GOVERNMENT INTERNAL AUDIT ACCOUNTABILITY IN MINISTRIES / EXTRA-MINISTERIAL DEPARTMENT. (A CASE STUDY OF THE OFFICE OF THE AUDITOR-GENERAL OF ENUGU STATE.)
This chapter reviews literature relating to the theme and sub-themes of this study. Major ideas of this section are grouped and presented under the following sub-headings.
2.1 this concept and nature of Auditing
2.2 Government Audit Department
2.3 The concept of Accountability
2.4 summary of Related Literature Reviewed
2.1 THE CONCEPT AND NATURE OF AUDITING
Wealter (1965) defined Auditing as such “an examination of the books, accounts and vouches of the business as will enable the auditor to report whether it is satisfies that the balance sheet has been properly drawn up. So as to provide according to the best of the information and explanation given to him and as shown by the Book, and if not to report in what respect he is not satisfies”. Another definition is that, advanced ALREIN AND JOHNES (1976) which it was defined as “an integrated process of accumulating and evaluating evidence by a competent independent person about quantifiable information of a specific economic entity for the purpose of determining and reporting upon the degree of correspondence between the quantifiable information and established criteria”.
There facts are obvious from the above definitions, these are: Reporting, correspondence and independence.
The independence of the audit Department pre-supposes that it is given a free hand in scheduling its activities, in determining what to investigate and method of investigation. This will guarantee auditors balance and courage to say no whenever the mater in dispatch is materials to the reliability of financial statements. The constitution of the federal encompass comprehensive provision that ensures the independence of the audit department.
Apparently, an essential aspect of the auditors functions lies with the reporting functions. He reports on the view presented by the account prepared by a client and their staff in accordance with the arms of auditors appointment and the determination of the correspondence between the balance sheet and account with the books in order to assess compliance, it must not be (included that the duty of an auditor is restricted to the correspondence and reporting. It concluded an exercise of reasonable skill and diligence, to satisfy himself that the books contains a proper record of the transactions executed as far as the information and the explanation given to him extend.
DEVELOPMENT OF AUDITING
Similar to the stages in growth of economic development, government audit also passed through various states of development. These developmental stages are directly related to the complexity of government actualities and operations and can, for convenience be directed into three such as: Traditional/Financial, compliance and performance auditing.
- Traditional/financial auditing : This is the simplest form of auditing and can be defined according to Omoeriola (1980) as “the objective, systematic professional and indepence examination of the financial operation of a public entity made subsequent to their execution for the purpose of verifying them, presenting the report of the audit findings together with conclusions and recommendations to the future actions by responsible officers and the appropriate professional opinion regarding the fairness of their presentations.
It is conducted to determine whether the overall financial statement which are the quantifiable information are stated in accordance with the specified criteria. The origin of this type of auditing came out of the historical desire of national legislature to exercise control over and ensure accountability in resort of the public revenue and expenditure.
- COMPLIANCE AUDITING: This tend to determined whether the auditor complies to established administrative procedures or rules set down by legislature. It is an extension of a government financial auditing. Compliance auditing embraces all aspect of financial audit including a determination of compliance with legislature requirements. Results of compliance audit are generally reported to some one within the organizational unit being audited rather than to a binad spectum of others, is the primary group concern with the extent of compliance with certain prescribed procedure and regulations.
SIDDMAN (1989) report that “This will enable the auditors not only to be given his opinion on the fairness of management representation as expressed in financial statement and other accounting data, thereby adding to review the implicit ascertain by management that has complied with the law and/ or other governing enteria”.
- THE PERFORMANCE AUDITING: The traditional / financial or the compliance auditing suffice for a government that plays a medium role in the economic life of its society and contain its transaction largely in maintenance of law and order. ALVINS and ARANS (1976) understood performance audit to be “a review of any part of an organization’s operating procedures and method for he purpose of executing efficiency and effectivness”.
Since may government, mostly in the developing countries have assumed increased responsibilities in the acceleration of economic and social development of their society, the public sector in many countries continue to increase in their size and public activities continues to increase in their complexity and diversity. Within this process of planned development managerial dimension other than the proprietary and regality of government transactions have surfaced and government today are concerned with ensuring that the Limited resources as their proposal are used economically as possible for the attainment of programmes, goals and obligations. This informs the present trend toward what is currently describes in some countries as performances, operation and full scope audit (Europe), value for money audit (U.S.A).
GORDON (1986) advanced the review that “The Auditor – General and his many bright assistants were expressing concern as to whether normal attest audit, similar to that is the private sector, was really making the needs of legislators, the elected representatives, Hence performance audit should be as an objective examination of an organization, programme, activity of function and is oriented toward identifying opportunities for greater economy, efficiency and effectiveness”.
