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Internal Control: Providing a Foundation for Accountability in Government

Author: International Organisation of Supreme Audit Institutions (INTOSAI)
Date: 2001
Size: 8 pages (43 KB)

Access full text: available online

Summary

What is the best way to provide a foundation for accountability in government? This question is addressed in this short booklet produced by the International Organisation of Supreme Audit Institutions. It is aimed at managers in governmental organisations and is concerned with helping them to ensure a proper control environment in their organisations.

The booklet states that internal control helps to provide assurance that management objectives are being achieved: planning, implementing, supervising and monitoring are all key components of it. It claims that it is essential that all managers in an organisation understand the importance of establishing and maintaining effective internal control. To help managers implement effective internal control the booklet puts forward an overall framework for establishing and maintaining it.

A strong internal control structure is fundamental to control of an organisation and its purpose, operations and resources.

• The head of each governmental organisation must ensure that a proper internal control structure is instituted, reviewed and updated to keep it effective.
• The Framework for Establishing and Maintaining Effective Internal Control shows that there are two key parties in internal control: managers and auditors.
• Managers continually monitor the operation of internal control practices throughout the organisation and modify them as appropriate.
• Auditors periodically audit an organisation’s internal control policies, practices and procedures to ensure that controls are adequate to achieve that organisation’s mission.
• Managers should establish an independent audit function as a key part of the internal control structure and establish objectives for the audit function.
• Managers should also identify areas for improving performance quality and respond to information developed through audits.

Internal, or management control, helps to provide reasonable assurance that the organisation:

• Adheres to laws, regulations and management directives
• Promotes orderly, economical and efficient operations and achieves planned outcomes
• Safeguards resources against waste, fraud, abuse and mismanagement
• Develops and maintains reliable financial and management information and fairly discloses that data through timely reporting.
• Has assessed the risks, from both external and internal sources, that it faces.

Access full text: available online

Source: INTOSAI, 2001, ‘Internal Control: Providing a Foundation for Accountability in Government’, INTOSAI, Vienna.
Author: Jackie Peace , j-peace@dfid.gov.uk