|Accountability And Effective Performance In The Public Service —The Role Of Internal Auditing|
|Wednesday, 12 January 2011 09:28|
By G.D. Zaney
Section 3 (2) (e) of the Internal Audit Agency Act, 2003 (Act 658), which established the Internal Audit Agency (IAA), requires the IAA to ensure that the plans, goals and objectives of Ministries, Departments and Agencies (MDAs) and of Metropolitan, Municipal and District Assemblies (MMDAs) are achieved.
MDAs and MMDAs are thus mandated to implement good corporate governance practices or performance management systems in the public service and ensure that organizational and national programme objectives are achieved with effectiveness, efficiency and economy.
On the part of Internal Audit, its function is to remind the MDAs and MMDAs about their responsibility, ascertain whether the processes established by the MDAs and MMDAs to manage performance are adequate in design and effective in practice, and make and monitor recommendations for improvements in performance management.
The ultimate goal of the Internal Audit Agency is, therefore, to promote professional internal audit practice in MDAs and MMDAs and, thereby, ensure accountability and effective performance in the public sector.
In recognition of the need to continually sensitize public sector institutions on the role of internal auditing in advancing the cause of good corporate governance, the concept of an Annual Internal Audit Forum was mooted by the Internal Audit Board in 2005.
Annual Internal Audit Forums have, therefore, been held since 2006, the first of which was on the theme: “Auditing as an accountability and management control tool”. The forum addressed issues relating to public sector cash management, safeguarding government assets and making internal auditing effective.
The Agency’s mandate to facilitate the prevention and detection of fraud was the subject of the second Annual Internal Audit Forum which was held in November 2007. It was on the theme: “Mitigating corporate fraud, abuse and waste — the role of internal Auditing”.
In September 2008, the third Annual Internal Audit Forum took place on the theme: “Risk management in the public sector — The role of internal auditing”. The theme was in consonance with section 3 (2) (f) of Act 658 which requires the IAA to ensure that risks are adequately managed in MDAs and MMDAs.
Last year’s Forum, the fourth in the series, was held on August 18, in pursuance of section 3(2) (e) of Act 658.
In the five years of its work, certain systemic weaknesses have been identified in the operations of MDAs and MMDAs.
These weaknesses include inadequate records management, inadequate accounting for revenues due and or collected, and misuse of internally generated funds or the non-preparation of bank reconciliation statements.
Other weaknesses have to do with the non-compliance with regulations and executive directives, inadequate safeguards and management of national assets, inadequate risk management and inadequate financial accounting and reporting.
Also becoming a disturbing trend in the nation’s public sector institutions are excessive borrowing, unprofessional revision of contracts, failure to follow balanced budget practices and to publish the appropriate statements and annual reports.
The root cause of these weaknesses is said to be traceable to the absence of effective performance management systems in our public institutions.
With the increasing demand of Government to improve the quality of services provided while cutting costs, public servants are under the obligation to be more accountable, customer-focused and responsive to stakeholders’ values.
The need for an effective financial management and audit practice in the public sector has, therefore, become particularly urgent — a need which must be met with the adoption of good performance management practices.
Performance management is a tool for assessing effectiveness, economy and accountability of public sector programmes.
The role of the internal auditor in helping the public services to evaluate and shape service delivery, and ensure that public sector programmes and systems are adequate in achieving organizational and national objectives thus becomes very significant.
Internal auditors have a key function to perform in relation to setting achievable performance targets, verification of transactions and the provision of management assurance at the planning and implementation stages of programmes.
Public sector institutions must use existing laws and procedures to formulate strategies and enhance public sector performance — and the internal auditor is part of strategy formulation.
The internal auditor must be involved in redefining organizational missions, objectives and targets. The internal auditor must be involved in the reconsideration of existing staff assessment or appraisal methods as well as in the review of operational processes.
In an effort to fulfill its mission and objectives and, thereby, contribute effectively to the efficiency of the public sector, the Internal Audit Agency has submitted proposals and changes to the internal audit function in MDAs and MMDAs.
In the same vein, Government has also directed Chief Executives in the public sector to ensure that they work with the IAA to establish functional Audit Report Implementation Committees as well as ensure that outstanding internal and external audit recommendations are cleared by December 2009, while the Public Services Commission (PSC), Office of the Head of Civil Service (OHCS) and the Ministry of Local Government and Rural Development have been charged to work together to enforce an effective performance management system in the MDAs and MMDAs.
Periodic reports are, therefore, required from the PSC, OHSC and the Local Government Ministry because performance is measured by annual reports, including audited financial statements, and routine management and operations reports, which also include staff appraisals from Departments to parent Ministries.
Another important requirement of a successful implementation of performance management is that organizational behaviour and culture must change, work ethics observed and the changes managed. The behaviour and attitudes of individuals and groups placed at the helm of affairs of governance must change and public servants need to be reminded that performance is not just about output, but also about timeliness, quality and cost effectiveness. And in all these, accountants and internal auditors have the responsibility to discourage the management of public institutions from negative practices in the utilization of scarce public sector resources.
Accountants and internal auditors must be involved in setting up sound budget and financial accounting systems.
The writer is an officer of the Information Services Department.