charter fo Audit committees
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English
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charter fo Audit committees

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Learn all about the services we offer
10 Pages
English

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T H E R E P U B L I C O F U G A N D A CHARTER FOR AUDIT COMMITTEES November 2008 1 Introduction The Public Finance and Accountability Act, 2003 [the Act], provides for the establishment of Audit Committees [S 8(6)]. In accordance with the Act, the Minister issues this Charter to provide guidance on the scope, responsibilities and powers of Audit Committees. The charter provides guidance to members of the Audit Committees in discharging their respective duties. It sets out the committee s objectives, authority, composition, roles and responsibilities and provides a channel of communication with the different stakeholders. 1.0 Overall Objective of the Audit Committee 1.1 The primary role of the Audit Committee is to assist the Accounting Officer in fulfilling his/her duties as designated to him\her by the Secretary to the Treasury in accordance with the provisions of the Public Finance and Accountability Act 2003 [Section 8]. 1.2 The Audit Committee will generally review and report on: • the financial reporting process, • the system of internal control; • management of risks • the audit process in the ministry/departments/agencies; and • the ministry/departments/agencies process for monitoring compliance with laws, policies, regulations and its code of conduct. 2 1.3 The Audit Committee will take special interests in all accounting, financial management, and audit ...

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T H E R E P U B L I C O F U G A N D A







CHARTER FOR AUDIT COMMITTEES









November 2008

1
Introduction


The Public Finance and Accountability Act, 2003 [the Act], provides for the
establishment of Audit Committees [S 8(6)].

In accordance with the Act, the Minister issues this Charter to provide guidance on the
scope, responsibilities and powers of Audit Committees.

The charter provides guidance to members of the Audit Committees in discharging their
respective duties. It sets out the committee s objectives, authority, composition, roles and
responsibilities and provides a channel of communication with the different stakeholders.

1.0 Overall Objective of the Audit Committee


1.1 The primary role of the Audit Committee is to assist the Accounting Officer in
fulfilling his/her duties as designated to him\her by the Secretary to the Treasury
in accordance with the provisions of the Public Finance and Accountability Act
2003 [Section 8].

1.2 The Audit Committee will generally review and report on:

• the financial reporting process,
• the system of internal control;
• management of risks
• the audit process in the ministry/departments/agencies; and
• the ministry/departments/agencies process for monitoring compliance with
laws, policies, regulations and its code of conduct.

2 1.3 The Audit Committee will take special interests in all accounting, financial
management, and audit matters, and pay special attention to plans and activities of
the Internal Audit Function in the ministry/department/agency.
1.4 In performing its duties, the Audit Committee will maintain effective working
relationships with the Minister, Secretary to the Treasury, Accounting Officer, the
Accountant-General, the Commissioner of Internal Audit, Internal Audit
Function, the Office of the Auditor General and any other relevant
agencies/organizations.
2.0 Authority


2.1 The Audit Committee shall draw its authority from the Public Finance and
Accountability Act, 2003 [Section 8, subsection 6] and subsidiary legislation.

2.2 The Audit Committee, shall in discharge of its duties and responsibilities, have
such powers to:

• Seek information from Accounting Officer or any other public officer as
circumstances may deem fit. Such information shall be submitted in a
timely manner and in such form as the Committee may specify; and
• Obtain professional advice from relevant government organs.

2.3 Under no circumstances will the Audit Committee have executive powers with
regard to its findings and recommendations on any operational aspects of the
management and control of the ministry/department/agency.

3.0 Appointment, Membership and competency requirements


3 3.1 An Accounting Officer may, and if so required by the Minister, establish and
maintain an Audit Committee, which shall have such constitution, powers and
duties as may be determined by the Minister.
3.2 The Audit Committee will comprise a chairperson, and four other members all
appointed by the Minister.
3.3 The Chair of the Audit Committee shall be elected from amongst the members at
the first sitting of the committee.

3.4 The Minister shall have powers to appoint members of the Audit Committees on
recommendation of the Accounting officer and approval of Permanent
Secretary/Secretary to Treasury


3.5 The Minister will have powers to remove any member of the Audit Committee
for;

• Inability to perform the functions of his/her office arising from infirmity of
body or mind
• Misbehavior or misconduct
• Incompetence
3.6 Every member including the Chairperson should be:
§ Independent of the ministry/department/agency;
§ Of unquestionable integrity;
§ Of sound independent mind;
§ Familiar and knowledgeable with the operations of the
ministry/department/agency;
§ Aware of the interests of all stakeholders; and

3.7 Audit committee members should collectively possess knowledge, skills and
experience in accounting, risk management, audit and legal issues relevant to the
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organization. Members should have wider understanding of the environment in
which the ministry operates and the relevant accountability structures.

4.0 Responsibilities and duties of Audit Committees:


4.1 Responsibilities and duties of the Audit Committee include the following:
In accordance with the Public Finance and Accountability Regulation 30, the
responsibilities and duties of the audit committee are;
• Approve annual and operational plans of Internal Audit Function;
• Review and approve annual budgets for Internal Audit Function to ensure
adequacy in relation to annual plans for the Function;
• Review and approve audit policy/strategy;
• Periodically review the overall quality of internal audit services;
• Review adequacy of Internal Audit Function, it s adherence to
professional standards, particularly independence, standing, scope,
resources, and reporting arrangements;
• Consider objectives and scope of any additional work undertaken by
internal auditors to ensure there are no conflicts of interest and that
independence is not compromised;
• Discuss with Accounting Officers internal audit findings and
recommendations, review and monitor implementations of the
recommendations;
• Review arrangements established by Accounting Officer for compliance
with regulatory and financial reporting requirements and ensuring that
there are adequate internal control systems;
• Through the Chairperson of the Audit Committee, represent concerns of
the internal audit to the relevant Accounting Officer, Accountant General
Secretary to the Treasury or the Minister
• Liaise with the Office of the Auditor General and other organs of the state

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4.2 The Audit Committee, with specific regard to the following, will:

4.2.1 Internal controls:
§ Based on the Internal audit reports, evaluate whether management of the
ministry/department/agency is setting the appropriate control culture by
communicating the importance of internal control and the management of risks
and ensuring that all employees have an understanding of their roles and
responsibilities.
§ Consider how management is held to account for the security of computer
systems and applications, and the contingency plans for processing financial
information in the event of system breakdown.

