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Internal Control Environment and Compliance Presentation

This presentation outlines the challenges, structure, and progress of the internal control environment and compliance in the department. It also discusses the relationship with the audit committee and AGSA, budgetary review recommendations, and the internal control maturity plan.

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Internal Control Environment and Compliance Presentation

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  1. PRESENTATION ON THE INTERNAL CONTROL ENVIRONMENT TO THE PORTFOLIO COMMITTEE A.Motaung DC: Internal Control and Compliance

  2. Presentation Outline • Internal Control Challenges • Internal Control Environment and the Combined Assurance approach in the department. • Internal Control Structure and Risk Management Capacity • Progress made to address 2013/14 AGSA reported matters • Relationship: Internal Control , Audit Committee and AGSA • Budgetary Review Recommendations and Status of Implementation • Internal Control Maturity Plan. • Conclusion

  3. 1. Internal Control Environment Challenges • Weak structures, systems and processes( Performance Information, Compliance and governance aspects). • Ineffective/weak monitoring and evaluation of financial, compliance and performance information. • Ineffective oversight functions to ensure that standards are met. • Poor record keeping mechanisms.

  4. 1. Internal Control Environment: Challenges.. • Inconsistencies in reporting on performance information. • Material non-compliance to regulatory frameworks(e.g. Irregular, Fruitless and Wasteful Expenditure). • Repetitive audit findings. • Non-implementation of consequence management. • Poor Audit Management( Responding to, clearing and co-ordination of Audit information between Head Office, Management Areas and Centres)

  5. 2. Internal Control Environment and the Combined Assurance approach in the department • The department is following a Combined Assurance Approach to ensure that Internal Control system is effective and efficient in all areas of its operations. • The approach has the following benefits:- • Maximise risk and governance oversight. • Maximise control efficiencies. • Optimise overall assurance to the audit and risk committee.

  6. 2.Internal Control Environment and the Combined Assurance approach in the department… • Each and everyone within the department has a role and responsibilities to maintain to ensure effective and efficient internal control system. • This approach therefore co-ordinates the efforts of management, internal and external assurance providers in a manner that ensures collaboration, and assists in bringing about a holistic view of an department’s risk profile and assurance activities.

  7. 2.Internal Control Environment and the Combined Assurance approach in the department… • The Combine Assurance approach ensure that Internal Control system is designed top provide assurance on the following aspects: • Effectiveness and efficiency of operations • Reliability of financial and performance reporting • Compliance with applicable laws and regulations • In doing so, the approach considers the following role players as 1st , 2nd and 3rd lines of defence as far as ensuring effective and efficient system of internal controls within the department

  8. 2.Internal Control Environment and the Combined Assurance approach in the department…

  9. 2.Internal Control Environment and the Combined Assurance approach in the department…

  10. 3. Internal Control Structure and Risk Management Capacity • The 2nd line of defence( Internal Control ) system setup that support management in ensuring effective and efficient internal controls, amongst others, and its structured as follows:- • Internal Audit component. • Risk Management • Internal Control Unit, and • Inspectorate Unit( Compliance)

  11. 3. Internal Control Structure and Risk Management Capacity…

  12. 3. Internal control structure and risk management capacity… • The department is addressing all vacancies within the Internal Control Environment. The following are examples of processes undertaken:-

  13. 4.Progress made to address 2013/14 AGSA reported matters

  14. 4. Progress made to address 2013/14 AGSA matters

  15. 5.Relationship: Internal Control Environment, Audit Committee and AGSA • Role players within the Internal Control Environment has committed to support Audit Committee through:- • Tracking and monitoring of Audit actions Plans. • Internal Controls being standing item on AC agenda. • Considering any other business/concern raised by AC AGSA:- Audit liaison, to quality review responses before submission to ensure acceptance thereof. • Monitor commitments and dashboard reporting. • Coordinate findings and responses (also from regions). • Hold meetings directly with AGSA to clarify issues and follow up on non-responsiveness. As a result of the above, the Internal Control Environment has gained the trust and support of the AC and AGSA.

  16. 5.Relationship: Internal control environment, Audit Committee and AGSA…

  17. 6. Committee’s Budgetary Review and Recommendation report adopted on 31 October 2014

  18. 6.Committee’s Budgetary Review and Recommendation report adopted on 31 October 2014…

  19. 6. Committee’s Budgetary Review and Recommendation report adopted on 31 October 2014

  20. 7.Internal Control Maturity Plan

  21. 7. Internal Control Maturity Plan…

  22. 7.Internal Control Maturity Plan…

  23. 7.Internal Control Maturity Plan…

  24. 7. Internal Control Maturity Plan…

  25. THANK YOU

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