AVAILABLE STATISTICS indicate that many state institutions do not have proper internal auditing systems when it comes to fuel consumption, use of official vehicles, contract awards and execution, store management and payroll. These have been identified as high risk areas for internal audit units.
Out of 121 internal audit reports, only 25 met the quality standards of the Internal Audit Agency (IAA) expectation in terms of form and content.
The remaining 96 have been caught in the web of improper development of audit findings, non-inclusion of management responses and poor follow up of previous audit recommendations, according to a report of the Finance Committee of Parliament on the 2006 Annual Report of the IAA.
An even more worrying phenomenon observed by the Finance Committee, chaired by James Klutse Avedzi, was that the Ministries, Departments and Agencies (MDAs); and the Metropolitan, Municipal and District Assemblies (MMDAs) were not complying with statutory regulations and government directives.
The non-compliance was found mainly in non-maintenance and update of asset register, non-preparations of bank reconciliation statements, inadequate controls over value books and unauthorized use of Internally Generated Funds (IGFs) as identified by the IAA report.
Again, 42 institutions covering 58 per cent of those examined had no Audit Report Implementation Committees (ARICs) in place with mandate to consider and implement audit reports.
Consequently, it has been recommended by the Finance Committee of Parliament that the IAA collaborate more with the Auditor-General�s Office to facilitate the process and to ensure that MDAs and MMDAs set up their Audit Implementation Committees.
The IAA was established in 2004 by Act 658 to set up standards and procedures for the conduct of internal audit activities in MDAs and MMDAs.
It is further required by law to ensure financial, managerial and operating information reported internally and externally are accurate, reliable and timely, and insisting that financial activities of the state institutions under review are in compliance with laws, policies, plans standards and procedures.
The Finance Committee of Parliament was informed that the Agency conducted a number of field operations during the year under review, with the aim of monitoring the submissions of internal charter and annual audit plan and reports by the Audit Units of the MDAs and MMDAs.
Feedback from the field operations is communicated to these institutions for further action.
On the summary of revenue and expenditure of IAA, the Finance Committee observed a difference between the total revenue for the year under review, which was �12,457,823,048 and total expenditure including depreciation of �8,357,911,244, resulting in excess of revenue over expenditure for the year of �4,099,911,804.
The Director-General of the IAA however explained that the excess revenue for the year was due to the Accrual Concept used by the Agency to prepare its accounts.
Source: Business Guide
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