Internal Audit Department, Kingdom of Lesotho

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STANDARD AUDIT PLANNING FORM
SP 1 Knowledge of the organization and its environment
Date Prepared by Reviewed Index
File Number: by

Year 30 June,2017 M.Lebesa M.Masia

Signature

Objective: To understand the mission and objective and the nature of the organisation
 Review mission and strategy
 Obtain an understanding of the entity using the following means:
 Review legal instruments /Acts etc. creating the entity
 Review Mission and vision statements and corporate objectives
 Review corporate plans - long and medium term plans
 Review minutes of board meetings and top management meetings
 Interview members of top management  
 ( If this already exists from prior years - review and update if required )

This form is divided into the following parts

- Part 1 Corporate Strategy and objectives
- Part 2 Entity Operations
- Part 3 Legal Environment
- Part.4 Human Resources Management
- Part.5 Financial Management And Accounting System

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No

PART 1- CORPORATE
STRATEGY AND
OBJECTIVES

1.1 Review legal  The constitution of Lesotho Yes MOF ()All

instruments /Acts 1993 Departments.
etc. creating the
entity  Public finance Management PFMAA Amendment is Yes Finance &
and Accountability Act underway. Procurement
(PFMAA) 2011.

 Treasury Regulations 2014. Yes Finance

 Procurement Regulations 2007. Procurement Yes Procurement &

Regulations are Finance.
 Public Officers Defined currently reviewed.
Contribution Pension Fund Act
2008. The Act is currently Yes Civil Servants
being reviewed by the pensions
 Specified Officer’s Defined Ministry.
Contribution Pension Fund
2008. Yes Members of
Parliament (MP)
 Old age pensions and pensions.
Regulations 2012.
Yes Old age Pensions.
 Pensions Proclamation of 1964.

 Public Service Act 2005. Yes Non-Contributory

civil Servants
 Loans and guarantees Act Pensions.
1967. Public Service Act,
Yes HR
2005.
Yes Public Debt
 Codes of Good Conduct of
Public Officers, 2005.

 Basic Conditions of

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No

Employment, 2011
 Loans and Guarantees Act of
1967

1.2 Does the entity Yes, Yes All Departments

possess Mission
and vision
statements and
corporate
objectives?

Identify the major  Strengthen macroeconomic Yes All Departments.

strategic and management so as to support
operational shared and inclusive growth.
objectives
 Improve domestic and external
revenue policies and
management to support a
competitive, efficient and
equitable revenue regime.

 Strengthen planning,
budgeting, monitoring and
accountability systems to
deliver timely, efficient and
effective use of public funds

 Put in place and enforce an

effective PFM legal framework
and systems to ensure
transparency and value for
money in use of public funds.

 Improve the investment

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
climate and access to finance
to support private sector
growth and job creation.

 Increase opportunities for

stakeholders to understand,
participate in and contribute to
Budget policies and decisions.

To streamline the budget preparation Formulated investment

1.3 Review the entity processes, systems and legislation climate policy yes Budget
corporate plans - Department
long and medium  Draft Budget Regulation- F/Y
term plans. Identify 2017/18
the significant  Develop a Budget Guidelines
objectives and and implement- F/Y 2017/18
targets.
To put in place an effective policy
framework for responsibilities and
coordination of the investment climate.
 Formula investment climate
policy – 2018/19

 Issue of Fleet management-

1.4 Review minutes of yes  Contract
Basotho Vehicles
board meetings Manageme
 Treasury- Non- reconciliation
and top nt
 Lack of Bank statement from
management  Cash
CBL from December 2016
meetings and manageme
 Mis-procurement- use of
identify significant nt
waiver

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
 Bank
issues raised Recon.
 PPAD

1.5 Interview members

of top
management to
find out their
understanding of
the entity’s
corporate mission,
strategy and
objective.

PART 2 ENTITY
OPERATIONS
The Ministry of Finance (MoF) is the custodian of the
2. 1 Review the national budget, public finance management (PFM), and
mandate and mandated to develop macroeconomic and fiscal policies to
ownership of the
support economic development.
entity

2.2 Identify the major  Budget

areas of  Public Debt
operations?  Macro Management and Economic Policy
 Public Procurement Advisory Dept
Yes All Departments
 Internal Audit
listed
 Private Sector Development
 Contracts
 Treasury
 Procurement
 Planning
 Pensions

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No

Identify the unique  The Public Procurement and Advisory Division is

services that are responsible for overseeing the procurement
provided by the
processes within line ministries.
entity
 The Macroeconomic Policy Department is responsible for
the preparation of the macroeconomic and fiscal
frameworks which are used to develop the fiscal strategy
and budget ceilings,

 Internal Audit is responsible for internal audit

processes within line ministries,

 Treasury Inspectorate is responsible for inspecting

accounting processes within line ministries.

