BUDGETORY CONTROL IN THE PUBLIC SECTOR:
THE ROLE OF THE INTERNAL AUDIT AGENCY OF GHANA
BY
PATIENCE ADJOA AUSTIN (MRS)
A THESIS SUBMITTED TO THE INSTITUTE OF DISTANCE LEARNING,
KWAME NKRUMAH UNIVERSITY OF SCIENCE AND TECHNOLOGY IN
PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF
COMMONWEALTH EXECUTIVE MASTERS IN BUSINESS
ADMINISTRATION
MAY 2011
1
DECLARATION
I hereby declare that this submission is my own work towards the Degree of Commonwealth
Executive Masters in Business Administration and that, to the best of my Knowledge, it
contains no material previous published by another person nor material which has been
accepted for the award of any other degree of the University, except where due
acknowledgement has been made in the text.
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Student Name & ID
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Certified by:
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Supervisor(s) Name
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Certified by:
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Date
ABSTRACT
An internal audit function is an essential part of any public expenditure management system
and should ensure that public spending is within budgetary provisions; disbursements comply
with specified procedures, provides for the timely reconciliation of accounts and effective
systems for managing and accounting for physical and financial assets (Commonwealth
Secretariat, 2005). The main objective of this study is to examine and determine the current
practices and involvement of Internal Audit Agency in budgetary control among MDAs and
MMDAs of public sector in Ghana. As an exploratory study the researcher made use of both
primary and secondary data which include face - to - face interviews; structured and
unstructured questionnaires administered to fifty (50) respondents of the Management and
Staff of the Internal Audit Departments and Finance, and budget offices in some selected
MDAs and MMDAs in Accra, Greater Accra Region.
The results on current practices reveal that audit work by IAA is not limited to only pre-audit
and financial compliance as suggested by World Bank (2006) but has extended to budgetary
control audits in the MDAs and MMDAs. IAA is engaged in providing services aimed at
ensuring compliance with budget laws, regulations and policies; effective internal control
systems; ethics and fraud detection. These services therefore would play an important role in
enhancing the accountability and transparency of the budget cycle and hence in detecting and
preventing corruption (Szymanski, 2007). Internal Auditors should therefore plan and perform
their audit procedures, evaluate and report on the results, recognizing that non-compliance by
the entity with law or regulations may materially affect the financial statements.
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ACKNOWLEDGEMENT
The completion of this study gives me joy and affection. It has really tasked me mentally,
physically and financially and tested my mettle as a student. I hope it will be of great help to
all who may use the valuable information in it later.
I duly acknowledge the support given me by others in various ways and at different times
during the critical moments when I embarked on it. May God whose help and blessing has
brought me this far bless them.
I am deeply grateful to my supervisor Mr. S K ENNINFUL whose patience, guidance,
suggestions and encouragement has brought this work to fruition. Next, I am very grateful to
my dear husband Mr. WILLIAM A. AUSTIN for his invaluable help in various ways.
I am equally grateful to the officials of the Internal Audit Agency. I am also indebted to Mr.
MOHAMMED NYASI HARDI and Mr. CEPHAS EGBEFOME of office of Parliament and
all the Chief Directors, Internal Auditors and Finance officers of the selected Ministries
Departments Agencies and Metropolitan, Municipal and District Assemblies.
My final indebtedness goes to Mr. THOMAS ANTWI-WILSON, Mr. DAUDI RAFIQUE and
Miss RITA ANOWUOH through whose kindness this work neatly typed and completed.
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DEDICATION
This study is dedicated to my husband Mr. William Andrew Austin who encouraged me to
attain this academic height.
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TABLE OF CONTENTS
Declaration
i
Abstract
ii
Acknowledgement
iii
Dedication
iv
Table of Content
v
List of Table
x
List of Figures
xi
List of Acronyms
xii
CHAPTER ONE:
PROBLEM OF THE STUDY
1.0
Introduction
1
1.1
Background of the Study
1
1.2
The Profile of Internal Audit Agency of Ghana
3
1.2.1
Role of the Internal Audit Agency (IAA)
4
1.2.2
Mission of IAA
6
1.2.3
Vision of IAA
7
1.3
Statement of the Problem
7
1.4
Research Objectives
8
6
1.5
Research Questions
8
1.6
Relevance of the Study
9
1.7
Research Methodology
9
1.8
1.9
Scope and Limitations of the Study
Organisation of the Study
10
10
CHAPTER TWO: LITERATURE REVIEW
2.0
Introduction
12
2.1
Background to Budgetary Control
12
2.2
Definition of Budget
13
2.3
Budgetary Control
14
2.4
How does Budgetary Control Relate to Budgeting
14
2.5
The Process of Budgeting in the Public Sector
15
2.6
Who is Responsible for Budgetary Control in Public Organizations 16
2.7
Definition of Defining of Internal
17
2.8
The Process of Internal Auditing
19
2.8.1
Risk Based Audit Plan
19
2.8.2
Planning Phase
19
2.8.3
Fieldwork Phase
20
2.8.4
Reporting Phase
20
2.8.5
Follow-up Phase
21
2.9
Roles of Internal Auditing
21
2.9.1
Internal Audit Role in Risk Management
22
7
2.9.2
Internal Auditors Role in Internal Control
25
2.9.3
Internal Auditors Role in Corporate Governance
29
2.10
Quality Assurance of Internal Audit
2.11
The Legal and Institutional Framework in Internal Auditing in Ghana31
2.12
Conceptual Framework
CHAPTER THREE:
30
32
MATERIALS AND METHODS
3.0
Introduction
35
3.1
Research Design
35
3.2
Target Population
36
3.3
Sample Size
36
3.4
Sample Technique
37
3.5
Data Collection
38
3.5.1
Data Collection Tools
39
3.5.2
Data Analysis Technique
39
3.6
Research Constraints and Problems
39
CHAPTER FOUR: ANALYSIS OF RESULTS AND DISCUSSIONS
4.0
Introduction
41
4.1
Demographic
41
4.1.1
Department/Section of Respondent
41
4.1.2
Duration of Respondent in their Current Position
42
4.1.3
Educational Background
44
8
4.1.4
4.2
Tenure at Workplace
45
Current Practices of IAA IN Budgetary Control Among MDAs and MMDAs 46
4.2.1
Preparation of Budgets
46
4.2.2
Budget Performance Monitoring
49
4.2.3
Budget Revision
50
4.3
Budgetary Control Services Offered by IAA to MDAs and MMDAs 51
4.4
Factors that Affect Services Provided by IAA to the MDAs and MMDA
54
CHAPTER FIVE: SUMMARY OF FINDINGS, CONLUSIONS AND
RECOMMENDATIONS
5.0
Introduction
56
5.1
Summary of Findings
56
5.2
Recommendation
60
9
LIST OF TABLES
Table 4.1.1 Department/Section of Respondents
42
Table 4.1.2 Duration of Respondents in their Current Position
43
Table 4.1.3 Educational Background of Respondents
44
Table 4.1.4 Tenure at Workplace
45
Table 4.2 Preparation of Budgets
47
Table 4.3 Budget Performance Monitoring
49
Table 4.4 Budget Revision
50
Table 4.5 Budgetary Control Services to MDAs and MMDAs
52
10
LIST OF FIGURES
Figure 1.2 Organogram of the Internal Audit Agency of Ghana
6
Figure 2.1 Three Pillars of Internal Auditing
21
Figure 2.2 Public Financial Management Cycle Source
27
Figure 2.3 Quality Assurance System in the Public Sector
30
Figure 3.1 A Schematic Representation of the Research Design Employed
36
Figure 4.1 Departments / Section of Respondents
42
Figure 4.1.2 Duration of Respondents in their current position
43
Figure 4.3 Educational Background of the Respondents
44
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ACCRONYMS
1) IAA
Internal Audit Agency
2) IIA
Institute of Internal Auditors
3) MDAs
Ministries Departments And Agencies
4) MMDAs
Metropolitan, Municipal And District Assemblies
5) GOG
Government of Ghana
6) PFM
Public Financial Management
7) CEO
Chief Executive Officer.
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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Budgeting is an integral part of medium term planning and control in the public sector
(Merchant, 1981). Budgeting is defined as a form of financial planning and as such budget is
utilised to impose the strategy of a country. Consequently, a budget is composed of different
