Effective Internal Audit As A Panacea To Efficient Local Government Administration
(A case study Isiala Mbano Local Government)
Effective internal audit plays a crucial role in ensuring the seamless functioning of local government administration. It serves as a systematic and comprehensive examination of financial, operational, and compliance processes, contributing to enhanced transparency, accountability, and efficiency within the local government structure. The meticulous scrutiny provided by internal audit mechanisms helps identify potential discrepancies, irregularities, and inefficiencies, thereby facilitating proactive corrective measures. By integrating robust internal audit practices, local governments can establish a resilient framework that fosters fiscal responsibility and ensures optimal resource allocation. This strategic approach not only mitigates the risk of financial mismanagement but also fortifies the decision-making processes, promoting a more streamlined and responsive local government administration. Consequently, the incorporation of effective internal audit practices emerges as a potent remedy for bolstering the efficiency and effectiveness of local government operations.
CHAPTER ONE
Introduction
Background Of The Study
Objectives
Brief Review Of Isiala Mbano Local Government
Statement Of The Problem
Research Questions
Research Hypothesis
Significance Of The Study
Scope
Limitations Of The Study
Definition Of Terms
CHAPTER TWO
Literature Review
Internal Audit: Evolution, Nature, Type And Operation
Essential Elements Of Internal Audit
Internal Audit Of Local Government
Internal Audit And The Efficient Administration And Fraud Control In Local Government duties Of Internal Auditors Towards Securing Efficient Administration And Control Of Fraud At The Local Government.
Internal Control In Efficient Local Government Administration And Fraud Control
Critical Relationship In Effect Local Government Administration
CHAPTER THREE
Research Methodology
Introduction
Research Design
Sources Of Data
Area Of Study
Population Of Study
Determination Of Sample
Reliability Test
Validility Test
Method Of Data Analysis
CHAPTER FOUR
Data Presentation And Analysis
Data Presentation
Data Analysis
CHAPTER FIVE
Summary Of Findings, Conclusion And
Recommendation.
Summary Of Findings
Conclusion
Recommendations
Bibliography
INTRODUCTION
Globally the role of auditing is being appreciated for its avowed operations and activities. Ihe and Umeaka (2006:370) defined auditing “as a process carried out by suitably qualified auditors during which the accounting records and the financial statements of an organization are subjected to examination by an independent auditor with the main objective of expressing an opinion in accordance with the relevant terms of appointment purpose” they also noted that the objectives of auditing
were grouped into two a. Primary objective: the auditor (one who carries out audit operation) is to report whether the financial statements shows a „true and fair view‟ of the financial affairs of the organization during the period under review and s
end date.
b. Secondary objective: This concerns the detection of frauds and errors and the prevention of frauds and errors The crux of this research work however is based on internal Audit – which is a very important aspect of auditing, how the internal audit unit of the government can be made effective in order to assist in the efficient administration of local Government Areas (LGA). Internal Audit as defined by Chukwu L. C. (2011: 28) is “an independent appraisal of activity within the organization for the service of accounting, financial and other business practice as a protective and constructive aim of management”. He further opined that, internal audit is a type of control which functions by measuring and evaluating the effectiveness of other types of control. Anosike. C. K (2009:29) noted that the primary objective of internal audit, is to promote utmost efficiency and security in conducting business, in our case, the business or operations of the Local government areas. Azubike (2005:83) enumerated the features of internal audit as follows:
a. Independence: it is carried out by independent personnel through appointed the management.
b. Appraisal Function: it appraises the activities of other. Example, reviewing the system of checking employee expense claims.
c. Management Service: Plans and controls work according to management policies, so that information used by the management is complete and reliable.
d. It is carried out skillfully and with due care.
e. The Findings, conclusions and recommendations are communicated promptly and efficiently.
He also noted that internal audit seeks for effectiveness, economic and efficiency. Effectiveness here: means achieving the program objective or goals.
Economy means operating at the lowest possible cost. Efficiency implies effectiveness in outputs, avoidance of accessory waste of resources.
Having known the definition of internal audit and its implications, It is seen that it plays a significant role in the efficiency of local government administration. However, as a group of the subject matter of this research work, explanation and highlights of local government and its administration shall be
attempted.
Several definitions have been put forward by authors and scholars on local Government, Okolie (2003), that local government is defined as “a unit of government below the central regional or state government, established by law to exercise political authority, through a representative cancel within a defined areas”.
The oxford advanced learner‟s Dictionary defines local government as the system of government of a town or an area by elected representation of the people who live there “or” an organization that is responsible for the government of an area”. Conclusively, for the purpose of this research work, the most acceptable definition of local government is that which is given by the guideline for local government is “government at the local the local level exercised through representative councils established by law to exercise specific powers within defined areas”. Local Government Administration in Nigeria, as defined by Okolie and Eze (2006:5) is “the administration of the grassroots at the local government areas by the Federal (National) or state government through the use of bureaucrats or an agency of either or both tiers of government”.
Effective Internal Audit As A Panacea To Efficient Local Government Administration:
Effective internal audit plays a crucial role in ensuring efficient local government administration. Local governments are tasked with providing essential services to their communities, managing resources, and ensuring accountability. Internal audit serves as a panacea to address various challenges and promote efficiency in the following ways:
- Financial Accountability:
- Internal audit helps ensure financial accountability by reviewing financial transactions, budget adherence, and compliance with financial regulations.
- It identifies and prevents financial irregularities, fraud, and mismanagement of funds, contributing to transparency and accountability.
- Risk Management:
- Internal audit assesses and manages risks associated with local government activities. This includes identifying potential risks, evaluating their impact, and recommending strategies to mitigate them.
- By addressing risks early on, internal audit helps prevent financial losses and reputational damage.
- Compliance Assurance:
- Local governments must adhere to various laws, regulations, and policies. Internal audit ensures compliance with these requirements by regularly reviewing and monitoring activities.
- Compliance audits help prevent legal issues, fines, and other penalties, contributing to the smooth functioning of the local government.
- Operational Efficiency:
- Internal audit evaluates the efficiency and effectiveness of operational processes within the local government. This includes assessing workflow, resource utilization, and service delivery mechanisms.
- Recommendations from internal audit reports can lead to improvements in operational efficiency and the overall effectiveness of local government services.
- Performance Measurement:
- Internal audit establishes key performance indicators (KPIs) and benchmarks to measure the performance of various departments and functions.
- By regularly assessing performance against established criteria, local governments can identify areas for improvement and implement strategic changes to enhance overall performance.
- Transparent Governance:
- Internal audit contributes to transparent governance by providing objective and unbiased assessments of local government activities.
- Transparent governance fosters public trust and confidence, as citizens are more likely to support a local government that is open and accountable.
- Resource Optimization:
- Through internal audit, local governments can identify opportunities for resource optimization. This includes streamlining processes, eliminating redundant activities, and ensuring that resources are used efficiently.
- Optimization leads to cost savings and allows local governments to allocate resources to areas that have a greater impact on the community.
- Continuous Improvement:
- Internal audit promotes a culture of continuous improvement by regularly assessing and reassessing processes and controls.
- Local governments can adapt to changing circumstances and improve their operations over time, ensuring they remain responsive to the needs of the community.
In summary, an effective internal audit function serves as a panacea for efficient local government administration by ensuring financial accountability, managing risks, ensuring compliance, enhancing operational efficiency, measuring performance, promoting transparent governance, optimizing resources, and fostering a culture of continuous improvement.