§ Review and report whether or not management has implemented internal control
recommendations made by internal auditors and the Office of the Auditor
General.

4.2.2 Internal Audit Function

§ Review the activities and organizational structure of the Internal Audit Function
and ensure that no unjustified restrictions or limitations are placed on the internal
auditors.
§ Review the effectiveness of the Internal Audit Function.
§ Ensure that significant findings and recommendations made by the internal
auditors are received, discussed, and action taken on a timely basis.
§ Ensure that management of the ministry/department responds to the
recommendations made by the internal auditors.


4.2.3 Submission of Financial Statements

6 § Ensure that the financial statements and any other related information required by
the Minister, the Secretary to the Treasury, the Auditor General and the
Accountant-General are submitted within the specified time and stipulated form.


5.0 Reporting Lines and Meeting procedures


5.1 The audit committees through its chairperson will at least once a year report to the
Minister on its operations and activities during the year.

5.2 Members to the Audit Committee shall meet at least quarterly

5.3 The Audit Committee may produce quarterly reports that shall include summary
of key audit issues and actions taken to date, the minutes of the Audit Committee
and any other issues the Minister may require.

5.4 The Head of internal Audit in the Ministry/ Department/Agency and the
Commissioner Inspectorate and Internal will be invited to attend all meetings as
an ex-official. In addition, the committee may request any other persons to attend
the meetings as and when the need arises to participate in the discussions on the
relevant agenda item(s).

5.5 The Audit Committee should have carefully planned timetables and agendas. To
maximize effectiveness, a written agenda for the next meeting should be prepared
by the Chairperson and the Secretary in consultation with the other committee
members. The agenda should be distributed to committee members in advance to
allow for proper consideration/preparation.

7 5.6 The agenda and any other discussion papers for a prior meeting shall be circulated
to members of the Audit Committee and those invited to attend the meeting
within a period of one (1) week to the scheduled meeting.

5.7 Any person who is going to attend a meeting may, not less than 7 days prior to the
meeting request the secretariat through the Chair, to add such items as he deems
necessary to the agenda
5.8 The minutes arising from the meeting, together with the action plan shall be
circulated to the members of the Audit Committee and copied to the Accounting
Officer, Commissioner Inspectorate and internal audit and the Head of Internal
Audit Unit.

5.9 The quorum at all meetings shall be three members. No member is permitted to
appoint a proxy.

5.10 Audit Committee decisions shall be taken by means of reaching a consensus and
where not possible, by a majority vote of members present. When using a vote,
and in case of a tie, the chairperson shall have a second or casting vote. The
chairperson shall at his/her sole discretion use the casting vote.

6.0 Relationship with the Commissioner Inspectorate and Internal audit and
Office of the Auditor General


6.1 The Audit Committee will hold open lines of communication with the Commissioner
Internal Audit and Office of the Auditor General prior to, during and after audit to cover
the following:

6.1.1 Audit planning meeting to discuss: - audit timetables, approach to work, and
areas of management concern.

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6.1.2 Ensure that significant Issues and recommendations made to or by the
Commissioner Internal Audit and Office of the Auditor General are received and
discussed on a timely basis.

6.1.3 Ensure that management responds to the recommendations by the Commissioner
Internal Audit, Office of the Auditor General and the Public Accounts Committee
(PAC).

7.0 Scope of Internal Audit/assurance


The internal audit/assurance should encompass the examination and evaluation of the
adequacy and the effectiveness of the organization s risk management, internal control
and governance processes and the quality of performance in carrying out assigned
responsibilities in line with their vision, to be the leading provider of effective
assurance and consulting services to Government
and mission,
to provide independent, objective assurance and consulting services designed to add
value and improve government operations on risk management, control and governance
processes
.
Internal audit activity scope is prescribed in the Internal Audit Charter, but generally
covers the evaluation of;
§ Reliability and integrity of information.
§ Compliance with existing policies, plans, procedures, laws, regulations and
contracts.
§ Safeguarding of assets
§ Risk management processes
§ Economical and efficient use of resources.
§ Accomplishment of established objectives and goals.

8.0 Secretariat

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Management is responsible for making available the services of the secretary for
drawing up the agenda and keeping the minutes of the meeting of the audit
committee. This function may be delegated to the Head of Internal Audit Unit.

9.0 Assessment arrangements

The chair of the Audit committee will take the lead in initiating the appraisal of the
performance of the committee on a self assessment basis or otherwise determined by
the Minister with appropriate input from the Accounting Officer, internal audit,
external audit and other stakeholders at least once during the term of the audit
committee.

10.0 Review of the charter

The committee shall in consultation with the Commissioner Inspectorate and Internal
Audit review this charter at least once a year and shall make recommendations to
the Minister on any changes deemed necessary for the proper functioning of the
committee.



11.0 Conflict of interest

Each member of the committee should take personal responsibility to pro-actively
declare any conflict of interest arising out of the business on the agenda or from
changes in the member s personal circumstances. The chair of the committee shall
then determine the appropriate course of action with the member. If it is the chair
that has a conflict of interest, the Minister should ask another member of the
committee to lead in determining the course of action.

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