EXTRA ORDINARY ISSUE, REGISTERED Ne, L-7532 Che Punjab Gazette PUBLISHED BY AUTHORITY LAHORE WEDNESDAY SEPTEMBER 19, 2018 GOVERNMENT OF THE PUNJAB LAW AND PARLIAMENTARY AFFAIRS DEPARTMENT NOTIFICATION (103 of 2018) 17 September, 2018 Notification No.SOR(LG)38-25/2018, dated 10.09.2018, issued by Government of the Punjab, Local Government and Community Development Department, is hereby published for general information: © “GOVERNMENT OF THE PUNJAB LOCAL GOVERNMENT & COMMUNITY ‘DEVELOPMENT DEPARTMENT Dated 17 September, 2018 (NOTIETCATION No.SOR(LG)38-25/2018. The following draft of the rules called “the Punjab Local Governments (Internal Audit) Rules, 2018" which the Government of the Punjab proposes to make in pursuance of the provisions of section 144 of the Punjab Local Government Act, 2013 (XVIII of 2013), is hereby published for information of the persons likely to be affected thereby + and notice is hereby given that the said draft, together with any objections ‘and suggestions with respect thereto, which may be received by the Secretary, LG&CD Department, within ten days of the publication of this, notification in the official Gazette shall be taken into consideration in his, office. Price Rs, 10.00 Per Page (4)580_ THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 1. Short title, extent and commencement.- (1) These Rules may be called the Punjab Local Governments (Internal Audit) Rules, 2018. (2) They shall extend to the Metropolitan Corporation and Municipal Corporations in the Punjab. (3) They shall come into force with immediate effect. 2. Definitions. otherwise requires: (a) “Act” means the Punjab Local Government Act, 2013 (Act XVII 02013); (2) In these rules, unless the subject or context (b) “Control” means and includes the rules, bye-laws, Government policies, procedures, systems, practices and organizational structures in place, designed to provide reasonable assurance that the objectives of the local government are achieved effectively & efficiently and to avert or detect and correct undesirable events well in time; (©) ‘Economy’ means acquiring resources at the competitive lowest cost without compromising the quality and quantity with regards to the objectives of the Local Government; (6) ‘Effectiveness’ means the relationship of an output to what is was intended to be achieved: (e) “Efficiency’ means the relationship of inputs to outputs in terms of optimum utilization of resources ()*Executive’ means and includes all officers and officials of the Local Government assigned to discharge the respective affairs of a Local Government; (2) ‘Governance’ means a leadership process through which the Executives set and oversee implementation of the rules, bye: laws, policies, designed to achieve better performance of functions and ensure accountability; (bh) Government.- means Government of the Punjab; () ‘House’ means an electes bdoay of tne Local Government; (“Internat Audit’ means an independent advice, appraisal and consulting activity designed to add value and to improve the service delivery to achieve the objectives of the Local Government, by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes;‘THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 551 (k) “Internal Auditor’ means Head of internal audit office of the Local Government established to conduct internal audit of Municipal Offices under these Rules; () ‘Local Government’ for the purposes of these rules means the Metropolitan Corporation and a Municipal Corporation; (m) “Mayor” means Mayor of the Metropolitan Corporation or a Municipal Corporation; (n) ‘Municipal Offices’ means offices of the Local Government including Planning, Finance, Regulation, Infrastructure, Services ‘and includes any other office which Government may by notification determine; (0) ‘Municipal Officer’ means the Head of Municipal Office of the Metropolitan Corporation or a Municipal Corporation; (p) ‘Principal Accounting Officer’ means the Chief Officer of the Metropolitan Corporation or a Municipal Corporation; (a) "Risk’ means the degree to which operations of the Local Government are exposed to breaches in ethics, financial indisciptine, toss, pilferage, misappropriation of funds, Inappropriate disclosure of data or ineffective use of resources and includes an act or event occurring that would have an adverse impact on the service delivery; and (9) *Risk Management’ means designing and implementing strategic plans and processes to manage risks at 2 level acceptable to the management of the Local Government, (2) Words and expressions used herein, but not defined in these Rules shall hhave the same meanings as are assigned to them in the Act. 3. Appointment of the Internal Auditor.-(1) Soon after the enforcement of these rules, the Local Government shall request the Government for the creation of post of an Internal Auditor. (2) After the creation of post of the Internal Auditor, the Local Government ‘shall appoint an Internal Auditor who shall be responsible for internal audit of the Local Government,$52__ THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 (3) The Internal Auditor and his support staff shall be the employees of the Local Government concerned. 4. Qualification, ete.- (1) The Internal Auditor shall (2) hold a post-graduate degree in the field of Economics, Finance, Law oF Public Administration; (b) Pakistan Institute of Public Finance Accountants (PIPEA), Internal ‘Audit or Subordinate Audit Service (SAS) qualified; and (c) have at least two years’ experience in the relevant fel (2) The pay and allowances, age, tenure in office and other terms and Conditions, of appointment of the Internal Ausitor shall be determined by the Local Government an Community Development Department in consultation with the Finance Department, Government of the Punjab. (3) The internal Auditor shall not hold another position in the Local Government. 5. Principles and obligation to Internal Audit.- (1) The scope of ‘work of the Internal Auditor shall include a broad range of advisory services, ‘gathering information on all functions of the Local Government, including ‘evaluation of design and systems, and formulation of advice with the ‘objective to improve efficiency, economy, building quality and ensure timely delivery of services. (2) The opinions, views, assessment, valuation and recommendations of the Internal Auditor shall be an advisory and consulting activity, designed to add value and to improve the service delivery, and shall be given. due consideration and weight by the Local Government while taking corrective ‘measures/actions. (3) _ Help the Local Government to perform all its functions by suggesting systematic and disciplined approach to the process of evaluation to improve the effectiveness of risk management, control and governance processes. (4) Appropriate guidelines, strictly consistent with the provisions of the ‘Act and rules and such guidelines may include advice on modifications of ‘existing systems and procedures, introduction of new systems, procedures, forms, etc., for carrying out the purpose of these rules.