strong sanctions.
Establishment of the Internal
Audit function and eliminating
of audit query backlogs:
1. According to Section 38(1)
(a) (ii) of the PFMA departments
are required to establish an
internal audit component and
audit committee as soon as possible.
Departments should identify
all outstanding audit queries
and set target dates for their
finalisation before commencement
of the implementation process
of the PFMA.
Risk assessment:
1. Accounting officers should
evaluate the extent to which
existing controls are appropriate
to their specific situation.
A risk assessment should be
performed, followed by any necessary
changes to the internal control
system.
Review of systems and training
of personnel on systems:
1. The accounting officer must
ensure that his/her department
has and maintains effective,
efficient and transparent systems
of financial and risk management
and internal control according
to Section 38(1)(a)(i) of the
PFMA.
(Systems include all guides,
procedures, processes and internal
departmental prescripts necessary
to ensure effective implementation
of the act.)
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