Belgian Technical Cooperation Internal audit presentation

2 Internal audit : presentation  Internal function since 11/2007  2 FTE : Vincent Gérardy and Dorota Maciag  Team based in Brussels headquarters but engagements performed at HQ and « on the field »  Sources :  Best practices in corporate governance  Management contract

3 Internal audit : mission  To give an independent and objective assurance to BTC on its operations, to improve them and contribute to add value  How ? By bringing a systematic, disciplined approach to evaluate the effectiveness of risk management, control, and governance processes and to improve them

4 Internal audit : mission  To ultimately report to the Audit Committee of BTC  Audit Committee ? Organ of the BTC Board of Directors. According to BTC Law, the role of the Audit Committee is to ensure that BTC is adequately identifying and managing the risks

5 Internal audit : reference framework  Internal audit charter (see intranet)  International standards issued by the Institute of Internal Auditors  Methodology used to evaluate the effectiveness of internal control :  Use of “COSO” concepts adapted to public sector (“INTOSAI”) to structure the thought  When keeping constantly in mind the mission, the values and the vision of BTC as well as its strategy

6 Internal audit : INTOSAI concepts

7 Internal audit / external audit & Co  Activities, objectives, etc. are different but complementary  Collaboration and synergies between quality audit, external audit and internal audit !

8 Internal audit : in practice  Once a year a risk-based audit plan is established (covering a period of 3 years) to determine the priorities of the internal audit activity  Coordination with external auditors on engagements and planning of the engagements  Approval or amendment of the audit plan by the Audit Committee

9 Internal audit : in practice – con’d  Performing the engagements : preferred approach :  Process audits – in opposition to audits of departments  Evaluation of all internal control objectives (efficiency of operations, financial aspects, compliance and resources safeguarding) during an audit with the exception of some specific audits (example : legal organization)

10 Internal audit : in practice – con’d  Performing the engagements : audit techniques :  interviews  analysis of documents  cycles description by way of flow charts  compliance tests, substantive testing, etc.  analytical reviews  etc.

11 Internal audit : in practice – con’d  Performing the engagements : steps  Preparation of the field mission :  Back to the risk analysis  Establishment of objectives, scope and audit techniques  Contact with the future auditees  Audit works performed at HQ : interviews, available documents analysis, etc.  Development of a work program and resources determination => main steps of the audited cycle and associated internal control risks (risks, potential control activities and indicators)

12 Internal audit : in practice – con’d  Preparation of the field mission – con’d :  Transmission of the work program in draft and a list of information to be prepared to the future auditees  Kick off meeting with the auditees :  Presentation of the « reasons why » of the audit, planning, objectives, scope and techniques of the audit  State of documents/information preparation  Auditees expectations, questions and risk analysis

13 Internal audit : in practice – con’d  Introductive interview with the auditees => Objective : to obtain key information (overall picture) on the audited cycle/the way the activities are organized

14 Internal audit : in practice – con’d  Performing the audit works on the internal control instruments (COSO, INTOSAI) :  Legal and/or contractual framework  Organizational structure (control environment)  Internal risk assessment  Procedures, tools and control activities within the cycle  Financial and non-financial information  Monitoring by management

15 Internal audit : in practice – con’d  Debriefing meeting with the auditees  Presentation and exchange on audit findings and recommendations  Draft report writing  Draft report transmitted to auditees for suggestions and comments  Examination of suggestions and comments received from the auditees

16 Internal audit : in practice – con’d  Transmission of the report to the Management Committee for suggestions and comments and for the establishment of the Management action plan (implementation of recommendations)  Presentation of the report to the Audit Committee  Transmission of the final report to the the auditees

17 Internal audit : in practice – con’d  Follow-up process by the internal audit to monitor the implementation of management actions : depending on the audit results  Examples of recent internal audit engagements : scholarships (Senegal), specific implementation methods of projects (Mali and Senegal)

18 Questions ? ????

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