“Here in the Ministry of Finance, Internal Audit Directorate is actually responsible to coordinate the activities of the internal audit units in the various ministries, departments and agencies and also the local councils,” he said.
Internal Audit was officially established in 2005 through the Government Budgeting and Accountability Act. What existed before this period was pre-audit, Mr. Sesay said. The European Union employed consultants to advice on how to create the internal audit directorate in the ministry. The current Director, Mr. Kandeh Sesay was a consultant for the establishment and restructuring of the Internal Audit Unit.
Internal audit looks at the system of internal control and external audit looks at financial statements and make recommendations. Internal audit directorate provides technical advice to Government MDAs. Internal auditors report to their vote controllers. This undermines the work of auditors.
The suggestion is that the auditors should report to the audit committee and not to the vote controller. The vote controller should be the first person to audit and he/she should not be the person to report to. Likewise, Vote Controllers should not appoint members of the audit committee. Reporting to the vote controller or Permanent Secretary places a limitation on the work of the unit. This is why they want a bill that will give internal auditors some amount of independence.
What Mr. Sesay’s team has identified is that most MDAs do not have vibrant audit committees. The Internal Audit is all about adding value. In Ghana, if management does not respond to the recommendations of the audit, they could be brought to book, he said. The cooperation of top management or vote controllers is a challenge, he stressed.
All 19 local councils have internal audit units. They provide regular reports. The Internal Audit Department developed the internal audit manual for local governments. The capacity in Local government is virtually weak, so the unit provides coaching for local government audit staff.