African Regional Director Planning and programming for sustained effective use of internal audit resources Rob Newsome African Regional Director

Overview The need to understand what is subject to audit Understand the objectives of the Ministry Using risk to position the audit work Co-ordinating with other assurance providers Skilling up the internal audit department

Audit Universe External Forces & Agents Strategic Management Processes Delivery against Political Promise Public service Vendors/Suppliers Contractors Sub-contractors Distributors Other government departments Ancillary Complimentary Services Trade Unions Landlords Strategic Management Processes External Forces & Agents Resource Management Processes Road construction Road maintenance Building services Asset protection And control Individuals Road users Not for profit Institutions Government Commercial Entities Core Business Processes Business Processes Markets Alliances Core Products Customers Planning and budgeting Logistics and Contractor management (Supply Chain) Customer Service Delivery Human Resource Management Financial/Treasury Management Regulatory Management Property Management Information Management Local Politics International Politics Regulators World Bank Financing Suppliers Natural Disasters Civill Strife Economy Technology Capital Markets

INTERNAL BUSINESS PROCESS Strategy to risk link Vision and Strategy “To succeed financially, how should we appear to our shareholders?” Objectives Targets Measures Initiatives FINANCIAL “To achieve our vision, how should we appear to our customers?” CUSTOMER “To satisfy our shareholders and customers, what business processes must we excel at?” INTERNAL BUSINESS PROCESS “To achieve our vision, how will we sustain our ability to change and improve?” LEARNING AND GROWTH

Benchmarking Risks which threaten objectives Controls linked to risks Accidents Monitor compliance with safety standards and policies & procedures Lack and timing of resources Monitor compliance with logistics plan Equipment break-downs Monitor compliance with maintenance plan Labour disruptions Human Resources management Wasted expenditure Budgeting and financial disciplines

Assurance co-ordination Assurance Areas Focus Timing Assurance Provider Cash risk Independently evaluate your process to ensure that the key controls in place adhere to sound cash management principles March September Management / Internal Audit External audit review Strategic Staff planning, productivity, succession, competency, performance, capacity, staff morale, mentorship June Management Plant maintenance Maintenance expenditure control May Human Resource Management Recruitment February

Internal Audit expectations To support the Board of Directors, Audit Committee and management in identifying and managing risks and thereby enabling them to achieve corporate objectives. This is achieved by: Enhancing the understanding of risk management and the underlying concepts and assisting to implement an effective risk process; and Providing objective feedback on the quality of organisational controls and performance.

Internal Audit resources needed for… Risk management ,and Providing objective feedback

Risk Management Resources Chief Risk Officer vs. Chief of Internal Audit Providing objective feedback on the process of risk management Risk management software to maintain the risk data base

Assurance Resources Determine which risks Internal Audit should provide assurance on Group the risks within logical processes to detemine effective audit coverage For each audit identified consider the resources needed to complete the review

Assurance Resources continued… Use software for data interrogation and audit working papers Assess the skill levels needed to complete each audit Determine the hours of each skill level to complete the specific tasks Per skill level aggregregate the estimated hours Obtain view of the total resource needed to complete the audit universe

Assurance Resources continued… Agree with management and the Audit Committee on the annual cycle to cover the audit universe The man plan of the department therefore has a zero base Determine the optimal level and specialist staffing mix inclusive of skills that may be outsourced This optimal man plan becomes the profile to recruit, train and provide career development

Assurance Resources continued… Benchmark the plan against international and other relevant measures to ensure that the investment is within acceptable norms Develop acceptable measures to report on department utilisation of resources

Closing comments Audit efficiency and effectiveness through using CAATs Establish monetary and time budgets for each review and measure actual performance

This approach is being adopted in the public sector This approach is being adopted in the public sector. What needs to be done to make it operational in your organisation???