1. Greg Hollyman - 1 2 October 2006 Implementing an Effective Internal Audit Function (Add your Business Unit name here) Implementing an Effective Internal Audit Function Monday, 2 October 2006

2. Greg Hollyman - 2 2 October 2006 Implementing an Effective Internal Audit Function Discussion Areas The starting point Elements of a transformation strategy Vision, Mission and Structure Internal Audit Charter Human Resource Issues Project management and Methodologies Marketing the function The way forward Conclusion

3. Greg Hollyman - 3 2 October 2006 Implementing an Effective Internal Audit Function The Starting Point City restructure – 6 Local Councils into 1 Different methodologies Lack of formalised training programmes Less than 50% with tertiary education – no CIA’s Limited to no use of technology Not relied upon by Office of the Auditor General Perception of “bloodhounds” focusing on petty issues Within 18 months became the first internal audit function in the country to receive a Quality Assurance Review by the Institute of Internal Auditors (IIA) and only the third local government in the world to receive one and obtained the highest rating

4. Greg Hollyman - 4 2 October 2006 Implementing an Effective Internal Audit Function The Transformation Strategy Develop a new, relevant vision, mission and structure Obtain approval of the internal audit charter Address the human resources issues Examine the project management and methodologies Market the function

5. Greg Hollyman - 5 2 October 2006 Implementing an Effective Internal Audit Function Vision, Mission and Structure Vision is shorter term and once achieved a new vision should be established Mission is how you operate – A starting point is the definition of internal auditing as defined by IIA Structure is dependent upon your circumstances, but should be as flat as possible and be risk-focused Formalise them and market them

6. Greg Hollyman - 6 2 October 2006 Implementing an Effective Internal Audit Function Internal Audit Charter Not a nice to have! Formalise it, get it approved by Audit Committee and publicise it Make sure it covers Risk Management, Governance and Control If involved in the recommendations for Audit Committee members ensure you get the right people – ignore AG rates

7. Greg Hollyman - 7 2 October 2006 Implementing an Effective Internal Audit Function Human Resource Issues Become members of the IIA Implement and sign the IIA Code of Ethics Implement a formal training and development plan but know your starting point (skills assessment) Give study assistance and push the right qualifications (CIA & CISA) Implement a performance management system

8. Greg Hollyman - 8 2 October 2006 Implementing an Effective Internal Audit Function Human Resource Issues (cont.) Involve the staff in designing the future e.g. focus groups addressing various areas Team-building exercises Focus on communication e.g. staff meetings, electronic newsletters, etc. Go the extra mile in obtaining benefits for the staff Embrace team philosophies

9. Greg Hollyman - 9 2 October 2006 Implementing an Effective Internal Audit Function Project management & methodologies Methodology must be risk focused Tailor the right methodology to your environment Ensure quality control mechanisms are built in Schedule your jobs and ensure an adequate time management system (i.e. time sheets) is in place Get the right tools, e.g. computers, relevant software packages, etc. Have external quality reviews performed as endorsed by IIA in the Standards

10. Greg Hollyman - 10 2 October 2006 Implementing an Effective Internal Audit Function What should be in your Internal Audit Manual? Contents must be in line with the IIA Standards Vision, Mission and Charter Roles and responsibilities of the team Methodology + work pack templates Standards and Code of Ethics Strategic Plans Performance Management System Training Calendars Any other relevant Internal Audit policies

11. Greg Hollyman - 11 2 October 2006 Implementing an Effective Internal Audit Function Market the function Identify your targets Market your function both internally and externally Investigate the development of marketing brochures to be rolled out with a marketing road show Most effective marketing is the deliverance of a professional service

12. Greg Hollyman - 12 2 October 2006 Implementing an Effective Internal Audit Function The Way Forward Join and use the IIA Know where the division needs to change and how – have a proper transformation strategy First get the basics right, e.g. methodologies, abide by the Standards for the Professional Practice of Internal Auditing, etc. Abide by the Code of Ethics Motivate, empower and look after the team - they can make or break a division Check if everything is on track – i.e. a QAR Package and market the division

13. Greg Hollyman - 13 2 October 2006 Implementing an Effective Internal Audit Function Conclusion Desire is the key to motivation, but it's the determination and commitment to an unrelenting pursuit of your goal- a commitment to excellence- that will enable you to attain the success you seek." ~~Mario Andretti~~

14. Greg Hollyman - 14 2 October 2006 Implementing an Effective Internal Audit Function THANK YOU