It’s their duty to establish audit committees – Shafudah

FINANCE permanent secretary Ericah Shafudah says the ministry is not responsible for developing risk management strategies for other ministries and government agencies.

She stated this in an interview with last week, noting that there was a need for ministries and government agencies to create internal audit committees to improve financial controls.

Auditor general Junias Kandjeke recently tabled audit reports which said many ministries and government agencies had been vulnerable to fraud and the misappropriation of funds during the 2015/16 financial year due to the absence or dysfunctional audit committees and risk management strategies.

Kandjeke’s reports submitted to parliament state that ministries failed to keep proper records of expenditure, exposing the government to fraud and corruption.

An audit committee is responsible for monitoring departmental spending, and ensures the implementation of recommendations by internal and external auditors to strengthen financial controls.

Deputy auditor general Goms Menette last Wednesday told that they wanted the government to put in place a legal framework which would compel state institutions to set up internal audit committees.

He said 50% of the ministries did not have audit committees in place.

Menette added that the office of the auditor general had made the recommendation last year already to the parliamentary standing committee on public accounts, but nothing came of that.

Some ministries have blamed the absence of audit committees and risk management policies on the finance ministry, saying the committee was not provided for in the State Finance Act of 1991.

The works ministry’s spokesperson, Julius Ngweda, confirmed to last week that the ministry has not yet established an audit committee, and was waiting for the finance ministry to develop a risk management policy so that “we can implement it”.

“There is nothing like an audit committee on the ministry’s establishment, but we are planning to have one shortly. We have one internal auditor at the ministry, who will establish that committee,” Ngweda said.

Although the establishment of internal audit committees is not provided for in the State Finance Act, Shafudah said all ministries and government agencies were expected to establish their committees.

“Each ministry should have its risk management policy because if they are only waiting on us, how are they going to identify the risks faced by their finance departments?” Shafudah asked.

She said the finance ministry had developed an audit charter which contains guidelines on how to implement the functions of audit committees, which will be shared with all ministries and government agencies.

“It has been stated in the State Finance Act that there should be internal auditors. One has to identify the risk areas of an institution, and then you develop the risk log of your institution, from which you structure the policies to tackle the risks,” she stressed.

The chairperson of the National Assembly’s standing committee on public accounts, Mike Kavekotora, last week said the committee was aware that several ministries and local authorities did not have internal audit functions in their finance departments. He said the committee has no power to compel ministries and government agencies to establish audit committees, and they only make recommendations to parliament.

“We do not go out instructing people to implement our recommendations. We go through parliament by making recommendations, and those affected by them will implement them,” he stated.

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