1. Balancing Service Delivery with Principles of Good Governance
INTERNAL AUDIT

2. Table of Contents
Introduction
IDP Process
Key Activities
Internal Audit Role
Audit of Performance Information
Internal audit Approach
Performance Auditing
Conclusion

3. Introduction Section 152 of the Constitution:
To provide democratic and accountable government for local communities;
To ensure the provision of services to communities in a sustainable manner;
To promote social and economic development;
To promote a safe and healthy environment; and e. to encourage the involvement of communities and community organisations in the matters of local government.
A municipality must strive, within its financial and administrative capacity, to achieve the objects set out in subsection (1).

4. IDP Process
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5. IDP PROCESS & EXPECTED OUTCOMES
It is a 5 year government-wide plan in a specific municipal area and is a product of the integrated development planning process.
It is a key planning instrument which guides and informs all planning, budgeting, management and decision-making in a municipality.
The success of the IDP is dependent on high level support and buy-in from local citizens and other key stakeholders.

6. The IDP answers the questions:
IDP PROCESS & EXPECTED OUTCOMES
The IDP answers the questions:

7. IDP PROCESS & EXPECTED OUTCOMES
Each municipality is expected to produce a proper IDP which
addresses issues of:
Service delivery
Poverty alleviation
Local economic development
Institutional transformation
Spatial integration
Environmental care
which would ultimately result in the improving quality of life

8. Accountability Cycle

9. Accountability Cycle

10. KEY ACTIVITIES Report Legal Mandate Key Deadline
Tabling of Final Budget to Council and Approving any changes
to the municipality’s IDP
Section 24 (1) & (2) of the Municipal Finance Management Act,
At least 30 days
before the start of the
budget year – i.e.: 31
May
Approve the Service Delivery
and Budget Implementation
Plan [SDBIP]
Section 53 (1) (c) (ii) of the Municipal Finance Management Act,
Within 28 days of the
approval of the
municipal budget by
Council

11. KEY ACTIVITIES Report Legal Mandate Key Deadline
Quarterly progress report on SDBIP
Section 41 (1) (e) of the Systems Act,
Section 166 (2) (a)
(v) and (vii) of the Municipal Management Finance Act
(MFMA) and Regulation 7 of the Municipal Planning and
Performance Management Regulations.
Within 30 days of the
end of each quarter –
i.e.: 31 October, 31
January, 31 April, 31
July

12. KEY ACTIVITIES Report Legal Mandate Key Deadline Mid-year performance
assessment (assessment
report due by 25 January each year)
Section 72 of the MFMA.
Section 13 (2) (a) of the Municipal Planning and
Performance Management Regulations 2001
By 25 January each year

13. KEY ACTIVITIES Report Legal Mandate Key Deadline Annual report
(to be tabled
before Council by 31January)
Sections 121 and 127 of the MFMA, as read with
Section 46 of the Systems Act and Section 6 of the
Systems Amendment Act.
By 31 January each year

14. ROLE OF INTERNAL AUDIT
The role of Internal Audit is clearly defined by the Institute of Internal Audit on its definition of Internal Auditing as
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.

15. ROLE OF INTERNAL AUDIT..CONT..
The objects of Local Government indicates the responsibilities and Core Functions of the Municipalities.
The focus of Internal Audit should be to assist Municipalities to achieve this objectives.

16. HOW?
Internal Audit plan include both Audit of Performance Information and Performance Audits to assist the Municipalities to deliver services to the communities.

17. AUDIT OF PERFORMANCE INFORMATION

18. RESPONSIBILITY OF IA
Regulation 14 (1). (a) A municipality must develop and implement mechanisms, systems and processes for auditing the results of performance measurements as part of its internal auditing processes.
Any auditing in terms of paragraph (a) must include assessments of the following:
(i) The functionality of the municipality’s performance management system; (ii) whether the municipality’s performance management system
complies with the Act; and (iii) the extent to which the municipality’s Performance measurements are reliable in measuring performance of municipalities on indicators referred to in regulation 9 and 10 (c) A municipality’s internal auditors must -
(i) on a continuous basis audit the performance measurements of the municipality; and (ii) submit quarterly reports on their audits to the municipal manager and the performance audit committee referred to in sub regulation.

19. RESPONSIBILITY OF IA
(i) on a continuous basis audit the performance measurements of the municipality; and (ii) submit quarterly reports on their audits to the municipal manager and the performance audit committee referred to in sub regulation.

20. DEFINITION OF IA
To meet the IA definition of value add, internal audit need to develop a plan which will be aligned to the calendar of activities for the IDP, Budget and PMS processes.

21. IA APPROACH
Alignment of Internal Audit Plan with the IDP, Budget and PMS Processes to ensure value add
i.e.: Prior end of May, January, October, April and July there should be Internal Audit projects on Audit of Performance Information

22. IA APPROACH
Alignment of Internal Audit Plan with the IDP, Budget and PMS Processes to ensure value add
i.e.: Prior end of May, January, October, April and July there should be Internal Audit projects on Audit of Performance Information

23. PERFORMANCE AUDITING

24. DEFINITION
Audit of operations performed from a management view point to evaluate the economy, efficiency and effectiveness of any and all operations.

25. IIA STANDARD
2120.A1 – The internal audit activity must evaluate risk exposures relating to the organization’s governance, operations, and information systems regarding the:
Reliability and integrity of financial and operational information.
Effectiveness and efficiency of operations.
Safeguarding of assets; and
Compliance with laws, regulations, and contracts

26. IIA STANDARD 2110 – Governance
The internal audit activity must assess and make appropriate recommendations for improving the governance process in its accomplishment of the following objectives:
Promoting appropriate ethics and values within the organization;
Ensuring effective organizational performance management and accountability;
Communicating risk and control information to appropriate areas of the organization; and
Coordinating the activities of and communicating information among the board, external and internal auditors, and management.
2110.A1 – The internal audit activity must evaluate the design, implementation, and effectiveness of the organization’s ethics-related objectives, programs, and activities.

27. CONCLUSION
The implementation of the Standards of Internal Audit and compliance with the Internal Audit definition will help Internal Audit to Add value to the Municipality.

28. My interest is in the future because I am going to spend the rest of my life there.
~ Charles F. Kettering