The Role of Internal Audit in Internal Controls of a Public University in Ghana

Abstract

Internal control is an important audit function used to examine the effectiveness and efficiency of control systems designed to ensure an orderly working environment. Currently, many academic institutions are facing several financial challenges and therefore internal controls are necessary, more than before, to help streamline operations and ensure proper use of resources. This paper presents a study conducted in the University of Mines and Technology (UMaT) to access the role of the Internal Audit in internal control. Questionnaire administration, interviews and policy documents and procedures were the main tools utilized in the study. It was found that policies and procedures such as Statutes, Financial Administration Act 2003 (Act 654), Financial and Stores Regulations, and Public Procurement Act 2003 (Act 663) exist in the University as regulatory frameworks to permit and maintain accountability for assets and to ensure that decisions are made with appropriate approvals. Documentation was a key control measure and supporting documents include Goods Receipt Voucher, Pro-forma invoice, Local Purchase Order, Pay-in Slips, Receipts, honour certificate and covering letters. Over 90% respondents agreed that transactions in the institution are supported by documents, accuracy of figures is ascertained, and policies and procedures are complied with. Above 80% also indicated that the Internal Audit Unit draws attention to internal controls, recommendations made by Audit Unit are accepted and implemented, payment vouchers are pre-audited, duties are segregated and revenues collected are checked. Thus, UMaT has put in place proper internal control measures which ensure an efficient, economic and effective use of its resources. It is recommended that control policies and manuals on policies and procedures be communicated to all the staff of the University as 70% of respondents indicated that these internal control policies are not communicated to all the staff.