INTERNAL AUDIT UNIT
Internal Audit is an independent objective assurance and consulting activity designed to add value and improve an organizations operations. Audit helps an organization achieve this through a systematic, disciplined approach in evaluating and improving the effectiveness of risk management control and governance processes. Internal Audit Unit at ECZ is a service unit entrusted with the responsibility of providing audit and assurance services to all the Units and Departments of the Examinations Council of Zambia. The Unit was established in 1998 with a staff compliment of one (1) but owing to increased workload Management has been steadily increasing the staff levels in the Unit to the current three (3).
Internal Audit is therefore, a catalyst for improving an organization’s effectiveness, efficiency by providing insight and recommendations based on intelligent analysis and assessments of data and company processes, with regard to integrity and accountability. Internal Audit provides value to governing Council and senior Management as an objective source of independent advice.
Before the Unit was set up the Council had a lot of difficulties in realizing all the income (especially from Examination fees) as misapplication and misappropriation of Examinations fees by stakeholders were very high due to lack of effective internal controls. However after the Unit was operationalized the Council’s income levels started increasing to acceptable levels as most of the weaknesses in the process of Examination fees collection chain were addressed e.g. at the time that the Unit was introduced, the Council was only able to realize about 60% of its income from Examination fees and internally generated resources. However, over the years income levels on all income streams have increased to about 95%. This has been made possible by ensuring that internal controls at all levels relating to revenues are strengthened as well as those relating to expenditures. Mainly the scope of internal auditing is broad but may involve the following.
- Efficacy of operations – ensure intended targeted results are accomplished;
- Reliability of financial reporting;
- Deterring and investigating fraud;
- Safeguard assets;
- compliance with laws and regulations of the Council;
- Auditors are advisors to Management and the Council on how to better execute your respective responsibilities.
Core function of the Unit
As already explained Auditors are not blood hounds but critical friends, watchdogs offering independent counsel to Management and council through the Audit Committee. At Examinations Council of Zambia Auditors critically analyse and if possible challenge current practices, champion or recommend best acceptable practices and therefore are a catalyst for improvement of processes in the Council, so that the Council achieves its strategic goals and objectives as outlined in its Vision, Mission and Strategic Plan.
At ECZ the above is achieved through the following;
- Evaluating Controls and advising Management– Auditors at ECZ are responsible for the evaluation of controls to ensure their effectiveness. This is to assess the operating effectiveness of internal controls as they relate to the operating environment of ECZ.
- Evaluating Risks- Internal Auditors at Examinations Council of Zambia have identified risks inherent to the activities of the Institutions and continually assess the effectiveness of the internal controls in place in order to mitigate or manage such risks. This is also important for Auditors in their planning of audit activities as resources should normally be applied where the control environment is weak and hence risks very high. At Examinations Council of Zambia Auditors are being more proactive when it comes to risk monitoring as opposed to being reactive. Through this approach officers in the Unit are able to identify possible future concerns and opportunities as well as identifying current issues.
Analysing Operations and Confirming Information
It is the responsibility of the Auditors at Examinations Council of Zambia to work closely with Management in reviewing operations and then report the findings there-in. In this regard Auditors produce Audit Reports for use as on-going Management tools to assist the Council in improving the efficiency and effectiveness of its activities and hence demonstrating accountability for and stewardship of scarce Council resources.
The Examinations Council of Zambia is governed by laws and regulations which clearly stipulate the various responsibilities of the organizations as it fulfils its mandate. The Auditors at ECZ strides to ensure that there is total adherence by Management to these rules, regulations, laws and codes of best practice, guidelines and principles as they apply individually and collectively to all parts of the Council. In so doing departures are noted, recorded and possible remedial actions recommended to management and Council through the Audit Committee.
Link between External Auditors and Management
At Examinations Council of Zambia it is the responsibility of internal Auditors to ensure that there is good professional working relationship between External Auditors and Management. This is done by ensuring that Management responsibilities as they relate to various accounting and non-accounting procedures are clearly explained to Management before engagement of Auditors and during the course of audit. This ultimately guarantees value for money services that are provided by the Auditors as the exercise is professionally and efficiently executed. This also ensures that the Internal Auditors fulfil their duty to senior Management and the Council though the Audit Committee on the state of governance, Risk Management and Control in the Council.
Areas of Focus
As already indicated the ECZ Internal Auditors focus on the whole organization i.e. all departments, Units and operations. Finance and non-finance audits are dealt with in the course of these audit assignments this is necessary as it provides assurance to the difference stakeholders that the Council is operating as per its provided mandate. Audit scope is to review the adequacy of control design to ensure that risks are effectively managed and then test operations of key controls to ensure that they are operating as prescribed by the Council.
In summary and reference to the above the Internal Audit Unit is responsible for the following:
- Testing of internal controls to ensure that they are both adequate and effective.
- Auditing of all income related activities of the Council i.e., Examination fees collections in all Schools/Centres and Colleges.
- Verification of Examination Candidate entries at all Grades to ensure their accuracy and reliability. This is important as the Council’s major expenditure arises from candidate entries i.e. various stationeries, consumables and Examination materials etc.
- Audit of Production and distribution of Certificates at all levels – This is important as it is one of the core responsibilities of the Examinations Council of Zambia.
- Monitoring of Examination processes – this is important in ensuring that the process and products that is finally released is of high standard.
- Monitoring of marking of Examinations at Grades 7, 9, 12, Teacher Education to ensure that there is transparency and accountability in the payment process for Markers, Institutions and staff involved in the processes.
- Audit of internally generated resources – Ensuring that the procedures and controls are effective and income is properly accounted for. (ECZ generates this income stream from walking customers and as such the need to have strong controls can not be over emphasized).
- Systems Audit on all Council operations across Departments and Units – This ensures that resources of the Council are prudently utilized.
- Works closely with the Audit Committee of the Council in ensuring that the Council gets accurate and timely information relating to the operations of the Council for timely decision making.
- Pre-auditing of all payments as per government initiative.
Note: All the above activities are outlined in the annual audit work plan which is approved by the Audit Committee.