Internal Audit

Internal audit, a component of the internal control system, is a strategic function in ensuring good governance throughout the organization. It is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. Internal audit 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.

INTERNAL AUDIT AGENCY (IAA)

The Internal Audit Agency (IAA) is an independent appraisal function at the Ministry of Labor. Its objective is to assist top management in the effective discharge of their responsibilities and furnishes management with corrective action recommendations and information concerning the activities reviewed.

MISSION AND SCOPE OF WORK 

The mission of the Internal Audit Division of the Ministry of Labor (MOL) is to provide independent, objective assurance and advisory services designed to add value and improve MOL’s operations. It will help MOL accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.  

The scope of work of the Internal Audit Division is to determine whether the Ministry of Labor’s network of risk management, control, and governance processes, as designed and represented by the Minister and Senior Management, is adequate and functioning in a manner to ensure that:  

  • Risks are appropriately identified and managed;
  • Interaction with the various governance groups occur as needed; 
  • Significant financial, managerial, and operating information is accurate, reliable, and timely;
  • Employees’ actions are in compliance with policies, standards, procedures, and applicable laws and regulations;
  • Resources are acquired economically, used efficiently, and adequately protected;
  • Programs, plans, and objectives are achieved;
  • Quality and continuous improvement are fostered in MOL’s control processes; and
  • Legislative issues impacting MOL are recognized and addressed appropriately. 

ACCOUNTABILITY 

The Internal Audit Divisionof the Ministry is primarilyaccountable to the Internal Audit Agency; and administratively reports to the Minister of Labor. Coordinate and provide oversight over other control and monitoring functions (risk management, compliance, security, legal, ethics, environmental, external audit).

RESPONSIBILITY 

The Director and staff of the Internal Audit Division have the responsibility to: 

  1. Develop a flexible annual audit work plan using an appropriate risk-based methodology, including any risks or control concerns identified by management, and submit the plan to the Internal Audit Agency for review and approval and furnish a copy to the Audit Committee.  
  2. Implement the annual audit plan, as approved, including as appropriate any special tasks or projects requested by the Management, Audit Committee and the IAA.  
  3. Maintain a professional audit staff with sufficient knowledge, skills, experience, and professional certifications to meet the requirements of this Charter. 
  4. Evaluate and assess significant merging/consolidating functions and new or changing services, processes, operations, and control processes, coincident with their development, implementation, and/or expansion.
  5. Issue periodic reports to Management, the Minister and IAA, summarizing results of audit activities, including significant audit issues and Management action plans;
  6. Keep the Minister informed of emerging trends and successful practices in internal auditing.
  7. Provide a list of significant measurement goals and results to the Audit Recommendation Implementation Committee.
  8. Assist in the investigation of significant suspected fraudulent activities within MOL and notify the Management, the Minister/Audit Recommendation Implementation Committee, IAA and external auditors of the results.
  9. Cooperate with the General Auditing Commission, regulators and other external auditors, as appropriate, for the purpose of providing optimal audit coverage to MOL at a reasonable overall cost.

REPORTING AND KEY PRIORITY AREAS

The Director /Head of internal audit Division report functionally and administratively to IAA, and then submit copy of all reports to relevant authorities, and the Audit Recommendation Implementation Committee (ARIC) at the client entity. The reporting line to the ARIC of client entities is for implementation of audit recommendation, and to ensure that the IAD is adequately resourced to execute its mandate.

The key priority areas for reporting are listed below:

  • Bank Reconciliation
  • Personnel and payroll management
  • Asset management
  • Procurement
  • Project deliverable
  • Time processing efficiency
  • Prior audit recommendations
  • Accounting and budget reporting
  • Pre-compliance disbursement and transaction, and
  • Revenue management