The World Bank is allocating US$4.5million to the Internal Audit Agency (IAA) for the next five years as funding for government projects to support its transformation from an Agency to a Service.
The amount is among others intended to support the IAA in meeting its logistical and other resource needs as it prepares to transition while putting in place an audit management system – the End to End Audit Management Information System (AMIS).
Announcing the funding, the Project Director-Public Financial Management Reforms, Dr. Mohammed Sani Abdulai, said the World Bank has assisted the Internal Audit Agency with some US$300,000 for over five years, training more internal auditors in the ‘Idea software’ used for data collection and analysis.
The assistance, he said, also covered development of IAA’s training manuals: which included the risk-based internal audit manual, public debt audit manual, financial statement audit manual, procurement audit manual, public-private audit manual as well as tax and non-tax audit manuals.
“All these manuals are intended to assist the Internal Audit Agency and Internal Audit Units within the various Ministries, Departments and Agencies in their work,” he said at the 2022 Annual Internal Audit Conference in Accra.
The event was held under the theme ‘Injecting Fiscal Discipline in Resource Mobilisation and Utilisation for Sustainable Development: The Role of Internal Auditors’.
In his address, Vice President Dr. Mahamudu Bawumia – who was the Guest Speaker – said the theme was crucial given that the 2022 budget seeks to reduce the overall year-end budget deficit. And this, he said, will require strict financial discipline.
“Fiscal discipline is the ability of government to balance revenues and expenditure. When fiscal discipline is not maintained expenditures exceed revenues, which creates a fiscal deficit. And the deficit will have both short-term and long-term adverse effects on the economy of Ghana.
“Government should also always raise enough revenue to meet or pay for the country’s expenditure needs. Because of shortfalls in revenue, government has no other alternative than to borrow either short-term or long-term loans to bridge the gap – which have to be paid with interest,” he stated.
Lack of fiscal discipline, he asserted, generally results from the injudicious use of policy discretion resulting in persistent deficits and procyclical policies, rising debt levels, and over time a loss of policy stability and credibility in the country.
The effects of fiscal indiscipline, he acknowledged, can lead to policy uncertainty, corruption, budgeting reforms or lack of fiscal policy sustainability, and crowding-out on national development and economic growth.
“It is toward this effort that the theme for the 2022 budget is ‘Building a sustainable entrepreneurial nation: Fiscal Consolidation and Job creation’, he added.
Government, he said, is also working with IAA to eliminate ‘ghost’ workers from payrolls by end of December 2022.
To this end, all public institutions have been directed to submit head-count copies of their monthly salary validation reports to the IAA and CAGD by the 15th of every month for validation, he disclosed.
“By this, government is taking steps to save a lot of money from ‘ghost names’ and pursue those who do not work but get paid by government, while at the same time improving supervision and productivity in the public sector,” Dr. Bawumia said.
To effectively utilise internal audit resources in the country, all Internal Auditors will be brought under the management, administrative, technical control and supervision of the new Internal Audit Service (IAS), he announced.
On his part, the Director-General of IAA, Dr. Eric Oduro Osae, in his remarks called for Internal Auditors to be well-positioned to help government address corruption.
“To effectively play their gatekeeping role, they require an appropriate practice environment devoid of intimidation and professional abuse to enable them apply the required standards and guidelines,” he stated.
He therefore called for passage of the Audit Service bill, which Dr. Bawumia later indicated will soon be considered by parliament.