Terms of Reference

INTERNAL AUDIT (CONSULTANCY) SERVICES

INTRODUCTION

The Spectrum Management Authority (SMA) is a limited liability company wholly owned by the Government of Jamaica. The Authority was established by the Telecommunications Act 2000 and became operational in April 2001. The Authority is an agency of the Ministry of Industry, Technology, Energy and Commerce (MITEC) which has portfolio responsibility for telecommunications in Jamaica.

The Organization

The SMA carries out all the functionalities of a spectrum management agency, including frequency allocation (band planning), monitoring of the spectrum, interference management, licensing of users and collection of spectrum licence fees. The Authority also provides policy and technical advice on spectrum management issues to the MITEC. In terms of organizational structure, there are five Divisions:

• Spectrum Engineering;

• Policy and Strategic Planning;

• Human Resources;

• Finance and Administration; and

• Legal Affairs.

The Authority is governed by a Board of Directors, appointed by the Minister with responsibility for telecommunications.

To strengthen the management and operations of the Authority and in keeping with good Corporate Governance, the Authority will be seeking to implement a system for conducting independent and objective appraisal of its activities, financial, procedural and otherwise. This document establishes the role and terms of reference of an Internal Audit Consultant (hereafter referred to as the Consultant) to carry out the functions within the Authority.

ROLE

The role of the Consultant is to undertake a systematic evaluation of the effectiveness of risk management, monitoring and control, and governance processes within the Authority. The Consultant will be required to conduct and prepare objective, detailed analysis of the Authority’s financial and operating activities for the purpose of evaluating the adequacy and effectiveness of the established systems of governance, risk management, and internal controls, namely, resources, systems, processes, structure and tasks. This activity should be designed to add value and improve the Authority’s operations

This role serves two main purposes:

Assurance: To provide the necessary assurance required by the Board of Directors of the Authority to fulfill its fiduciary responsibilities to the organization, and

Service/Consultation: To improve the effectiveness of the financial and operating activities by:

• Identifying opportunities for improvement and making the appropriate recommendations for management actions, and

• Identifying risks and proposing risk mitigating solutions.

AUTHORITY

The Consultant reports administratively to the Chairman of the Board of Directors and functionally to the Audit Committee of the Board. This will assure:

1. independence from those directly responsible for activities and operations under review

2. a wide and unrestricted scope of audit activity, and

3. an appropriate level of attention to audit findings and recommendations.

The Consultant is independent from line management and has no direct responsibility for or authority over any of the activities under review. In order to maintain objectivity, the Consultant cannot develop and install procedures, prepare records or engage in any other activity that s/he would audit.

SCOPE OF WORK

The scope of the Internal Audit Consultancy includes but is not limited to financial, accounting, technical and administrative operations of the Authority. This may include examination, evaluation and provision of recommendations in relation to:

1. The extent to which internal policies and procedures to govern the operations of the Authority exist and to determine their relevance and effectiveness;

2. The level of compliance with existing internal policies and procedures, as well as applicable laws, guidelines and regulations;

3. The economic and responsible use of resources and the mechanisms for safeguarding the company’s assets;

4. The operational effectiveness and efficiency of the organization’s operating procedures and systems for doing business;

5. The operations and programmes of the Authority to ascertain whether the results are consistent with established goals and objectives as set out in the Operational Plans and whether the operations or programmes are being executed as planned;

6. The reliability and integrity of financial and operating information;

7. The adequacy and reliability of reporting and monitoring mechanisms to assess performance and risk.

The Consultant may also perform other engagements that are one-time and special in nature as requested by the Board of Directors.

REPORTING

The Consultant will be required to submit:

• An initial Report after assessment, to include recommendations for strengthening the Authority’s operations.

• A comprehensive internal audit plan

• Periodic reports to the Board of Directors through the Audit Committee.

The Report must relate to the financial/planning year of the Authority and include any significant issues up to date.

The frequency of audits and timing of subsequent reports will be determined by the Audit Committee of the Board.

PROFESSIONAL STANDARDS

The Consultant’s work should be performed with due professional care and in accordance with appropriate professional auditing practice. The work should have regard to the International Standards for the Professional Practice of Internal Auditing and to the standards and code of ethics of the Institute of Chartered Accountants of Jamaica. These standards include:

Attribute Standards, which cover the purpose, authority and responsibility of internal audit, its independence and objectivity, internal audit proficiency and due professional care as well as internal audit quality improvement programs including both internal and external assessments.

Performance Standards which cover managing the internal audit activity (including developing risk based plans), the nature of work (including risk management, control and governance), engagement planning, performing the engagement, communicating results, monitoring progress and addressing management’s acceptance of risks.

Furthermore, the Consultant will be responsive to change and best practices within the profession.

CONDUCT OF WORK

The Consultant is required to prepare reports detailing the results of and recommendations arising from each audit and provide it to the Audit Committee and to the Chairman of the Board of Directors.

The Audit Committee and the Chairman of the Board are responsible for ensuring that appropriate actions are taken to address and implement the recommendations. The Consultant is required to prepare periodic follow-ups to determine the status of implementation.

ACCESS TO INFORMATION

The Consultant will be authorized to have full, free and unrestricted access to all records of the Authority (paper and electronic), systems, information, property and personnel. The Consultant will also liaise with the External Auditors to optimize the audit services provided to the Authority.