Company LOGO INTERNAL AUDIT SERVICE of the REPUBLIC

Company LOGO INTERNAL AUDIT SERVICE of the REPUBLIC OF CYPRUS Katerina Demetriadou Paphiti Internal Audit Officer A’ September 2016 1

Company LOGO 1) Internal Audit Act (2003 and 2014) Ø Approved by the House of Representatives in July 2003, amendment in December 2014. Ø The Law provides for: - The appointment of the Commissioner of Internal Audit and his/her duties. - The establishment of the Internal Audit Board and its duties. - The establishment of an independent Internal Audit Service. - The obligations of audited organisations and the respective offences. 2

Company LOGO 1) Internal Audit Act (2003 and 2014) – Commissioner of Internal Audit Ø Head of the Internal Audit Service – term of office for a period of six years and may be renewed for one additional term. Ø Prepares Strategic Plan for the Internal Audit Service. Ø Prepares Annual Audit Plan for the Internal Audit Service. Ø Is responsible for the preparation and submission of an Audit Report to the management of the organisation that was audited. Ø Submits within six months from the end of each year an Annual Report to the Internal Audit Board describing the activities performed by the IAS during the previous year. 3

Company LOGO 1) Internal Audit Act (2003 and 2014) – Commissioner of Internal Audit The Commissioner is responsible for carrying out the internal audit function for all government organisations. According to the Art. 2 of the Law, Internal Audit means: «An independent, objective and consulting activity designed to add value and improve the operations of government organisations. It helps an organisation to achieve its objectives through a systematic and disciplined approach in order to assess and improve the effectiveness of risk management, management and control systems and governance procedures. » 4

Company LOGO 1) Internal Audit Act (2003 and 2014) – Commissioner of Internal Audit Government organisations: According to Art. 2 of the Law, government organisation means the Public Service under the control of the Republic and includes the Public Educational Service, the Police, the Army, the National Guard but does not include: (a) the President of the Republic the House of Representatives and the High Court or any Court under its jurisdiction. (b) the Attorney General, the Auditor General and the Public Service Committee for actions in relation to their Constitutional duties. 5

Company LOGO 1) Internal Audit Act (2003 and 2014) – Commissioner of Internal Audit For this purpose the Commissioner has the authority to: Ø examine and evaluate the adequacy and effectiveness of internal control systems, Ø examine and evaluate the systems that have been set to ensure compliance with policies, procedures, legal obligations and regulations, Ø examine and evaluate the economy, efficiency and effectiveness of the various activities and procedures, Ø conduct special investigations and audits on any subject that affects the integrity, loss of revenue, interests and operational effectiveness of the Public Service. 6

Company LOGO 1) Internal Audit Act (2003 and 2014) – Suspicion of possible fraud or irregularity According to Art. 12 of the Law: «If, during an audit, circumstances are revealed that raise suspicion of possible fraud or irregularity or significant damage on the assets of the auditee or the state, the Commissioner is required to take immediate action to stop such an activity. In such a case, a special report will be prepared and submitted immediately to the relevant authorities» 7

Company LOGO 1) Internal Audit Act (2003 and 2014) – Internal Audit Board: Establishment The Board is appointed by the Council of Ministers for a period of three years and is composed of five members (Αrt. 15): 1. The Minister of Finance - Chairman 2. The Minister of Labour, Welfare & Social Insurance 3. The Minister of Works Transport, Communications & 4. The Accountant General of the Republic 5. A person with experience on internal audit matters who is not a public officer. 8

Company LOGO 1) Internal Audit Act (2003 and 2014) – Internal Audit Board: Duties 1. To safeguard the independence of the Internal Audit Service. 2. To observe the results of the Internal Audit Service and inform the Council of Ministers accordingly. 3. To suggest measures to the Council of Ministers for the strengthening of the internal audit function in the public sector. 9

Company LOGO 1) Internal Audit Act (2003 and 2014) – Internal Audit Service Conducting of Audits (Art. 9) The Internal Audit Service conducts audits on any activity, of any government organisation and for this purpose may follow any methodology and approach it deems appropriate. Independence (Art. 10) The Commissioner and the Internal Audit Service are independent from the auditee and must not have any direct responsibility or power over, the operations to be audited or take part in any executive decision. 10

Company LOGO 1) Internal Audit Act (2003 and 2014) – Internal Audit Service Authorisation (Art. 11) The Internal Audit Service has authority to: • have access, in a reasonable time, in all books, documents, accounts, property, payment vouchers, files, correspondence and other data necessary for performing the internal audit function. • enter into any building or other premises and ask from any officer to provide all the information and all the explanations deemed necessary forming an opinion. Each officer shall respond timely in providing such explanations. 11

Company LOGO 1) Internal Audit Act (2003 and 2014) – Obligations of organisations The management of each organisation that has been audited is obliged within one month from the date of submission of the audit report, unless the Commissioner specifies otherwise, to submit to the Commissioner a timetable with the measures they intend to take in relation to the audit findings. 12

Company LOGO 2) Organisation Structure The Internal Audit Service to be able to meet its obligations and responsibilities has been organised in the following departments: 1) Internal Audit Department for Public / Government Services (Section Α΄ and Β΄) – Consultant of the Republic 2) Department of Audit of Programmes Co-funded by the E. U. – Partner of E. E. as Audit Authority 13

Organisation Structure - Today 14

Company LOGO Internal Audit Department for Public / Government Services – Section Α΄ engages in: 1. issues relating to the Internal Control Units set up in ministries under the relevant Ministerial Decisions and Art. 80 of the Law which provides for the Fiscal Responsibility and the Financial Framework [N. (20(I)/2014]. 2. conducting specialised ΙΤ audits and penetration tests of computerised systems in Government Services. 3. conducting assignments on “horizontal” matters across the public service. 15

Company LOGO Internal Audit Department for Public / Government Services Role of Internal Control Units are distinct with respect to the role of the IAS. The Internal Control Units should act as safeguards (internal control – 2 nd line of defense) and the IAS conduct the internal audit (3 rd line of defense). 16

Company LOGO Internal Audit Department for Public / Government Services 17

Company LOGO Internal Audit Department for Public / Government Services The Internal Audit Department for Public / Government Services – Section Β΄ is mainly responsible for the internal audit and assignments on “horizontal” matters across the public service. 18

Company LOGO Department of Audit of Programmes Cofunded by the E. U. In addition to the responsibilities provided by the Internal Audit Service for conducting internal auditing in Government Services, as defined in the Act, the IAS has been appointed as the independent Audit Authority for Projects co-financed with EU funds based on Decisions of the Council of Ministers. As Audit Authority under the Community Regulations, IAS is responsible for conducting project and system audits on operations and on the Management and Control Systems. Generally, the audits cover projects implemented with co-financing from the Structural Funds and the Cohesion Fund, the European Fisheries Fund, the Solidarity Funds and Financial Mechanisms EEA - Norway. 19

Company LOGO Contact us Commissioner of Internal Audit: Ms Anna Zavou Christoforou Address: 13 Limassol Avenue, 2112 Aglantzia, Nicosia CYPRUS Mailing address: P. O. Box 23812, 1686 Nicosia CYPRUS Τel: +357 22608800 Fax: +357 22463257 Email: commissioner@internalaudit. gov. cy Website: www. internalaudit. gov. cy 20

Company LOGO Thanks 21