The Relationship between Internal Audit, MPAC, and Audit Committee
Relationship between Internal Audit, MPAC and
Audit Committee
IMFO Annual Conference 2016 at Durban ICC, 04 October 2016
Presented by: Makhosandile Kwaza
Agenda
1.
Introduction
2.
Role of the municipal council
3.
Council committees
4.
Difference between Audit Committee and MPAC
Introduction (1)
40
.
Government of the Republic.—
(l) In the Republic, government is constituted as
national, provincial
and local spheres
of government which are
distinctive, interdependent
and interrelated.
Introduction (2)
151. Status of municipalities -:
(1)
The
local sphere of government
consists of municipalities, which must be
established for the whole of the territory of the Republic.
(2)
The
executive and legislative authority
of a municipality is
vested in its
Municipal Council
.
(3)
A municipality has
the right to govern, on its own initiative
, the local
government affairs of its community, subject to national and provincial
legislation, as provided for in the Constitution,
(4)
The
national or a provincial government
may
not compromise or impede
a municipality’s ability
or right to exercise its powers or perform its
functions.
Principle of separation of powers
•
Constitution gives expression to
the principle of separation of powers
by recognising
the functional independence
of the three branches of
government
(executive, legislature and judiciary).
•
In the local government the independence between the executive
and legislature is not exist.
•
Same councillors who are executive members become part of
legislative in the council.
Oversight report on annual report
•
Section 129 of the MFMA – published
•
Section 129(4) of the MFMA only provides for the issuance of
guidance on the manner in which municipal councils should consider
annual reports and conduct public hearings.
•
Does the council need to still appoint the committee to prepare the
oversight report or is that the function of MPAC.
•
Perhaps the terms of reference for MPAC should also give mandate to
MPAC to perform this function.
Council
Section 79
Committees
Section 80
Committees
Audit
Committee
Topic
•
Relationship between:
•
Internal Audit;
•
Audit Committee; and
•
Municipal Public Accounts Committee (MPAC)
Internal Audit
•
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.
•
Established in terms of s 165 of the MFMA
•
Prepare a risk based IA plan
Differences between Audit Committee and MPAC
Audit Committee
•
Composed of Independent members
who have certain expertise.
•
Advise the Executive, Accounting
Officers and the Municipal Staff
Members.
Municipal Public Accounts Committee
•
Section 79 committee – composed of
councillors.
•
Can enforce certain activities that they
deem to be correct to be actioned by
the Executive, Accounting Officer and
Municipal Staff Members.
Relationship between Internal Audit, Audit Committee
and MPAC (1)
Internal Audit
•
Advise the accounting officer and
report to the audit committee on the
implementation of the internal audit
plan.
•
Audit reports are used as
basis
for
the Audit Committee to advise the
municipality.
Audit Committee
•
Approve the IA Charter, IA plan and
advise on the quality of Internal Audit
reports.
•
Have private meeting with the CAE
and External Auditors to discuss issues
of mutual interest.
Relationship between Internal Audit, Audit Committee
and MPAC (1)
Audit Committee
•
advise the municipal council, the political
office-bearers, the accounting officer and
the management staff of the
municipality.
•
review the annual financial statements
to
provide the council of the municipality
with an authoritative and credible view of
the financial position of the municipality.
•
respond to the council on any issues
raised by the Auditor-General in the audit
report.
MPAC
•
The purpose of the MPAC is to do
oversight of the executive.
•
According to SALGA and Cogta
guidelines MPAC must, amongst
others, interrogate the financial
aspects of a municipality.
•
The Audit Committee could assist
them in this regard.
I thank you
This presentation explores the roles of municipal councils, council committees, and the differences between Audit Committees and MPAC in the context of local government governance. It highlights the importance of separation of powers, oversight reports, and the functions of various committees in ensuring effective governance within municipalities.
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Presentation Transcript
Relationship between Internal Audit, MPAC and Audit Committee IMFO Annual Conference 2016 at Durban ICC, 04 October 2016 Presented by: Makhosandile Kwaza
Agenda 1. Introduction 2. Role of the municipal council 3. Council committees 4. Difference between Audit Committee and MPAC
Introduction (1) 40. Government of the Republic. (l) In the Republic, government is constituted as national, provincial and local spheres of government which are distinctive, interdependent and interrelated.
Introduction (2) 151. Status of municipalities -: (1) The local sphere of government consists of municipalities, which must be established for the whole of the territory of the Republic. (2) The executive and legislative authority of a municipality is vested in its Municipal Council. (3) A municipality has the right to govern, on its own initiative, the local government affairs of its community, subject to national and provincial legislation, as provided for in the Constitution, (4) The national or a provincial government may not compromise or impede a municipality s ability or right to exercise its powers or perform its functions.
Principle of separation of powers Constitution gives expression to the principle of separation of powers by recognising the functional independence of the three branches of government (executive, legislature and judiciary). In the local government the independence between the executive and legislature is not exist. Same councillors who are executive members become part of legislative in the council.
Oversight report on annual report Section 129 of the MFMA published Section 129(4) of the MFMA only provides for the issuance of guidance on the manner in which municipal councils should consider annual reports and conduct public hearings. Does the council need to still appoint the committee to prepare the oversight report or is that the function of MPAC. Perhaps the terms of reference for MPAC should also give mandate to MPAC to perform this function.
Council Section 79 Committees Section 80 Committees Audit Committee
Committee Role Section 79 Legislative/Oversight Section 80 Executive Audit Committee Advisory
Topic Relationship between: Internal Audit; Audit Committee; and Municipal Public Accounts Committee (MPAC)
Internal Audit 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. Established in terms of s 165 of the MFMA Prepare a risk based IA plan
Differences between Audit Committee and MPAC Audit Committee Composed of Independent members who have certain expertise. Advise the Executive, Accounting Officers and the Municipal Staff Members. Municipal Public Accounts Committee Section 79 committee composed of councillors. Can enforce certain activities that they deem to be correct to be actioned by the Executive, Accounting Officer and Municipal Staff Members.
Relationship between Internal Audit, Audit Committee and MPAC (1) Internal Audit Advise the accounting officer and report to the audit committee on the implementation of the internal audit plan. Audit reports are used as basis for the Audit Committee to advise the municipality. Audit Committee Approve the IA Charter, IA plan and advise on the quality of Internal Audit reports. Have private meeting with the CAE and External Auditors to discuss issues of mutual interest.
Relationship between Internal Audit, Audit Committee and MPAC (1) Audit Committee advise the municipal council, the political office-bearers, the accounting officer and the management staff of the municipality. review the annual financial statements to provide the council of the municipality with an authoritative and credible view of the financial position of the municipality. respond to the council on any issues raised by the Auditor-General in the audit report. MPAC The purpose of the MPAC is to do oversight of the executive. According to SALGA and Cogta guidelines MPAC must, amongst others, interrogate the financial aspects of a municipality. The Audit Committee could assist them in this regard.
