Purpose

The Internal Audit Committee provides oversight to the Internal Audit Bureau (IAB) as an independent, objective assurance and management consulting activity that adds value and promotes continuous improvement of GNWT operations.  The IAB helps the GNWT management accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving governance processes by recommending adequate internal controls to manage risk.

Authority

The Financial Administration Act, Section 40, requires that:

1. “the Board shall

1. Establish an Internal Audit Committee to oversee the functions of the Internal Audit Bureau; and
2. Determine the mandate of and develop terms of reference for the Committee”.

2. The Internal Audit Committee must be composed of the Comptroller General as chairperson, and such other members as the Board may determine.”

Composition

The members of the Internal Audit Committee are:

• Comptroller General (Chair) (permanent member)
• Secretary to Cabinet (permanent member)
• Secretary of the Financial Management Board (permanent member)
• Deputy Minister of Justice (permanent member)
• Deputy Minister of Environment and Natural Resources
• Deputy Minister of Industry, Tourism and Investment
• Up to two independent members with approval from the Financial Management Board

Meetings

The Internal Audit Committee meetings will be conducted as follows:

• a quorum will consist of the Chair and at least three members
• Will be scheduled by the Chair, typically four times per year
• Are attended by members in person or via teleconference without substitutions
• Could be attended by the Auditor General of Canada and other persons as invited by the Chair
• The IAB Director prepares minutes for review by the Chair before they are circulated to all members
• The IAB Director provides administrative support to the Internal Audit Committee

Responsibilities

The Internal Audit Committee shall provide oversight for the IAB by:

• Approving the IAB Charter that is consistent with the GNWT governance framework direction such as the Financial Administration Act, Access to Information and Protection of Privacy Act, Financial Administration Manual, and GNWT Public Service Code of Conduct
• Ensuring the IAB operates in compliance with the GNWT governance framework
• Ensuring that the independence of the IAB is maintained.
• Reviewing the effectiveness of compliance with the mandatory elements of the Institute of Internal Auditors’ Core Principles for the Professional Practice of Internal Auditing, the Code of Ethics, the International Standards for the Professional Practice of Internal Auditing, and the Definition of Internal Auditing by annually reviewing the communication checklist with the IAB Director.
• Reviewing plans, activities, resource allocation, and the organizational structure of the IAB.
• Inquiring about the IAB’s scope and resource limitations in addressing GNWT risks
• Overseeing the adequacy and allocation of internal audit services across the GNWT departments and, if necessary, recommending appropriate improvements.
• Regularly reviewing and approving government-wide audit risk assessments, audit priorities and audit work plans.
• Monitoring departmental response to audit findings and recommendations in managing risks to GNWT objectives.
• Monitoring government-wide risks and internal control issues and identify emerging themes to develop action plans to improve governance and mitigate risk at the enterprise level.
• Reviewing and approving the performance and remuneration of the IAB Director
• Approving decisions regarding the appointment and removal of IAB Director
• Providing advice to the IAB Director.

The Internal Audit Committee can initiate, institute and call special projects to improve the governance, risk management, and internal controls of Government departments and public agencies.

The Internal Audit Committee will perform other activities directed by the Financial Management Board (FMB).

Reporting

The IAB Director functionally reports to the Internal Audit Committee.  The administrative reporting relationship is to the Comptroller General.

The Internal Audit Committee will provide an open avenue of communication between management, Internal Auditors, Legislative Auditors, and the FMB.  The Audit Committee shall communicate on an ongoing basis matters of concern to the Senior Management Committee of Deputy Ministers.

The Internal Audit Committee will, at least annually, report any items of significance to the FMB on:

• governance processes, risk management and internal controls issues
• organizational independence of IAB.

Review and Revision

The Internal Audit Committee will review the Terms of References as required.