Internal Audit Directorate
Objectives
The main objectives of the internal audit unit are to provide independent, objective assurance and consulting services designed to add value and improve the provincial department's operations.
It helps provincial departments accomplish their objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, controls and governance processes.
Scope
The role of the internal audit unit is to assist accounting officers and the audit committee in the effective discharge of their responsibilities. The scope of the internal audit unit can broadly be defined within three categories:
- Risk Management – assist management and audit committee in identifying, evaluating and implementing risk management methodologies and controls to address risks.
- Internal Controls – providing an independent evaluation of the adequacy of internal controls to determine their effectiveness and efficiency and by developing new controls and providing recommendations for enhancements or improvements to the existing controls.
- Governance – evaluating and developing recommendations for the enhancement or improvement of the processes through which objectives and values are established and communicated; accountability is ensured and corporate values are preserved.
Internal Audit Unit Divisions
The internal audit unit is headed by a Chief Director and is divided into two directorates namely directorate assurance services and directorate special investigations.
- Directorate Assurance Services – this directorate is responsible for all internal audit function; facilitating risk assessments; drawing up three year rolling audit plan and preparing operational plans.
- Directorate Special Investigations – this directorate is responsible for all fraud and corruption related audits. It is also responsible for the hotline services.
Internal Auditing Standards
The unit conducts its audits in accordance with the Standards for Professional Practice of Internal Auditors as set out by the South African Institute of Internal Auditors. These standards among other things include the following:
- Purpose, Authority, and Responsibility - the purpose, authority, and responsibility of the internal audit activity should be formally defined in a charter , consistent with the Standards. Independence and Objectivity - the internal audit activity should be independent, and internal auditors should be objective in performing their work.
- Organisational Independence - the head of internal audit should report to a level within the organisation that allows the internal audit activity to fulfil its responsibilities.
- Individual Objectivity - internal auditors should have an impartial, unbiased attitude and avoid conflicts of interest.
- Professional Proficiency - internal auditors should possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. The internal audit activity collectively should possess or obtain the knowledge, skills, and other competencies needed to perform its responsibilities.
- Due Professional Care – internal auditors should apply the care and skill expected of a reasonably prudent and competent internal auditor.
- Continuing Professional Development - internal auditors should enhance their knowledge, skills, and other competencies through continuing professional development.
- Quality Assurance and Improvement Program – the head of internal audit should develop and maintain a quality assurance and improvement program that covers all aspects of the internal audit activity and continuously monitors its effectiveness.
Code of Ethics for Internal Auditors
The Code of Ethics established by the Institute of Internal Auditors governs the unit's daily activities. The Code of Ethics entails among other things the following principles which internal auditors are expected to apply and uphold:- Integrity - the integrity of internal auditors establishes trust and thus provides the basis for reliance on their judgment.
- Objectivity - internal auditors exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined. Internal auditors make a balanced assessment of all the relevant circumstances and are not unduly influenced by their own interests or by others in forming judgments.
- Confidentiality - internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so.
- Competency - internal auditors apply the knowledge, skills, and experience needed in the performance of internal auditing services.
The Role of the Audit Committee
The role of the audit committee is to consider the internal audit plans; audit reports and activities of the department and management's plans as well as processes with regard to good governance. The audit committee reports and makes recommendations to the accounting officer, but the accounting officer retains the responsibility for implementing such recommendations. The audit committee should assist management in carrying out its oversight responsibilities as they relate to internal controls; financial and other reporting practices as well as compliance with laws and regulations.
Risk Management
Risk management is about decisions taken by management that contribute to the achievement of the department's objectives by applying it both at individual activity level and in functional areas. Risk management is therefore a series of activities that can be summarised as follows:
- Assessing, identifying, evaluating and monitoring or eliminating of actual and potential risks that a department may be faced with in achieving its objectives.
- The process of accepting, reducing, mitigating or eliminating risks by implementing new or improved internal controls that contribute to achieving objectives.
- Eliminating any management controls that no longer serve as risk control function but only stifle efficiency.
- Identifying opportunities that may otherwise be overlooked and consider exploiting opportunities previously considered too risky. An effective risk management strategy is pro-active and anticipatory enabling the department to achieve its objectives.
Contacts Details
Mr SS Masoko
Acting General Manager: Internal Audit
Tel: +27 13 766 2209
Email: ssmasoko@mpg.gov.za
Zandile Sibanda
Director: Internal Audit
Tel: +27 13 766 2334
Email: zcmashaya@mpg.gov.za