3.5 Applying the Three Lines Model in the Public Sector
The Institute of Internal Auditors (IIA) has worked collaboratively with global volunteers and representatives of The International Organization of Supreme Audit Institutions (INTOSAI) on a White Paper to identify how public sector entities may best implement the TLM.
This presentation will follow the outline of the Paper and includes the following objectives:
- Explain the importance of effective governance in public administration;
- Describe a model for governance in public administration using the IIA’s TLM;
- Apply the 6 Principles of TLM to the public sector;
- Describe the roles of internal audit and external audit in government at all levels and identify the opportunities for and benefits of greater collaboration between the two types of audit functions; and
- Identify and encourage practices in the public sector for greater consistency, stronger governance, and better government.
Organizations are human undertakings, operating in an increasingly uncertain, complex, interconnected and volatile world. They have multiple stakeholders with sometimes competing interests. Organizations need effective structures and processes to enable the achievement of objectives while supporting strong governance and risk management, which the TLM can help identify. Both the governing body and management rely on internal audit to provide independent, objective assurance and advice on all matters and to promote and facilitate innovation and improvement.
TLM emphasizes three fundamental elements for governance: accountability, actions, assurance. Our presentation will seek to answer three key questions that internal auditors must help their public sector organizations navigate:
- Why do you need accountability?
- Why do you need actions, goal oriented, application of resources, managing risks?
- Why do you need independent assurance?
In trying to bring clarity to public sector governance we are applying the TLM as a framework for analysis. The Model invites internal auditors to ask of their organizations:
- Who is accountable to stakeholders (the public, citizens, service users, tax payers)?
- Who is charged with executive decisions and actions (including managing risks)?
- Who is providing independent assurance (internally, externally)?
- Are these roles clearly defined?
- Are there appropriate interactions among them?
TLM can be applied to individual bodies (departments, ministries, agencies, public corporations) and is applicable for government as a whole.
We look forward to an opportunity to share this paper with a public sector audience and facilitate a conversation around how the TLM can be practically applied and advantageous in the public sector environment.