functional budgets that could help a country for development such as agriculture, technology,
tourism and other budgets (Smith & Mcgeary, 1997). Also among the essential reasons for
having a budget plan are to effectively allocate resources; coordinate, render and dimension
activities of the country and also for efficient communication.
In budgeting, the focus is not only to prepare the budget, but more importantly to produce a
budget that Management is able to use budgetary control systems to monitor and compare the
actual results.
Budgetary control as a proven management tool (Chandler, 1990) helps
organization management, and enhances improved performance of any economy in different
ways. Its primary function is to serve as a guide in financial planning operators; it also
establishes limits for departmental excesses. It helps administrative officials to make careful
analysis of all existing operations, thereby justifying expanding, eliminating or restricting
present practice (Musselman and Hughes, 1981). Where components of a budget relate to the
responsibilities of individual executives, then budgetary control may act as a means of
securing adherence of those executives to corporate objectives.
13
In the public sector, controls are mainly in-built in the public financial management system.
Public financial management includes the legal and organisational framework for supervising
all phases of the budget cycle, including the preparation of the budget, internal control and
audit, procurement, monitoring and reporting arrangements, and external audit. The broad
objectives of public financial management are to achieve overall fiscal discipline, allocation
of resources to priority needs, and efficient and effective allocation of public services.
An internal audit function is an essential part of any public expenditure management system
and should ensure that public spending is within budgetary provisions; disbursements comply
with specified procedures, provides for the timely reconciliation of accounts and effective
systems for managing and accounting for physical and financial assets (Commonwealth
Secretariat, 2005).
According to Baltaci & Yilmaz (2006), the effort to reform a fiscal system should include
internal control and audit due to the crucial role they play in enhancing accountability and
effectiveness. Internal audit provides both governments and related parties with a powerful
tool for understanding the extent to which the public institution in question has delivered on
budget and effective services. Internal audit activity has become an essential internal
assurance mechanism in public financial controls and tool for monitoring and evaluating
managerial activities prior to external evaluation by external auditors.
14
In recent years, the Government of Ghana (GoG) has made significant progress in
strengthening fiscal discipline and improving the efficiency of its public financial
management (PFM) system. The Government has strengthened the legislative base, increased
the transparency of budget information, improved control over expenditures, and strengthened
budget oversight. At the heart of these initiatives was the passage of Internal Audit Agency
Act, 2003 (Act 658) which established the Internal Audit Agency in 2004. The creation of the
Internal Audit Agency (IAA) was motivated by the need for Government to establish a
structure that could support the eventual transfer of budgetary authority and expenditure
control to the MDAs and MMDAs. However, the roles of IAA in budgetary control remain
unclear among the MDAs and MMDAs (World Bank, 2006). Since internal auditing
particularly audits relating to budgetary control has assumed a strategic dimension in public
sector governance and financial management reforms, it has become necessary that the
relevant statutory institution, Internal Audit Agency, be positioned to meet current audit
demands and trends.
1.2 THE PROFILE OF INTERNAL AUDIT AGENCY OF GHANA
The Internal Audit Agency (IAA) was established by the Internal Audit Agency Act 2003
(Act 658) with a mandate to co-ordinate, facilitate and provide quality assurance for Internal
Audit Units in MDAs and MMDAs. The key requirements of the Act are the provision of
internal auditing assurance and consulting services that will ultimately lead to the
enhancement of efficiency, accountability and transparency in the management of resources
in the public sector.
15
The creation of the Internal Audit Agency was predicated on the need for the Government to
put in place a structure that could support the eventual transfer of budgetary authority and
expenditure control to the MDAs and MMDAs. These initiatives are part of the government‟s
efforts under the Public Financial Management Reform Programme (PUFMARP).The
Act received Presidential assent on 31 December 2003, Administrative transition was allowed
up to 31 August 2004 and effective implementation started in 2005.
The governing body of the Agency is the Board which was sworn in on August 4, 2004. It
comprises a membership of nine drawn from the public sector, the private sector and the
Institute of Chartered Accountants (Ghana).
The Board formulates policies and establishes appropriate structures for the effective and
efficient execution of the Agency‟s mandate. It ensures that the Agency operates within the
overall framework of Act 658 and also facilitates collaboration with other agencies for the
achievement of improved management of national resources. The Secretariat of the Agency is
headed by a Director-General, supported by 2 Deputy Director-Generals and 4 Directors.
1.2.1 ROLE OF THE INTERNAL AUDIT AGENCY (IAA)
The Internal Audit Agency (IAA) Act, Act 658 specifically directs the Agency to ensure that:
•
financial, managerial and operating information reported internally and externally is
accurate, reliable and timely,
•
the financial activities of the MDAs and MMDAs are in compliance with laws,
policies, plans, standards and procedures,
16
•
national resources are adequately safeguarded,
•
national resources are used economically, effectively and efficiently,
•
plans, goals and objectives of MDAs and MMDAs are achieved, and
•
risks are adequately managed in the MDAs and MMDAs.
17
Below is the organogram of the institutional arrangement.
Fig 1.2: Organogram of the Internal Audit Agency of Ghana
1.2.2 MISSION OF IAA
The IAA oversees internal audit practice in the MDAs and MMDAs by setting standards,
providing quality assurance and supporting capacity building for good corporate governance.
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1.2.3 VISION OF IAA
“To become an organisation that providing value-added internal auditing for accountable
performance by 2015”.
1.3 STATEMENT OF THE PROBLEM
Internal Auditing in the public financial management system is essential in ensuring proper
budgetary control. It reduces misappropriation of funds, financial risk management, effective
and efficient use of limited resources, corruption and ensures value for money. In this regard,
the role of the IAA cannot be underestimated. A study carried out by the World Bank in 2006
on the Public Financial Management in Ghana revealed that insufficient understanding of the
role of internal audit in ensuring appropriate control in an environment where the Accounting
Officer is formally held accountable for his/her expenditure, combined with weak capacities
amongst Internal Audit Unit staff in the MDAs and MMDAs, undermine the effectiveness of
the internal audit function in carrying out it roles (World Bank, 2006). Also, the majority of
internal audit work after its establishment in Ghana is focused on pre-audit and financial
compliance with limited attention being paid to budgetary control in the MDAs and MMDAs.
Additionally, the current knowledge on the type of services offered by IAA to control MDAs
and MMDAs budgets seems to be limited and its effectiveness also not known. It is against
this background that this researcher wants to study the role of IAA in budgetary control in
order to engender the Agency‟s relevance to modern trends of internal auditing.
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1.4 RESEARCH OBJECTIVES
The overall objective of this study is to examine the current practices and involvement of
Internal Audit Agency in budgetary control among MDAs and MMDAs of public sector in
Ghana.
Specifically, this study is

