African Journal of Public Affairs Volume 7, Number 3 (2014)

Permanent URI for this collectionhttp://hdl.handle.net/2263/59910

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Front matter, African Journal of Public Affairs, Volume 7, Number 3
(African Consortium of Public Administration, 2014)
Stakeholders’ view on the contribution of public sector internal auditing to enterprise risk management
(African Consortium of Public Administration, 2014) Coetzee, Philna
Although risk management is not a new phenomenon, enterprise risk management (ERM) is a relatively new concept in the business environment. In a very short time, ERM has established its worth in all sectors. This article investigates the views of chief audit executives (CAEs), the chairs of audit committees (CACs) and accounting officers (AOs) with regard to the contribution that the internal audit function (IAF) makes to ERM in the public sector. This contribution is considered in the context of existing ERM structures and the level of coordination between ERM and the IAF. Results indicate that the CAEs have very different views from the other two categories of respondents, and that the existence of ERM structures has very little effect on how the contribution of internal auditing to ERM is perceived.
Perceptions on internal audit function contributions in South African national government departments
(African Consortium of Public Administration, 2014) Erasmus, Lourens J.; Fourie, Houdini
In terms of the Public Finance Management Act, Act 1 of 1999 and Treasury Regulations, it is compulsory for national government departments in South Africa to establish an effective and efficient internal audit function (IAF). An effective IAF can help achieve the policy objectives of the government, which promised that big strides would be made in the social and economic development arena. The question then arises whether, two decades later, key stakeholders believe that the mandatory IAFs are living up to expectation. Hence, the objective of the study reported in this article was to determine whether selected stakeholders were satisfied with the IAFs’ contribution on selected activities. The findings and conclusions are based on a quantitative analysis of the data. Responses to structured questionnaires were collected from chief audit executives (CAEs), accounting officers (AOs) and chairpersons of audit committees (CACs) in South African national government departments. The findings show that all three categories of stakeholders expect more from IAFs, but only the CAEs believed IAFs were currently contributing well. The AOs and the CACs did not regard the IAFs’ current level of contribution as very high. These findings should assist stakeholders responsible for the functioning of internal auditing in the South African public service.
Staffing of public sector internal audit functions at national departments in South Africa
(African Consortium of Public Administration, 2014) Erasmus, Lourens J.; Fourie, Houdini
Governance codes in public sector legislation in South Africa have contributed considerably to accelerated growth in public sector internal auditing in national departments. In consequence, accounting officers (AOs), who are the heads of department (HoDs) of national departments, have been tasked with establishing and/or improving the staffing of public sector internal audit functions (IAFs), in order to enable the IAFs to fulfil the role of public sector internal auditing, as stipulated by South African legislation and professional standards. The objectives of the study reported in this article were to determine the staffing situation in public sector IAFs, and whether there was a statistically significant gap between the numbers of filled internal auditor posts by staff level, compared to the ideal number of internal auditors’ posts at these public sector IAFs, as perceived by the chief audit executives (CAEs). The research methodology followed was a quantitative descriptive method combined with statistical analysis to analyse and interpret the data. The research instrument used to obtain the research data was a quantitative research questionnaire distributed to the CAEs of national departments of the South African government. The survey revealed that the number of internal auditors’ posts filled (staffing levels and posts) at public sector IAFs was inadequate, according to CAEs perceptions regarding the ideal number of posts to be filled. However, when the perceived ideal staffing complement was compared to the approved staffing complement of public sector IAFs, no significant difference between the two variables was found. The article concludes that deficiencies in the current staffing complement of public sector IAFs can be attributed to a lack of human resources planning, particularly in respect of succession planning, as shown by the large percentages of vacant internal auditors’ posts at three of the four internal auditor levels.
Perceived role of internal auditing in fraud prevention and detection in South African public sector national departments
(African Consortium of Public Administration, 2014) Motubatse, Kgobalale Nebbel
The objective of this article was to determine whether the internal audit function (IAF) has a role to play in the prevention and detection of fraud in the South African public sector, with reference to national departments. Accordingly, the possible role of the IAF is discussed, with specific reference to fraud prevention and detection, fraud risk and reportable wasteful, irregular and unauthorised expenditure. The article presents a literature review and discusses the data gathered by means of a survey from the accounting officers (AOs), who act as heads of department (HoDs), the chairpersons of audit committees (CACs), and the chief audit executives (CAEs) of national departments in the South African public sector on their perceptions of the IAF’s role with regard to fraud. The findings show that the AOs, CACs and CAEs believe that the IAF has a responsibility to detect material fraud and reportable fruitless and wasteful, irregular or unauthorised expenditure in national government departments. Furthermore, a review of the literature suggests that the prevention and detection of fraud should remain the responsibility of the AOs, and the survey revealed that the responding AOs and CACs perceive the IAF as a management tool to detect elements of fraud. It is recommended that the AOs and the IAFs should take equal responsibility in notifying the CACs about any allegations of fraud received from any whistleblowing assurance provider. In conclusion, the article suggests avenues for further research on internal auditing’s role regarding fraud prevention and detection.
