Internal Audit
Objective of the internal audit is to assist the Board of Directors and the Executive Bodies of the Company in enhancing the Company management efficiency, improving its financial and economics activities, specifically through systems and sequential approach to the analysis and assessment of the Systems of Risk Management, Internal Control and Corporate Governance, as tools to provide reasonable assurance of achievement of the Company objectives.
The division responsible for implementation of internal audit function in the Company is the Internal Audit Department.
Internal audit is functionally accountable to the Company Board of Directors, which means that the Board of Directors shall implement control and organization of internal audit division activity, including:
- approval of the Plan and Report on its implementation;
- approval of the budget;
- Approval of the Decisions on appointment, dismissal of the head of internal audit division, and definition of his/her remuneration.
The goals and objectives, functions, basic principles of arrangement and functioning, powers of internal audit are stated in the Internal Audit Policy of Kubanenergo PJSC approved as amended by the Decision of the Board of Directors (Minutes No. 233/2016 of 3/17/2016).
Internal documents of the Company, regulating Internal Audit functions:
| Name of the Document | Company Management Body that approved the document (latest revision) |
Details of the Company management body decision, by which the document was approved |
Guidelines on Internal Auditing and Glossary of Internal Audit |
Director General |
Order No. 56 of 1/27/2016 |
Guidelines on Monitoring of Implementation of Plans of Corrective Actions for Elimination of Violations and Faults Detected during Internal Audits |
Director General |
Order No. 651 of 7/27/2016 |
Regulation on Internal Audit Department |
Board of Directors |
Minutes No. 251/2016 of 9/23/2016 |
Program of Internal Audit Quality Assurance and Improvement |
Board of Directors |
Minutes No. 257/2016 of 12/6/2016 |
Regulations on Cooperation of the Internal Audit and Control Department with other Company Divisions during Audits and Monitoring of Implementation of the Plans of Corrective Actions |
Director General |
Order No. 346 of 4/26/2016 |
Regulations on Organizing Activities of the Internal Audit and Control Department |
Director General |
Order No. 511 of 6/23/2015 |
Instruction on Development and Use of the Unified Classifier of Violations and Faults |
Director General |
Order No. 600 of 7/20/2015 |
Unified List of Network Reports |
Director General |
Order No. 89 of 5/25/2016 |
Procedure for Evaluation of Efficiency of the System of Internal Control and the System of Risk Management of ROSSETI Group of Companies |
Director General |
Order No. 6 of 1/12/2016 |
In 2016, the number of Company employees carrying out internal audit function amounted to 5 persons.
In 2016, the internal auditor carried out 21 control activities, including:
Following the results of the control activities carried out by internal audit in 2016, 115 corrective actions aimed at elimination and further prevention of identified violations and deficiencies are to be implemented.
All 82 corrective actions with the term of implementation maturing in the reporting year, were executed.
Corrective Actions implemented in 2016:
Implementation of the corrective actions is controlled by the Audit Committee of the Board of Directors by hearing of the regular quarterly reports of the Company management on implementation of corrective action plans for elimination of deficiencies detected by the Company Revision Commission, the internal auditor, and external control bodies.