 The Budget Department is responsible for managing

the preparation, approval and implementation of the
Budget.

 The Treasury is responsible for the processing and

control of expenditures, salaries, revenues,
management of cash and bank accounts,

 The Public Debt and Aid Department is responsible

for debt payments,

 Contracts Management Unit manages key contracts

of government and for Public Private Partnerships,

 Private Sector Development responsible for

oversight of state owned enterprise.

 Pensions Department is responsible for management

and payment of public service and old age pension
payments.
All Government Ministries, Agencies, Parastatals and
Identify the major State owned Entities e.g
stakeholders and - Post Bank,

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
- Standard Lesotho Bank,
beneficiaries - LNIG,
- Avani,
- Centre For Accounting Studies,
- Lesotho Institute of Accountants,
- LHDA,
- Econet.
- Central Bank of Lesotho;
- NUL;
- LRA
Development Partners including IMF World Bank, EU and

2.3 Review the Major Divisions:

organizational  Budget
structures, major
 Public Debt
divisions,
 Macro Management and Economic Policy
directorates , cost
centres and  Public Procurement Advisory Dept
locations  Internal Audit
 Private Sector Development
 Contracts
 Treasury
 Procurement
 Planning
 Pensions

Directorates:
 Macroeconomic Policy and Management (MPM)
 Regional Integration (RI).

2.4 Identify and Support Services

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
 Legal All Departments
Review the  Human Resources
administrative  Accounts
support services  Planning yes
and systems  Procurement

Support Systems

 Administration Old Age Pension,

 CSDRMS, Pensions
 BFP, Debt
 IFMIS, All departments
 Resource Link, All departments
All departments

2.5 Identify the major SSD- Planning

 Records Management is housed Liquor Commission,
locations,
premises, plants, opposite Victoria Hotel
SSD- Planning
farms etc.  LMDA is based at Post Office Building
 Pensions Unit- Pensions
 Global Fund Coordinating Unit is based at MGC Building SSD- Planning

2.6 Review the  Lack of clear structure, line of responsibility, staffing and yes Treasury
management skills to enable the delivery world class functions is a Contract
processes of the significant challenge facing the ministry. management
business units and  This means that functions are not performed in a Internal Audit
divisions. Review professional and coordinated manner, losing the PSD
the allocation of opportunity for improving effectiveness of limited public
tasks and funds and synergies between the functions and

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
departments.
operations
amongst the
divisions and
business units
How are the
functions allocated
to various
departments and
cost centers?

2.7 Review the In adequate team work, and coordination amongst department is yes All Department
working evidenced in the Ministry.
relationship and
coordination
mechanism
amongst the
departments for
effectiveness?
Contracts: -
2.8 Identify the major Creation of new Interim Fleet Management Unit (IFMU), Yes PPAD
projects/ with support of Principal Secretaries of the Ministries, for
programmes Procurement
management of individual Basotho vehicle service
/development
providers.
initiatives and
their respective Planning
objectives Planning
 Public Finance Management Reform Programme
 Refurbishment of Border post - for efficient Contract
collection of revenues Management
 Integrated Revenue Management System. Yes
 Records Management - for better management of SSD
Government records.
 Support to HIV/AIDS by Global Fund - for combating
the spread of HIV/AIDS and TB in the whole country,
through education, campaigns and provision of
drugs
 Upgrading of HR and Payroll Integration System
 Lesotho Millennium Development Agency
Programme
 IFMIS upgrade

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
Legal
Proposing compliance function within the Ministry

Human resource

 Work Climate survey - meant to promote and create

a conducive working environment within the entire
Ministry
 Implementation of the Performance Management
System - to strengthen the management and
supervision of Ministerial staff, improved service
delivery and the achievement of Ministerial goals
 Sensitization workshops for staff on rules and
regulations governing the Civil Servants - to
promote adherence and compliance when
performing their day to day duties

 Implementation of the PPAD Management Information

System
o The system’s purpose is to support the processes of PPAD
 Implementation of the Electronic Documents and Records
Management System
o The system’s purpose is to support the processes of the
Registry Offices

 Creation of new Interim Fleet Management Unit (IFMU), with

support of principals of the ministry, for management of
individual Basotho vehicle service providers.

