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Aligning Internal Audit & Risk Management
Under the Governance Umbrella
Corporate Audit & Risk Manager
David van Beek
26 November 2008
TransGrid• Background
• Structure
• Governance
• Alignment of: – Risk Management– Audit
Background
• TransGrid owns operates the NSW high voltage electricity transmission network, connecting generators, distributors and major end users across the state
• Legislation – SOC Act – Energy Services Corporation
Background
• 12,500kms of transmission lines
• 83 substations
• $4.2b assets
• 950 staff
TransGrid’s Structure
• Board
• Managing Director
• Executive
• 7 Business Units
Governance
• Formalised• Key elements
– Board and Sub Committees– Managing Director– Exec Committees– Internal Control– Audits– Authorities
• Sub-delegations• Position Descriptions
– Corp Plan and Reports– Codes– Risk Management
TransGrid Corporate Governance Framework
Executive Board
TransGrid Board
Board Audit & Risk Committee
Board Remuneration and Structure
CommitteeCommittee
Board Regulatory Committee
Board and Committees
Managing Director / Executive
Executive Committee
Business Review Committee
Executive OH&S Committee
Executive Environment Committee
Executive Audit and Risk
Committee
Information Technology
Executive Committee
Capital Works Program Steering
Committee
Executive Protective Security
Committee
Executive Revenue Reset
Executive CommitteesOther Influences on Governance
Legi
slat
ion
and
Oth
er K
e y D
o cu m
ent s
e.g
Go v
ern m
ent D
irect
ive s
, Cod
e s o
f Pra
ctic
e
Ext
erna
l Aud
it s
Aud
it an
d R
isk
Act
ivit i
e s
Cor
pora
te P
lan s
/ R
epor
t s S
tate
men
t of C
orpo
rate
Inte
nt (
SC
I), A
nnua
l Rep
ort a
nd
Per
for m
ance
Rep
ort s
Inte
rna l
Con
trol F
ram
e wor
k
Cod
e of
Eth
ics,
Boa
rd C
ode
of C
ondu
ct a
nd S
upp l
ier
Cod
e
Inst
rum
ent a
nd S
ub-d
e leg
atio
n of
Aut
hor it
y/P
o sit i
on D
e scr
ipt io
n s a
nd
Per
for m
ance
Mon
itor in
g
Po l
icie
s/P
roce
dure
s/M
anua
ls
NSW Parliament
Shareholding Minister Portfolio Minister
Risk Management
• Based on AUS/NZ 3460
• Various Assessments
• Standard Terms
• Peer Review
Corporate Plan
Mission
Vision
Values
Objectives
Strategies
Initiatives
Strategic Risk Assessment undertaken for the longer term risks (>12months) associated with the organisation not achieving its Corporate strategies.
Operational Risk Assessment undertaken for the more immediate (<12months) risks associated with the organisation not achieving its objectives.
Fraud Risk Assessments
Project Risk Assessments
Environment Risk Assessments
OH&S Risk Assessments
Treatment Actions form Actions in the Business Unit Plans
Business Unit Plans
Business Unit Plans
Business Unit Plans
Individual Performance Agreements
Individual Performance AgreementsIndividual
Performance Agreements
Individual Performance Agreements
Individual Performance AgreementsIndividual
Performance Agreements
Individual Performance Agreements
Individual Performance AgreementsIndividual
Performance Agreements
Audit
• Risk based auditing
• Test controls against risks
• Rated based on risk
• Peer Review
Alignment of Audit and Risk Management
• Combined
• Joint responsibility
• Process and Procedures developed in one area
• Joint Board and Exec Committees
Challenges• Focus
• Integration of risk management
• Systems to manage risk
• Reporting of Risks
• Responsibilities
• Value add of the audit reports
• Value of the elements of audit and risk
Questions