1. Increasing and Demonstrating value and of Internal Audit
NATIONAL TREASURY - SOUTH AFRICA
Presenter: Pulane Mkhize| 01 November 2018

2. Positioning Internal Audit Activity (IAA) Oversight and Support
OVERVIEW
Introduction
Focus areas
Positioning Internal Audit Activity (IAA)
Oversight and Support
Funding
Quality Management

3. INTRODUCTION Four focus areas selected for this presentation
Positioning IAA
Key to increasing the value of Internal Audit
Adequate positioning ensures and protects independence
Oversight and Support
Oversight committees are powerful mechanisms used to ensure accountability in South African government
Funding
Research has shown that the amount of funding and resources committed to an area directly affect the value, quality, and services related to the area
Quality Management
Quality management is essential to create superior quality products which not only meet but also exceed customer satisfaction

4. Strategically positioned within Governance and Control Framework
POSITIONING IAA
Internal Auditing is a formal part of financial management process in the South African public sector
Strategically positioned within Governance and Control Framework
Compulsory through legislation for every entity
Public Finance Management Act
Municipal Finance Management Act
Supplemented and enhanced by
Treasury Regulations
Internal Audit Framework- Second Edition 2009
Circulars – Circular 65
Covers critical elements 4

5. POSITIONING IAA Organizational Independence
IAA is positioned within the office of the Accounting Officer (AO)
IAA is controlled by Chief Audit Executive (CAE)
Appointment of Chief Audit Executive
Senior and Budget Management level
Administrative and Functional reporting to AO and Audit Committee (AC)
AC concurs in the appointment and removal
Reporting Responsibility
CAE reports at every AC meeting
AC evaluates the performance of the CAE and IAA
Authority
IAA conducts and reports its work without interference
Facts are reported as discovered 5

6. OVERSIGHT AND SUPPORT
Audit Committees established by legislation for oversight
National and Provincial institutions appointed in consultation with Ministers and Member of Executive Council
Local Government appointed by Council
Key responsibilities on IAA
Protects the independence
Ensures its effectiveness
Review the performance
Reports to Parliament, Legislatures and Council
Oversight reports made public with annual reports
Ensure IAA findings and recommendations are acted upon

7. FUNDING
AO ensures that IAA has a budget
Budgets controlled by the CAE
IAA in-year monitoring reports are presented to AC
IAA’s budget covers the following items
Infrastructure including accommodation
Personnel expenditure
Computer equipment and software
Professional Membership
IAA budget is evaluated by AC
IAA budget is a reportable item

8. QUALITY MANAGEMENT
Quality related reviews performed as follows:
AC reviews
Strategic and Operational plans of IAA
Performance of IAA against the plan
Quality Assurance and Improvement Program
National/Provincial Treasury reviews
Compliance with the IIA standards and Code of Ethics
Adequacy of IAA Charters
Readiness to undergo External Quality Review
Auditor General reviews
Compliance with applicable laws, regulations and applicable frameworks

9. THANK YOU

10. RSA GOVERNANCE AND CONTROL FRAMEWORK10