misinterpretation of the Review reports by internal audit or some other regulation or through an error in independent audit of scheme control plans and operating application. manuals. New legislation may require the introduction of new Formal and documented procedures for the translation of administrative and control statutory requirements into scheme rules. Formal control New Legislation procedures. This may result in plans and the independent review of operating instructions errors in either the design or and control plans may also constitute audit evidence where operation of controls required schemes are introduced following new legislation. to ensure regularity. Where regulation is developed International by such institutions, there is a Schemes (funded Sources of evidence identified in connection with the risk that regulations and by the United complexity of regulations may apply equally to such funded guidance may be misinterpreted Nations, EU or schemes. or omitted from internal other institutions) instructions. Formal agreements between the entity and the agent defining control procedures to be applied in the administration of services; Where programs are Services and Documented procedures and outcome of management administered by agents, Programs control and monitoring of third party activities; departments lose a degree of Delivered Reports from inspection visits by internal audit to third direct control and may have to Through parties to review systems and procedures, including those rely on agents to ensure Parties relevant to regularity; compliance with authorities. An assurance or agreed upon procedures report on payments and receipts, or on controls over payments and receipts, by the third party’s auditor. Departmental instructions and guidance to claimants clearly stating criteria for making claims; Standard requirements for documentation evidencing entitlement to be submitted in support of claims exist An entity’s ability to confirm (this may be a condition of payment of grant or a Payments and compliance with authorities may requirement once the activity supported by the grant has Receipts Made on be restricted where, for been completed); the Basis of example, criteria specified for Reports from physical inspection of claimants’ records etc. Claims or receipt of grant are not subject to confirm eligibility; Declarations to direct verification. Documented procedures for assessing the financial standing of claimants before awarding a grant and for monitoring continuing solvency exist; Independent certification of the application of grant by external auditor.
misinterpretation of the regulation or through an error in application. Review reports by internal audit or some other independent audit of scheme control plans and operating manuals. New Legislation New legislation may require the introduction of new administrative and control procedures. This may result in errors in either the design or operation of controls required to ensure regularity. Formal and documented procedures for the translation of statutory requirements into scheme rules. Formal control plans and the independent review of operating instructions and control plans may also constitute audit evidence where schemes are introduced following new legislation. International Schemes (funded by the United Nations, EU or other institutions) Where regulation is developed by such institutions, there is a risk that regulations and guidance may be misinterpreted or omitted from internal instructions. Sources of evidence identified in connection with the complexity of regulations may apply equally to such funded schemes. Services and Programs Delivered Through Parties Where programs are administered by agents, departments lose a degree of direct control and may have to rely on agents to ensure compliance with authorities. Formal agreements between the entity and the agent defining control procedures to be applied in the administration of services; Documented procedures and outcome of management control and monitoring of third party activities; Reports from inspection visits by internal audit to third parties to review systems and procedures, including those relevant to regularity; An assurance or agreed upon procedures report on payments and receipts, or on controls over payments and receipts, by the third party’s auditor. Payments and Receipts Made on the Basis of Claims or Declarations An entity’s ability to confirm compliance with authorities may be restricted where, for example, criteria specified for receipt of grant are not subject to direct verification. Departmental instructions and guidance to claimants clearly stating criteria for making claims; Standard requirements for documentation evidencing entitlement to be submitted in support of claims exist (this may be a condition of payment of grant or a requirement once the activity supported by the grant has been completed); Reports from physical inspection of claimants’ records etc. to confirm eligibility; Documented procedures for assessing the financial standing of claimants before awarding a grant and for monitoring continuing solvency exist; Independent certification of the application of grant by external auditor.
1d%20-%20Financial%20Audit%20Practice%20Notes%20-%20Phase%201%20_FINAL_%20_2_.docx