BY-LAW ON THE WORKING PROCEDURES AND PRINCIPLES OF THE INTERNAL AUDIT COORDINATION BOARD

SECTION ONE

Purpose, Basis and Definitions

Purpose

Article 1 – The purpose of this By-law is to arrange the working procedures and principles of and other issues related to the Internal Audit Coordination Board.

Basis

Article 2 – This By-law has been prepared pursuant to Article 66 of the Public Financial Management and Control Law No 5018.

Definitions

Article 3 - The following terms included in this By-law are defined as follows;

a) Board          : Internal Audit Coordination Board,

b) Chairman: Chairman of the Internal Audit Coordination Board,

c) Member      : The Chairman and the members of the Internal Audit Coordination Board,

d) Law : Public Financial Management and Control Law, No 5018,

e) Auditing Standards   : The “Public Internal Auditing Standards” to be determined by the Internal Audit Coordination Board in accordance with International Auditing Standards, which internal auditors are obliged to comply with,

f) Code of Ethics         : The “Professional Code of Ethics” to be followed by internal auditors and to be determined by the Internal Audit Coordination Board in accordance with generally accepted international code of ethics,

g) Audit Manuals         : The manuals related to internal audit function issued by the Internal Audit Coordination Board, to present the basis for the manuals to be prepared by the internal audit units of public administrations,

h) Secretariat   : The relevant department assigned by the Ministry of Finance, General Directorate of Budget and Fiscal Control, to carry out the secretarial duties of the Internal Audit Coordination Board,

SECTION TWO

Establishment, Duties, Authority and Responsibilities of the Board

Appointment of the Board members

Article 4 – The Internal Audit Coordination Board affiliated with the Ministry of Finance consists of seven members. One of these members is proposed by the Prime Minister, one by the Minister in charge of the Undersecretariat of State Planning Organization, one by the Minister in charge of the Undersecretariat of Treasury, one by the Minister of Interior and three, including the chairman, by the Minister of Finance, and appointed by the Council of Ministers. Those who will be appointed to the Internal Audit Coordination Board should possess the qualifications necessary to carry out the duties defined under Article 67 of the Law. One of the candidates to be proposed by the Minister of Finance should be an academician having a doctoral degree in one of the branches including economics, finance, accounting or business administration.

Duration and Termination of Membership

Article 5 – The members shall be appointed for a period of five years. Two months prior to the end of this five-year period, the Board shall request the names of the candidates from the concerned Ministries. Members may be reappointed at the end of their terms.

If there is a vacant membership position for any reason, the Board informs the concerned ministry within one month. Appointment to the vacant membership position shall be made by the Council of Ministers upon the proposal to be made within one month by the concerned minister.

Board membership shall terminate of its own record, if the member;

a) has a penal conviction due to the crimes stated in Article 48, Paragraph A/5 of Civil Servants Law, No 657.

b) has an illness or impairment testified by a medical board report, preventing him/her from carrying out the duty on a continual basis,

c) withdraws from Board membership,

Duties of the Board

Article 6 –In order to regulate, monitor, improve, harmonize and coordinate the internal audit systems of the public administrations, the Board shall perform the following duties as an independent and impartial body:

a) To determine internal audit and reporting standards, and to prepare and develop audit manuals.

b) To develop annual risk assessment in compliance with the auditing standards and international practices and the corresponding risk-based auditing methods.

c) To establish the cooperation between the internal audit units of public administrations and other audit units, if any.

d) To provide recommendations to the public administrations as to taking the necessary measures for the prevention and elimination of fraud and irregularities.

e) To provide recommendations to public administrations on ensuring a specific audit task outside the scope of the program, conducted by internal auditors in risky areas.

f) To regulate and revise the internal audit training programs and to modify them in line with the changing needs.  

g) To contribute to the settlement of conflicts in cases of divergence of opinions between the internal auditors and the heads of public administrations.

h) To evaluate the internal audit reports of the administrations and to consolidate their results in an annual report to be submitted to the Minister of Finance, and publicize it.

i) To determine, according to the volume of the transactions, whether internal auditors shall be appointed for district and village municipalities.

j) To determine other procedures on the appointment of internal auditors.

k) To determine the code of ethics to be followed by the internal auditors. 

l) To regulate and monitor the certification system of internal auditors  

    m) To ensure cooperation with the external audit system.

n) To evaluate the condition of internal audit units, at least every five years, within the scope of quality assurance programs.

o) To monitor and evaluate whether the regulations of the Board are followed by internal audit units and internal auditors.

p) To plan the expenditures relating to the training of internal auditor candidates and internal auditors, and the other activities of the Board.

r) To examine the reports submitted to the Board, stating any action by internal auditors that will damage the prestige of internal auditing profession, to discuss the issues in terms of the certificates of the internal auditors if necessary and to conclude to a decision.

s) To review at least once a year, the regulations prepared by the Board in view of the changing and developing conditions.

