Internal Audit Departments Regulation
This manual has been enacted based on Article 15 of the Key Principles Law for Organizational Structures and Functions of the Ministries of Republic of Afghanistan to oversee the activities of Internal Audit Departments (IAD) within the ministries and organizations.
Based on the resolution No. 2644 dated 17/09/1359 of minister’s council of Republic of Afghanistan regarding establishment of internal audits of organizations and public enterprises, Internal Audit Departments shall be established in the ministries’ headquarters and the departments having other affiliated units affiliated with them by the ministries and public organizations.
Internal Audit Departments shall work as an organizational unit directly under supervision of the ministers or heads of public organizations.
The head of internal audit department is responsible for performances of the internal audit department to the minister or the head of the organizations.
Internal audit departments shall work according to minister’s council resolutions, provisions of this manual, standard guidelines and other documents managing financial and economic activities of the ministers, public organizations and enterprises and shall ensure their implementations.
On this basis of this manual, the ministries and organizations shall produce internal audit departments’ job descriptions considering the characteristics of the work of the units working under them.
Internal Audit Departments’ duties are as follow:
- Conduct regular audit and evaluation of the financial and economic activities of the units which are under direct supervision of the ministries and offices.
- Guide and manage activities of the internal departments within the system of the ministries and the organizations.
- Frame proposals regarding control and audit affairs development within the systems of the ministries and the organizations.
- Methodic and practical aids to the internal audit departments of relegated units of the ministries and the organizations.
- Provide suggestions based on the audit and evaluation finding to enhance production effectiveness, to reduce cost of the products, to use efficiently human resources and fixed assets of financial and tangible resources, to ensure protection of properties, to prevent unnecessary expenditures, to audit unreasonable usage of properties and the government discipline.
- Provide a complete list of the departments under the ministries and the organizations in which the internal audit department audits their financial and economic activities.
- Audit and evaluation of financial and economic activities of the enterprises, offices and public organizations according to the plan, necessity and/or orders of the senior authorities in case it is not included in the plan.
- Conduct audit of different financial and economic activities, and evaluation of implementation of the decisions and recommendations made of the previous audit.
- Based on the analysis and evaluation of audit finding, provide corrective recommendation regarding identified problems, and controlling its implementations process.
- Making legal decisions regarding preventing illegal performances of the departments and enterprises during the audit.
- Swift reports to the relevant authorities in case any illegal performance and/or violation is identified.
Organizing the activities
The internal audit department shall create annual and quarterly plans for the related units and at least one time audit shall be forecasted for each unit in one year.
In audit plan, name of the organization, subject, starting data and ending date of the audit combined with combination of the auditor’s group shall be determined.
For combination of the auditor experts required from other units of the ministries or organization shall be utilized besides to the employees of internal audit department.
Audit plan of internal audit departments within the ministries and/or organizations shall be approved by the minister or head of the organization and a copy of it shall be presented to Directorate of General Control and Audit of the minister’s council of Republic of Afghanistan for notice and accumulation of control and audit affairs 15 days prior to starting date of the plan.
Audit and evaluation will be conducted based on written order of the minister or head of the organization that directly supervises internal audit department.
Audits shall be conducted by a group of auditors. The group is responsible for reviewing the relevant documents and evidences during the audit time period and executes the audit program approved by the internal audit manager. In this program, audit of both inventory realization and checking for goods availability shall be considered as a priority.
Head of audit department shall highlight the relevant points regarding the program, and audit plan for both inventory realization and checking for goods availability before the conducting audit to the group member and determines the assessment topics, work intensity and the time period for each group member.
Head of the internal audit department shall consistently monitor the on the field performances of the auditors’ group field and shall make contributions in performance of the specified duties in methodic and practical manners.
The auditors shall use necessary tactics for removing violation and compensation of damages in coordination with the audited entity’s manager.
While facing an abuse or other legal violation which cause illegal expenditure of the government fund during or after audits, auditor shall draft a report and forward the report to the Attorney General Office for legal follow-up combined with the documents and evidences, written details of the people involved and signed by the minister or head of the organization.
Audit report is made based on the audit findings in which all the identified facts, violation and deficiencies including details of other relevant and separate reports are marked. The audit report is signed by the head of the group and group’s members, head of the organization and accounting manager of the audited entity.
At the beginning of the audit and evaluation report, generally the document based on which the audit has been conducted, subject of the audit, audited entity, audit period, starting and ending dates of the audit, name of the audited entity’s director, and accounting manager who have been responsible during the audit period are mentioned combined with determining those financial and economic dealings which are audited in detail and those assessed as a brief evaluation.
Auditing findings included in the report shall be based on the arrangement of the subject matters that have been explained in the approved audit programs.
The violations and deficiencies found during the audit shall be formulized in the report in a realistic and proper manner. Violated people, their violation case, documents and the rules which they have violated, damages caused and written details of the involved people shall be included in the report.
Head of the internal audit department shall assess the audit findings within 20 days and send it to the director who has approved the audit. The responsible people shall work further to improve financial and economic activities, reduce the identified deficiencies and clarify compensations for the damages or for legal follow-up according to his/her orders.
Internal audit department shall mange an appropriate statistics of the audit findings, and it shall control and follow decisions and recommendations made on the basis of audit findings for compensation of the damage. For this reason, a specific assessment plan shall be made and executed to follow implementation of the decisions made according to the audit findings.
Audits conducted by the internal audit departments shall be based on the “Managing and Performance Audit Manual” and the approved program.
Internal Audit Departments of the ministers and organization shall receive the reports from the units based on form (1) and the date for receiving of these reports shall be determined by the minister or head of the organizations.
At the end of each 6 months, internal audit departments shall draft an accumulated report of the ministries or/and the organizations according to the form (1) of the internal audit within 10 days and shall send it to the Directorate of General Control and Audit of the minister’s council of Republic of Afghanistan, ministry of finance, central statistics office and other entities to which they send their annual or quarterly reports.
Head of the internal audit department shall develop the job description of the employees on the basis of their grade within the organizational structure and shall share it with the employees, and each employee will be responsible for the given duties.
Leading authorities of the ministries and the internal audit departments shall consistently take initiatives for developing skills of the employees, and enhancing quality control and audit.
Directorate of General Control and Audit of the minister’s council shall conduct methodic guidance and control actions for the internal audit departments.
In the internal audit departments, employees with higher education or secondary vocational education fulfilling the requirements of the departments shall be employed.
This manual shall be enforced after it’s published in the official gazette.