Audit Act, 2016
Act 6 of 2016
- Published in Government Gazette no. 53 on 16 September 2016
- Commenced on 1 April 2017 by Legal Notice of 2017
- [This is the version of this document from 16 September 2016.]
Part 1 – Preliminary
1. Short title and commencementThis Act may be cited as the Audit Act, 2016 and shall come into operation on the date to be appointed by the Minister by notice published in the Gazette.
2. InterpretationIn this Act, unless the context otherwise requires—"audit" means—(a)an examination and evaluation of financial records;(b)an expression of opinion; and(c)a systematic review of systems and controls employed by the management of the audited entity."Auditor-General" means a person appointed as such under section 142 of the Constitution;"auditing standards" means the prescription of basic principles and practices which auditors are expected to follow in the conduct of an audit;"accounting officer" includes a public officer or a person operating as an agent in Lesotho who is charged with the responsibility of—(a)collecting, receiving or accounting for, or who collects, receives or accounts for any public moneys; or(b)disbursing the receipt, custody or disposal of or the accounting for public shares;"chief accounting officer" means an officer designated by the Minister who is personally charged with the responsibility for financial control over his ministry, department or unit;"compliance audit" means a comprehensive review of adherence to regulatory guidelines by an organization;"Consolidated Fund" means the consolidated fund of the Government of Lesotho as referred to in section 110 of the Constitution;"document" means any record of information which includes anything on which there is writing or an image, mark, figure, symbol or perforation that has a meaning for persons qualified to interpret anything from which a sound, image or writing can be produced or extracted with or without aid;"environmental audit" means an independent external audit of environmental issues;"expenditure" means payment of public money authorized by Parliament through an Appropriation Act;"financial audit" means an independent examination of accounts of an institution for the purpose of expressing an opinion;"financial institution" means a deposit taking institution or non-deposit taking institution carrying out financial activities as stipulated in its license, irrespective of whether it is a banking or non-banking financial institution;"financial year" means the period commencing 1st April and ending on 31st of March of the next year;"forensic audit" means an examination and evaluation of financial in formation of an institution or an individual;"Independent Auditor" means a practicing member of a professional body recognised by the law of Lesotho;"internal auditor" means an employee charged with providing an in dependent and objective evaluation of financial and operational business activity of an organization, including its internal control, risk management and corporate governance;"internal control" means a system established by a Public Body or a Statutory Body to safeguard the assets of such a body and which provide reasonable assurance regarding the achievement of objectives in effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable laws and regulations;"Minister" means the Minister responsible for finance;"Office" means the Office of the Auditor-General established under section 3 of this Act;"performance audit" means an assessment of the activities of an organization to see if its operations are being carried out with due regard to economy, efficiency and effectiveness and that accountability requirements are met reasonably;"professional body" means a membership body comprised of individual professionals, accountants, auditors and accounting technicians who perform a variety of roles in the accountancy field and adhere to high quality standards of practice;"public accounts" means all accounts required under the Public Financial Management and Accountability Act 20113;"public body" means the central and local government bodies in which the government has a controlling interest;"public monies" means any money, bank deposit, negotiable instrument and other investment or earning—(a)in the custody or under the control of the Government or a local authority or their agencies;(b)in the custody or under the control of any person acting for or on behalf of the Government or local authority or their agencies; or(c)held by the Government in trust for, or otherwise for the benefit of a person other than the Government;"public officer" means a person holding or acting in any public office;"regularity audit" means a combination of financial and compliance audits;"revenue" includes all tolls, taxes, imports, rates, duties, fees, fines, penalties, forfeitures, rents due, proceeds of sale and all other receipts of the Government from whatever source over which Parliament has the power of appropriation, the proceeds of all loans raised and all grants and gifts received by the Government;"statutory body" means any statutory corporation in which the Goverment has financial interest of fifty percent or more, or such a body as the Minister may by notice published in the Gazette designate.
Part II – The Office of the Auditor-General
3. Continued existence of the Office of the Auditor-General
4. Independence of the Office of the Auditor-GeneralThe Office of the Auditor-General shall—
5. Power to inspect financial institutions
6. The Auditor-GeneralThe Auditor-General shall—
7. Functions of the Auditor-General
8. Tenure of office of the Auditor-GeneralThe Auditor-General shall vacate his office at the age of sixty.
9. Salary and benefits of the Auditor-GeneralSubject to section 115 (1) and (5) of the Constitution, the salary and benefits of the Auditor-General shall be in accordance with the Statutory Salaries Act, 19724.
