INTERNAL AUDIT AGENCY ACT, 2003
(ACT 658)
ARRANGEMENT OF SECTIONS
Section
PART I—ESTABLISHMENT AND FUNCTIONS
OF THE INTERNAL AUDIT AGENCY
1. Establishment of Internal
Audit Agency
2. Object of the Agency
3. Functions of the Agency
4. Governing body of the Agency
5. Membership of the Board
6. Functions of the Board
7. Tenure of office of members of
Board
8. Allowances for members
9. Meetings of the Board
10. Disclosure of interest
11. Committees of the Board
12. Director-General
13. Functions of the
Director-General
14. Independence and powers of the
Director-General
15. Secretariat and other staff of
the Agency
PART II—INTERNAL AUDIT UNITS FOR
MDAs AND MMDAs
16. Establishment of Internal
Audit Units
17. Action by the Agency
18. Exhibition of professionalism
and competence
19. Integrity
20. Confidentiality
PART III—FINANCIAL AND
MISCELLANEOUS PROVISIONS
21. Accounts and audit
22. Funds of the Agency
23. Annual reports to the
President
24. Regulations
25. Offences and penalties
26. Interpretation
27. Transitional provision
THE SIX HUNDRED AND FIFTY-EIGHTH
ACT OF THE PARLIAMENT OF THE
REPUBLIC OF GHANA
ENTITLED
THE INTERNAL AUDIT AGENCY ACT,
2003
AN ACT to establish an Internal
Audit Agency as a central agency
to co-ordinate, facilitate,
monitor and supervise internal
audit activities within
Ministries, Departments and
Agencies and Metropolitan,
Municipal and District Assemblies
in order to secure quality
assurance of internal audit within
these institutions of State; to
provide for the Board of the
Internal Audit Agency and to
provide for connected purposes.
DATE OF ASSENT: 31st December,
2003.
BE IT ENACTED by Parliament as
follows:
PART I—ESTABLISHMENT AND FUNCTIONS
OF THE INTERNAL AUDIT AGENCY
Section 1—Establishment of
Internal Audit Agency.
There is established by this Act
an Internal Audit Agency.
Section 2—Object of the Agency.
The object of the Agency is to
co-ordinate, facilitate and
provide quality assurance for
internal audit activities within
the Ministries, Departments and
Agencies and the Metropolitan,
Municipal and District Assemblies.
Section 3—Functions of the Agency.
(1) The Agency shall set standards
and procedures for the conduct of
Internal audit activities in the
MDAs and MMDAs.
(2) The Agency shall ensure that
(a) financial, managerial and
operating information reported
internally and externally is
accurate, reliable and timely;
(b) the financial activities of
MDAs and MMDAs are in compliance
with laws, policies, plans,
standards and procedures;
(c) national resources are
adequately safeguarded;
(d) national resources are used
economically, effectively and
efficiently;
(e) plans, goals and objectives of
MDAs and MMDAs are achieved; and
(f) risks are adequately managed
in the MDAs and MMDAs.
(3) Without limiting subsections
(1) and (2), the Agency shall
(a) promote economy, efficiency
and effectiveness in the
administration of government
programmes and operations;
(b) prepare plans to be approved
by the Board for the development
and maintenance of an efficient
internal audit for the MDAs and
MMDAs;
(c) facilitate the prevention and
detection of fraud; and
(d) provide a means for keeping
the MDAs and MMDAs fully and
currently informed about problems
and deficiencies related to the
administration of their programmes
and operations and the necessity
for appropriate corrective action.
(4) The Agency shall monitor,
undertake inspections and evaluate
the internal auditing of the MDAs
and MMDAs.
Section 4—Governing Body of the
Agency.
The Agency shall have a governing
Board known as the Internal Audit
Board.
Section 5—Membership of the Board.
(1) The Board shall consist of the
following members appointed by the
President acting in consultation
with the Council of State:
(a) a chairperson;
(b) the Minister responsible for
Finance or a representative of the
Minister;
(c) the Minister for Local
Government and Rural Development
or a representative of the
Minister;
(d) the chairperson of the Public
Services Commission or a
representative of the chairperson;
(e) the Director-General of the
Agency appointed under section 12
of this act;
(f) two other members appointed
from the private sector; and
(g) two professional accountants
each with not less than ten years
experience in the profession
nominated by the Council of the
Institute of Chartered Accountants
(Ghana).
(2) The President shall in
appointing members of the Board
have regard to the integrity,
knowledge, expertise and
experience of the persons and in
particular their knowledge in
matters relevant to the functions
of the Agency.
