Khyber Pakhtunkhwa government has evolved a comprehensive policy for a centralised internal audit across all provincial departments, offices and autonomous bodies. Sources said that the internal audit function is being developed for the first time in the history of the province.
The internal audit policy is intended to build confidence of the citizens by providing unbiased assessments of whether public officials are managing public resources responsibly, effectively and honestly. In the last cabinet meeting, the policy was approved to pave way for devising a rollout plan for the implementation of the policy. The KP will emerge as the second province after Sindh to have dedicated internal audit functions.
As per proposed plan, the implementation on the policy will be initiated soon after the issuance of notification of internal audit policy by finance department, which is expected in the next couple of weeks. A centralized wing, titled Provincial Internal Audit Cell (PIAC), will be established at the finance department. A separate and independent Internal Audit Cell (IAC) will be established in every government department and directorate.
All employees within the IAC will maintain independence from the operational management and shall have no direct authority over any of the operational activities of the department. As per statistics, there are 34 departments and 81 directorates in KP. In the first phase, IACs will be established in the 13 priority departments.
The PIAC will provide support, assistance, technical backstopping and coordination for the functioning of IACs across the provincial government. The PIAC will be headed by the provincial coordinator internal audit in BPS 19, who will report to the secretary finance. The KP government considers internal audit a very important management tool, which has been formulated with a technical support from DFID-funded Sub-National Governance (SNG) programme.
According to the approved policy, internal audit policy supports the governance responsibilities of oversight, insight and foresight. Moreover, the oversight intends to address whether public sector entities are doing what they are supposed to do; funds are being spent on intended purposes and laws are being complied with.
The purpose of the policy is to provide a legal basis for the functioning of internal audit in all the departments of the KP government. It defines the broad principles related to the purpose, authority and responsibility of the IACs and the role of the PIAC with regard to coordination, support and functioning of IACs.
The KP finance department through the internal audit policy intends to establish and put in place effective internal controls in every department and office for the purpose of efficiency, transparency, judicious use of resources, avoid wastage and misappropriation and to detect errors and irregularities in the financial proceedings and other processes of the government.
The jurisdiction of the internal audit will include all payments made out of the provincial consolidated fund, contract award and management - processes and record, recruitments, risk and asset management. This policy shall be applicable to all departments, directorates, attached departments, attached offices and autonomous/semi-autonomous bodies, authorities and boards working under the administrative departments.
Under the law, IACs will prepare and implement an annual audit plan, assess the quality of the department's risk management, governance, assessing compliance of the management's activities, and assisting the department's management in the investigation of significant suspected fraudulent activities within the department.
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