Government is in the process of establishing an internal audit unit to oversee the constant improvement and greater discipline in the management of public finances, Minister in the Ministry of Finance Ryan Straughn has announced.
He said while the unit would be fully established by September 2021 under the Public Finance Management Act, work has already started through a series of consultations to get appropriate training.
Straughn was addressing the Institute of Internal Auditors’ (Barbados Chapter) 20th anniversary celebrations and ethics seminar under the theme Shaping the Future, Today, at the Radisson Aquatica Resort on Monday.
“Unless we are committed to improving our processes and lifting our standards, unfortunately the quality of our public service will deteriorate because we are not keeping up with the time,” said Straughn.
“We have determined that it is important, not just from a financial perspective, that there needs to be an internal audit office, but from a process of review and consistent economic improvement in the way Government delivers,” he said.
Among its functions, the unit would be responsible for evaluating the risks and identify breaches so that remedial action can be taken readily, conducting auditing of public entities, publishing up-to-date-information on an official Government website and carrying out annual audit plans to cover major risks and exposures across public enterprises and state-owned enterprises, said Straughn.
“In so doing, checking that risks are identified and managed, public money, in that sense, is adequately safeguarded and used as intended,” said Straughn.
“In addition, constant checks will be in place to identify any breaches in applicable laws, policies and procedures. This will ensure high ethical standards,” he promised.
The economist said the internal audit unit would be “critical” to restoring some taxpayers’ confidence in Government especially as it relates to the auditor general’s reports.
“As far as Government is concerned, we have to improve our internal operations such that the content of the auditor general’s report at the end of the year, ought to reflect there is a vibrant internal mechanism in place,” he said.
The internal audit unit will be headed by a director that would report to a committee, which he promised would be introduced formally at a later date.
The committee will oversee the operations of the internal auditors to ensure the work is in line with international standards, he said, while pointing out that a partnership with the Institute of Internal Auditors (Barbados Chapter) would be critical as training and recruitment commence.
“The use of the internal audit office is aimed at improving delivery of goods and services in the public sector, introducing greater fiscal discipline and should result in greater accountability of corporate officers and directors and staff of state-owned enterprises and Government business entities,” said Straughn.
Also promising increased public engagement on the management of public finances, Straughn said the establishment of the new unit should result in an improvement in the island’s competitiveness since it was a key reform that will bring a difference to the way Government operates over the next 20 or 30 years.
President of the local chapter of the Institute of Internal Auditors Esther Griffith said she fully supported the establishment of an internal audit unit in Government, adding that the chapter stood ready to assist with the project.
“The chapter will seek to have discussions with the Barbados Government highlighting the need for greater oversight and the benefits that can be gained by having internal audit activities performed in more financial institutions,” she said, while arguing that to date there has been very little use of internal auditors in both private and public sector operations.
She pointed out that the profession was facing several challenges including a lack of testing facilities in Barbados, a misconception that internal auditors cannot be independent if they are employed by an organisation, and that the internal auditors’ body was not widely recognized as a professional body.
She pointed out that the internal auditors were guided by strict international standards.
Notwithstanding the concerns, Griffith said there were some opportunities, including that of working with the University of the West Indies, Cave Hill Campus to develop a programme for those wanting to sit for the Certified Internal Auditor examination.
“The concept of the programme is still at the initial stage. There is also an opportunity for the Barbados chapter to work with the Barbados Government to provide training to internal auditors in the Barbados Government,” she added.