Mkaguzi wa Ndani

THE UNITED REPUBLIC OF TANZANIA PRIME MINISTER’S OFFICE

REGIONAL ADMINISTRATION AND LOCAL GOVERNMENT

MAFINGA TOWN COUNCIL

(All coresponding should be addressed to;Mafinga Town  Director ,Mafinga Town Council,

P.O. Box 76, TEL. +255 26 2772393, FAX +255 26 2772070)

REVISED INTERNAL AUDIT CHARTER OF MAFINGA TOWN COUNCIL 30TH JUNE 2017

INTRODUCTION:

The Public Finance Act, 2004 as amended in 2010 required the establishment  of Internal Auditor General Division (IAGD) .In July ,2011 , the IAGD was established and charged with the responsibility of supervising  and monitoring Internal Audit services in Ministries , Departments , Regional Secretariats , Local Government Authorities , Executive Agencies and Donor funded Project.

In addition to that Regulation 28 of the Public Finance Regulations 2001 revised in 2004, required the accounting officer to establish an effective internal audit service unit within the council, also order number 13(1) of Local Authorities Financial Memorandum required the council to employ its own Internal Auditors who shall work closely with the heads of departments and shall report directly to the accounting officer.

The National Board of Accounting and Auditors on behalf of the Government of the United  Republic of Tanzania in March 2011 adopted the use of International professional Practice Framework (IPPF) issued by the Institute of Internal Auditors (IIA) to be used by internal auditors in Tanzania include those Public Sectors.

The International Standards for the Professional Practice of Internal Auditing (Standards 1000) on the other hand, require development of an Internal Audit Charter explaining the purpose, authority and responsibility of internal audit activities.

This charter therefore is in compliance with International Standard for the Professional Practice Framework and International Technology Audit Function (ITAF) .In addition, the Charter framed to meet the needs of the Government of United Republic of Tanzania and also to the requirements of;

•    Client Service Charter for the Ministry of finance.

•    Requirement from IAGD.

•    Principles of Public Service Delivery issued by Presidents Office-Public Service Management.

•    Public Finance Act No 2001 as amended in 2010.

•    Local Authority Finance memorandum 2009.

•    National Board of Accountants and Auditors.

•    Institute of Internal Auditors Tanzania

•    Other appropriate laws and regulations.

This charter is intended to provide a more comprehensive statement of the purpose, authority, responsibilities and reporting relationship of the internal audit services in Mafinga Town Council.

COUNCIL’S VISION AND MISSION STATEMENT.

Vision:

Mafinga Town Council is committed to make sure that its people having better and sustainable economy.

Internal Auditor services will facilitate achievement of the above vision by providing a world class internal audit services on control, risk management and governance processes.

Mission:

The Mafinga Town Council together with all stakeholders is looking forward to provide good services delivery and poverty alleviation to its people by considering priorities set by stakeholders through the use of available resources by the year 2025.

Internal audit mission involves the carrying out of an independent appraisal activity within the LGA for the review of accounting, financial and other operations as a basis for service to management.

It is a managerial control which functions by measuring and evaluating the effectiveness of other controls.

MANDATE OF THE INTERNAL AUDIT SERVICES

The internal Audit services assist Accounting Officers in accomplishing objectives of their organizations and in pursuing this order internal audit is an independent appraisal of internal control within our council done by examining and evaluating the effectiveness and adequacy of such controls. The Public Finance Act, 2004 as amended 2010 and Local Authority Finance Memorandum, 2009 provide internal auditors with a role of examining and evaluating the adequacy and effectiveness of internal control, risk management controls and governance processes in our council.

PURPOSE OF INTERNAL AUDIT SERVICES

Internal auditing is an independent, objective assurance and consulting activity designed to add Value and improve the Mafinga Town Council’s operations. Mafinga Town Council accomplishes its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

According to IPPF and ITAF as issued by IIA and ISACA respectively, the purpose of internal auditing is to add value by improving operations of the Mafinga Town Council. This is done by assisting all levels of management to achieve their objectives through effective discharge of their responsibilities, so these roles includes;

•    Perform audit assurance in objective and analytical manner , in accordance with international practice framework , and

•    Engage in consultancy and furnishing management with analyses, appraisals recommendations and commentaries aimed at identifying avenues for improvement in risk management, control and governance processes.

STANDARDS OF AUDIT PRACTICE

The Internal Audit staff shall govern themselves by adherence to the definition of internal auditing, Code of ethics, related government laws and regulations, circulars, manuals and International Standards.