To identify the current practices of IAA in budgetary control among MDAs and
MMDAs

To examine the type of services offered by IAA services in terms of budgetary control
among the MDAs and MMDAs

To identify factors that effectively affect the services provided by IAA to the MDAs
and MMDAs
1.5 RESEARCH QUESTIONS
This study was guided by the following questions:

What are the current practices of IAA in budgetary control among the MDAs and
MMDAs?

How often and what type of budgetary control services is offered by IAA to MDAs
and MMDAs?

Which factors affect the effectiveness of the IAA services?
20
1.6 RELEVANCE OF THE STUDY
Findings and Recommendations from this study would help Internal Auditors of the Internal
Audit Agency in the public sector to work with management of MDAs and MMDAs to
improve budgetary control, secure their commitment to improve internal controls and to
ensure compliance with applicable laws. The findings would also expose budgetary control
measures that will minimize the opportunities for corruption and to avoid fraud and abuse.
1.7 RESEARCH METHODOLOGY
Research requires an organised data gathering in order to pinpoint the research philosophies
and theories that will be included in the research and instruments of data interpretation. In
this study, the descriptive approach was employed. The descriptive research methods use
observation and surveys.
The target population for the study was the Management and Staff of the Internal Audit Units
and Finance, Accounts‟, budget offices in MDAs in Accra, Greater Accra Region. The sample
group consisted of 50 respondents comprising 10 Management Personnel and Staff of IAA
and 40 Internal Auditors, Accounting Officers, Finance Directors, and Budget Officers MDAs
and MMDAs of the public sector.
The primary data sources used for the study included face –to- face interviews, structured and
unstructured questionnaires administered to the Management and Staff of the MDAs, MMDAs
and IAA.
Answered and retrieved, coded and analyzed using the Statistical Programme for the Social
21
Sciences (SPSS).
Tables, charts, graphs, frequencies and percentages were used to
demonstrate the responses that were obtained from the respondents. Both qualitative and
quantitative methods of investigations were employed in the analysis and interpretation of data
for the study. Based on the analysis and their interpretations, conclusions were drawn and
recommendations given.
1.8 SCOPE AND LIMITATIONS OF THE STUDY
The study was limited to Staff of the IAA, Management and Staff of the Internal Audit Units
and Finance, Accounts‟, budget offices in MDAs and MMDAs in Accra, Greater Accra
Region.
The time frame allocated for the study was not adequate. With a time frame of only four
months allocated for this study, in-depth study and analysis of objectives could be
compromised. Collection of questionnaires involved a lot of money for which the researcher
was solely responsible.
The researcher faced the challenge of non co-operating staff, loss of questionnaires and some
staff not answering certain questions raised in the questionnaire.
1.9 ORGANISATION OF THE STUDY
This study is divided into five Chapters. Chapter one dealt with the introduction to the study,
statement of the problem, objectives of the study, research questions, relevance of the study,
methodology, scope of the study and its limitations.
22
In Chapter two, relevant literature was reviewed to present the theoretical conceptual
framework that related to the study. Chapter three focused on how the whole research was
carried out while Chapter four was based on the analysis of the data gathered. In Chapter five,
the researcher provided some critique and recommendations to solve the problems identified
and drew conclusions based on the findings of the study.
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CHAPTER TWO
LITERATURE REVIEW
2.0 INTRODUCTION
This chapter presents the literature on the historical evolution of internal audit and its role in
ensuring effective and sound budgetary control systems of public financial management. It
also discusses the various roles of internal audit in corporate governance and risk management
as well as the functions of the Internal Audit Agency of Ghana.
It also looked at the advantages and disadvantages of budgetary control as well as the various
techniques used in assessing budgetary control.
2.1 BACKGROUND TO BUDGETARY CONTROL
Following the uncertainties prevailing in the business environment today, managers and
other stakeholders alike must be poised and prepared to compete favourably under these
rapidly shifting conditions.
In order to survive under these environmental complexities and vagueness, managers and
stakeholders of various institutions need sharp tools, proven management techniques to
forecast the major changes which are likely to affect the business, while they choose future
direction and dimension of resources needed to attain selected goals.
Budgetary control as proven management tool (Chandler, 1990) helps organization
management, and enhances improved performance of any economy in different ways. Its
primary function is to serve as a guide in financial planning operators; it also establishes
24
limits for departmental excesses. It helps administrative officials to make careful analysis of
all existing operations, thereby justifying expanding, eliminating or restricting present
practice. (Musselman and Hughes 1981).
Public Sector Organizations are mostly set up to help improve the welfare of the citizenry and
create the atmosphere for the growth of the private sector. In doing this several problems
including that of financial management, are encountered. Among the problems of financial
management, the problem of non adherence to budgetary control procedures has been
recognised (Steward, 1993) as very crucial to the success of the public sector. This is because
budgetary control is crucial for the survival and success of every public organization.
2.2 DEFINITION OF BUDGET
According to Budlender and Hewitt, Budget is a financial plan. In other words, it is a plan
which has been expressed in financial or monetary terms. Therefore before a budget is
prepared, there ought to be a plan in place. A budget is therefore prepared within the context
of a prepared plan or a contemplated plan.
A budget is a plan expressed in quantitative and money terms. Budgets need to be prepared
and approved in advance of the period in which they are to be used. Budgets can include some
or all of income, expenditure, and the capital to be employed. Moreover, a budget can be
drawn up for an entire organization, any segment of the organization such as a department or
sales territory or division, or for a significant activity such as the production and sale of a
specific product. Williamson (1998)
25
According to gntmasterminds.com budget is a financial and /or quantitative statement,
prepared and approved prior to a defined Period of time of the policy to be pursued during
that period for the purpose of attaining a given objective. It may include income, expenditure
and employment of capital.
2.3 BUDGETARY CONTROL
TheBusinessDictionary.com defines budgetary control as a management practice where
budgets are used as means of planning and controlling an organization‟s operations. A
Budgetary control system includes budget preparation and clarification of budget control
periods, determination of variances, (analyzing the causes of the variances (variance analysis)
and taking of corrective actions especially where unfavourable variances are concerned.
2.4 HOW DOES BUDGETARY CONTROL RELATE TO BUDGETING
A budget is a plan expressed in quantitative and money terms. Budgets need to be prepared
and approved in advance of the period in which they are to be used. Budgets can include some
or all of income, expenditure, and the capital to be employed. Moreover, a budget can be
drawn up for an entire organization, any segment of the organization such as a department or
sales territory or division, or for a significant activity such as the production and sale of a
specific product. Lucey (1981).
Budgets are simply exercises in calculation unless they are used. When we use a budget, we
do so as part of a system of budgetary control. That is, we have some basic ideas of what we
26
want to do, we prepare budgets to help us achieve those ideas; and then once we have done
whatever it is that we wanted to do, we check to see if we kept to our budget.
According to Williamson (1996) budgetary control relates to the establishment of budgets
relating the responsibilities of budget holders the needs of a policy. Budgetary control also
relates to the continuous comparison of actual with budgeted results: it does this to try to
ensure that the objectives of that policy are achieved; or to provide a basis for the change of
those objectives.
In summary, a budget is a statement setting out the monetary, numerical or non quantitative
aspects of an organization‟s plans for the coming week or month or year. Budgetary control is
the analysis of what happened when those plans came to be put into practice, and what the
organization did or did not do to correct for any variations from these plans. Jones and
Pendlebury (1984).
2.5 THE PROCESS OF BUDGETING IN THE PUBLIC SECTOR
Prior to the commencement of a financial year and at a time designated by the Finance
Minister, Directors and Divisional/Head/General Managers submit budget proposals for the
ensuing year. This takes place after appropriate consultation with Budget Holders. The budget
proposals are prepared in detail and conform to a format issued by the Finance Minister.
In the process of budget preparation within the public sector, coordination is very essential.
Without coordination, certain activities and expenses may be duplicated, and there may also
be uncomplimentary or disjointed activities being undertaken. Coordination means viewing
27
the system as a whole and dovetailing all the various parts together. Without coordination,
positive synergies in various departmental efforts may be lost. There should be coordination
with respect to:
1. Kick-starting the budget preparation;
2. Issuing guidelines for budget preparation;
3. Issuing prescribed formats or specimen forms to be used for preparing budgets;
4. Issuing deadlines for the preparation and submission of budgets of units, departments,
divisions, etc;
5. Issuing deadlines for budget hearing sessions;
6. Issuing deadlines for the preparation of master budgets;
7. Overseeing the scrutiny of subsidiary budgets;
8. Raising queries and seeking clarification on various subsidiary budgets
The budgetary process requires adherence to particular timescales for the performance
of routines and duties. The Finance Minister is responsible for issuing and reviewing
guidance on budgetary timetables. It is the responsibility of all Directors and
Divisional/Head/General Managers concerned to adhere to such timetables and inform
the Finance Minister of any reasons preventing the achievement of a specific deadline.
(Guideline for the 2011 – 2013 Budget Preparation)
2.6 WHO IS RESPONSIBLE FOR BUDGETARY CONTROL IN PUBLIC
ORGANIZATIONS?
The responsibilities of budgetary control in the public sector rest on the shoulders of the head
of the organisation (i.e Chief Executive Officer (CEO)/Chief Directors/ Coordinating
28
Directors). According to the Financial Administrative Regulation (FAR) 2004, LI 1802
Section 2(f) “the head of government department shall receive and order the disbursement of
any trust moneys for which the head of department has been appointed as administering
authority by or under any enactment or agreement”.
The head of the organisation is regarded by all as the spending officer of the organisation and
therefore has the mandate to control the allocated budget within the limits prescribed by the
Minister of Finance
2.7 DEFINITION OF INTERNAL AUDITING
With changing times, the concept of internal auditing has undergone significant changes with
regard to its definition, scope of coverage and approach. In some institutions, the scope of
modern internal auditing has been broadened from financial issues to include value for
money, evaluation of risk, managerial effectiveness and governance processes
In 1978, the Institute of Internal Auditors (IIA) defined internal auditing as:
“An independent appraisal activity established within an organization as a service to the
organization. It is a control, which functions by examining and evaluating the adequacy and
