- 10 Marks
PSAF – May 2019 – L2 – Q5a – Public expenditure and financial
Describe the composition of the Audit Committee and explain its role in enhancing public financial governance.
Question
a) In an effort to strengthen public financial accountability, the Public Financial Management (PFM) Act, 2016 (Act 921) has introduced an Audit Committee in the covered entities as part of the public financial governance infrastructure to replace the Audit Report Implementation Committee (ARIC). Many experts hold the view that ARIC did not perform well due to lack of independence and legal framework. To address these lapses, the PFM Act paid attention to the composition of the Audit Committee and empowers the Minister of Finance to issue regulations for the effective functioning of the committee. A good number of Audit Committees have since been inaugurated and operational.
i) Describe the composition of the Audit Committee and explain how the structure of the committee could enhance the effectiveness of public financial governance. (5 marks)
ii) Explain THREE (3) responsibilities of the Audit Committees as enshrined in the PFM Act and the related guidelines issued by the Minister of Finance. (3 marks)
iii) Suggest TWO (2) ways by which the effectiveness of Audit Committee can be enhanced. (2 marks)
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