RESPONSIBILITIES OF HEAD OF INTERNAL AUDIT SERVICES AND STAFF

In effective implementation of the charter head of Internal Audit Services and their supporting staff have a responsibility of assessing compliance with policies and procedures as well as recommending corrections of processes. The responsibility for correcting such process rests with the respective management. In discharging their responsibility the head of Internal Audit Services and Staff will;

I.    In collaboration with accounting officer, prepare an annual audit plan using an appropriate Risk-based methodology and submit to audit committee and accounting officer for review and approve and have a copy sent to the office of controller and auditor general, Minister responsible for Local government, Internal auditor general and regional commissioner by not later than 15 of July of the year.

II.    Implement approved annual audit plan including any special task or projects requested by, management, audit committee and Internal Auditor General or other competent Authority as the case may be necessary provisions must be made in the annual plan for such special tasks or projects.

III.    Prepare and submit dated reports direct to the accounting officer for action and onward transmission to the Finance committee and Audit committee. The accounting officer will send a copy to the Controller and Auditor General, Permanent Secretary, Minister responsible for Local government and RAS within 15 working days from the date of receiving the report.

IV.    Issue a periodic report to the Management, Audit Committee and Internal Auditor General summarizing results of audit activities.

V.    Prepare and submit two reports to the accounting officer;

•    A quarterly report shall be submitted to the accounting officer within 15 days after the end of the quarter and

•    Annual report shall be submitted to the accounting officer within 15 days after the end of the quarter.

VI.    After audit reports have been prepared and signed by Internal Auditor will be submitted to the accounting officer, copied of such reports shall be sent to the Controller and Auditor General, Permanent secretary, Minister responsible for Local government and RAS with a covering letter.

VII.    Put in place mechanism for tracking implementation of recommendations made in the audit report.

VIII.    Conduct special reviews or studies as requested by the management or Audit committee or Internal Auditor General.

IX.    Always perform his duties professional and any comments, observations must be in adequately and place, failure to observe professional ethics shall lender the auditor personally responsible for any faulty conclusions arising from that audit.

X.    Ensure working in accordance with the standards for the Professional Practice of Internal Auditing and Internal Audit Code of ethics as well as other professional auditing standards that may be applicable.

XI.     Keep a register of work done showing dates of field work, the date of final reports, date and nature of the responses proposed follow up activity. Such registers shall be made available to the Controller and Auditor General upon request.

XII.    Assist in investigation of significant suspected fraudulent activities and inform management on results.

XIII.    Not conduct an audit or investigation without a written programme which must show clearly at least the following;

•    Title of the audit programme;

•    Objective of the audit, and

•    The audit procedures in logical sequential flow.

XIV.    The Internal Auditor shall appraise the soundness and application of accounting ,financial and operational control and in particular,

•    Review and report on proper control over the receipts, custody and utilization of all financial resources of the council.

•    Review and report on compliance with financial and operational procedures laid down in any written law, instruction and good accounting practice as defined by the Minister from time to time in order to insure sound financial practices.

•    Review and report on the correct classification and allocation of revenue and expenditure accounts.

•    Review and report on the reliability and Integrity of financial and operating data in order to allow for the preparation of accurate financial statements and other reports, and

•    Review and report on the systems in place which are used to safeguard assets.

XV.    The internal Auditor shall not give or provide information to a person who has no entitlement to the information possessed.

XVI.    Assist management on follow up of external auditors or regulatory reports and recommendations.

XVII.    Establish quality assurance programme.

XVIII.    Maintain staff with sufficient knowledge.

RESPONSIBILITY OF THE MANAGEMENT

The management has a responsibility of ensuring that;

I.    Risks are appropriately identified and managed.

II.    Interaction between various governance processes occurs as needed.

III.    Significant financial, managerial and operating information is accurate, reliable and timely.

IV.    Employees’ actions are in compliance with polices, standards, procedures, and applicable laws and regulations.

V.    Resources are acquired economically, used efficiently and are adequately protected.

VI.    Programs, plans and objectives are achieved.

VII.    Requirements and agreements with funding partners are met.

VIII.    Legislative or regulatory issues impacting on the government are recognized and addressed properly.

IX.    Written responses to all internal audit reports are submitted.

AUTHORITY OF HEAD OF INTERNAL AUDIT SERVICES AND STAFF

The heads of Internal Audit services and their staff are authorized to;

I.    Have full, free and unrestricted access to any and all of audited institutions functions, records, physical properties and personnel pertinent to carrying out any engagement with stringent regard for safekeeping and confidentiality.

II.    Have full and free access to the audit committee.

III.    Allocate resources and determine scope of work and apply the techniques required to accomplish audit objectives.

IV.    Obtain the necessary assistance of personnel in organization where they perform audits, as well as other specialized services from within or outside the organization.

V.    Have free and unrestricted access to the accounting officer, oversight organ and Internal Auditor General.

VI.    Documentation and information given to Internal Audit will be handled in the same prudent manner as by those employees normally accountable for them.