effectiveness of other controls. The objective of internal auditing is to assist members of the
organization in the effective discharge of their responsibilities. To this end, internal auditing
furnishes them with analyses, appraisals, recommendations, counsel and information
concerning the activities reviewed” (Ali et al., 2007)
29
The modern scope and focus of internal auditing are reflected in the current definition that
was formally adopted by the IIA in 1999:
“An independent, objective assurance and consulting activity designed to add value and
improve an organization‟s operations. It helps an organization accomplish its objectives by
bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk
management, control, and governance processes”.
According to Asare (2008), the difference between the definitions of 1978 and 1999 (as
repeated in IIA 2008) what is worthy of note is the prominence of objectivity in internal audit
activities and also the emphasis on the evaluation and improvement of the effectiveness in
risk management and governance processes. The current definition also contemplates two
main internal audit services: assurance and consulting services.
Assurance services, according to IIA (2008):
Involve the internal auditor‟s objective assessment of evidence to provide an independent
opinion or conclusions regarding an entity, an operation, a function, a process, system, or
other subject matter. The nature and scope of the assurance engagement are determined by the
internal auditor. There are generally three parties involved in assurance services: (1) the
person or group directly involved with the entity, operation, function, process, system, or
other subject matter - the process owner, (2) the person or group making the assessment - the
internal auditor, and (3) the person or group using the assessment - the user.
Consulting services, according to the same source:
Are advisory in nature, and are generally performed at the specific request of an engagement
client. The nature and scope of the consulting engagement are subject to agreement with the
30
engagement client. Consulting services generally involve two parties: (1) the person or group
offering the advice - the internal auditor, and (2) the person or group seeking and receiving
the advice - the engagement client. When performing consulting services the internal auditor
should maintain objectivity and not assume management responsibility (IIA, 2008).
According to IIA (2008), even though the above differences in definition may affect the
practice of internal auditing in each environment, adhering to the IIA International Standards
for the Professional Practice of Internal Auditing (Standards) would ensure that the
responsibilities of internal auditors and the internal audit activity are met.
2.8 THE PROCESS OF INTERNAL AUDITING
In the published Internal Audit Manual of the University of Ottawa in October 2009,
the following is the internal audit process:
2.8.1 Risk Based Audit Plan
The internal audit process begins with the Risk Based Audit Plan, which is updated annually
and approved by the Audit Committee of the Board of Governors. Once approved, the Plan
becomes a guideline for conducting audits in the coming year. In addition to the audits
performed under the Plan, Internal Audit also conducts special audits and consulting work on
demand.
2.8.2 Planning Phase
In the planning phase, the audit staff reviews any past audit work, looks over literature on the
area being reviewed, and makes a preliminary review of the unit budgeted and actual revenues
and expenses. The auditors also formulate the audit scope and objectives on which they base
31
the fieldwork phase. The planning phase also includes an introductory meeting to discuss
objectives, timelines, and other important information that can ease the internal audit process.
At this time, the audit staff may request few pieces of information, such as an organization
chart, a contact list and literature describing the unit‟s procedures, if available.
2.8.3 Fieldwork Phase
In the fieldwork phase, typically the lengthiest part of the audit, the audit staff gathers
information about the auditee's operations, gains an understanding of the unit's functions, and
identifies both strengths and weaknesses. This work includes reviewing financial activity,
administrative and business procedures, overall unit functions, and other activities specific to
each section in the unit. The audit staffs interviews key personnel, observes unit procedures,
and periodically reviews the audit progress with the unit's heads and personnel. Ultimately,
this phase allows the audit staff to identify areas of risk and concern in the unit's internal
controls and procedures, all of which are discussed with the auditee before or at the
conclusion of the fieldwork.
2.8.4 Reporting Phase
In this phase, all fieldwork results are compiled, presented and discussed with the client. The
client must provide action plans with timeframes that address all recommendations. A final
summary report then goes to Senior Management and the Audit Committee for review.
32
2.8.5 Follow-up Phase
Based on timeframes in the action plans, a follow-up is performed to ensure that the required
measures have indeed been implemented.
2.9 ROLES OF INTERNAL AUDIT
The role of internal auditing have been identified as involving three main elements, namely
the evaluation and improvement of risk management, control and governance processes.
These elements are sometimes referred to as the “three pillars” of internal auditing.
Fig.2.1 Three Pillars of Internal Auditing
Source: Asare, (2008)
33
Risk management, control and governance encompass the policies and procedures established
to ensure the achievement of objectives and include the appropriate assessment of risk, the
reliability of internal and external reporting and accountability processes, compliance with
applicable laws and regulations, and compliance with the behavioural and ethical standards
set for public organizations and employees. The three elements are further discussed below as
reinforcements of the fundamentals of an internal audit function in the public sector. (Asare,
2008)
2.9.1 Internal audit role in risk management
The demand for proper risk management strategies in the public sector emanates from the
complexity and dynamism of the operating environment, ever-increasing needs of society
coupled with general unpredictability pattern and dwindling of resources for national
development.
According to the Australian Department of Finance and Deregulation, risk management is an
important responsibility for any public sector entity for effective and efficient use of
resources. It defines risk management as follows:
Risk is the possibility of an event or activity impacting adversely on an organisation,
preventing it from achieving organisational outcomes. Risk management comprises the
activities and actions taken to ensure that an organisation is conscious of the risks it faces,
makes informed decisions in managing these risks, and identifies and harnesses potential
opportunities. Managing risk well requires careful consideration of the key concepts of
minimising loss, maximizing opportunity and preparing for uncertainty (Commonwealth of
Australia, 2008)
34
The internal auditor‟s role in risk management involves assessing and monitoring the risks
that the organization faces, recommending the controls required to mitigate those risks, and
evaluating the trade-offs necessary for the organization to accomplish strategic and
operational objectives. Griffiths (2006) “internal auditing provides independent and objective
assurance to an organization‟s management that its risks are being mitigated to an acceptable
level, and reports where they are not”. Fraud and corruption are key risks that need to be
managed in the public sector. Surveys by KPMG in the US (KPMG, 1999) and Deloitte and
Touché Tohmatsu in New Zealand (2000) suggest that, in general, internal auditors are more
optimistic about the extent of their potential contribution to risk assessment and management
than are senior executives.
Management has the responsibility to put in place systems and processes that will prevent and
detect fraud within an organisation. However, it is internal audit that gathers sufficient
objective information for management to carry out its stewardship function and to be well
informed on the risks of fraud and effectiveness of fraud control procedures and to enable
them to understand the complexities of fraudulent activities.
Internal audit adds value through improving the control and monitoring environment within
organizations to detect fraud (Coram et al., 2007). The very presence of internal audit review
in an institution serves as a deterrent measure on the assumption that any fraud perpetuated
may be uncovered. Good governance principles require that audit committees or similar
oversight bodies, work closely with internal auditors in fraud risk evaluation and
investigations especially when recent trends suggest perpetration by senior management in
collusion with other employees.
35
Khan (2006) identified the useful role internal audit could play in the investigation process
and made the following suggestion:
“Internal auditors can play a vital role assisting the agencies responsible for investigation of
alleged cases of corruption in public sector organisations by way of interpretation of various
rules, explanation of various practices, and the sharing some of the confidential information
that they may possess as they usually have more diversified and detailed knowledge of the
operations in different parts of the organization than the investigating agency staff that are
deployed only for a particular case”.
The challenge of public sector internal audit, however, is to avoid becoming compliance
based due to the presence of a strict legal framework that sets out the public financial controls
and internal auditing processes. Moving towards risk-based internal audit will require a
foresight function of monitoring and advising on the improvement of program efficiency and
effectiveness and mitigating risks that hinder the achievement of organisational objectives.
Internal auditing professional standards require the function to monitor and evaluate the
effectiveness of the organization's Risk management processes. Risk management relates to
how an organization sets objectives, then identifies, analyzes, and responds to those risks that
could potentially impact its ability to realize its objectives.
Griffiths‟ study (1999) within 92 FTSE 200 companies reveals that financial director‟s
perception of internal audit is by no means universally positive. However, their main concerns
were that the function was too low key and basic (and therefore insufficiently operationally or
business risk oriented) or that the function was lacking in skills (or had a poor mix of
skills/staff). Following the financial directors in his study, internal audit needs to become
36
much more business (risk) and operationally oriented, be more proactive, responsive and
innovative and enhance the skills within the function as well as a the quality of the staff. In
general, providing a more constructive contribution via involvement in the assessment and
management of business risk would enhance financial directors‟ perception of the internal
audit function. More specifically, managing the control and risk self assessment process or
having a significant involvement in its delivery provides the opportunity to directly support
the financial directors‟ requirements and responsibilities in this regard.
2.9.2 Internal auditor’s role in internal control
Internal auditing activity is primarily directed at improving internal control. Committee of
Sponsoring Organisation (COSO) defined internal control in auditing as a process, affected by
an organization's structure, work and authority flows, people and management information
systems, designed to help the organization accomplish specific goals or objectives. Internal
Control is a means by which an organization's resources are directed, monitored, and
measured. It plays an important role in preventing and detecting fraud and protecting the
organization's resources, both physical (e.g., machinery and property) and intangible (e.g.,
reputation or intellectual property such as trademarks)
Under the COSO Framework, internal control is designed to provide reasonable assurance
regarding the achievement of objectives in the following internal control categories:

