Mr. George K Gachoka
Deputy Internal Auditor General (MOD)
INTERNAL AUDIT DIVISION
Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization to accomplish its overall objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance process. This definition is covered in the Institute of Internal Auditors Global where Kenya is a member. The standards outlined by the institute are as follows;
1100 – Independence
1120 – Objectivity
1300 – Assurance
2100 – Risk management
2130 – Governance
2120 – Control
Functions of Internal Audit
Treasury circular 4/08 Ref No. MOF/IAG/GEN/018/66 dated 26th May 2008 details the functions of Internal Audit some of which are listed herebelow;
i. Conduct systems audits to provide reasonable assurance that key operating systems such as cash management, procurement, transport revenue/AIA, assets management etc are functioning effectively and that the Ministry’s strategic and operational objectives are being met consistently, efficiently and in a cost-effective manner.
ii. Conduct Risk Based Audits (RBA) to provide reasonable assurance that risk management process structures put in place by management are functioning effectively and recommending appropriate risk mitigation measures where necessary.
iii. Provide consulting services to the Ministry in developing appropriate risk management, control and governance frameworks and enhance the level of assurance provided to management.
iv. Conduct value for Money (VFM) Performance Audits geared towards economic, effective and efficient use of the Ministry’s resources and sound management of expenditure with the view to enhancing value for tax payers’ money.
v. Review, analyze and evaluate budgetary allocations and re-allocations process and periodical budgetary performance reports submitted to Treasury by Ministry of Defence to ensure that the allocation and expenditure trends are in line with the Ministry’s strategic objectives and that there is evidence of prudent and effective uilization of budgetary resources.
vi. Review and evaluateAnnual Appropriation Accounts, fund Accounts and Statement of Assets & Liabilities before they are submitted to Controller and Auditor General by Accounting Officers
vii. Verify and analyze periodical financial returns that are required to be submitted to Treasury by Ministry of Defence from time to time such as pending bills returns, expenditure returns, imprest returns, revenue and AIA returns, staff returns, vehicle returns etc.
The Public Finance Management Act,2012
In addition to the Treasury circular, the Act of Parliament No. 18 of 2012 which was assented on 24th July 2012, Section 73 states that National government entity to maintain Internal Audit arrangements. According to Section 73(3-5) empowers the Internal Auditor General department of National Treasury to ensure that its arrangement for conducting Internal Auditing should cover various activities which are the same as the ones stated in the Treasury circular above.