Public Sector: Risk Management Guidelines for the Audit Committee

Public Sector: Risk Management Guidelines for the Audit Committee

• 22 July 2024
• Auditing and Assurance
• South African Accounting Academy

An Audit Committee is an independent committee constituted to review the control, governance and risk management within the Institution, established in terms of section 77 of the Public Finance Management Act (PFMA), or section 166 of the Municipal Finance Management Act (MFMA).

The guideline is designed to:

• Provide the Audit Committee with information to enable them to fully understand the roles and responsibilities of their office in terms of risk management;
• Provide templates to assist the Audit Committee to effectively discharge such roles and responsibilities.

Contents:

The guideline has been structured according to the sections noted below.  Each of the sections contains underlying information that can be accessed by clicking on the title.

• Legal mandate and corporate governance (Section 4)
• Strategic value of the Audit Committee in risk management (Section 5)
• High level responsibilities of the Audit Committee (Section 6)
• Evaluation criteria (Section 7)
• Additional reading / reference (Section 8)

Legislating the implementation of risk management in public sector institutions is part of a macro strategy of Government towards ensuring the achievement of national goals and objectives.  The following legislative instruments provide the legal foundation for the Audit Committee's responsibility for risk management:

• National Departments
• Constitutional Institutions
• Provincial Departments
• Public Entity
• Provincial Entity
• Municipalities
• Municipal Entity

Click here to download the Guide:

https://ag.treasury.gov.za/org/rms/rmf/Shared%20Documents/Downloads/21%20Guidelines%20for%20the%20Audit%20Committee.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• Public sector entities must review the control, governance and risk management within the Institution.
• As an auditor and independent reviewer, you need to consider and be aware of relevant guides that are issued by regulators (e.g. National Treasury) in respect of your public entity clients.

Relevance to Your Clients:

• Public sector entities must review the control, governance and risk management within the Institution.
• Public entities need to consider and be aware of relevant guides that are issued by regulators (e.g. National Treasury).

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