ADMINISTRATIVE ORDER NO. 70 -
STRENGTHENING OF THE INTERNAL CONTROL SYSTEMS OF GOVERNMENT OFFICES,
AGENCIES, GOVERNMENT-OWNED AND/OR CONTROLLED CORPORATIONS, INCLUDING
GOVERNMENT FINANCIAL INSTITUTIONS, STATE UNIVERSITIES AND COLLEGES AND
LOCAL GOVERNMENT UNITS
I, GLORIA MACAPAGAL-ARROYO, President of
the Republic of the Philippines, by virtue of the powers vested in me
by law, do hereby order:
Section 1. Creation of Internal Audit Service. — All
heads of government offices, agencies, government-owned and/or
controlled corporations, including government financial institutions,
State Universities and Colleges (SUCs) and local government units,
shall organize an, Internal Audit Service (IAS) in their respective
offices.
The IAS shall be an integral part of the office and shall assist in the
management and effective discharge of the responsibilities of the
office, without intruding into the authority and mandate of the
Commission on Audit (COA) granted under the Constitution. It shall
function in accordance with the policies established by the provisions
of Republic Act No. 3456 as amended by Republic Act No. 4177.
The IAS shall be provided with sufficient support from the top
management to gain the cooperation/confidence of the auditee.
Sec. 2. Conduct of Internal Audit. — Internal
Audit shall be performed with proficiency and due professional care, in
accordance with the following, to wit:
1.
The IAS shall ensure that the technical proficiency and educational
background of internal auditors are appropriate for the audit to be
performed;
2. Internal
auditors shall possess/obtain the knowledge, skills and discipline
needed to carry out the audit responsibilities of the IAS;
3. The IAS
shall ensure that internal audits are properly supervised and performed
with due professional care;
4. The IAS
shall conduct the audit in conformity with International Standards for
the Professional Practice of Internal Auditing; and
5. The Code of
Ethics promulgated by the Association of Government Internal Auditors
(AGIA) shall be strictly observed to maintain high standards of honest,
objectivity, diligence and loyalty.
Sec. 3. Standard of the Internal Auditing
Profession. — The head/chief of IAS shall ensure that internal audit
practices, methods and procedures in the agency are improved and
updated through continuing education. The AGIA shall ensure that all
audit works in all government agencies are conducted in conformity with
the standards of the internal audit profession.
Sec. 4. Personnel Complement. — Agencies without
IAS shall immediately organize one. The head of the agency shall review
the organizational structure and personnel complement and convert
existing vacant positions and/or parallel positions of incumbents in
the agency necessary for the creation/strengthening of the IAS.
Sec. 5. Monitoring and Reporting. — All heads of
agencies are hereby directed to submit a report of compliance to the
Office of the President through the Office of the Executive Secretary
within one (1) year from the date of effectivity of this Order.
Subsequently, the accomplishment of the IAS shall be included in the
Agency Annual Report.
Sec. 6. Transitory Provision. — All incumbent
Internal Auditors and those performing internal audit functions per
A.O. No. 278, s. of 1992 shall continue to perform internal audit
functions. Their position title shall be reclassified to Internal
Auditor positions.
Sec. 7. Repealing Clause. — All issuances, orders,
guidelines, rules and regulations inconsistent herewith are hereby
revoked.
Sec. 8. Effectivity. — This Administrative Order
shall take effect immediately.
DONE in the City of Manila,
this 14th day of April, in the year of Our Lord, two thousand and three.
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