Introduction

Legal Requirement: The establishment of Audit Committees is required under Section 5 of Public Finances (Management) Act 2016. This requires National Departments, Statutory Authorities, Provincial Governments and Local Level Governments to establish the functions of Audit Committees and Internal Audit Units.

This requirement was introduced in November 2004 and operation of the amended legislation became effective on 1st March 2005.

DOF has been rolling out Public Sector Audit Committee Program since 2005. To date forty five (45) audit committee are established in different government agencies. The government agencies comprise of national departments, statutory bodies and provincial administrations. Department of Finance is now moving to further develop and ensure substance of the program. Finance has set out the actions that need to take place to be able to expand the number of audit committees in operation, maximize the effectiveness of those committees and agency internal audit units, and ensure that both agencies and the committees continue to build capability and effectiveness.

From 2005 to 2009 the Public Sector Audit program (PSAP) was funded by Department of Finance and from 2010 to 2015 the program was a joint initiative of the Australia and PNG Government to introduce financial improvements and good governance practices into all PNG Government agencies receiving financial support from National Government through the Annual Budget . The Aus-Aid support ceased at the end of 2015. Department of Finance (DOF) has been the government agency responsible for implementation of the Public Sector Audit Program.

As at the end of 2018, 45 Audit Committees were established in the public sector. As at 30 June 2018, we have a total of 45 committees, with the last one being the Public Services Commission.

Expansion of the Program

Despite continuous challenges this program is expanding and has established 45 audit committees to date. 8 new agencies have made formal request indicating their readiness to come on board the program. Internal audit and compliance division is looking at considering setting up 4 to 6 new committees this year. These will primarily depend on the availability of support resources and the readiness of the receiving agencies.