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Presentation on theme: "PRE-AUDIT/POST AUDIT PRESENTATION"— Presentation transcript:

Charles Barugahare Director Internal Audit

2 PRESENTATION OUTLINE Definitions and back ground of Pre/Post Auditing
Merits and Demerits of pre and post Auditing Risk assessment in MUK Pre- Auditing in Makerere University Post -Auditing in Makerere University Auditing in the college system Way forward 1st July 2011 and beyond Conclusion Questions/Comments

3 Definition/Back ground to Auditing
Internal auditing (IA) is an independent objective assurance and consulting activity designed to add value and improve organization’s operations (iia definition) Independence & objectivity aspects are very critical Consulting refers to furnishing Council, Mgt and staff with analysis, appraisals, recommendations and capacity building aspects Add value & improving operations covers recommending use of best practices, identification of new risks/new required controls Being able to handle emerging business issues

4 Definition & background of IA Cont’d
IA is aimed at evaluating and improving the effectiveness of; Risk management, controls, and governance processes

5 Definitions cont’d Pre -Auditing –refers to an examination of documents supporting a transaction or a series of transactions before they are paid for and recorded. Post- Auditing refers to the review of documents or a series of transactions after the transaction has been recorded or consummated.

6 Rational for pre- Audit
Rising incidents of illegal, irregular, wasteful and anonymous disbursements of public funds Marked inadequacies in internal controls Case for Selective pre -auditing Not all transactions are subject to pre-auditing –only transactions or areas considered to have issues above.

7 Rational for post audit
Able to review more areas than under pre- audit Possible to assess the organisation's resources and ensure that all resources (human,material, and financial) are utilised appropriately so that the best possible results are achieved; Able to produce meaningful reports for mgt & Council attention Able to verify the reliability and suitability of the information systems; Able to ascertain compliance to policies, laws independently Able to inform the management of any irregularity or anomaly revealed and to recommend appropriate measures for their elimination; Able to Follow-up on whether the recommendations by the internal auditors/external Auditors have been implemented.

8 Merits/Demerits of Pre/post audit
Looks at transactions Some transactions are impractical to pre-audit Errors are identified & corrected before transaction Narrow scope Generally limited or no reports Auditors are part of operations Traditional practice Looks at risks, processes, controls Its practical to audit for all activities or risky ones Errors are identified after payment/transaction Wider scope Generally reports produced Auditors independent of operations Recommended best practice

9 PRE- AUDITING IN MUK The key areas currently pre-audited are;
Verification of all deliveries Reviewing all payment vouchers Verification of all pay change reports Reviewing all accountabilities Certifying certain project reports

10 Verification of deliveries
Must audit verify all deliveries or critical deliveries? If some, who verifies the rest? How do we select those to be verified by Audit and those by the rest? How do we monitor that those verified by others are actually verified?

11 Verification Cont’d The Answer to 1 is NO, only critical deliveries require to be verified Critical deliveries can be determined by amount or nature of delivery- Nature – All capital items continue to be verified by Audit Amount – All transactions above 2million ( micro procurements) In the Colleges- The transactions below 2M, the person responsible for administration receives the items and be verified by Accountant- Reporting. For Administration Units ??? Audit to review on an going basis stores records and reports Audit to be represented in opening all procurement bids above 30M

12 Other pre-audit aspects in the schedule
See details in the schedule

13 Post auditing in MUK The audit structure, staffing and positioning were all planned for a post audit set up Council has pronounced itself post auditing The risk assessment and the demands from mgt, Audit committee and stakeholders are driving the post audit approach.

14 Current post audit situation
About 70% pre- Audit and 30% post audit. No comprehensive risk assessment, Audit areas selected judgementally or using rough assessments Limited skills and knowledge in most staff Limited computer skills

15 Post Audit cont’d Limited access to computerized systems
Limited guidelines Limited exposure by most staff on Audit program set up, identifying and documenting audit evidence, report writing etc.

16 Post audit -Going forward
Staffing with technical/practical skills improved Strategize to give more attention to post audit Documentation and marketing post auditing Refer assessment done by the Committee

17 Auditing in the college System
Auditing will remain a central activity in the university Post auditing largely influenced this decision. More in the pre- template

18 End Questions, comments & remarks!!!!!!! Thank you


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