Effectiveness and efficiency of operations.

Reliability of financial reporting.

Compliance with laws and regulations.
37
Management is responsible for internal control. Managers establish policies and processes to
help the organization achieve specific objectives in each of these categories. Internal auditors
perform audits to evaluate whether the policies and processes are designed and operating
effectively and provide recommendations for improvement. Management control in the public
sector includes all the policies and procedures put in place by a government and the
management of public sector entities aimed at promoting accountability of resources.
In the public sector, controls are mainly in-built in the public financial management system.
Public financial management includes the legal and organisational framework for supervising
all phases of the budget cycle, including the preparation of the budget, internal control and
audit, procurement, monitoring and reporting arrangements, and external audit. The broad
objectives of public financial management are to achieve overall fiscal discipline, allocation
of resources to priority needs, and efficient and effective allocation of public services. Internal
audit, in turn, has the key function of reporting to the senior management of public sector
entities on the functioning of the management control systems, and recommending
improvement where applicable (Asare, 2008).
Control structures and the accountability framework cover a broader spectrum of Public
Financial Management issues as shown in Figure 1 below, which include strategic planning
(including budgeting), managerial activities (procurement, public debt and asset
management), accounting and reporting, internal and external audit; and legislative oversight
(Asare, 2008).
38
Fig.2.2 Public Financial Management Cycle
Source: Baltaci & Yilmaz (2006)
According to Baltaci & Yilmaz (2006), the effort to reform a fiscal system should include
internal control and audit due to the crucial role they play in enhancing accountability and
effectiveness. Internal audit provides both governments and related parties with a powerful
tool for understanding the extent to which the public institution in question has delivered on
budget and effective services. Internal audit activity is an essential internal assurance
mechanism in public financial controls and tool for monitoring and evaluating managerial
activities prior to external evaluation by external auditors. Internal auditors in the public
sector work with management to improve service delivery, secure their commitment to
improve internal controls and to ensure compliance with applicable laws.
Public procurement constitutes a huge portion of government expenditure and is an area that
is often vulnerable to conflicts of interest and corruption of public officials. Internal audit
activities will further enhance transparency, fairness, reduce corruption and ensure value for
39
money in public procurement. According to Szymanski (2007), “control systems play an
important role in enhancing the accountability and transparency of a public procurement
system and hence in detecting and preventing corruption. Such systems should include
adequate independent internal control and audit with a clear coordination of all control
mechanisms”. However, internal auditing as a control measure does not only minimize the
opportunities for corruption through the verification of procurement processes but also
ensures effective physical monitoring of capital items procured and actual utilisation to avoid
fraud and abuse.
In a study to identify the interaction between CEOs and CFOs and internal auditors and their
respective roles, Galloway (1995) points out that manager may restrict the internal auditor‟s
role to the evaluation of internal controls over traditional areas such as accounting and
finance. Similarly, Mathews at al. (1995) found an apparent lack of understanding of the wide
range of services that internal audit can offer. In their survey of CEOs in Australia, they found
that 41.8 percent of the respondents believe that the internal audit function is simply an
independent appraisal of the internal control system.
Ridley and D‟Silva (1997), comparing and contrasting senior managers‟ perceptions of
internal auditing value, also found that most senior managers saw internal auditing in its
traditional role of providing assurance through investigation, check and assessment. Some
recognised a widening internal auditing scope into new roles as consultants and advisers,
particularly in control associated with information technology and management performance.
Remarkably, the pattern of management perceptions of value from internal auditing
40
contributions was mixed between CEOs and CFOs. More CEOs than CFOs saw a growth of
value in reports to regulators and reports on environmental issues. More CFOs than CEOs saw
a growth of value in reports on internal control.
2.9.3 Internal auditor’s role in corporate governance
Internal auditing activity as it relates to corporate governance is generally informal,
accomplished primarily through participation in meetings and discussions with members of
the Board of Directors. Corporate governance is a combination of processes and
organizational structures implemented by the Board of Directors to inform, direct, manage,
and monitor the organization's resources, strategies and policies towards the achievement of
the organizations objectives. The internal auditor is often considered one of the "four pillars"
of corporate governance, the other pillars being the Board of Directors, management, and the
external auditor (Asare, 2008).
A primary focus area of internal auditing as it relates to corporate governance is helping the
Audit Committee of the Board of Directors (or equivalent) perform its responsibilities
effectively. This may include reporting critical internal control problems, informing the
Committee privately on the capabilities of key managers, suggesting questions or topics for
the Audit Committee's meeting agendas, and coordinating carefully with the external auditor
and management to ensure the Committee receives effective information.
41
2.10. QUALITY ASSURANCE OF INTERNAL AUDIT
According to Christin Narku Tawiah of Institute of Chartered Accountants (Ghana) in his
presentation at the 5th Annual Internal Audit Forum, (2010) quality assurance involves
procedures, processes and activities designed and implemented to ensure that services
provided to the clientele of the organisation meets the appropriate standard of quality. The
establishment of the quality assurance system is the responsibility of corporate governance
and management. Internal auditing therefore conducts assignments and provides feedback that
enables management demonstrates the relevant authority that public performance and
accountability responsibilities have been duly discharged and fulfilled. The extent of the role
of internal auditing depends on the responsibilities and authority granted by management
which is found in the internal audit charter of the organization.
The role of Internal auditing in quality assurance should be done with the above
circumscribed environment in which internal auditing operates. The role of internal auditing
in each segment of the quality assurance system is as depicted below:
Fig. 2.3 Quality Assurance System in the Public Sector
INPUT
TRANSFORMATION
PROCESS
FEEDBACK
Source: Christin Narku Tawiah, (2010)
42
OUTPUT
Input refers to the infrastructure, human resources, equipments, programmes and services
being offered by the organization.
Transformation process involves the detailed procedures and activities undertaken to
perform the service. The organization should have acceptable standard and procedures which
should be documented to guide performance in subsequent measurement of outcome.
Outputs are the outcomes of the processes, procedures and the activities performed.
To perform its role very well internal auditing must be conversant with the system to be able
to plan and evaluate the quality assurance system.
2.11 THE LEGAL AND INSTITUTIONAL FRAMEWORK OF INTERNAL
AUDITING IN GHANA.
As part of the reforms under the Public Financial Management Reform Programme
(PUFMARP), a scoping study for the establishment of internal control audit functions in
Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District
Assemblies (MMDAs) was carried out in 2003. It resulted in proposals for the establishment
of a Central Internal Audit Agency to enhance efficiency, accountability and transparency in
the management of resources in the public sector. This resulted in the passage of the Internal
Audit Agency Act, 2003 (Act 658). Prior to Act 658, the Auditor General operating under the
Audit Service Act 2000 (Act 584), had a lot of scope for internal auditing work in addition to
his main activity as the public sector external auditor with the responsibility to assuring the
citizenry of accountability by government in the use of the country‟s financial resources.
43
The Auditor General under the 1992 Constitution and Act 584 is not subject to the direction
or control of any other person or authority and has the power to disallow any item of
expenditure that is contrary to law. Significantly, Act 584 enjoins internal auditors of any
public institution or body to submit copies of all reports issued as a result of internal audit
work to the Auditor General. This requirement is corroborated by Act 658 Section 16 (7) that
“a copy of the internal audit report of an autonomous body shall be submitted to the AuditorGeneral”.
2.12 CONCEPTUAL FRAMEWORK
There is no doubt that budgetary control as a process within the public institutions has
increased in profile during the past decade due to the restrictions on funds and the need to
ensure that these institutions spent within their approved budgets. It could be argued that in
the past it was the external auditors who took the limelight for ensuring accountability, but in
recent years, thanks to reports relating to corporate governance the role and importance of
internal auditing in ensuring that budgetary control processes are adhered to. This is
reinforced by the Turnbull Report on Corporate Governance (September 2009) which has
helped identify the relevance of having a sound budgetary control structure within public
institutions.
The Turnbull Report on Corporate Governance provides guidance about the adoption of a
risked based approach to establishing a system of internal control and need to establish
efficient and effective budgetary control processes for public institutions to achieve its
business objectives.
44
External perceptions of an organization are affected by the level of risk that it faces and by the
way its risks are managed. A major risk exposure and a source of business failure and /or lack
of opportunity success has been the failure to manage change. Organizations need to be aware
of changing markets, service delivery (example e-commerce) and morale. Effective risk
management and efficient internal control procedures can be used to mange change, to
involve all levels of people in the organization in meeting its business objectives, and to
improve an organizations credit rating and ability to raise funds. Therefore, the proper focus
on risk management, internal control procedures and strict adherence to proper budgetary
control processes can result in considerable benefits been gained by an organization.
In effect, the success of budgetary control processes within the public organizations helps in
addressing the following:

The review of the budgetary control arrangements that currently exist within an
organization is done annually to confirm that they provide robust financial governance
and that there is an effective budgetary control environment in place and operating
across the organization

Sound budgetary control procedures are critical to an organization‟s success. The key
tasks of budgeting are to monitor actual performance against the approved budgets and
to take appropriate and swift action to address any variations.

There is no misapplication of funds from one expenditure item to another so that
management can ensure that funds are used for their actual and/or budgeted purposes.

There always exist processes to seek approval for warrants in order to commit the
government to spend.
45
CHAPTER THREE
METHODOLOGY
3.0 INTRODUCTION
This chapter presents the method of data analysis which includes the description of the
relevant variables and method of data collection, data type, source, and procedure. The study
employs both primary and secondary data to examine and determine the current practices and
involvement of Internal Audit Agency in budgetary control among MDAs and MMDAs of
public sector in Ghana.
3.1 RESEARCH DESIGN
Research design is the strategy, plan and structure of conducting a research project (Kweit and
Kweit, 1981, in Leedy, 1993). As a starting point in describing the research design, Figure 3.1
below is a diagrammatical representation of the research design employed for the purposes of
this study.
Research requires an organised data gathering in order to pinpoint the research philosophies
and theories that will be included in the research and instruments of data interpretation. In
this study, the descriptive approach would be employed. In this method, it is possible that the
study would be cheap and quick. It could also suggest unanticipated hypothesis. Nonetheless,
it would be very had to rule out alternative explanations and especially infer causations.
46
Figure 3.1: A Schematic Representation of the Research Design Employed
Administer
Questionnaire/Interview
to Management, Staff of
IAA
Administer Questionnaire to
Finance Directors, Budget
Officers, and Internal Auditors
of MDAs and MMMDAs
Obtain Secondary data
from publish articles,
reports, books, journal, etc.
Capture the data and inspect the data
using descriptive, inferential
statistics and frequency tables
Test the reliability of the data
(Cronbach‟s alpha reliability
Coefficient)
Analyse and discuss results
Source: Adapted from Leedy, (1993)
To illustrate the descriptive type of research, as stated by Creswell (1994): Descriptive
method of research is to gather information about the present existing condition. The purpose
of employing this method is to describe the nature of a situation, as it exists at the first time of
the study and to explore the cause or causes of a particular phenomenon. The researcher opted
to use this kind of research considering the desire of the researcher to obtain first hand data
from the respondents so as to formulate rational and sound conclusions and recommendations
for the study.
47
3.2 TARGET POPULATION
The target populations for the study are the Management and Staff of the Internal Audit
Departments and Finance, Accounts‟, budget offices in MDAs in Accra, Greater Accra
Region.
3.3 SAMPLE SIZE
The sample group consisted of 50 respondents comprising 10 Management Personnel and
Staff of IAA and 40 Internal Auditors, Accounting Officers, Finance Directors, and Budget
Officers MDAs and MMDAs of the public sector. Ministry of Finance and Economic
Planning; Ministry of Water Resources, Works and Housing; Parliamentary Service of Ghana;
Environmental Protection Agency; and Accra Metropolitan Assembly have been targeted for
the study because they have established Internal Audit Unit as demanded by the law, Internal
Audit Agency Act 2003 (Act 658).
3.4 SAMPLING TECHNIQUE
Both stratified and random sampling methods were chosen to enable researcher get to the core
targets for the study and ensure minimum sampling bias. These sampling methods were used
to select respondents for the study. This technique was used because it ensured that everyone
in the population had an equal chance of being selected. The goal of the sampling method used
was to obtain a sample that is a representative of the population. The techniques used by the
researcher to select the sample size required prior knowledge of the target population which
allowed a determination of the size of the sample needed to achieve a reasonable estimate with
accepted precision and accuracy of the population
48
3.5. DATA COLLECTION
As an exploratory study, the researcher made use of both primary and secondary sources of
data including published and unpublished materials. This was done to combine the advantages
of utilizing both sources of data in order to minimize the disadvantages of using only one
source. Primary source involved the collection of information directly from the respondents
concerning the subject under study. Secondary sources included extraction of facts and figures
from books, articles, journals, and materials from the internet.
The primary data sources that were used for the study included face –to- face interviews,
structured and unstructured questionnaires that was administered to the Management and Staff
of the MDAs, MMDAs and IAA.
The questions were based on the personal profile of respondents, and internal auditing as
means of budgetary control in the MDAs and MMDAs. The three main elements of internal
auditing, namely the evaluation and improvement of risk management, control and
governance processes were explored. According to Asare (2009) risk management, control
and governance encompass the policies and procedures established to ensure the achievement
of objectives and include the appropriate assessment of risk, the reliability of internal and
external reporting and accountability processes, compliance with applicable laws and
regulations, and compliance with the behavioural and ethical standards set for public
organizations and employees. The questions were to explore the effectiveness of these three
pillars of internal audit in achieving budgetary control based on the exposition of Asare
(2009) in the selected MDAs and MMDAs.
49
3.5.1 DATA COLLECTION TOOLS
The instruments used for the collection of primary data were questionnaires and personal
interviews. The questionnaires were designed to contain both close-ended (90%) and openended (10%) questions. The close-ended questions helped respondents to answer easily and
enable the researcher to accumulate and summarize responses quickly and more efficiently.
Interviews were also conducted to confirm some of the responses on the questionnaires.
3.5.2 DATA ANALYSIS TECHNIQUE
The questionnaires that were answered and retrieved were coded and analysed using the
Statistical Programme for the Social Sciences (SPSS). Tables, charts, graphs, frequencies and
percentages were used to demonstrate the response that was obtained from the respondents.
Both qualitative and quantitative methods of investigations were employed in the analysis and
interpretation of data for the study. Based on the analysis and their interpretations, conclusions
were drawn and recommendations given.
3.6
RESEARCH CONSTRAINTS AND PROBLEMS
Several challenges were encountered by the researcher in the administration of the
questionnaires which have been outlined following:

Situations where respondents were not met at all or even those present had misplaced
their questionnaires and new ones had to be given them.