Section 6—Functions of the Board.
The Board shall formulate policies
for the Agency and shall
(a) establish appropriate
structures for the effective and
efficient execution of the object
of the Agency;
(b) secure the achievement of the
object of the Agency;
(c) approve plans for the
development and maintenance of an
efficient internal audit for
bodies and institutions to whom
this Act applies; and
(d) take reasonable and timely
action on the reports submitted to
it by the Director-General.
Section 7—Tenure of Office of
Members of the Board
Members of the Board other than
ex-officio members shall hold
office for a period of four years
and are on the expiration of that
period eligible for re-appointment
except that a member shall not be
appointed for more than two terms
in succession.
Section 8—Allowances for Members.
Members of the Board other than
the Director-General shall be paid
such allowances as the President
in consultation with the Minister
may approve.
Section 9—Meetings of the Board.
(1) The Board shall meet at such
times and places as the
chairperson may determine but
shall meet at least once every
three months.
(2) The chairperson may at
anytime, and shall, on the written
request of the Director-General or
four other members of the Board,
call a special meeting of the
Board.
(3) At each meeting of the Board
the chairperson shall preside and
in the absence of the chairperson,
a member of the Board elected by
the members present from among
their number shall preside.
(4) The quorum for a meeting of
the Board shall be three members
including the Director-General or
the person acting as
Director-General.
(5) A decision at a meeting of the
Board shall be that of the
majority of the members present
and voting and where there is
equality of votes, the chairperson
or the person presiding shall have
a second vote.
(6) The Board may co-opt a person
to act as an adviser at its
meetings but a co-opted person is
not entitled to vote at a meeting
on a matter for decision by the
Board.
(7) The validity of any
proceedings of the Board shall not
be affected by a vacancy in its
membership or by a defect in the
appointment or qualification of
any of its members.
(8) Subject to this section, the
Board shall regulate its own
procedures.
Section 10—Disclosure of Interest.
(1) A member of the Board who is
directly or indirectly interested
in a matter being considered or
dealt with by the Board shall
disclose the nature of the
interest at a meeting of the Board
and shall not take part in any
deliberation or decision of the
Board with respect to the matter.
(2) A member who fails to disclose
an interest under subsection (1)
is liable to be removed from the
Board.
Section 11—Committees of the
Board.
The Board may for the discharge of
its functions appoint committees
comprising members or non-members
or both and may assign to a
committee such functions of the
Board as the Board may determine
except that a committee composed
exclusively of non-members may
only advise the Board.
Section 12—Director-General.
(1) There shall be appointed by
the President, in accordance with
article 195 (1) of the
Constitution an officer who shall
be the chief executive of the
Agency and be designated the
Director-General.
(2) The Director-General shall
not, while holding office, occupy
any other office or employment
which is likely to conflict with
the duties of the Director-General
whether or not there is
remuneration attached to it.
(3) Notwithstanding subsection
(3), the Director-General may with
the approval of the Board act as a
member of a commission appointed
by the Government, to enquire into
any matter affecting
accountability, management and
governance.
(4) Subject to the provisions of
this section, the Director-General
shall be appointed on terms and
conditions specified in the
Director-General’s letter of
appointment.
Section 13—Functions of the
Director-General.
(1) The Director-General shall,
subject to directions of the Board
on matters of policy and subject
to this Act, be responsible for
the day-to-day management and
administration of the Agency, and
may make such decisions and
exercise powers that are necessary
for the attainment of the object
and functions of the Agency.
(2) Without limiting subsection
(1), the Director-General shall
(a) secure the execution of the
policies of the Board;
(b) make regular reports to the
Board on the management and
operations of the Agency;
(c) provide the data, statistics
and advice necessary for the
formulation of policies for the
attainment of the object of the
Agency; and
(d) perform such other duties as
the Board may direct.
Section 14—Independence and Powers
of the Director-General.
(1) Subject to the Constitution
and this Act the Director-General,
in the performance of the
functions as Director-General is
not subject to the direction and
control of any other person or
authority but a public body, organ
or the head of an MDA or an MMDA
may request the Director-General
to carry out such specific
investigations as may be
considered reasonable by the
Director-General.
(2) The Director-General or a
person authorised by the
Director-General is entitled
(a) to be given such information
and explanations as the
Director-General may request in
the performance of duties under
this Act; and
(b) to inspect books, records and
offices in the performance of
duties under this Act or any other
enactment and shall be given
access to the books, records and
offices on demand.
