INTRODUCTION

The Directorate: Internal Control and Risk Management resides under the Chief Directorate: Financial Management. The existence of Internal Control and Risk Management is in terms of Section 38 (1) of the Public Finance Management Act:

The accounting officer…has and maintains:

(i)                 Effective, efficient and transparent systems of financial and risk management and internal control

The Internal Control Unit is an independent function providing an internal audit service to management and the Department. Internal Control supports managers by evaluating internal control systems and recommending improvements where controls are found to be lacking or inappropriate.

Risk Management is the process of identifying risk that the Department is exposed to, rating the impact of risk and then devising means of reducing the risk to an acceptable level, i.e. managing the risk.

FUNCTIONS OF INTERNAL CONTROL

1.                  Evaluating the internal control systems within the Department

2.                  Monitoring compliance with policies and regulations

3.                  Conducting reviews and investigations

FUNCTIONS OF RISK MANAGEMENT

1. System documentation for the Department, per programme and per process in order to identify risk and controls
2. Identification and implementation of cost effective, integrated responses to multiple risks identified
3. Updating the risk profile with the risks identified
4. Development of the Risk Management Strategy for the Department
5. Creating awareness on risk management across the Department

WHY INTERNAL CONTROL AND RISK MANAGEMENT ARE COMBINED

Risk assessment has to be carried out first.

Based on the results of risk assessment, Internal Control evaluates the adequacy and effectiveness of internal controls.

OBJECTIVES OF THE DIRECTORATE

• To promote risk management by profiling risk and advising management on the risk areas
• Assist in the development and review of systems documentation
• To promote good governance
• Assist in the development of sound financial policies and procedures
• Instill a culture of financial discipline
• Monitor compliance with policies, regulations and norms and standards

ACTIONS OF THE DIRECTORATE

• Creating awareness and continuous review of the fraud prevention plan
• Creating awareness on the applicable rules, policies and procedures
• Review compliance with internal controls and recommending improvements as required
• Promoting good governance and assisting in compliance with prescripts, rules and regulations and norms and standards