Some respondents having been assured of their anonymity of their personalities
declined to offer any assistance to the researcher.
50
CHAPTER FOUR
DATA ANALYSIS AND DISCUSSION OF RESULTS
4.0 INTRODUCTION
This chapter presents the results of the study in the context of the objectives as stated in
section 1.4 of chapter one. The objectives of the study are to identify the current practices of
IAA in budgetary control among MDAs and MMDAs; examine the type of services offered
by IAA in terms of budgetary control among the MDAs and MMDAs; and to identify factors
that effectively affect the services provided by IAA to the MDAs and MMDAs. This chapter
also discusses the implications of the results in the previous chapters.
4.1 DEMOGRAPHICS
In order to investigate the knowledge, skills, professional experience and other competencies
of respondents in budgeting and audit environment, demographic characteristics of the
respondents such as their department/section, current job title, and how long they have been in
the current office were elicited by the researcher.
4.1.1 DEPARTMENT/SECTION OF RESPONDENTS
The researcher needed to know the various department/section of respondents to help identify
the worth of professional experience in budgeting, budgetary control and audit process
environment. Table 4.1 and Figure 4.1 below summarize the data obtained on the
department/section of respondents.
51
Table 4.1: Department/Section of Respondents
Department/Section
Frequency
Percent (%)
Internal Audit Unit
8
16
Budget Office
13
26
Finance Office
24
48
Chief Dir. Sec
5
10
Total
50
100
Source: Field Research May 2011
Figure 4.1: Department/Section of Respondents
25
Frequency
20
15
10
5
0
Internal
Audit Unit
Budget
Office
Finance
Office
Chief Dir.
Sec.
Departments/Section
Analyzing the data obtained from the questionnaire, Figure 4.1 reveals that 24 respondents
were from Finance Office‟s representing 48% formed the majority with 13 respondents from
Budget Office‟s representing 26%. 8 respondents from Internal Audit Units representing 16%
while 5 respondents from Chief Director‟s Secretariat representing 10%.
52
Table 4.1.2: Duration of Respondents in Their Current Position
Duration
Frequency
Percent (%)
Between 6-10 years
22
45
Between 11-15 years
15
30
5 years or less
8
17
16 years and above
5
8
Total
50
100
Source: Field Research May 2011
Figure 4.1.2: Duration of Respondents in Their Current Position
Figure 4.2 below present‟s data on the duration of officers in their current positions at the
various institutions. The figure shows that majority of respondents (45%) have been in their
current positions for between 6 – 10 years. 30% of the respondents have been in their current
53
positions for between 11 – 15 years. Respondents who have been in their positions for 5 years
or less represents 17% whiles 8% of the respondents have been in their positions for 16 years
and above.
4.1.3 Educational Background
The IIA's standard 1210 on proficiency of the auditor require that the internal auditors possess
the knowledge, skills and other competencies needed to perform their responsibilities (IIA,
1999b). The researcher therefore determined these essential characteristics of the respondents
by way of asking them to indicate their educational background. Figure 4.3 below presents the
data of educational background of respondents.
Table 4.1.3: Educational Background of Respondents
Background
Frequency
Percent (%)
O’/ A Level
2
4
Professional Certificate
5
10
HND/1ST Degree
34
68
Higher Degree
9
18
Total
50
100
Source: Field Research May 2011
54
Frequency
Figure 4.3: Educational Background of Respondents
35
30
25
20
15
10
5
0
O'Level/A'
Level
Professional
Cert
HND/First
Degree
Higher Degree
Level of Education
From Table 4.3 and Figure 4.3, it is can be seen that respondents hold a range of educational
qualifications from O‟ Level /A‟ Level Certificate to Higher University Degree (Masters‟ and
PhD Degrees). Most of the employees constituting majority of the total respondents have an
average HND /First Degree qualification representing 68%. Five (5) of the respondents have
Professional Certificate. Nine (9) out of the fifty (50) respondents have Higher Degrees and
another two (2) holding the O‟ Level /A‟ Level Certificates. This result suggests that majority
of the respondents involve in the budgetary control processes have higher educational
qualifications and would have sufficient knowledge and skills needed for auditing the budget
process.
The Table 4.1 4 blow presents the categories of years of service at the targeted MDAs and
MMDAs as indicated by the respondents. The respondents have served in their respective
MDAs and MMDAs from 1 to 21 more years with 28 out of 50 spending 6-10years
representing 54%. 12 out of 50 representing 24% have tenure of 5 and less. This indicates the
respondents are experienced professionals that would have an in-depth knowledge of budget
and audit procedures in the MDAs and MMDAs. It also suggests that there exist high turnover
rate in this professional environment.
55
Table 4.1.4 Tenure at Workplace
Tenure
Frequency
Percent (%)
less than 5
12
24
6 – 10
28
54
11 – 15
6
12
16 – 20
3
6
21 and more
1
2
50
100
Total
Source: Field Research May 2011
Since, internal audit work requires knowledge and experience on a wide range of systems and
operations, it is imperative to deploy or employ auditors with extensive professional skills and
to upgrade their skills through continuing professional training and development.
4.2 Current Practices of IAA in Budgetary Control among MDAS and MMDAS
Information on current practices of IAA in budgetary control among MDAs and MMDAs
were obtained by asking questions regarding their involvement in 1.) budget preparations; 2.)
budget performance monitoring; and 3.) budget revision which forms the main component of
the financial management cycle of the public sector (Baltaci & Yilmaz, 2006).
4.2.1 Preparation of Budgets
From Table 4.2, the mean values of the responses of respondents on the involvement of
internal auditors in reviewing established control procedures during budget preparations in
MDAs and MMDAs ranges from 1.4 to 3.9. Respondents “agree” that internal auditors
review established control procedures to ensure budgets are prepared for appropriate time
56
periods and in areas which impact Government projects and contracts (3.6); and cost-control
or other budgetary objectives are consistent with strategic and long-range plans (3.9).
However, respondents “disagree” that internal auditors review established control procedures
to ensure budgets are prepared in a timely manner (2.4); the integrity of budgeted amounts
from the perspectives of both upper management and individual managers (1.7); budgets
receive final approval by an appropriate management level (1.4); and appropriate budget
information is distributed to individual managers responsible for meeting budgetary
objectives, and to personnel responsible for monitoring budget performance (1.6).
This result suggests that the focus of internal auditors during budget preparation is on
compliance with government objectives and not the governance process in MDAs and
MMDAs. This finding also implies that IAA review procedures engender policy-based
budgets as noted (World Bank, 2006). Nevertheless, the IAA‟s inability to review control
measures geared at ensure the good governance during budget preparation could introduce
some weaknesses in the budget planning and formulations such as incomprehensive
information on budget parameters (World Bank, 2006). This is because appropriate budget
information from upper management and individual managers responsible for meeting
budgetary objectives in MDAs and MMDAs may not be available, as observed from mean
values of responses on governance statements which ranges from 1.4 to 1.7 (see Table 4.2)
57
Table 4.2: Preparation of Budgets
Question
Statement
Mean
Range
3.6
1-5
2.4
1-5
…. budgets are prepared for
appropriate time periods and in areas
which impact Government projects
and contracts.
…. budgets are prepared in a timely
manner
…. cost-control or other budgetary
objectives
are
consistent
1-5
with 3.9
strategic and long-range plans.
…...
the
integrity
of
budgeted
Internal Auditors
amounts from the perspectives of 1.7
review established
both
control procedures
individual managers.
to ensure…..
….. budgets receive final approval by 1.4
upper
management
1-5
and
1-5
an appropriate management level.
…. appropriate budget information is
distributed to individual managers
responsible for meeting budgetary 1.6
objectives,
and
to
personnel
responsible for monitoring budget
performance.
58
1-5
4.2.2 BUDGET PERFORMANCE MONITORING
Table 4.3 presents the responses to statements on the auditing procedures to ensure budget
performance monitoring. Respondents “strongly agree” that auditors review established
control procedures to ensure actual performance is periodically compared to budgets, and that
variances are identified and reported, representing a mean value of 4.5. However, they
“disagree” to the statement that Auditors review established control procedures to ensure all
possible corrective actions are identified and implemented in a timely manner, representing a
mean value of 1.8.
Table 4.3 Budget Performance Monitoring
Question
Statement
Auditors review
……. actual performance is
established control
periodically compared to budgets, and
procedures to
that variances are identified and
ensure…….
reported.
Mean
Range
4.5
1-5
…….all possible corrective actions are
identified and implemented in a timely
1-5
1.8
manner.
Survey scale: 1=Strongly Disagree; 2=Disagree; 3= Unsure (neither agree nor disagree); 4= Agree; 5=
Strongly Agree
Response Category: SA = Strongly Disagree (1.50 or less); A = Disagree (1.51 – 2.50); NA = Unsure
(Neither Agree nor Disagree) (2.51 – 3.49); D = Agree (3.50 – 4.49); and, SD = Strongly Agree (4.5 or
greater).
59
The result suggests IAA ensures that during budget performance monitoring, budget variances
that occurred during budget implementation are identified and reported. This would make
MDAs and MMDAs budgets predictable and effectively controlled during execution. The
result also indicates that effecting corrective measures in timely manner to variances
identified is overlooked during auditing of budget control measures.
4.2.3 BUDGET REVISION
Table 4.4 shows the responses on the involvement of auditors in reviewing established control
procedures during budget revision. Respondents “disagree” with the statements that „auditors
review established control procedures to ensure that any revisions made to approved budgets
are justified‟; and that „auditors review established control procedures to ensure that once the
need for a budget revision is established, it is made in a timely manner‟ representing mean
values of 2.4 and 1.5 respectively. This result suggests that internal auditors hardly audit
established control procedures for budget revision. This has a tendency to undermine the
effective monitoring of budget performance as a result of data inaccuracies. It could also
breed corruption since accounting officers would not give meaningful justifications for any
revision of budget during its execution (IIA, 2006a).
