Treasury Internal Audit Framework - Revised 2009

Introduction 1.1 Background The National Treasury developed the Internal Audit (IA) Framework during the 2003/2004 financial year. The Framework derives its mandate from two legislations namely, the Public Finance Management Act, (Act No. 1 of 1999 as amended by Act 29 of 1999) (PFMA), and the Municipal Finance Manage-ment Act, (Act No. 56 of 2003) (MFMA). The OAG received requests from internal auditors in the Public Service for the framework to be updated. The update therefore is in view of the following: • To increase its relevance and user friendliness in general; • To reflect developments in the discipline of internal auditing; • To be expanded such that it includes practical implementation that relate to the different spheres of government; and • To include best practices and guidelines identified. The reviewed Framework is intended to, amongst others: • Be simple for users to understand; Internal Audit Framework • Be Public Service specific and meet the specific requirements of the various spheres of government; and • Be well structured and easy to navigate. 1.2 Purpose The purpose of this Framework is to establish a minimum guideline for the development and operation of internal auditing in the Public Service. It serves as a source of reference and is the pre-eminent guidance mechanism on internal auditing in the Public Service. It is intended to ensure that the Internal Audit Activities (IAA) comply with the requirements of: • The Constitution of the Republic of South Africa; • The Public Finance Management Act, (Act No. 1 of 1999, as amended by Act 29 of 1999 (PFMA); • The Treasury Regulations (TR) issued in terms of the PFMA; • The Municipal Finance Management Act 56 of 2003 (MFMA); • The Institute of Internal Auditors’ (IIA) International Standards for the Professional Practice of Internal Auditing (ISPPIA); and National Treasury Introduction • The COSO1 framework on internal control, as well as the risk management framework2. Against this background, the Framework aims to provide a standard set of guidelines regarding internal auditing in Government. Research and findings of assessments conducted in the past indicated varied levels of internal auditing practices within all facets of Government. The OAG believes that the Framework will set the tone and create the necessary impetus for a sustainable and effective internal auditing mechanism in government.