PRE-AUDIT/POST AUDIT PRESENTATION

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PRE-AUDIT/POST AUDIT PRESENTATION

• Charles Barugahare
• Director Internal Audit

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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

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Definition/Back ground to Auditing

• Internal auditing (IA) is an independent
  objective assurance and consulting activity
  designed to add value and improve organizations
  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

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Definition background of IA Contd

• IA is aimed at evaluating and improving the
  effectiveness of
• Risk management,
• controls,
• and governance processes

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Definitions contd

• 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.

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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.

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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.

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Merits/Demerits of Pre/post audit

• PRE

• POST

• 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

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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

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Verification of deliveries

1. Must audit verify all deliveries or critical
   deliveries?
2. If some, who verifies the rest?
3. How do we select those to be verified by Audit
   and those by the rest?
4. How do we monitor that those verified by others
   are actually verified?

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Verification Contd

• 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

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Other pre-audit aspects in the schedule

• See details in the schedule

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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.

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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

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Post Audit contd

• 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.

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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

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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

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End

• Questions, comments remarks!!!!!!!
• Thank you