(3) Where there is any critical
financial or economic crisis or
exigency which requires immediate
action and there is insufficient
time to call a meeting of the
Board, the Director-General may
with the concurrence of the
chairperson of the Board exercise
the powers of the Board and take
such action as may be necessary.
(4) Where any action has been
taken by the Director-General
under subsection (3), the
Director-General shall as soon as
practicable call a meeting of the
Board to report the action taken
for ratification or review by the
Board.
Section 15—Secretariat and other
Staff of the Agency.
(1) There shall be a secretariat
of the Agency, the head of which
shall be the Director-General.
(2) There shall be appointed by
the President in accordance with
article 195(1) of the Constitution
such other public officers as the
Agency may require for the
performance of its functions.
(3) There may be transferred or
seconded to the Agency such public
officers as may be requested by
the Director-General and approved
by the Board.
(4) The President may, in
accordance with article 195 (2) of
the Constitution, delegate the
power of appointment under this
Act.
PART II—INTERNAL AUDIT UNITS FOR
MDAS AND MMDAs
Section 16—Establishment of
Internal Audit Units.
(1) There shall be established in
each MDA and MMDA, an internal
audit unit which shall constitute
a part of the MDA or MMDA.
(2) There shall be appointed for
each internal audit unit,
personnel required to ensure an
effective and efficient internal
auditing of the MDA or MMDA
concerned.
(3) An internal audit unit
established under subsection (1)
shall in accordance with this Act
and standards and procedures
provided by the Agency, carry out
an internal audit of its MDA or
MMDA and shall submit reports on
the internal audit it carries out
to the Director-General of the
Agency.
(4) The internal audit unit of an
MDA shall submit a copy of its
internal audit report to its
management body and such other
persons as it is required to
submit the report.
(5) (a) The autonomous bodies of
the Constitution shall be Subject
to the standards and procedures of
the agency and shall have Internal
audit units.
(b) The internal audit units of
the autonomous bodies shall not be
subject to the agency but shall be
subject to the Auditor-General.
(c) A copy of the internal audit
report of an autonomous body shall
be submitted to the
Auditor-General.
(6) A copy of an internal audit
report of an MMDA shall be
submitted to its Regional
Co-ordinating Council.
(7) A Regional Co-ordinating
Council shall furnish the Agency
with a copy of an internal audit
report submitted under subsection
(6).
(8) The Audit Report
Implementation Committees of MDAs
and MMDAs as established under
section 30(1) of the Audit Service
Act, 2000 (Act 584) shall be
responsible for the implementation
of the recommendations of the
internal audit reports.
Section 17—Action by the Agency.
The Agency may upon examination of
an internal audit report, take
such action as it considers
appropriate including
recommendation of prosecution and
disciplinary action in respect of
any breaches found.
Section 18—Exhibition of
Professionalism and Competence.
Internal auditors operating by
virtue of this Act,
(a) shall exhibit the highest
level of professionalism in the
gathering, evaluation and
communication of information when
auditing and shall act only in
areas for which they have the
necessary knowledge, skills,
experience and competence;
(b) shall perform internal
auditing in accordance with
Generally Accepted Principles of
Internal Auditing and the standard
and guidelines of the Agency as
established under section 3(1);
and
(c) shall in the performance of
their work make a balanced
assessment of all issues of
relevance to the work and should
not be influenced by their
personal interest or the interests
of other persons.
Section 19—Integrity.
Internal auditors to whom this Act
applies shall
(a) perform their work with
honesty and diligence;
(b) not knowingly be a party to
any illegal activities or engage
in acts that discredit the work of
internal auditing or the MDA or
MMDA;
(c) make disclosures required by
law and the standards and
procedures as established under
section 3(1);
(d) not participate in any
activity or relationship that may
impair or is likely to be taken to
impair unbiased assessment,
including an activity or a
relationship that may be in
conflict with the interests of the
MDA or MMDA;
(e) not accept anything or any
favour that may impair or might be
taken to affect their professional
judgment; and
(f) disclose all material facts
known to them, the non-disclosure
of which may distort any reporting
activity.
Section 20—Confidentiality.
(1) Internal auditors shall
respect the value and ownership of
information they receive and shall
not disclose information without
authority unless there is a legal
or professional obligation to do
so.
(2) Internal auditors shall be
prudent in the use and protection
of information acquired in the
course of their duties.
(3) Internal auditors shall not
use information for any personal
gain or in any manner that would
be contrary to this Act or
detrimental to the legitimate and
ethical objectives of the Agency,
MDAs and MMDAs.
