Ministries and Gov’t Departments Urged to Ensure Efficient Operation of Audit Committees

The Audit Commission is advising all government departments, ministries and executive agencies to take the necessary steps to ensure the efficient operation of their various audit committees.
Chairman of the Audit Commission and member of the Institute of Chartered Accountants of Jamaica, Leighton McKnight told JIS News that while the intention was not to take action against agencies which were still in the infancy stage with the setting up of committees, pressure would be brought to bear on organizations which were not functioning in this respect within the year.
“We are being fair to people we couldn’t go and throw the book after them just starting out, but what we have been doing now is getting them to know the rules. Within the year if you are not functioning your names would be published, pressure will be brought to bear on those who don’t function,” he stated.
The Audit Commission Chair said stringency in this regard was necessary as Audit Committees formed a “critical aspect of corporate governance and if utilized properly can save a lot of money and embarrassment,” and ensure that public funds are accounted for in a much more efficient manner.
The Audit Commission which was established in April this year forms part of the Government’s efforts to improve accountability and transparency in the public sector and has oversight responsibility for the various audit committees in government departments, ministries and executive agencies. Audit committees in turn provide independent, effective oversight on the financial reporting process and internal controls of the agency.
Mr. McKnight said audit committees as part of their reporting responsibilities are required to submit annual reports to a number of persons including the Financial Secretary, Auditor General, the Accounting officer of the department, the Chief internal auditor and the Audit Commission. He noted however that audit committees have no executive powers and are not responsible for the preparation of financial statements or the implementation of proper systems of internal controls.
Continuing he said the Commission, which is in its first year of operation, will at the end of the year carry out an evaluation exercise of each committee.”Clearly those who do not function properly will have to decide where we go from here, because we have the power to dismiss committee members, reconstitute committees”, McKnight stated.
He noted however that the terms to address delinquency were still being formulated, but pointed out that audit commissions are required by law, the Financial Administration and Audit Act, and the Public Bodies Management and Accountability Act to call on audit committees to function properly and “bring people in line.”
Explaining further the Commission Chair, said the Commission also ascertains that the respective bodies have charters, which speak to the objectives and responsibilities of the audit committee, ensure that they meet, have a chairperson and ensure that they are properly constituted.
In noting that Audit Commissions have been a part of the government service for some time, the Audit Commission Chair said over time some have performed creditably, others not as effectively and some agencies or departments have not yet established a committee.
“We are on a drive to get everybody up to speed, when we do the annual evaluation those who are not performing up to par actions will have to be taken,” he informed.
In the meantime he said the Commission since its establishment has been engaged in collecting information on the functioning audit committees as well as those ministries or government departments which have not yet formed a committee.
“Because of the initial set up our first few months was a fact finding mission to assess where we are in terms of compliance with these people, we gave them until the 30th of June to respond, we have had responses from most of them, some fully functional, some don’t have anybody, some are partially functioning, so we are now in the process of dealing with those that are not properly functioning or do not have any committees at all,” McKnight informed.
The Commission which is staffed by six Commissioners drawn from various fields including the Institute of Chartered Accountants, the Institute of Internal Auditors, the Auditor General’s Department, the Ministry of Finance and the Cabinet Secretary’s Office, ensures that all ministries, government departments and executive agencies have functioning best practice audit committees in operation.
Other members of the committee are: Vice President of the Institute of Internal Auditors, Colin Greenland; Divisional Director of the Auditor General’s Department, Pamela Monroe-Ellis; Hillary Alexander, of the Cabinet Secretary’s Office, and Deputy Financial Secretary of the Finance and Planning Ministry, Robert Martin.