We can’t over-emphasize the importance of audit committees to institutional governance – Dr Osae

Dr Eric Oduro Osae
Dr Eric Oduro Osae

Dr Eric Oduro Osae, the Director-General of the Internal Audit Agency (IAA), Tuesday reiterated the importance of internal audit committees to institutional governance in the management of public funds, saying their immeasurable role cannot be over-emphasised.

He noted that these committees require the backing of management and all-important stakeholders of an institution to carry out their mandate.

“In order to achieve effective management of public funds, the Audit Committee is intended to collaborate with the Management and all stakeholders of your institution.”

Dr Osae stated during the mass inauguration of Audit Committees for Health Sector Institutions under the Ghana Health Service, established under the Public Financial Management Act, 2016 (Act 921).

“I hope the audit committees inaugurated today will live up to expectations and contribute towards strengthening controls and accountability systems among health sector institutions,” he said.

Efficient systems for public financial management are essential for an open and accountable government, without which managing public funds would be difficult and the country runs the risk of underdevelopment.

Touching on controlling of the weaknesses in the Health Sector institutions, Dr Osae said majority of the over GHS1.08 billion irregularities identified in the 2021 Auditor-General’s Report were on health institutions.
The Report indicated that the Ministry of Health institutions were among only 17 out of the 32 whose financial statements were qualified.

He said 52 out of the 212-page Audit Report were on the Health Sector institutions, which suggested that internal control systems in the sector were weak, hence the mass inauguration of Internal Audit Committees.

Dr Osae said, similarly, in the 2021 Auditor-General’s Report on Public Corporations and other statutory institutions, irregularities in four health institutions amounted to GHS 22.7 million.

He said the Public Financial Management Act of 2016 (Act 921) was enacted to manage those risks and lessen their negative effects on the nation’s development.

The formation of an audit committee was one of such initiatives aimed at improving internal control structures in public institutions to ensure value for money.

Pursuant to the establishment of the audit committees by Section 86, the Public Financial Management (PFM) Act repealed Section 16 (8) and Section 30 of the Internal Audit Agency Act, 2003 (Act 658) and the Audit Service Act, 2000 (Act 584), respectively, which had created the Audit Report Implementation Committee.

The Audit Committee was a high-level corporate governance committee, which contributes to the effectiveness of public accountability and the appropriate use of public resources.

“The Audit Committee of your institution is being inaugurated today to fulfill the internal control requirements of Section 86 (1) of the PFM Act 2016 (Act 921), the Public Financial Management Regulations, 2019 (L.I. 2378), the Public Procurement Act, 2003 (Act 663) as amended, the Guidelines for Effective Functioning of Audit Committees (2023) and other applicable financial laws on managing public funds.”

Dr Osae said the formation, membership, roles and reporting responsibilities of the Audit Committee were provided under Sections 86 – 88 of the PFM Act, Regulations 220 and 223-229 of L.I. 2378, and part 8 of the Guidelines.
He said the roles of the Audit Committee under the laws of Ghana could be categorised into three main areas: mandatory roles, advisory roles, and support to the Internal Audit Unit, other internal Monitoring Units, and
External Scrutiny.

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