PART III—FINANCIAL AND
MISCELLANEOUS PROVISIONS
Section 21—Accounts and Audit.
(1) The Agency shall keep proper
books of account and other records
in relation to these in a form
determined by the Controller and
Accountant-General and approved by
the Auditor-General.
(2) The Agency shall, not later
than three months after the end of
the financial year, submit for
audit to the Auditor-General, its
books of account and records.
(3) The Auditor-General shall, not
later than three months after the
submission under subsection (2),
audit the books of account of the
Agency.
(4) The financial year of the
Agency shall be the same as the
financial year of the Government.
Section 22—Funds of the Agency.
The funds of the Agency are
(a) monies provided to the Agency
by Parliament for the discharge of
its functions; and
(b) monies that accrue to the
Agency.
Section 23—Annual Report to the
President.
(1) The Board shall not later than
three months after the end of each
financial year submit to the
President a report of the
activities of the Agency in
respect of the preceding financial
year and shall in the report
(a) state its findings on
activities of the internal audit
units of the MDAs and the MMDAs;
(b) provide details of its
expenditure for the preceding
financial year as compared with
its budgeted expenditures for that
year.
(2) The President shall cause the
report with such comments as the
President determines, to be laid
before Parliament by the Minister.
Section 24—Regulations.
(1) The President may, on the
advice of the Board, by
legislative instrument prescribe
Regulations necessary for the
effective implementation of this
Act.
(2) In furtherance of subsection
(1) Regulations may be made in
respect of
(a) the persons or bodies to whom
reports of the internal audit
units shall be distributed by the
Board;
(b) the protection of internal
auditors; and
(c) any other matter in accordance
with this Act.
(3) Any Regulations made under
this section may be signed by a
Minister authorised by the
President.
Section 25—Offences and Penalties.
(1) Any person who
(a) gives the Director-General any
information or explanation which
the person knows to be false or
which the person has no reason to
believe to be true contrary to
section 14 (2) (a);
(b) fails to produce for
inspection by the Director-General
or otherwise fails to give the
Director-General access to any
book, record or office when
requested by the Director-General
contrary to section 14 (2) (b);
(c) wilfully suppresses any
information or explanation
required by the Director-General;
or
(d) obstructs the Director-General
in any way in the performance of
functions under this act;
(e) provides information which the
person knows to be false or which
the person has no reason to
believe to be true to an internal
auditor,
commits an offence and is liable
on summary conviction to a fine
not less than 1,000 penalty units
or to imprisonment for a term not
exceeding 5 years or to both.
(2) Any internal auditor who acts
in breach of any of the provisions
of sections 18, 19 or 20 shall be
subject to such action as the
Board shall recommend including
criminal prosecution.
(3) Any member of staff or
employee of the Agency who
(a) demands or takes a bribe,
gratuity, recompense or reward for
the neglect, omission, commission
or performance of duty under this
Act;
(b) wilfully fails to report to
the Director-General any abuse or
irregularity that comes to the
notice of the person in the course
of the performance of duties under
this Act; or
(c) makes any report to the
Director-General which the person
knows to be false or which the
person has no reason to believe to
be true
commits an offence and is liable
on summary conviction to a fine of
not less than 1,000 penalty units
or to imprisonment for a term not
exceeding 5 years or to both.
(4) For the purposes of subsection
(1), the Director-General includes
any officer acting under the
instructions of the
Director-General.
Section 26—Interpretation.
In this Act unless the context
otherwise requires,
"Agency" means the Internal Audit
Agency established under section
l;
"Board" means the Board of the
Internal Audit Agency;
"Minister” means the Minister
responsible for Finance;
"MDA"
means Ministries, Departments and
Agencies and includes all
government bodies and institutions
that receive government subvention
wholly or partially;
"MMDA"
means Metropolitan, Municipal and
District Assemblies.
Section 27—Transitional Provision.
(1) Internal audit officers and
all public officers performing
internal audit work in any MDA or
MMDA immediately before the coming
into force of this Act, shall upon
the coming into force of this Act
be deemed to constitute the
members of an internal audit unit
of the MDA or MMDA for the
purposes of this Act.
(2) Notwithstanding subsection
(1), public officers performing
internal audit duties in an MDA or
MMDA on the date of the coming
into force of this Act may be
re-assigned to such internal audit
units as the appointing authority
may determine.
Date of Gazette Notification: 31st
December, 2003. |