Legislation - Municipal Entity

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13 Δεκ 2013 (πριν από 3 χρόνια και 4 μήνες)

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Templa
te: Municipal Entity


V
1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management
Framework

Legislation
-

Municipal
Entity








Published by:



Template
: Legislation


Municipal Entity

v1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management Framework

Legislation
-

Municipal Entity


i

Contents

1

Introduction

1

1.1

Accounting Officer / Authority

1

1.1.1

Section 95 (c)(i) of the Municipal Finance Management Act
(Act 56 of 2003) (MFMA)

1

1.2

Management, Other Personnel, Chief Risk Officer, Risk
Champions

1

1.2.1

Section 105 of the Municipal Finance Management Act (Act
56 of 2003) (MFMA)

1

1.3

Internal Auditors

2

1.3.1

Section 165 (2) (a), (b)(iv) of the Municipal Finance
Management Act (Act 56 of 2003) (MFMA)

2

1.3.2

Section 2110


Risk Management of the International
standards for the Professional Practic
e of Internal Auditing

3

1.4

Audit Committee

4

1.4.1

Section 166 (2)(a)(ii) of the Municipal Finance Management
Act (Act 56 of 2003) (MFMA)

4


Template
: Legislation


Municipal Entity

v1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management Framework

Legislation
-

Municipal Entity


1

1

Introduction

1.1

Accountin
g Officer / Authority

1.1.1

Section 95 (c)(i) of the Municipal Finance Management Act (Act 56 of
2003) (M
FMA)

Section 95 (c)(i)
of the
MFMA

requires that:

“The accounting officer of a municipal entity is responsible for managing the
financial administration of t
he entity, and must for this purpose take all
responsible steps to ensure
-


(c) that the entity has and maintains
e
ffective, efficient and transparent
systems
-




(i)
of financial and risk management and internal control.”

1.2

Management, Other Personnel, Chie
f Risk Officer, Risk
Champions

1.2.1

Section 105 of the Municipal Finance Management Act (Act 56 of 2003)
(M
FMA)

The extension of general responsibili
ties in terms of Section 105 of the M
FMA
to
other officials of municipal entities

implies that responsibility fo
r risk

Template
: Legislation


Municipal Entity

v1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management Framework

Legislation
-

Municipal Entity


2

management vests at all levels of management and that it is not limited to
only the acc
ounting officer

and internal audit.

1.3

Internal Auditors

1.3.1

Section 165

(2)

(a),
(b)(iv) of the Municipal Finance Management Act (Act
56 of 2003) (MFMA)

Section 165 (2)

(a), (b)(iv)
of the
MFMA

requires that:

“(2) The internal audit unit of a municipality or municipal entity must
-


(a) prepare a risk based audit plan and an internal audit program for each
financial year;

(b) advise the accounting officer and report to t
he audit committee on the
implementation on the internal audit plan and matters relating to:



(iv
)
risk and risk management
.”


Template
: Legislation


Municipal Entity

v1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management Framework

Legislation
-

Municipal Entity


3

1.3.2

Section 2110



Risk Management

of the International standards for the
Professional Practice of Internal Auditing

Section 2110



Ri
sk Management

of the International standards for the
Professional Practice of Internal Auditing states:

“The internal audit activity should assist the organisation by identifying and
evaluating significant exposures to risk and contributing to the improvem
ents
of risk management and control systems.

2110.

A1


The internal audit activity should monitor and evaluate the
effectiveness of the organisation’s risk management system.

2110. A2


The internal audit activity should evaluate risk exposures relating
t
o the organisation’s governance, operations, and information systems
regarding the:



Reliability an integrity of financial and operational information;



Effectiveness and efficiency of operations;



Safeguarding of assets;



Compliance with laws, regulations, an
d contracts.


Template
: Legislation


Municipal Entity

v1.0608


Naganela Pele



Think Ahead”

Public Sector Risk Management Framework

Legislation
-

Municipal Entity


4

2110. C1


During consulting engagements, internal auditors should address
risk consistent with the engagement’s objectives and be alert to the existence
of other significant risks.

2110. C2


Internal Auditors should incorporate knowledge of
risks gained
from consulting engagements into the process of identifying and evaluating
significant risk exposures of the organisation.”

1.4

Audit Committee

1.4.1

Section 166 (2)(a)(ii) of the
Municipal Finance Management Act (Act 56 of
2003) (MFMA)

Section 166 (2)(
a)(ii) of the MFMA states:


(2)
An audit committee
is an independent advisory body which must



(a) advise the municipal council, the political office
-
bearers, the accounting
officer and the management staff of the municipality, or the board of directors,

the accounting officer and management staff of the municipal entity, on
matters relating to
-




(ii) risk management
.”