RESOLUTION OF THE CABINET OF MINISTERS OF UKRAINE

of September 28, 2011 No. 1001

Some questions of implementation of internal audit and creation of divisions of internal audit

According to part three of Article 26 of the Budget code of Ukraine the Cabinet of Ministers of Ukraine decides:

1. Approve the Procedure of internal audit and creation of divisions of internal audit it (is applied).

2. To ministers, heads of other central executive bodies since January 1, 2012:

1) to form and provide functioning of structural divisions of internal audit in limiting borders of number of employees of the ministries, other central executive bodies, their territorial authorities, having reorganized control and auditing divisions;

2) to provide implementation of internal audit according to the Procedure approved by this resolution;

3) to provide organizational and functional independence of structural divisions of internal audit;

4) to take measures to prevention of illegal intervention of the third parties in planning of activities of internal audit, implementation of internal audit and preparation of the report on its results.

3. To the ministries, other central executive bodies:

To bring 1) till January 1 in 2012 into accord with this resolution:

structure of the ministries, other central executive bodies;

own regulatory legal acts;

To inform 2) till March 1, 2012. The Ministry of Finance and the State financial inspectorate about condition of accomplishment of this resolution.

3-1. Determine that the strategic plan of activities of internal audit the next three years and the operational plan of activities for internal audit for 2019 affirm no later than February 15, 2019.

4. Provide to the Ministry of Finance explanations concerning application of the Procedure approved by this resolution.

4-1. The public auditing service by results of implementation of the state financial control quarterly no later than the 10th following reporting quarter to provide to the Ministry of Finance information on condition of internal control and internal audit in the ministries, other central executive bodies, their territorial authorities and budgetary institutions which belong to the sphere of management of the ministries, other central executive bodies concerning which in the accounting period implementation of actions of the state control is complete.

5. Recommend to local government bodies:

form structural divisions of internal audit since January 1, 2012;

during the organization and implementation of internal audit to be guided by the Procedure approved by this resolution and regulatory legal acts of the Ministry of Finance adopted in its execution.

7. This resolution becomes effective from the date of publication, except Item 6 of this resolution which becomes effective since January 1, 2012.

Approved by the Resolution of the Cabinet of Ministers of Ukraine of September 28, 2011, No. 1001

Procedure of internal audit and creation of divisions of internal audit

1. This Procedure determines the mechanism of formation of structural divisions of internal audit and questions of their activities.

Action of this Procedure extends to the ministries, other state bodies, Council of Ministers of the Autonomous Republic of Crimea, the regional, Kiev and Sevastopol city state administrations, other main managers of means of the government budget (further - state bodies), their territorial authorities and budgetary institutions which belong to the sphere of their management (further - budgetary institutions).

2. Object of internal audit are activities of state body, its territorial authorities, companies (including subjects of managing, the state share in which authorized capital exceeds 50 percent or constitutes the size which provides to the state the right of the solving influence on economic activity of such subjects of managing), the organizations and the organizations belonging to the sphere of its management, in full or on single questions (at separate stages) and the actions performed by heads of such bodies, companies, organizations and organizations for ensuring effective functioning of internal control system (respect for the principles of legality and effective use of budgetary funds and other assets, achievement of results according to the established purpose, accomplishment of tasks, plans and requirements to their activities).

3. In state body for implementation of internal audit it is formed as independent division - structural division of internal audit (further - division).

According to the decision of the head of state body of division will be formed in its territorial authorities and budgetary institutions within the number of staff of their workers.

The number of employees of the relevant divisions is determined with taking into account:

availability (absence) in state body of territorial authorities, and also the companies, organizations and the organizations which belong to the sphere of its management;

quantity and the amounts of financing of the budget programs which are carried out by managers of budgetary funds according to the functions assigned to them;

number of administrative services;

number of control and observation functions;

the number of spheres in which forming and realization of state policy is provided;

quantities of objects concerning which the state body performs functions on management of objects of state-owned property;

amount of the financial, personnel, temporary and other resources necessary for providing scope of the objects of internal audit determined by results of risks assessment.

In case of impossibility of creation of division in state body which extreme number of staff does not exceed 50 established posts and also in territorial authorities of state bodies and budgetary institutions the official to who powers on implementation of internal audit are assigned is designated.

In case of modification concerning the name and/or the number of division of the Ministry of Finance reasons for such changes (taking into account ensuring organizational and functional independence of division, determination of number of employees of division according to requirements of paragraphs of third - the tenth this Item) together with the approved staff list of state body move (changes in it).

4. The main task of division is provision to the head of state body, its territorial authority and budgetary institution of objective and independent conclusions and recommendations relatively:

functioning of internal control system and its enhancement;

enhancements of management system;

prevention of the facts of illegal, inefficient and not productive use of budgetary funds and other assets;

the prevention of emergence of mistakes or other shortcomings of activities of state body, its territorial authorities, the companies, organizations and the organizations belonging to the sphere of its management.

5. Division according to the tasks assigned to it:

1) carries out assessment:

efficiency of functioning of internal control system;

extents of accomplishment and the goal achievement determined in strategic and annual plans;

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