Transnet Implements Co-Sourced Internal Audit Strategy with Deloitte and EY

State-owned ports and rail network operator Transnet has announced that it will be implementing a new co-sourced internal audit strategy. The move comes as the embattled company seeks to improve governance and internal controls, and as part of the strategy, 40% of its internal auditing functions will now be carried out in-house. Professional services firms Deloitte and EY have been appointed to provide internal audit services following a competitive, open-market procurement process. The appointment is effective from May 2023 for a period of five years, and it follows the end of Transnet’s current contracts this month with professional services firms.

Transnet will work with a number of firms, including Deloitte, their transformation partners Thamani Advisory, Africa Rise and Shine, and Isibani Chartered Accountants and Auditors, as well as EY Services and their transformation partner, Motlanalo Chartered Accountants and Auditors, to improve risk management, governance, and internal controls. The company hopes that this will increase operational effectiveness.

The internal audit services will be split into two parts. The first part will focus on assurance and related services, which will be handled by Deloitte and EY and their respective empowerment partners. The second part will look at the proactive assurance of high-value awarded to Deloitte and its empowerment partners.

In addition to improving internal controls, Transnet will also work with its new internal audit partners to help rebuild its capacity in training audit professionals. The company is reviving its role as one of the leading trainers for auditors and will be scaling up its training programme, with the aim of training a minimum of 100 trainees over the next few years through the Institute of Internal Auditors accredited programme.

The appointment of Deloitte and EY marks a departure from Transnet’s previous fully outsourced internal audit service. The company says that the move to a co-sourcing model will help it improve its governance and internal controls and increase its operational effectiveness.

Overall, the appointment of Deloitte and EY, along with other professional services firms, is part of Transnet’s efforts to improve its operations and governance. The move to a co-sourced internal audit strategy is expected to increase efficiency and transparency within the company, and it may also serve as a model for other state-owned enterprises looking to improve their internal controls and governance.