Accra, July 12, GNA - The Member of Parliament for Navrongo Central, Mr. Joseph Kofi Adda, has said the establishment of a Central Internal Audit Agency independent of the Controller and Accountant-General would ensure the co-ordination of activities of Internal Auditors of Ministries, Departments and Agencies.
He said there was the need for the functions of the Internal Audit to be clearly spelt out in the Financial Administration Bill under the consideration stage in Parliament.
The establishment of Internal Audit Committees would also compel MDA's to take the findings of internal auditors seriously and to implement their recommendations.
Mr. Adda was explaining the rational for the establishment and functions of Internal Audit to the Parliamentary Press Corps after he had withdrawn a proposed amendment for its establishment in Parliament on Friday, at the consideration stage of the Bill.
The MP withdrew the amendment when the Minister of Finance, Mr. Yaw Osafo-Maafo, explained that Cabinet had approved the establishment of an Internal Audit Agency and the Bill would be laid before Parliament soon. The Bill prefers that function to be performed under existing legislation even though the entire Bill is supposed to address shortcomings in the existing laws, Mr. Adda who was formerly Head of the Public Finance Management Programme of the Ministry of Finance, said.
He noted that Internal Audit function under the current law, Financial Administration Decree 1979 (PNDC 221), gives the Auditor General the prerogative to make the necessary arrangements for the conduct of internal audit.
"The actual performance of that function however was presently carried out within the Controller and Accountant-General's Department and this is a clear conflict and has the potential to compromise effectiveness and internal controls".
Mr. Adda said the Internal Audit function in the public sector has largely been misunderstood thus causing the staff of internal audit units of MDA's to be marginalised and assigned to performing only pre-audit, which is simply the vetting of invoices and vouchers. He said even though the principal role of Internal Audit as part of the management process of organisations was to ensure effective control and to rectify lapses in financial management, most internal auditors were frustrated in the performance of their duties.
They are deprived resources to perform their work if they come up with adverse findings against their heads of departments and this situation has led to the widespread fraud, embezzlements and other forms of malpractice's that exist in the public sector.
There is the need to highlight and elevate the role of Internal Auditors to help forestall any damage that would be done to the scarce financial resources that the country needs urgently for development, Mr. Adda said.
As at now very little is being done about the findings by Internal Auditors and their reports only gather dust while malpractice's continue, he added.
He said the failure to take action on the findings of these reports leaves the External Audit reports as the only alternative means of bringing such malpractices to the attention of the attention of the authorities, which often took years after the damage had been done.
Mr. Adda said to refuse to highlight the role of the Internal Auditor in the Bill and to spell out what was required of them was a "serious shortcoming".