‘THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 _ 553 (5) Municipal Offices are kept fully informed about frauds, misuses and deficiencies in performance of different functions and policies administered or financed by them and recommendations for corrective actions to address such problems, misuses, deficiencies and to report on the progress made in this regard. 6. Role and responsibilities of the Local Government. - (1) Internal ‘Audie shall be @ continuous management function of the Local Government, (2) The Internal Auditor shall have direct access to the Principal ‘Accounting Officer, in the discharge of his assigned functions. (3) The Local Government shail facilitate access to all relevant record, documents, minutes of the House and committees, files, books, papers, ‘accounts and vouchers of Municipal Offices, to Internal Auditor: Provided that so long as the record remain in the custody of Internal Auditor he shall be responsible for its safe custody and ensure that such record is rot destroyed, damaged, misplaced or tampered in any manner, (4) The Internal Auditor shall be entitled to request from the executives, such Information and explanations which are necessary for the performance of his functions. (5) In case of any classified and secret information, restrictions imposed by law regarding the eligibility to have access to information shall also apply to the Internal Auditor. (6) The Municipal Offices shall improve their risk management, control ‘and governance through the recommendations of Internal Auditor to achieve the policy objectives of the Local Government. (2) The Mayor and Chief officer shall ensure that the rights and privileges ‘ranted to the Internal Auditor under these Rules are not infringed upon by an act of any officer or staff under their administrative contral (8) Any person hindering or obstructing the work of Internat Audit in the Performance of its functions or denying or wilfully delaying access to information required by him under these Rules shall be subject to disciplinary action under relevant Efficiency and Discipline Rules. (8) The Local Government shall provide the support staff to the Internal Auditor.554__ THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 Role and responsibilities of the Internal Auditor.- (1) The Internal Auditor shall serve as the Principal Support Officer to the Mayor and Principal Accounting Officer and shall provide information and make recommendations to them. (2), The Internal Auditor shall examine, inter alia, whether the Local Government has in place: 1, mechanism to ensure compliance with the policies, laws, rules and bye-laws and effective systems of internal control to achieve its objectives; IL. strategy to manage risks and measures to manage resources economically, efficiently anc effectively; IL. procedure to safeguard the assets of the Local Government; IV. reliable information systems including that of accounting information and financial management; V. mechanism to prevent and detect fraud, abuse and waste of public resources: VI procedure for addressing the deficiencies in the operations and systems of the Local Government ientiied by the Internal Auditor; VIL. mechanism for community participation to improve the service delivery; and VIL. mechanism for redressal of grievance of citizens; (3) without prejudice to sub rule (2), the functions of Internal Auditor shall inter aia incluce: 1. evaluation of adherence to laws, regulations and 2pproved policies of the Government and procedures; IL. evaluation of the institutional processes, including human resource, management, and information flows, office accountability mechanisms of the Local Government to safeguard resources against fraud, waste, abuse and mis-management; IIL, reviewing of systems of Internal Control and evaluate systems and processes of the Local Government and . making recommendations for improvements to‘THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 $55 promote orderly, economical efficient and effective ‘operations: IV, study of specific matters as directed by the House, Mayor fF Principal Accounting Officer ; consuming community based inputs on service delivery, Institutional processes and actual outcome; and Vi. any other ancillary task assigned by the House, Mayor or Principal Accounting Officer (4) _ The Internal Auditor shall ensure that the internal audit is conducted In a manner that it i. demonstrates uncompromised integrity, competence and due professional care; li, is objective and free from undue influence; li, aligns with the role, functions and risks of the Local Government; ly. Is insightful, proactive, future-focused and promotes positive change; vv. leads to continuous improvement in service delivery; vi, communicates effectively; vii. does nat interfere in the functioning of the Local Government; and vil. is in accordance with the provisions of the Act and these rules without any extraneous consideration, 8. Internal audit reports.- (1) The Internal Auditor shall, according to the annual ausit programme, conduct detailed internal audits of the Local Government and present his findings through periodic reports to the Mayor ‘and Principal Accounting Officer. (2) Not later than two months after an internal audit report is issued, the Internal Auditor shall follow-up his findings and suggestions in order to ascertain whether the corrective actions were taken, and the desired results achieved or not. (3) The Internal Auditor shall Inform the Mayor and Principal Accounting Officer on the status of the follow-up activity of the Municipal Office audited. 9. Annual report. (1) The Internal Auditor shall present an Annual Report as soon as possible after the end of each financial year but not later than the 30th September, on the performance of his office to Mayor and the Principal Accounting Officer who shall place it before the House.$86_THE PUNJAB GAZETTE (EXTRAORDINARY) SEPTEMBER 19, 2018 (2) The Annual Report shall be public document to the extent that it does not Include information specifically made confidential pursuant to laws in force SECRETARY GOVERNMENT OF THE PUNJAB LOCAL GOVERNMENT AND COMMUNITY DEVELOPMENT DEPARTMENT” ‘SALAH UD DIN Acting Secretary Government of the Punjab Law and Parliamentary Affairs Department