Statement on Internal Financial Control
Responsibility for the System of Internal Financial Control
I acknowledge the responsibility for ensuring that an effective system of internal financial control is maintained and operated.
The system can only provide reasonable and not absolute assurance that assets are safeguarded, transactions authorised and properly recorded, and that material errors or irregularities are either prevented or would be detected in a timely manner.
Key Control Procedures
I have taken steps to ensure an appropriate control environment by:
- clearly defining management responsibilities;
- establishing formal procedures for reporting significant control failures and ensuring appropriate corrective action;
- establishing an Audit Committee to advise me on discharging my responsibilities for the internal financial control system.
The National Treasury Management Agency (“the Agency”) has established processes to identify and evaluate business risks by:
- identifying the nature, extent and financial implication of risks facing the organisation;
- assessing the likelihood of identified risks occurring;
- assessing the organisation’s ability to manage and mitigate the risks that do occur;
- assessing the costs of operating particular controls relative to the benefit obtained.
The system of internal financial control is based on a framework of regular management information, administrative procedures including segregation of duties, and a system of delegation and accountability. In particular it includes:
- a comprehensive budgeting system with an annual budget which is reviewed and agreed by the Chief Executive with the Minister for Finance;
- regular reviews of periodic and annual financial reports which indicate financial performance against forecasts;
- setting targets to measure financial and other performance;
- clearly defined capital investment control guidelines;
- formal project management disciplines;
The Agency has an internal audit function, which operates in accordance with the Code of Practice for the Governance of State Bodies. The work of internal audit is informed by analysis of the risk to which the Agency is exposed, and annual internal audit plans are based on this analysis. The analysis of risk and the internal audit plans are endorsed by the Chief Executive and Directors and approved by the Agency’s Audit Committee. At least annually, the Internal Auditor (currently PricewaterhouseCoopers) provides the management of the Agency and the Agency’s Audit Committee with a report of internal audit activity. The report includes the Internal Auditor’s opinion of the adequacy and effectiveness of the system of internal financial control.
The Agency’s monitoring and review of the effectiveness of the system of internal financial control is informed by the work of the internal auditor, the executive managers within the Agency who have responsibility for the development and maintenance of the financial control framework, and comments made by the Comptroller and Auditor General in his management letter or other reports.
Annual Review of Controls
I confirm that, in the year ended 31 December 2013, I, as Chief Executive, having taken advice from the Agency’s Audit Committee, conducted a review of the effectiveness of the system of internal financial control.
John C. Corrigan, Chief Executive
National Treasury Management Agency
30 June 2014