The Department of Finance (DOF) is the first Philippine government agency to formally adopt global principles and standards in internal auditing with the recent approval by Secretary Carlos Dominguez III of the charter governing such practices that aim to improve the performance and operations of the DOF and its attached offices and bureaus.
It also became the first state agency to comply with international standards on managing and protecting its critical and valuable data under its Information Security Management System (ISMS).
The Internal Audit Service (IAS) Charter, approved by Dominguez through Department Order No 02-2018, institutionalizes within the DOF a systematic and disciplined approach of independently evaluating performance, internal controls, operations and programs.
This IAS Charter is in keeping with the adoption by the Commission on Audit (COA) in 2016 of the Philippine Internal Auditing Framework for the Public Sector, which adheres to global professional practices.
The Philippine Internal Auditing Framework “provides authoritative guidance essential for the professional practice of internal auditing,” and is “aligned with the prevailing international principles and standards.”
Under the IAS Charter, the head of the IAS “shall report functionally to the Secretary and administratively to a designated Undersecretary” to maintain and assure that the office has sufficient authority to fulfil its mandate.
The DOF-IAS is currently headed by Director Ma. Luisa Notario.
According to Notario, “the DOF-IAS is mandated to provide an independent objective assurance and advisory services designed to add value and improve DOF operations, including its bureaus and attached agencies.”
The DOF’s IAS Charter provides that the Department’s Internal Audit Service “shall remain free from all conditions that threaten the ability of the internal auditors to carry out its responsibilities in unbiased manner,” Notario said.
“Should IAS independence and objectivity be impaired, details of impairment shall be disclosed to the DOF Secretary,” she added.
The scope of internal audit activities covers, but are not limited to, “the objective examinations of evidence for the purpose of providing independent assessments to the DOF Secretary on adequacy and effectiveness of governance, risk management and control processes of DOF,” Notario said.
Under the IAS Charter, the head of the DOF-IAS “shall have the responsibility to submit annually to the DOF Secretary a risk-based internal audit plan for review and approval.”
“The DOF-IAS shall maintain a quality assurance and improvement program that covers all aspects of internal audit activity, and which includes evaluation of the conformance with applicable standards and internal auditors’ conformance with applicable code of ethics,” the Charter states.
The creation of the IAS in all government agencies was mandated almost 56 years ago by Republic Act No 3456 or the Internal Auditing Act of 1962 and was amended through RA 4177.
In 1992, the functions and duties of the IAS were outlined in Administrative Order No 278 issued by then-President Aquino and was reissued by then-President Arroyo in 2003 through Administrative Order No. 70
In the DOF, its IAS was created through Department Order No. 35-07 and was the basis for the approval by the Department of Budget and Management of the IAS organizational structure and staffing pattern under Executive Order 366 or the Government Rationalization Plan.