THE HEAD OF INTERNAL AUDIT SERVICES AND STAFF ARE NOT AUTHORIZED TO;

I.    Perform any operational duties to be audited by them in organization.

II.    Implement internal control, risk management and governance process, develop procedures, install system and prepare records or engage in any other activities that may impair Internal Auditors’ judgments.

III.    Initiate or approve transactions other than those of internal audit services.

IV.    Direct the activities of any unit’s employee not employed by the internal audit function, except where employees have been appropriately assigned to auditing teams or to otherwise assist the internal auditors.

ACCOUNTABILITY OF HEAD OF INTERNAL AUDIT SERVICES

The head of Internal Audit Services in discharging their duties shall administratively report to the Accounting Officer and functionally to Audit Committee and Internal Auditor General.

To discharge this, the head of Internal Audit shall;

I.    Provide quarterly and annual assessment on the adequacy and effectiveness of organization’s process for controlling its activities and managing its risks in the areas set forth under the scope/mandate.

II.    Report significant issues related to the processes for controlling the organization’s activities.

III.    Periodically provide information on the status and the results of the annual risk based audit plan and the sufficiency resources of the internal audit functions.

IV.    Coordinate with and provide information to other oversight organs of Government as deemed necessary.

V.    Report on special assignments to appropriate authorities.

SCOPE OF INTERNAL AUDIT SERVICES

The scope of work of Internal Audit service is enshrined in the Regulation 34 of the Public Finance Regulations, 2004 and order 14 of the Local Authority Financial Memorandum, 2009.

These include;

I.    Reviewing and monitoring framework of risk management to ensure that risks are appropriately identified and managed;

II.    Reviewing governance process to ensure that interaction with various governance groups occurs as needed;

III.    Reviewing polices, plan, procedures, laws and regulations that could have a significant impact on operations to determine whether an entity is in overall compliance.

IV.    Reviewing the reliability and integrity of financial and operating information and the means used to identify measure, classify and report such information.

V.    Reviewing the systems established to ensure compliance with those polices plans, procedures, laws and regulations which could have a significant impact on operations and reports and whether the organization is in compliance.

VI.    Reviewing the means of safeguarding assets and as appropriate, verifying the existence of such assets.

VII.    Reviewing and appraising the economy, efficiency and effectiveness with which resources are employed.

VIII.    Reviewing operations and programs to ascertain whether results are consistent with established objectives and goal and whether the operations or programs are being carried out as planned.

INDEPENDENCE

I.    The internal audit activity shall;

•    Remain free from interference by any element in the organization on matters of audit selection, scope, procedures, frequency, timing or report contents.

•    Head of internal audit shall report administratively to the accounting officer and functionally to Audit Committee and Internal Auditor General.

•    Implement its plan on its own initiative in all activities to be audited.

•    Be subject to periodical review performed through self-assessment, ongoing monitoring of the performance and an independent review performed by a team outside organization.

II.    The Internal Auditors will report to the head of Internal Audit on any situation in which a conflict of interest or bias is present or may be reasonably inferred.

III.    The head of Internal Audit will confirm to the Internal Auditor General at least annually, the organizational independence of the internal audit activity.

REPORTING RELATIONSHIP STRUCTURE

The heads of Internal Audit shall report to the management, the Audit Committee and Internal Auditor General.

In case of special engagement, head of Internal Audit shall report both to the authority whose assignment was executed and the Internal Auditor General.

The head of Internal Audit services should ensure that reports are sent to heads of units who have direct responsibility for the unit being audited and who have the authority to take action on the internal audit recommendations.

Internal Audit reports are confidential documents and their distribution should therefore be restricted to those who are eligible.

RELATIONSHIP WITH OTHER ORGANS

The internal audit will work proactively with the external auditor including sharing of their audit plans in order to minimize duplication of audit effort. This will be accomplished by;

•    Regular meetings between the Internal Audit services Unit and External Audit.

•    Access by the External Auditors to the Internal Audit documentation including working papers and reports.

In performance of their duties and through appropriate channels, Internal Auditors shall also interact and complement with other government institutions to promote efficiency, effectiveness and economy in utilization of resources in attainment of national objectives.

                                                                                         Prepared by:    ……………………

Erick Anthony Ntikahera

TOWN INTERNAL AUDITOR

MAFINGA

Endorsed by:                                                                                                                     Approved and authorized by             

  ………………………                                                                                                           …………………………          

 Suma Mwailafu                                                                                                                    Saada .S. Mwaruka

CHAIRMAN OF AUDIT COMMITTEE                                                                                    TOWN DIRECTOR

MAFINGA TOWN COUNCIL                                                                                                  MAFINGA TOWN COUNCIL