Authority of the Board

Article 7 — The Board is authorized;

a)  to issue communiqués, manuals and decisions about subjects related to the its field of duty,

b) to evaluate the applications made to the Board and to monitor their results,

c) to decide on establishing study and specialization groups when necessary,  

d) to invite experts, with no voting right, to meetings for purposes of technical assistance and consultancy,

e) to evaluate study, dissertation, research and other types of work as well as statistical data about internal auditing and publish those deemed necessary.

f) to define the information and documents to be kept by internal audit units and internal auditors,

g) to request from public administrations, all the information and documents required by its duty,

Monitoring of the Internal Audit System

Article 8 – The Board performs its monitor function by means of;

a) following the conformity of internal audit system and its activities, with the legislation,

b) identifying the deficiencies of the internal audit system and the areas requiring improvement, by keeping track of the international developments and results of internal and external quality evaluation,

c) defining best internal audit practices by comparing the activity results of internal audit units and making them widespread in public administrations,  

d) organizing meetings when necessary, with the heads of public administrations, heads of internal audit units and internal auditors in order to evaluate the internal audit system and implementation results,

Duties and Responsibilities of the Chairman

Article 9 – The Chairman steers the Board meetings and fulfills the following duties in order to ensure that the activities are administered in an efficient and organized manner:

a) To represent the Board.

b) To issue calls for Board meetings and to chair the meetings.

c) To choose one of the members as the vice chairman.

d) To inform the concerned people and public administrations about the decisions made.

e) To inform the public on behalf of the Board.

f) To conduct direct correspondence with the public administrations on behalf of the Board.

Responsibilities of the Members

Article 10 – The members shall be responsible for the fulfillment of the duties vested in the Board by the Law and the Regulations issued in accordance with the Law.

The members have to devote the due attention and diligence to the Board activities, and to be impartial in its actions and decisions.

 

The guarantees of the Board members

Article 11 – The Board members are independent while carrying out their duties. No entity, body, authority or person may give any order or instruction with an aim to influence Board decisions.

SECTION THREE

Working Procedures and Principles of the Board

Convention of the Board, Quorum and Agenda

Article 12 – The Board convenes on the dates to be determined by the Chairman.  Upon the proposal of at least two members, the Chairman also issues a call for the Board meeting following the agenda on demand within seven days.

The Board convenes with at least four people steered by the Chairman or the Vice Chairman. The decisions shall be taken by the absolute majority of the total number of members. Abstention from voting is not allowed.

The agenda, place and the time of the meetings shall be defined by the Chairman. The changes in this respect as well as the documents relating to the topics to be discussed shall be sent out to the members at least two days beforehand.

The agenda of the meeting can be changed during the meeting upon the proposal of the members.

Upon the unanimous decision of the Board, remote attendance to the meetings via technological means may be possible. 

 

 

Voting

Article 13 – Once the discussions concerning the agenda are completed, the agenda item shall be brought to a vote. Voting shall be by open ballot.

The members in opposition to the decisions shall send out their written minutes of dissent to the Board, until the next meeting day.

Casebook

Article 14 – The Board decisions shall be written over the casebook along with the date and the sequence number and be signed by the members. Each page of the case text including more than one page is initialed by the members.

The documents forming the basis of the decisions shall be indicated in the decision records by sequential numbers, and shall be annotated by the Board and kept in a separate file.

The principles and procedures as to the form and use of the casebook, minutes of meetings and the other documents to be used by the Board, shall be determined by the Board.

The secretariat shall carry out the duties of writing the decisions and keeping the casebook and its annexes.

Announcement of the Board Decisions

Article 15 – The Chairman or a member authorized by the Chairman may make an announcement to the press and broadcasting bodies about the discussion topics and the decisions of the meetings.   

Preparatory Activities for the Meetings

Article 16 – Before the discussion of the issues that require study and research, the Board may request that the activity and specialization groups, which it will establish, shall prepare reports and documents. The opinions and conclusions affirmed in this report are not binding for the Board.

Cooperation with External Audit

Article 17 –The Board shall establish the necessary cooperation with Turkish Court of Accounts, in order to ensure that internal and external audits are administered harmoniously.

 

SECTION FOUR

Duties of the Secretariat

Duties of the Secretariat

Article 18 – The Secretariat performs the following duties in order to assist the Board in carrying out its duties and responsibilities in an effective and efficient manner:

a) To conduct the correspondence related to the arrangement of the Board meetings.

b) To keep the minutes of the Board meetings.

c) To take the necessary actions suggested by the decisions of the Board.

d) To make research and studies in order to develop and update internal auditing standards and methods, code of ethics as well as reporting standards in accordance with international practices.

e) To carry out activities related to the preparation and updating of the draft internal audit manuals.

f) To carry out the tasks related to the internal audit plan and programs.

g) Regarding the internal audit reports which will be sent via an electronic medium, to work on these reports within the framework of the principles and procedures to be set out by the Board, and to consolidate the results of reports.

h) To carry out activities within the framework of the principles and procedures to be set out by the Board, in relation to the training and certificates of internal auditors.

i) To make research on the international developments and practices related to risk assessment methods and to inform the Board in this respect.

j) To assist the Board in the legislative work relating to internal audit.   

k) To conduct the duty of rapporteur for the Board.

l) To carry out other tasks assigned within the scope of Article 6 of this By-law.

Sufficient number of personnel is assigned to the secretariat to assist the Board in its duties.

Enforcement

Article 19 - This By-law shall enter into force on the date of its publishing.

Execution

Article 20 - Provisions of this By-law shall be executed by the Minister of Finance.