In the histories of the earliest civilisations, before the art of recording could be known, auditing took place orally. The steward in charge of the cattle, goods and other forms of wealth would from time to time, produce to his master the wealth with which he was entrusted and give account of his stewardship, reciting from memory the goods and cattle's acquired, those disposed off and those still in his possession. The master would listen to this recital of the steward's transactions and question him thereon.
The master was the listener, the auditor. Auditing is derived from the Latin word (Audire, which is to listen) and acquired a secondary meaning: "One who satisfies himself as to the truth of accountability of another"
As of today the Institute of Internal Auditors define Internal Audit as "an independent objective assurance and consulting activity designed to add value and improve organization's operations. It helps organisation by bringing a systematic discipline approach to evaluate and improve the effectiveness of risk management, controls and governance processes"
The internal audit function of the Municipality must promote the achievement of Municipality's goals and strategic objectives
The Internal Audit function of Aganang Municipality was established as per section 165 of Municipal Finance Management Act (MFMA) and other related Legislations. The functionality of this unit commenced on the 01st September 2008 after the appointment of Chief Internal Auditor Mr. Mmakgabotuka Maphoto who report administratively to the Office of the Municipal Manager and functionally to the Audit Committee which was established in terms of section 166 of MFMA.
Appointment of new Audit Committee
The municipality appointed its first Audit Committee in January 2008 for a period of two years. The contract of this Audit Committee elapsed in January 2010. Members of the previous Audit Committee were as follows: Mr. Moloto Mokwele (Chairperson), Mr. Masha Mulaudzi (member) and Ms Gift Dinga (member).
The provisions of the section 166(1) of the Municipal Finance management Act require the Municipality to have a fully functioning and effective Audit Committee. Through compliance with the mentioned legislation the municipality appointed a new Audit Committee which commences with its functions as from 01 July 2010. The term of office of the committee will be two years ending 30 July 2012.
The scope of the committee as outlined in section 166(2) of MFMA entails advising the Municipal Council, Executive Committee, Management and staff of the Municipality on the following matters:
- Internal financial control and internal audit
- Risk management
- Accounting policies
- Accuracy, reliability of financial reporting and information
- Performance management
- Effective governance
- Compliance with MFMA, Division of Revenue Act (DoRA) and any other applicable legislations
- Performance evaluation
- Review of financial statements
- Matters raised by Auditor General
- Carrying out of investigation into the financial affairs of the municipality as may be required.
As compared to the previous Audit Committee of three members, the new committee comprises five members. The purpose of extending the membership of the committee was to cater for expertises which were not covered by the previous Audit Committee. The previous Audit Committee was only covering expertise in the fields of Internal Audit and Financial management.
In the new committee the following expertise were considered .i.e. Internal Audit, Financial Management, Legal, Performance Management, and Information Technology. Outlined below are the names of the new members with their field of expertise: Mr. Malose Mphahlele (Audit), Advocate Letsepe Thubakgale (Legal), Mr. Alpheus Mashego (Performance Management), Mr. Tinyiko Baloyi (Information Technology) and for the purpose of continuity the Council resolved to retain the services of Mr. Masha Mulaudzi from the previous Audit Committee whom will serve as a Financial expert in the Audit Committee.