Accountants and management control expects make distinctions between internal checks and internal controls as they exist in an organization. Internal check is part of internal control system designed in an organization where one employee is not solely responsible for recording of all phases or supervises or monitors all facets of an activity through a pre-designed system. In its simplistic form, a cashier whose primary duty is to receive funds from the public and customers does not have access to other accounting records, particularly those of customers of the organization. Internal control however, is wider in scope. It encompasses all methods, procedures and devices including internal checks, internal audits that management uses to assure compliance with organization policies and strategies.
A good internal control has at least 4 components. 1) it observes, detects or sensors 2) it evaluates, assesses or selects 3) it directs, modifies or effects and 4) it has a communication network.
There are 3 current news items that reveal staggeringly the lack of internal controls in the governance of our dear country. Until those in authorities aggressively addresses such absence or grotesquely flawed system we shall ever be moving in circles.
Odododiodioo Bye-Election: Was there a Budget for Project? On the eve of recently held bye elections at Odododiodioo Constituency it was reported of the unexpected and frantic attempts to undertake much deserved some projects in the strategically targeted areas of the constituency. As every child knows, the efforts were to influence the outcome of the election. A question that one should ask is what the source of funding for these projects was. Were the funds budgeted for? If they had been budgeted for why were the projects not initiated earlier on until on the eve of the by elections? If the projects were not budgeted for, what was the source of funding by the local government? The very Machiavellian antics of this exercise go to prove that there is no internal control existing in the organization that was responsible for the installation of street lights and pavement of streets.
Akampa Committee: Were there Internal Controls in Existence? Another story that throws into sharp focus the absence of managerial control system is the tragic-comical proceeding of the Akampa Committee investigating the Director of Ghana School of Law (GSL). Ever-flowing stream of evidence are being presented to portray lack of internal control at worse or non-functional internal system at best. The director circumvents the existing control systems at his whims and caprices. A Mr. Anim who goes by the title of Principal Accountant regularly, in his own words disburses funds for payment of textbooks without any voucher. Mr. Anim tries to justify such unethical, unprofessional and unconscionable behavior on his part by the authoritarian nature of his boss, Mr. Anasa-Asare, the subject of the Committee. The fruitless effort of Mr. Anim to excuse himself rather accuses himself. If Mr. Anim is really a member of the Institute of Chartered Accountants of Ghana or any other professional institute worth its salt, he would have remembered that the sins of others are poor excuse for his own. Loyalty to his professional calling should have outweighed his sense of insecurity. Mr. Anim should have denied disbursement of funds without the relevant vouchers. Though Mr. Anim acted as a detector he failed in his task as a modifier. Other evidences of the same committee reveal some face glaring facts; the lackadaisical manner in which we do things in Ghana. An organization like GSL should not be doing business with the set up owned by director. Apparently, the concept of conflict of interest is alien to the Ghanaian environment. Why on earth should the business owned if not controlled by the director be suppliers of textbooks for the GSL?
Mr. Anim on another occasion revealed that he had on numerous occasions been by external auditors for pre-financing purchases of text book from Read Wide, Ghana Ltd. This statement of Mr. Ennin goes to prove that the external auditor's report is not worth the paper on which it was printed. Mr. Anim should have been sanctioned for failure to comply with earlier reports. The absence or failure of the internal control system is amplified by subsequent reports ignored successfully.
The Audit Report of Kumasi Metropolitan Assembly (KMA)
Among some of the findings of the interim Audit Report of the KMA was that “contracts being awarded without any regard to contract procedures” as stipulated by law. Additionally, contract disbursements were made without Metro Engineer's certification or report let alone vouchers.
Conclusion No matter how well-designed and flawless an internal control system that exists, it needs human beings to operate effectively and efficiently. This singular and undeniable fact places an onerous task on political leaders and those in authority. Most of our political leaders consider their ministries and departments as fiefdoms. They not only actively circumvent rules and regulation routinely themselves but fail to act when the short comings of the system are brought their attention. Of course, every government commits misdeeds and feels it must conceal them. But for our nation to move forward and progress our leaders must pay more attention to simple and obvious rules and regulation and not conceal or ignore them. Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.