Dear Editor,
There are provisions in the various Budget Agencies in Central Government for the establishment and for the operations of internal auditing units (IAU). The Auditor General (AG) who is in effect the external auditor of the public sector had revealed in his 2015 Report that there were 47 internal auditors in 23 Agencies. Of those Agencies, the Guyana Revenue Authority and the Ministry of Finance comprised 17 and 15 internal auditors respectively. This total of 32 represented 68 percent.
Reports have been written over the past two decades, of whom yours truly has been a contributor, for the need for IAUs to be established in major Agencies and for them to be staffed with qualified and experienced auditors. Unfortunate to say, no serious positive action has yet been taken by the relevant authorities.
The 2017 AG’s Report to the Speaker of the National Assembly, as in previous Reports, has revealed many adverse findings on the accounts of Ministries, Departments and Regions also referred to as Agencies. Those findings have resulted in the AG issuing two unqualified opinions, six qualified opinions, and two disclaimer opinions, due to the significance of the findings, on the ten Financial Statements as per legal requirement.
Taking into consideration the significant number of adverse findings, it is imperative that serious consideration, which is imminent, be given towards having vibrant IAUs in the major Budget Agencies. Those findings have, among others, highlighted contract awards involving breaching the Procurement Act, shortfalls in Capital Expenditure attributed to low execution rate of foreign funded projects, 323 vacancies in the ten Regions, payment vouchers not presented for audit, and frequent non compliances of the controls, governance and risk systems.
Arising from the AG’s audit findings, it can be said that the internal audit function with unqualified and inadequate staff only operates in name and certainly does not provide any added value to the operations of those Agencies at the end of the 2017 financial year.
What is being written is nothing new. The IAUs are yet to possess qualified and skilled staff to perform audit engagements which require compliance with the Global Institute of Internal Auditors’ (IIA) International Standards and its Code of Ethics, among others. Hence, their findings and recommendations are not taken seriously by the executive management staff in the Central Government work environment.
Internal auditing in the Budget Agencies needs to be aggressively promoted and be implemented. This situation is long overdue and should be given the utmost priority. Serious consideration is required to be given to:
1) determining which Agencies needs IAUs
2) determining the optimum staffing levels in each Agency
3) hiring staff who possess at least the minimum academic and/or professional qualifications, and related work experience
4) having an intensified continuing professional development programmes for the auditors following, among others, the IIA’s guidelines and pronouncements.
On 4), it should be noted that internal auditors are required to be responsible for continuing their education in order to enhance and to maintain their proficiency. They need to be informed on both improvements and current developments in internal auditing standards, ethics, procedures, and techniques.
The practice of internal auditing in the Budget Agencies of Central Government is still in its infancy (what a disaster!) stage, and it has been in that state for over two decades. With the adverse findings being revealed in the AG’s Annual Audit Reports, developing and promoting internal auditing is the way forward. In order to meet the goal of attaining a high degree of transparency and accountability, it is imperative that a vibrant internal auditing activity complement that of the external auditor – the AG. Let’s get this activity aggressively moving forward in early 2019.
Yours faithfully,
John Seeram