10. Resignation of the Auditor-GeneralIf the Auditor-General wishes to resign from the Office of the Auditor-General he shall give at least six months notice, in writing, to the King before vacating the office.
11. Removal from the Office of the Auditor-GeneralThe Auditor-General shall be removed from office by the King if the question of his removal from office has been referred to a tribunal appointed under section 142(4), (5) and (6) of the Constitution and the tribunal has recommended to the King that he ought to be removed for inability or for misbehavior.
12. Designation of an acting Auditor-GeneralPursuant to section 142(2) of the Constitution if the Auditor-General is for any reason unable to exercise the functions of his office under this Act, a person may be appointed to act as the Auditor-General, and any person so appointed shall, subject to the provisions of section 142(3), (5) and (7) of the Constitution, continue to act until a person has been appointed to the office of Auditor-General and has assumed the functions of that office or, as the case may be, until the person in whose place he is acting has resumed those functions.
13. Disclosure of interest
14. Appointment of the Deputy Auditor-GeneralThe Deputy Auditor-General shall be appointed by the Auditor-General acting on the advice of the Audit Advisory Committee.
15. Functions of the Deputy Auditor-GeneralThe Deputy Auditor-General shall—
16. Remuneration for Deputy Auditor-GeneralThe remuneration and benefits of the Deputy Auditor-General shall be determined by the Auditor-General acting on the advice of the Audit Advisory Committee, in consultation with the Minister responsible for finance.
17. Retirement of the Deputy Auditor-GeneralThe Deputy Auditor-General shall—
18. Appointment and remuneration of the staff of the Office of the Auditor- General
19. Retirement age of staff of the Office of the Auditor-GeneralA member of staff of the Office of the Auditor-General shall—
20. Conduct of the staff of the Office of the Auditor-GeneralA member of the staff of the Office of the Auditor-General who—
21. Designation of Acting Deputy Auditor-General
22. Access to documents and property
23. Power to obtain information from others
Part III – Administrative provisions
24. Contracts with accounting and other professional firms
25. Audit inspection reports
26. Special reportsThe Auditor-General may, at any time, if he considers it necessary, send a special report on any matter incidental to his powers and duties under any provision of this Act to the Minister for presentation to Parliament.
27. Annual audit report on the consolidated financial statementsThe Auditor-General shall submit a report on the consolidated financial statements made by him to the Minister for the time being responsible for finance who shall, not later than 7 days after—
28. Accounts of spending units, statutory bodiesThe Auditor General shall report on his examination and audit of accounts of spending units, statutory bodies and projects; and send such reports to the appropriate minister who shall present the report to Parliament.
29. Disclosure of information
30. Submission of an annual performanceThe Auditor-General shall, once in a financial year, submit an annual performance report which shall include financial statements of the Office of the Auditor-General to the Minister for presentation to Parliament six months after the end of the financial year.
Part IV – Establishment of the Audit Advisory Committee
31. Establishment and composition of the Audit Advisory Committee
32. Meetings of the Committee
33. Functions of the CommitteeThe Committee shall—
34. Tenure of officeTenure of office for members of the Committee who are not public officers shall be three years.
35. Remuneration and expenses of members of the Committee
36. Disclosure of interestIf a member has a direct or indirect pecuniary interest in a matter and is present at a meeting of the Committee at which the matter is the subject for consideration by the Committee, the member shall, before the commencement of the meeting, disclose all the material facts pertaining to interest of the member to the Committee, and shall not take part in the consideration or discussion, or vote on any question in respect of the matter.
Part V – Financial provisions and accountability
37. Presentation and submission of an annual plan and proposed budgetThe Auditor-General shall prepare and submit to the Minister—
38. Audit Revenue Fund
39. Application of fundsThe Deputy Auditor-General shall—
40. Audit fees
41. Audit of financial statements of the Auditor-GeneralThe Minister shall appoint an independent auditor to audit and report on the following—
Part VI – Miscellaneous
43. RegulationsThe Minister may make regulations for giving effect to the provisions of this Act.
44. RepealsThe Audit Act 1973 and Audit (Statutory Bodies) Act, 1973 are repealed.
History of this document
01 April 2017
16 September 2016 this version
Published in Government Gazette number 53