Wed | Oct 18, 2017

Audit commission wants better responses from public sector management

Published:Tuesday | May 26, 2015 | 12:00 AM
Dr Peter Phillips

The Audit Commission in the Ministry of Finance and Planning has expressed grave concern about the slow pace at which management in the public sector responds to audit queries.

It says in some cases the quality of responses from management needs significant improvement.

In its annual report for the year ending March 31, 2014, tabled in the Senate on Friday, as a ministry paper, the commission stated that of the 23 annual reports received from audit committees, 80 per cent reported that outstanding management response was a recurring issue.

"This is an area that needs to be immediately addressed by the accounting officers and senior management as a lack of appropriate action by management will result in the perpetuation of the risk exposure, which may have significant financial implications on government's scarce resources," declared Finance Minister Dr Peter Phillips.

Ineffective controls

At the same time, the lack of accountability by persons in positions of authority and the failure to enforce sanctions to ensure accountability have contributed to weak or ineffective systems of internal controls resulting in a proliferation of non-compliance and breaches within most government entities.

Another concern highlighted in the Audit Commission's annual report is the perennial insistence on the part of government departments or bodies for internal auditors to conduct pre-audits of payroll and leave calculations to ensure accuracy before final payments are made.

However, the Audit Commission said this goes against the principle of independence in the profession, as by performing the pre-audits, internal auditors are deemed to be a part of the operations.

"This is an inefficient use of the internal audit resources and impairs its objectivity and independence. For instance, high-risk areas identified to be audited within the financial year were not done due to the time spent on conducting pre-audits," said Phillips, who signed off on the ministry paper.

Inadequate staff

The commission also highlighted inadequate staffing issues, noting that most of the internal audit units are facing grave challenges due to a

shortage of staff. This has impacted the internal auditors unit's ability to provide appropriate audit coverage to monitor the risk exposures associated with the entities they serve.

"There are instances where there is only one internal auditor for an entity which has islandwide operations, for example, the Child Development Agency and the Ministry of Foreign Affairs," the commission reported.

The Government of Jamaica Audit Commission was first established on April 12, 2005, as an independent body charged with the responsibility of ensuring the continued effectiveness of the audit committees by monitoring their performance against the appropriate regulation.

The commission was enacted as a body corporate with the 2009 amendments to the Financial Administration and Audit (FAA) Act which resulted in the statutory establishment of its functions and authority. The commission was reconstituted on July 1, 2011, with six members duly appointed by the governor general, with the solicitor general or his designate being an ex officio member.

There are currently 32 audit committees under the purview of the commission.