60
Table 4.4: Budget Revision
Question
Statement
………any
Mean
Range
revisions
Auditors
review made to approved budgets 2.4
established
control are justified.
1-5
procedures to ensure that ………..once the need for
……..
a
budget
revision
is 1.5
1-5
established, it is made in a
timely manner.
Survey scale: 1=Strongly Disagree; 2=Disagree; 3= Unsure (neither agree nor disagree); 4= Agree; 5=
Strongly Agree
Response Category: SA = Strongly Disagree (1.50 or less); A = Disagree (1.51 – 2.50); NA = Unsure
neither (Neither Agree nor Disagree) (2.51 – 3.49); D = Agree (3.50 – 4.49); and, SD = Strongly
Agree (4.5 or greater).
4.3 BUDGETARY CONTROL SERVICES OFFERED BY IAA TO MDAs AND
MMDAs
Table 4.5 shows budgetary control services offered to MDAs and MMDAs by IAA.
Respondents indicated that IAA “always” provides compliance with budget laws, regulations
and policies audit services, representing 4.83 while risk management audit services are
“rarely” provided representing a mean value of 2.41. The respondents also indicated that IAA
“very often” provide effectiveness of internal control audit services; and ethics and fraud
audit services as a way of budgetary control in the MDAs and MMDAs representing mean
61
values of 3.62 and 3.12 respectively. Training workshops on budget audit procedures and
internal controls are “rarely” conducted by the IAA (1.52)
Table 4.5 Budgetary Control Services to MDAs and MMDAs
Question
Statement
Mean
.. compliance with budget
laws,
regulations
Range
4.83
1-5
2.41
1-5
3.62
1-5
3.12
1-5
1.52
1-5
and
policies audit services?
…risk management audit
services?
How frequent does IAA
… effectiveness of internal
conduct ……
control audit services?
… ethics and fraud audit
services?
… training workshops on
budget audit procedures and
internal controls?
Survey scale: 1=Never; 2= Rarely; 3= Sometimes; 4= Very often; 5= Always
Response Category: N = Never (1.50 or less); R = Rarely (1.51 – 2.50); S = Sometimes (2.51 – 3.49);
VO = Very often (3.50 – 4.49); and, A = Always (4.5 or greater).
According to Asare (2008) internal audit can help to improve governance processes by
focusing on how values are established to ensure effective and efficient control and
management of public sector entities. Such a value system requires an open government that
62
is transparent in its dealings with a high sense of ethical behaviour and fairness (Asare, 2008).
The result in this study reveals that IAA is engaged in providing services aimed at ensuring
compliance with budget laws, regulations and policies; effective internal control systems;
ethics and fraud detection. These services therefore would play an important role in enhancing
the accountability and transparency of the budget cycle and hence in detecting and preventing
corruption (Szymanski, 2007). It would also enhance the governance process of the budget
cycle. Similar result was also obtained by World Bank study in 2006 that investigated the
financial management system of Ghana and noted significant improvement in transparency of
budget documentation in the MDAs and MMDAs but, however, raised concerns on lapses in
in-year-end reporting on utilisation of resources which hampers monitoring of budget
performance.
A cardinal objective of the IAA established with the passage of the Internal Audit Agency
Act, 2003 (Act 658) is to ensure that risks are adequately managed in the MDAs and
MMDAs. As noted from the Table 4.2, IAA paid little attention to risk management services
to ensure budgetary control in the MDAs and MMDAs. This finding is contrary to surveys by
KPMG in the US (KPMG, 1999) and Deloitte and Touche Tohmatsu in New Zealand (2000)
suggest that, in general, internal auditors are more optimistic about the extent of their
potential contribution to risk assessment and management than the senior executives or public
sector managers. It could be that IAA perceived public financial management system in the
MDAs and MMDAs as a regime where risk management was a management process, not an
internal audit process. Risk management was delegated to public sector management who
were tasked with identifying and addressing risks, including formulating action plans in case
63
of „events‟ or „occurrences‟ happening. This has a potential of negatively impacting on efforts
aimed at mitigating risks at an acceptable level particularly the occurrence of fraud and
corruption which are key risk in the public sector (Griffiths, 2006).
In recent time, training outlays are typically treated as expenses rather than investments (Hope
and Frazer, 2003). The IAA needs to conduct training workshops on budget and audit
procedures for financial and internal audit managers as indicated by the results in Table 4.2
which shows that such training workshops are rarely organised for the MDAs and MMDAs.
Even if the most sophisticated budgetary planning and control system is put in place, the
absence of the necessary investment in upgrading those involved in budgeting will amount to
total failure of such budgeting system (Adedeji, 2004). The training workshop is also an
important way in which auditors are helped with the identification and assessment of risks or
dealt with other issues (Page and Spira, 2004). Absence of training workshops on budget and
audit procedures could accounts for the low risks assessment and management among the
MDAs and MMDAs. (mean value, 2.41; Table 4.5).
4.4 FACTORS THAT AFFECT SERVICES PROVIDED BY IAA TO THE MDAs AND
MMDAs
Independence of the IAA
Majority of the respondents stated that the independence of IAA is very crucial in ensuring
effectiveness of services they provided to the MDAs and MMDAs. Similar results were
obtained by Fogarty and Kalbers (2004) who identified independence, autonomy and selfregulation as key attributes to effective internal auditing. The independence of internal audit is
an important factor in its claim to professional status and can be characterised in various
64
ways: operational independence from management processes, independence of reporting line
and independence as an individual‟s state of mind. Fogarty and Kalbers (2004), however,
observed that organisations should also be aware that internal auditor‟s faces the challenge of
role conflict and that efforts to eliminate role conflict should not deny internal auditors the
very essence of their roles in the organizations.
Change in Perception
Respondents also reported the need to reframe perceptions of internal audit within the MDAs
and MMDAs with accompanying operational changes. One of the respondents succinctly put
it this way: people always think that they know what internal audit is about, and generally it is
nothing like what it is about, [like] thinking that you are there to catch them out and trip them
up. Some people said “Why do you need to look at this and why do you need to look at that”,
I think they see us as an obstacle to get over at times.
Other factors
Other factors mentioned include skills of staff, welfare of staff and logistics. Respondents also
stated that provision of on-site support to the Internal Audit Units (IAU‟s), training and
recruitment of quality internal auditors could help improve budgetary control services offered
to the public sector.
65
CHAPTER FIVE
SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
5.0 INTRODUCTION
The broad objective of this study is to examine and determine the current practices and
involvement of Internal Audit Agency in budgetary control among MDAs and MMDAs of
public sector in Ghana. In addressing this objective, Management and Staff of the Internal
Audit Units, Finance and budget officers in MDAs and MMDAs in Accra, Greater Accra
Region were chosen for the study.
In an effort to investigate the broad objective of the research, three specific objectives were
explored. Thus, to identify the current practices of IAA in budgetary control among MDAs
and MMDAs; examine the type of services offered by IAA in terms of budgetary control
among the MDAs and MMDAs; and identify factors that effectively affect the services
provided by IAA to the MDAs and MMDAs. As an exploratory study, the researcher made
use of both primary and secondary data which include face - to - face interviews, structured
and unstructured questionnaires administered to the Management and Staff of the MDAs,
MMDAs and IAA. The results of the study are summarised in 5.1.
66
5.1 SUMMARY OF FINDINGS
Current Practices of IAA in Budgetary Control among MDAs and MMDAs
Information on current practices of IAA in budgetary control among MDAs and MMDAs
were obtained by asking questions regarding their involvement in 1.) budget preparations; 2.)
budget performance monitoring; and 3.) budget revision which forms the main components of
the financial management cycle of the public sector (Baltaci & Yilmaz, 2006).
The results on current practices reveal that:The focus of IAA during budget preparation is on
compliance with government objectives and not the governance process in MDAs and
MMDAs. This observation was mentioned by majority of respondents.
On budget performance monitoring, IAA ensures that budget variances that occurred during
budget implementation are identified and reported by reviewing the established control
procedures of the MDAs and MMDAs. This would make MDAs and MMDAs budgets
predictable and effectively controlled during execution.
However, the internal auditors „hardly‟ audit established control procedures for budget
revision representing a range of mean values of 1.5 to 2.4., and has a tendency to undermine
the effective monitoring of budget performance as a result of data inaccuracies or
manipulations by public official and could also breed corruption.
Internal audit work by IAA is not limited to only pre-audit and financial compliance as
suggested by World Bank (2006) but has extended to budgetary control audits in the MDAs
and MMDAs.
67
Budgetary Control Services offered by IAA to MDAs and MMDAs
The result in this study revealed that IAA is engaged in providing services aimed at ensuring
compliance with budget laws, regulations and policies; effective internal control systems;
ethics and fraud detection. These services therefore would play an important role in enhancing
the accountability and transparency of the budget cycle and hence in detecting and preventing
corruption (Szymanski, 2007).
A cardinal objective of the IAA established with the passage of the Internal Agency Act, 2003
(Act 658) is to ensure that risks are adequately managed in the MDAs and MMDAs.
However, results from this study show that IAA “rarely” provide risk management audit
services to the MMDAs representing a mean value of 2.41, to ensure budgetary control in the
MDAs and MMDAs. This finding is contrary to surveys by KPMG in the US (KPMG, 1999)
and Deloitte and Touché Tohmatsu in New Zealand (2000) suggest that, in general, internal
auditors are more optimistic about the extent of their potential contribution to risk assessment
and management than the senior executives or public sector managers.
Training workshops on budget audit procedures and internal controls are “rarely” conducted
by the IAA representing a mean value of 1.52. Absence of training workshops on budget audit
