First in the country: K-P launches internal audit system

System to have unlimited access to records of departments to track flaws before external auditors do

PESHAWAR: Khyber-Pakhtunkhwa on Tuesday became the first province in the country to formulate and implement an internal audit policy for all of its departments, directorates, attached departments autonomous bodies and local governments.

The policy was formally announced by Khyber-Pakhtunkhwa (K-P) Finance Minister Muzaffar Said with support from Sub-National Governance (SNG) programme at a ceremony in Peshawar.

The new policy will see the government build an internal audit system in each and every department of the K-P government.

These systems will, in turn, be run by a central internal audit cell, called the Provincial Internal Audit Cell (PIAC). The PIAC will primarily operate at the finance department while separate internal audit cells (IAC) will be set up in each department, directorate, attached department, autonomous body and district government.

So far, the government has set up IACs in 13 departments of the provincial and district governments in Peshawar. More cells will be set up at the remaining government departments gradually, Finance Department Additional Secretary Safeer Ahmed explained in his presentation.

Further explaining the system, Ahmed said that each IAC would be headed by an audit officer along with auditors and supporting staff.

“The IAC shall have unrestricted access to the departments’ books and records, functions, properties and personnel,” Ahmed said while explaining the powers of the IAC. He added that cooperation with the IAC would be mandatory.

Earlier, Finance Secretary Shakeel Qadir allayed fears of officials, assuring that the new system will not burden departments and government functionaries. Rather, he explained, the system was meant to ease their work and make the audit less imposing than an external audit.

“The system is not a witch-hunt,” Qadir explained, adding, “it is not an additional burden on the departments rather it will provide solution to your problems,”  He added that mistakes and errors, either in financial record keeping or procedures, are normal. But when spotlights are shone on them by external auditors, they become embarrassing for the department and its staff.

“It (the internal audit cells) would partially — if not completely — put an end to these procedural and financial errors,” he said, adding that experts from the IAC would point out the errors within the department and help fix them before the external auditors trace them.

Qadir added that the finance department would make the requisite arrangements for housing the offices of IACs since most departments lack space and resources to adjust and facilitate these officials.

Talking about the expansion of IACs, he said that fresh recruitments would be made as per requirements. “Internal audit is an entity of the future. It has to expand,” Qadir asserted, adding that under the current local government system, an internal audit system was desperately needed.

The finance minister called the system as part of the “self-accountability” gamut and asked all departments and government employees to work with the system and to adopt a culture of self-accountability.

Published in The Express Tribune, November 1^st, 2017.