The objection of a performance audit then is to fast the working of government control systems, examine apparent weakness report the conditions of funds, draw conclusions and made recommendations the emphasis is on identification of problem suspected to require correction or improvement and the means of effecting it.
There is no doubt that financial information is not sufficient to inform government management decision makers as legislatives general public, about the advancement and failures in carrying out government programmes. The size and complexity of which has been increasing rapidly in recent time. The length of period of transactions from simplest to the sophisticated methods of auditing will depend on a host of factors such as: the state of development of financial and budgetary system, the degree of reliability of system of the internal management controls, the effectiveness and availability of qualified auditor who have had supplemented training in the management science which are needed in this type of Audit.
GOVERNMENT AUDIT DEPARTMENT
The researcher approaches to this topic inform four local perspectives or spectum i.e. independence, staff composition, Auditing of the Auditor – General and the Audit function of the Auditor – General.
- INDEPENDENCE: COMPEL (1955) discussing the independence of the Audit Department noted that, it must be department presuppose, that it must be independent form excessive control by the politicians and senior government officials. This includes independence in Scheduling of activities in determining what to investigate and method of investigation. Where the independence of the Auditor – General and Audit Department in general is adequately provided employee would report any identifying fraud. However, people do not report due to the consequences of doing so.
Douglas (1978) observed that many civil servants have been killed for either having the knowledge of one fraud or the other hand for reporting it. This renders the informal control useless. Another factor is the control environment that goes with independence. If the environment is not conducive for reporting the fraudulent act e.g. where there is no adequate projection for the employee (audit staff) his family and property is not guaranteed and the possibility of management not taking appropriate action on audit report, the tendency is therefore audit personnel for either keep silent or get co-opted who fraudulent deals.
For the office of the Auditor – General, the constitution (1992) provided that “He shall have access to all books, records, returns and other document relating to the being audited. He shall not be subjected to the direction or control any authority or person in the performance of his duties”. Unlike the internal Auditors in the ministries and Extra – Ministerial Department, the auditor – General reports to the legislature of the federation or a state in respect of federal audit and state and local; government Audits respectively. He shall be appointed by the president of the federation or government of the state, as the case may be, upon the recommendation of the relevant civil service commission subjected to confirmation by the senate or House of Assembly of the state in the case of federal, state and local government Auditor – General respectively.
Equally, the removal of the Auditor – General is effectively alarming requisit retirement age, can be done by the president of the Federation or the Governor of a state acting on an address supported by two – third majority of the senate or House of Assembly of the state, as the case may be, with regard to this inability to discharge the functions of this office by reason of the following: informing of mind, body, mis-conduct or any other causes. His salary and condition of service other than allowance shall not be altered to be his disadvantages after his appointment.
- AUTHORITY OF THE AUDITOR – GENERAL: An employee (Auditor staff) who observes or discovered and will to report if he feels that management/government would take appropriate actions on the report and that adequate punishment awaits those who found involved in fraudulent acts. This according to the operational guideline or civil service reform (1988).
An Audit Alarm committee is to established comprising the Auditor – General as chairman, and the representative of the president (Governor) as member, to examine cases of alarm raised and brought before it. It shall be standard for procedure for payment. Audit question raised by the internal Auditor but over ruled by the chief executive (of Almighty) to be referred to the Audit alarm committee. It shall be deemed an offence for any officers is pro any queried payment under the audit alarm system any further, without an audit certificate issued by Auditor – General once a payment audit alarm has been raised. Furthermore, the general guidelines for the implementation of the civil service reform (1988) provides as follows:
“The Auditor – General has the power to sanction and sur-charge any officer as stipulated in the guidelines governing offences and sanctions has powers to the president (or the governor in the case of the state) through the president’s representative on the Audit Alarm committee, may notify the president of Audit alarms of significant, importance and serious pre-payment audit quarices for which the accounting officer of the ministries / extra – ministerial Department is liable or responsible in addition any other sensitive issues which, because of its urgencies, cannot wait issue which because of its urgency until the committee as covered should past through representatives of the president.
Moreover, where the query concerns the accounting officer shall be answered by him in person. If the accounting officer does not respond within the stipulated time to query, that effects his office, Auditor – General may inform the president in writing where the failure to answer the audit query is by an officer other than the minister, Auditor – General shall impose, through the minister’s personnel management Boar the necessary sanction or punishment on the officer who shall have the right of appeal to the public Accounts committee.
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