procedures could accounts for the low risks assessment and management (mean value, 2.41)
among the MDAs and MMDAs since training workshops serve as an important way in which
auditors facilitate the identification and assessment of risks or dealt with other issues (Page
and Spira, 2004).
68
Factors that affect Services provided by IAA to MDAS and MMDAS
The following observations were outlined: majority of the respondents stated that the
independence of the IAA is very crucial in ensuring effectiveness of services they provided to
the MDAs and MMDAs.
Similar results were obtained by Fogarty and Kalbers (2004) who identified independence,
autonomy and self-regulation as key attributes to effective internal audit services provision.
Respondents also reported the need to reframe perceptions of internal audit within the MDAs
and MMDAs with accompanying operational changes. Particular references were made to the
perception that internal auditors “are there to catch them out and trip them up”
Other factors mentioned include skills of staff, welfare of staff and logistics. Respondents also
stated that provision of on-site support to the IAU‟s, training and recruitment of quality
internal auditors could help improve budgetary control services offered to the public sector.
Respondents also indicated that Factors which have resulted to debates over the issue of the
auditor's independence often involve the provision of non audit services by external auditors.
Efforts must be done to improve independence within the self-regulatory regime of auditors
and reduce the possibility of capture occurring in their operations. Measures should be put in
place to safeguard every auditor's independence. Steps must be ensured to improve
accountability to complement efforts towards improving independence.
69
5.2 RECOMMENDATION
From the results obtained in this study, IAA must pay attention to the following to
enhance its budgetary roles in the public financial management system of the MDAs and
MMDAs:
Budget revision control procedures; this will help the Agency to effectively monitor budget
performance as a result of data inaccuracies and also give meaningful justifications for any
revision of budget during its execution. Risk identification, assessment and its management:
This helps management to set objectives, identifies, analyzes, and responds to those risks that
could potentially impact its ability to realize organisations objectives.
Training workshops on risk management audit must be conducted to ensure that MDAs and
MMDAs are conscious of the risks it faces, makes informed decisions in managing these
risks, and identifies and harnesses potential opportunities.
Workshops on budget and audit procedures must be conducted to ensure that MDAs and
MMDAs adhere to laid down procedures; failure to comply with these procedures may be
treated as breach of financial discipline.
Seminars/workshops to educate management of various MDAs and MMDAs on the roles of
the Internal Audit Units to avoid role conflicts must be conduct by IAA.
IAA Should be Intensify their on-site support programme for the IAUs to increase capacity
building of Internal Auditors in MDAs and MMDAs on budgetary controls.
Quality assurance processes in public sector should be strictly adhered to by MDAs and
MMDAs. This helps IAU to conform to the various operating standards and regulations of the
internal audit profession.
70
Internal Auditors should plan and perform their audit procedures, evaluate and report on the
results thereof, recognizing that non-compliance by the entity with law or regulations may
materially affect the financial statements
The increasing supervisory focus on corporate governance and on internal controls will
require supervisors to take account of the views of internal auditors.
The increasing sophistication of control and risk management systems requires the expertise
of internal auditors.
71
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local governments of Malaysia,‟ Southern African Journal of Accountability and Auditing
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Asare, T. (2008), Internal Auditing in the Public Sector: Promoting Good Governance and
Performance Improvement, International Journal on Governmental Financial Management, pg.
15- 28
Baltaci, M. & Yilmaz, S. (2006), Keeping an Eye on Subnational Governments: Internal Control
and Audit at Local Levels, World Bank Publications, pp.7-15
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Government,
Comcover,
available
at
http://www.finance.gov.au/comcover/better-practice-
guide.html
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Meeting on “Ethics, Integrity, and Accountability in the Public Sector: Re-building Public Trust in
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Petersburg, Russia
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KPMG (1999), Transforming internal audit from its compliance role into a strategic
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Osbornebooks.co.uk Budgeting and Budgetary Control Chapter 19 Page 363
Schmidt, J.A. (1992). In time to replace Traditional Budgeting? Journal of Accountancy
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Changing Role of Internal Audit
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36384-GH
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APENDIX
QUESTIONNAIRE
TOPIC: BUDGETARY CONTROL IN THE PUBLIC SECTOR - THE ROLE OF THE
INTERNAL AUDIT AGENCY
RESPONDENTS:
INTERNAL AUDIT & FINANCE STAFF
INTRODUCTION:
This questionnaire is designed to collect data to be used purely for an academic purpose. The
data will help me to meet part of the requirements for the award of MBA degree in the
Kwame Nkrumah University of Science and Technology. I wish to assure you that all
responses to these questions will be strictly confidential. Thank you for your cooperation and
time.
Please tick (√) one where multiple answers have been provided.
SECTION A: JOB VARIABLES
1. Name of Section/Department………………………………………………………
2. How long have you worked with your Institution?
[a] 5 or less years [b] 6-10 years [c] 11 -15 years [d] 16 – 20 years [e] 21years or more
3. Current Job Title/Office……………………………………………………………
4. How long have you been in your current office?
[a] 5 or less years [b] 6 – 10years[c] 11 – 15years [d] 16 – 20 years [e] 21 years or
more
CURRENT PRACTICES OF IAA IN BUDGETARY CONTROL AMONG MDAs AND MMDAs
a. Preparation of Budgets
76
Auditors review established control procedures to ensure…..
5.
…. budgets are prepared for appropriate time periods and in areas which impact Government
projects and contracts.
Strongly Disagree
6.
7.
Disagree
Unsure
…. budgets are prepared in a timely manner.
Strongly
Strongly Disagree
Disagree
Unsure
Agree
Agree
Strongly Agree
Strongly Agree
…. cost-control or other budgetary objectives are consistent with strategic and long-range plans.
Strongly Disagree
Disagree
Unsure
Agree
Strongly Agree
8.
…... the integrity of budgeted amounts from the perspectives of both upper management and
individual managers.
Strongly Disagree Disagree Unsure Agree
Strongly Agree
9.
….. budgets receive final approval by an appropriate management level.
Strongly Disagree
Disagree
Unsure Agree
Strongly Agree
10
…. appropriate budget information is distributed to individual managers responsible for meeting
budgetary objectives, and to personnel responsible for monitoring budget performance.
Strongly Disagree Disagree Unsure Agree
Strongly Agree
11.
Budget Performance Monitoring
Auditors review established control procedures to ensure………….
actual performance is periodically compared to budgets, and that variances are identified and
reported.
Strongly Disagree Disagree Unsure Agree
Strongly Agree
77
12.
….all possible corrective actions are identified and implemented in a timely manner.
Strongly Disagree
Disagree
Unsure
Agree
Strongly Agree
Budget Revision
Auditors review established control procedures to ensure that ……….
13.
….any provisions made to approved budgets are justified
Strongly Disagree
14.
Disagree
Unsure
Agree
Strongly Agree
…...once the need for a budget revision is established, it is made in a timely manner.
Strongly Disagree Disagree
Unsure
Agree
Strongly Agree
EXAMINE THE TYPES OF SERVICES OFFERED BY IAA IN TERMS OF
BUDGETARY CONTROL AMONG MDAs AND MMDAs
How frequent does IAA conduct……………
15.
…….compliance with budget laws, regulations and policies audit services?
Never
16.
Very Often
Always
Rarely
Sometimes
Very Often
Always
………….effectiveness of internal control audits services?
Never
18.
Sometimes
………risk management on audit services?
Never
17.
Rarely
Rarely
Sometimes
Very Often
Always
………….ethics and fraud audit services?
Never
Rarely
Sometimes
Very Often
78
Always
………..training workshops on budget and audit procedures and internal controls?
19.
Never
20.
Rarely
Sometimes
Very Often
Always
Mention and indicate the frequency of other audit services offered by IAA
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
……………………………………………………………………………………………
FACTORS THAT EFFECTIVELY AFFECT SERVICES PROVIDED BY IAA TO
MDAs/MMBAs
21. Which factors do you think affect the effectiveness of service offered by IAA.
.......................................................................................................................................................
.............................................................................................................................................
.......................................................................................................................................................
.............................................................................................................................................
.......................................................................................................................................................
............................................................................................................................................
..................................................................................................................................................
22. How can the services offered by the IAA on budgetary control be improved?
.......................................................................................................................................................
.............................................................................................................................................
.......................................................................................................................................................
.............................................................................................................................................
..................................................................................................................................................
.................................................................................................................................................
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80
81