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Tenaga Nasional Berhad 158 Annual Report 2009statement oninternal audit functionThe internal audit function of the Company iscarried out by the Group Internal AuditDepartment (GIA). GIA was established to supportthe Board, through the Board Audit Committee,to discharge their responsibilities of maintaininga sound system of internal control to safeguardshareholders’ investments, the interest ofstakeholders and the Group’s assets.GIA reports functionally to the Board AuditCommittee and administratively to the ChiefExecutive Officer. GIA authority, scope andresponsibilities are governed by a Group InternalAudit Charter that was revised and approved bythe Board Audit Committee in 2007.GIA’s mission is to provide objective andindependent assurance of the Group’s system ofinternal controls, through the following:• Preparing and implementing a risk basedstrategic annual audit plan which covers theauditable entities within the organisation.• Reviewing the adequacy and effectivenessof governance, risk management and controlprocesses established by the Group tomanage its risks and operations.• Reporting internal control weaknesses andrecommending preventive/corrective actionsto improve operations, enable accuratereporting, safeguard assets and promote theeconomic utilisation of resources.• Monitoring the implementation of correctiveactions to ascertain their adequacy andability of the auditable entities to strengtheninternal controls in their area of operations.The internal audit function is structured into coreand non-core units. The areas of audit coverageincludes the functions of governance, riskmanagement and review of controls in the areasof generation, transmission, distribution,procurement, projects, accounting & finance,human resource, information & communicationtechnology and investments in subsidiaries.During the financial year, GIA issued 159 reportsarising from the performance of 231 plannedjobs, 10 ad hoc jobs and 77 follow-up audits oncorrective actions. Out of the 231 planned jobs,3 were co-sourced with external consultants. Therest were performed in-house by GIA. The cosourcedjobs were in the areas of informationand communication technology (2 jobs) andproject management (1 job). The co-sourcing ofassignments enabled GIA to build up their skillsand competencies in the areas co-sourced.GIA is staffed by a total of 84 auditors. Theauditors comprise staff with backgrounds inengineering, finance, business, accounting,information and communication technology andquantity surveying.The overall cost spent by GIA in financial year2008/2009 is RM11.1 million, where 74% wasfor staff related costs and 6% for co-sourcingfees to consultants.Training courses are provided to GIA staff in theareas of auditing skills, technical skills, personaldevelopment and also English language courses.Apart from training courses, staff are encouragedto become Certified Internal Auditors. They areprovided with incentives such as allowances andreimbursement of examination and registrationfees when they pass the Certified Internal Auditorexaminations. A total of 5 staff are pursuing theCertified Internal Auditor qualification. During thefinancial year, GIA won the Corporate Award -Tier 4, Category I for its strong commitment toprofessional development from the Institute ofInternal Auditors Malaysia.The improvements carried out by GIA during thefinancial year include the following:• Facilitation in the implementation of a KeyPerformance Indicator on completion ofcorrective actions for areas with weaknessesfor all division heads.• Promotion of ethical awareness through areview of ethics systems, a Fraud and EthicsSurvey and also presentations of the Fraudand Ethics Review to various groups withinthe organisation.• Enhancement of internal control awarenessthrough sessions with management traineesand divisional staff.• Introduction of Terms of Reference forSpecial Audits to ensure adequate andaccurate coverage of areas reviewed.• Incorporation of objectivity and conflict ofinterest reviews on audit team members foreach audit assignment.GIA is committed to provide objective andindependent assurance as well as provide valueadded services to our customers in accordancewith the International Professional PracticesFramework on internal auditing.Tan Sri Dato’ Lau Yin Pin@ Lau Yen BengChairmanBoard Audit CommitteeTenaga Nasional Berhad(Senior Independent Non-Executive Director)