Internal Audit Committee

Audit Committee for MDA

The purpose of this article is to outline the role, responsibilities, composition and operating guidelines of the Audit Committee of respective Ministry/Departments/Agency (MDA) (hereafter called as Committee).

Authority and Independence

The Committee is accountable to the Principal Accounting Officer (PAO). In discharging its responsibilities, the Committee has the authority to:

i. Conduct or authorize investigations into any matters within its scope of responsibility;
ii. Access information, records and personnel as required to fulfil its responsibilities;
iii. Request the attendance of any executive or employee, at committee meetings;
iv. Conduct meetings with external auditors (comptroller and auditor-general) and internal auditors as necessary; v. Obtain advice from an external expert as necessary;
vi. Resolve any disagreements between management and the auditor regarding financial reporting; and
vii. Pre-approve all auditing and non-audit services in consultation with the Head of MDA.

Role

The role of the Committee at the Ministry/Division is to provide independent assurance and assistance to the PAO on control, governance and risk management. The Committee does not replace established management responsibilities and delegations. The Committee will provide the PAO with prompt and constructive reports on its findings, especially when issues are identified that could present a material risk to the MDA.

Composition

The PAO should establish an Audit Committee at the Ministry/Division consists of five (5) members who are all independent. The Committee is constituted so as to ensure independence and its membership will be disclosed in the annual report of the MDA. The Committee collectively (not necessarily individually) has an understanding of:
i. MDA’s environment and accountability structures;
ii. Governance processes within the MDA;
iii. Financial reporting;
iv. Risk management;
v. Internal control;
vi. External audit process;
vii. Internal audit process;
viii. Legal process; and
ix. Information technology.

Members of the MDA Audit Committee

No.	Designation	Position
1.	Ex-Addl. Secretary/Ex Director General/Ex-Chief Engineer of concerned MDA	Chairperson
2.	A representative from the Finance Division (Not below the rank of Deputy Secretary)	Member
3.	A representative from the Line Ministry (Not below the rank of Deputy Secretary)	Member
4.	A retired officer from Comptroller and Auditor General (Director or above Grade)	Member
5.	A representative from the Business Faculty of Public University (Not below the rank of Associate Professor)	Member

The Head of MDA will be a permanent attendee of audit committee meetings. The members of the Committee should have expertise in the business and financial matters in which the MDA operates. Members’ terms and conditions are disclosed in the letter of appointment.

The Chairperson possesses sound communication and strong leadership skills.

Responsibilities

The Committee is accountable to the PAO for the exercise of its responsibilities. The Committee will at all times, recognize that the primary responsibility for the management of the MDA rests with the PAO.