2.9 Inquire about the

 Fuel Contract - Engine
major contracts? yes Contract

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
Management
 Basotho Vehicles Service Providers’ contracts (under IFMU)
Identify the major SSD
suppliers and  Estate Management Contract – JHI
MIS
contractors  ANGA
Treasury
 CBS
Internal Audit
 Softech
 CQS

PART 3 LEGAL
ENVIRONMENT
Constitution of Lesotho and Office of the Attorney General Act of
3. 1 Review the 1994
legislative
framework and
authority creating
the entity
 Public Financial Management and Accountability yes Finances
3.2 Identify any Act,2011
special Acts or  Treasury Regulations, 2014
legislation that  Public Procurement Regulations, 2014 Procurement
govern the
operations of the
entity
 Public Financial Management and Accountability Act, Yes Finance
3.3 Identify the 2011
legislation,  Treasury Regulations, 2014
regulations,  Public Procurement Regulations, 2007
government Procurement
ordinances, and
ministerial
directives which
influence the
operations and
entity’s objectives

PART.4 HUMAN RESOURCES MANAGEMENT

Yes Human resource
4. 1 Review the
established  805 established positions
number of posts
and how many are

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No

 574 positions are filled

filled

Review how staff  234 positions are vacant

posted at various
locations.

 Recruitment and Selection

4.2 Review the human Yes Human resource
 Performance Management
resources
 Training and Development
management
 Employee Relations
function
 Remuneration and Benefits
 Records Management

 Treasury - Administration
4.3 Identify the - Cash Management
categories of - Financial
technical and - Performance Monitoring
administrative staff - Expenditure Management
employed? Review - Revenue Management
job descriptions - Financial Systems Support
- Sub-Accountancies in all the 9 districts with an exception
of Maseru

 Support Services-
 Internal Audit
 Macro-Economic and Fiscal Policy Management
 Regional Integration
 Macro and Fiscal Management
 Private Sector and Financial Affairs
 Public Debt Management
 National Authorising Office
 Procurement Policy & Advisory division
 Pensions
 Contracts Management
 Private sector development
 Financial Affairs Unit Government complex

4.4 How does the  Open competition – Positions are advertised Yes Human Resource
entity ensure that through external circular for one-month period

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
 Job specifications - Competencies and required
appropriately qualifications are clearly articulated.
qualified and  Selection process – is conducted by HR Office in
experienced staff
consultation with relevant HOP
are recruited,
 Interviews - Interviews for all Civil Servants are
retained and
promoted? performed by Public Service Commission which is
statutory body to ensure independent and objective
assessment.
 Promotion is based on merit, relevant experience
and a consistently good performance

Retention strategy - There is a small retention allowance for

certain fields e.g. Legal and IT staff, which does not serve
the purpose therefore, requires review.

4.5 Does the personnel  File auditing is undertaken to ensure availability of yes Human Resource
department relevant information in each of the employee files.
maintain updated
service records of
 Employees have to furnish the HR office with their
each member of
staff including current qualifications after completion of training for
details of training filing.
attended

4.6 Review the training  There is a training and development policy within yes Human Resource
policy. Is there a the Human resources and Development Manual.
training budget? Is
 Training has to address identified gaps for improved
there a training
performance and the right exercise to determine
section? Are
appropriate that there is Training and Needs Assessment.
training and  Training is currently administered by HR staff in
professional respective Ministry of Finance departments.
development  Training Plan and Training Budget should ideally be
activities done concurrently as they have to be aligned.
organized? However, Training plan is usually compiled long after
the budget has been prepared. As the Budget is
Is there a policy on being prepared, the training needs from different
staff
departments must have already been identified and
rotation/transfers?

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
fall within the budget
(where applicable)

PART.5 FINANCIAL MANAGEMENT AND ACCOUNTING SYSTEM

5. 1 Identify the IPSAS- Cash Yes Treasury- Cash

Accounting Management
standards and
policies adopted by
the entity?

5.2 Identify and review

the major IFMIS Yes ICT- IFMIS
accounting systems
and procedures?

 Operation-
5.3 What are the major Printing of
budgetary Cheques
restrictions? Shortage of financial resources 

5.5 Review the chart of New chart of Accounts is obtained and reviewed.
accounts -Copy of Chart of Accounts is an attachment to this Doc

5.5 Obtain the list of

bank accounts  Recurrent Expenditure Account - 711192 - Acc. No. yes Treasury – Cash
operated by the 0101403715012 Management
entity and the Bank reconciliation
authorized  Development Expenditure Account - 711193 Acc. No. is not performed as
specimen 0101403715013 required.
signatures.
 Trust Monies Account - 711221 - Acc. No.

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No
0101403715011

Cash management to provide other bank accounts held with CBL

and signatories

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 Internal Audit Department, Kingdom of Lesotho

Ref Factors Identified and Reviewed Documents Remarks Inherent Audit area affected
risk
impact?
Yes/No

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