Heading up internal auditing in the public sector : profiling the chief audit executives (CAEs) of South African national government departments
(African Consortium of Public Administration, 2014) Steyn, Blanche
The Public Finance Management Act, 1 of 1999, requires the public sector to establish internal auditing functions. The study reported in this article aimed to identify the requirements for a public sector chief audit executive (CAE). The study used a multi-stage methodology. The first stage focused on a literature review to develop a profile for a public sector CAE. The second tested the profile that was developed against the requirements of current job advertisements for CAEs in South Africa. The third identified the current profile of CAEs at national departments by means of a survey using a questionnaire to which 32 CAEs responded. In the fourth stage, the profile developed from the literature was compared to the actual profile of national departments’ CAEs. The findings show that the national department CAEs’ experience levels are in line with the profile developed, but that their academic and professional qualifications lag behind the criteria stipulated in the profile. As far as could be determined, this is the first study to profile the CAEs at national departments in the country. The results can be used to help develop more appropriate and focused career development plans for internal auditors who are already in the public sector. However, the results should be evaluated against the backdrop of the broader South African environment, where there is a shortage of skilled internal auditors, and care should be taken when considering the generalisability of the results, because the study focused only on national departments.
The standing of internal auditing in South African national government departments
(African Consortium of Public Administration, 2014-10) Van Staden, Marianne; Barac, Karin; karin.barac@up.ac.za
South Africa’s successive corporate governance codes have progressively increased their emphasis on internal auditing. This article had two aims, both resulting in specific contributions to the internal auditing literature in South Africa. Firstly, it aimed to provide a comprehensive overview of factors that could affect internal audit standing, based on the references to internal auditing in the King report on governance for South Africa 2009 (King III). Secondly, questionnaire data collected from relevant stakeholders were aligned with the review of the internal audit function standing obtained from King III in a comparative analysis of the standing of the internal audit functions of national government departments. The main finding of this article is that internal auditing in government departments lacks the standing that is envisaged in King III. Regular communication between chairpersons of audit committees (CACs), accounting officers (AOs) and the heads of internal auditing (CAEs) of each department should clarify the role that internal audit functions are expected to fulfil using the resources available. The agreed role should be reflected in the internal audit charter of each department. The National Treasury should play a prominent role in evaluating the reasonable nature of and compliance with government departments’ internal audit charters.
Internal auditing as a corporate governance mechanism : a comparison between public sector and private sector functions
(African Consortium of Public Administration, 2014-10) Barac, Karin; Van Staden, Marianne; karin.barac@up.ac.za
Internal auditing has progressively gained prominence as a corporate governance mechanism. There are some important differences between internal audit practices in the private sector and their counterparts in the public sector, but changes in the public sector have arguably reduced these differences, especially with regard to governance. This study compares specific dimensions of a public and a private sector internal audit function as a component of a more comprehensive corporate governance mechanism, in the context of public sector reforms, including the adoption of governance and management frameworks originating in the private sector. The study is based on primary and secondary data, drawing on the views of similar stakeholders. The findings of the study support the view that even though internal audit functions in South African national departments are perceived to be valid corporate governance mechanisms, they are not yet as well established as those of the listed companies in South Africa selected for this study. The elements where the internal audit functions of the public sector were found to be lacking highlight areas where improvements are needed to achieve a well-established internal audit function as an effective public sector corporate governance mechanism.
Internal audit outsourcing practices in the South African public sector
(African Consortium of Public Administration, 2014-10) Plant, Kato; kato.plant@up.ac.za
This article explores internal audit outsourcing practices in the South African public sector. It examines the extent of outsourcing, the rationales for outsourcing, the preferred external service provider(s) for an outsourced internal audit function (IAF), as well as the status of outsourced IAFs. Data were gathered using questionnaires to interview the heads of IAFs, namely chief audit executives (CAEs), and the users of internal audit services, namely the chairpersons of the audit committees (CACs), as well as the accounting officers (AOs) of national government departments in South Africa. The findings indicate that the respondents preferred in-house IAFs to outsourced IAFs, because of the perceived commitment to governance by in-house IAFs. However, due to a lack of technical expertise and a shortage of competent internal auditors, the IAF is often outsourced to external audit service providers. These results provide public sector authorities with insight into the status of internal audit practices in the public sector and will enable internal audit stakeholders to optimise their sourcing practices and meet stakeholder expectations.

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