Internal auditing in the public service

- where it is and the way forward

John Seeram

By John Seeram


John Seeram

The Fiscal Management and Accountability (FMAA) Act No 20 of 2003 – Section 11(b) requires heads of budget agencies to maintain effective Internal Audit Units (IAUs). Unfortunately, many agencies are yet to establish IAUs.

According to the 2015 Auditor General’s (AG) Report, there were 47 Internal Auditors in six agencies of which three—the Guyana Revenue Authority (17), the Ministry of Finance (15) and the Georgetown Public Hospital Corporation (7) comprised 39 or 83 percent. Major agencies are yet to see the establishment of IAUs, for example, the Ministries of the Presidency, Education, Public Infrastructure, Public Health, Agriculture and Public Security. It was reported by the AG that the IAU of the Ministry of Finance is centralised for various ministries, departments and regions. However this unit only comprises 15 auditors. Although the information I am presenting is approximately a year old, my understanding is that there has been no significant change since then; I am subject to correction.

Many reports have been written over the past two decades of the need for IAUs at budget agencies. However, implementation has been very slow, and apparently not been given priority status.

The way forward

Over the past two years, 50 forensic audits have been done on public sector entities and those audit reports are currently being addressed by the relevant authorities. Whether those audits were all forensic in nature is questionable, since the auditors hired were not qualified forensic auditors but public accountants.

We should, however, learn from those audits to address the need for strengthening internal auditing in the budget agencies. Yes, we can continue or start the process by hiring internal auditors but how effective will they be if they do not possess the relevant skills. This can only come about by guidance which the internal audit profession globally has to offer and for auditors to adhere to.

The Institute of Internal Auditors Global (IIAG), headquartered in Florida, USA is the body responsible for the development and growth of this esteemed profession. With the approval of the IIAG, Chapters are established globally. This Chapter which was established in April 2000 has been playing a meaningful role as an advisory body, and among others, in continuing professional development of internal auditors.

As a member of the local Chapter and a former president, it is the view that the practice of internal auditing in the public service is still in its ‘infancy’ stage. Lessons learnt from those forensic audits tell us, among others, that internal auditing has to meaningfully complement external auditing which is done by AG. The relevant authorities need to address this situation which should be given priority. Every week/month we have been reading in the media of deficiencies in the operating system hence the loss of assets such as cash and stocks, etc.

What is needed

Some suggestions for the establishment and functioning of an effective internal auditing system in the Public Service are set out hereunder:

1)  Determine which agencies need to establish IAUs and which can be served by the Ministry of Finance. Also the required staffing of internal auditors for each unit.

2) IAUs should not only be staffed by accountants but also by non-accountants, for example, engineers, information technologists, etc, since non accounting departments will be required to be audited.

3) Auditors will need to undergo intensive on-the-job training as continuing professional development is in keeping with the IIAG’s pronouncements. In so doing, they will need to know of the Nature of Internal Auditing, with the focus on risk management, controls and governance process International Standards for the Professional Practice of Internal Auditing Code of Ethics – both the Principles and the Rules of Conduct

4) Who should the IAUs report to? Invariably reporting should be to management (the Permanent Secretary (PS), the Deputy PS, etc) and audit committees who can ensure that the results/findings are given due consideration and action taken accordingly.

5) Adequate funds should be provided in the 2018 Budget to provide for additional IAUs at the major budget agencies, for staff requirements at the optimum level for those units, and for on-the-job training.

6) Internal Auditors must realize that the unit is part of the agency’s organisation structure, hence they have to work along with other staff in the agency to attain its goals. At the same time, management is required to work along and to support the IAU as a partner in the pursuit of excellence.


The findings in the AG’s Annual Reports and the Forensic Audit Reports have indicated the need for effective IAUs in the Public Service. At present, there are shortcomings such as very few agencies with IAUs, the optimum staffing level of those units to be determined, and the quality of audit work being produced when measure against the IIAG’s professional standards, is in  dire need of improvement.

One way of attaining a high level of accountability and transparency is to have effective IAUs at major budget agencies as required by the FMAA. Also, now is the time to act from the various audit reports issued, by developing the practice of the internal auditing profession to the required standards, so that the public service can benefit immensely, and the agencies will receive value for money expended.


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