Government Budgeting and the Internal Audit s Role A budget codifies a government s planned expenditures and anticipated revenues, reflecting its policy priorities for the coming year.however, the budget is more than just a single document it is a year-long cycle of processes whose different phases offer civil society varying access points to influence budget resources, allocations, and outcomes. In this workshop, we discuss the budget cycle s major events and stages and the changing role of internal audit Purpose Budget helps to aid the planning of actual operations by forcing managers to consider how the conditions might change and what steps should be taken now and by encouraging managers to consider problems before they arise. It also helps co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments. Other essentials of budget include: To control resources To communicate plans to various responsibility center managers. To motivate managers to strive to achieve budget goals. To evaluate the performance of managers To provide visibility into the company's performance For accountability Internal Audit acts as a check to the work of the managers in operations. It checks the reliability and authenticity of the budgets and processes therefore employed. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. This workshop is a must attend event, as it will empower the delegates with cutting age budgeting and auditing skills Who should attend this workshop. Heads of Departments Financial controllers
Directors Accountants Internal and External Auditors PROGRAM OUTLINE 1 st Session Day 1 2 nd Session Day 2 Public Sector Budgeting Budgeting Budgeting Principles and Techniques Budgeting Procedures Budgeting process in Government The budget cycle Identification and collection of information for budgeting purposes Types of Budget Activity Based Budgeting Zero-based budgeting Incremental budgeting Performance Budgeting Budget Management Management of Revenue, Expenditure, Assets and Liabilities Public Expenditure Management o Basis for Medium-Term Expenditure Framework o Macroeconomic reforms o Budgetary reform programmes in Africa for poverty reduction o Strategic Management in the context of MTEF. o o Integrated financial Management Systems in the public sector Best Practices in Public expenditure reforms in Africa and country reports Financial Risk Management o Risk Measurement o Risk Management o Bond Fundamentals and Option Markets o Fixed Income Securities and Derivatives o Operational Risk and Liquidity Risk o Firm-wide Risk Management o Credit Risk and Credit Exposure o Managing Credit Risk o Portfolio Risk Management o Hedge Risk Management
3 rd Session Day Three Budgetary Control The basic concepts of budgetary control The process of budgetary control Facing the Actuals o What are the variances and why are they important? o The budget is the plan i.e. understanding the need to proactively work towards budget and adhere to budget. o Comparing actuals to budgeted monthly o Comparing actuals to budgeted year to date o Understanding the significance of changes in variances o Causes of Budget Variances o Calculating Variances o Proper Variance Analysis o Flexing the budget Public Sector Accounting Introduction to Public Sector Accounting o Definition o Introduction to accounting on the Public Sector o Nature and type of services provided by the Public Sector, functions of the Public Sector, o Objectives of accounting in the Public Sector 4 th Session Day Four Sources of Government Revenue Financial Accounts and Records o Introduction to Types of Accounts and Records of the Following Institutions: o Ministries and departments, Treasury, Central Government o Writing up books and accounts of government ministries and departments, o Writing books and accounts of the treasury, o Drawing up a trial balance for government ministry/ department, o Preparation of annual financial statement Internal Auditing The role of the internal auditor Role of the Institute of Internal Auditors (the IIA) Advantages of outsourcing/co-sourcing internal audit function The process of internal auditing o The IIA s Professional Practices Framework o Planning o Execution o Reporting o Monitoring and follow-up Performance Auditing Definition of Performance Auditing
Value-for-money Approach to Performance Auditing Risk-based Approach to Performance Auditing Objectives and risk identification frameworks Performance Measures Elements of Internal Control Defining internal control Assessing the control environment Management's responsibility for control Context of control Reliability of financial reporting The purpose of preliminary survey Linking risk management and performance management 5 th Session Day Five Control Mechanisms Internal audit's responsibility regarding control Limitations of internal control Organisational structure Budgetary controls and financial reports IT/IS general controls Integrity and competence of personnel Codes of conduct Developing Recommendations for Improvement Improving Corporate Governance in the Public Sector Defining Corporate governance Identifying the crimes of fraud, theft, bribery and corruption Assessing local and International governance standards Emphasising the Components of Corporate Governance Underlining Management s Corporate Governance Responsibilities Determining weaknesses in Corporate Governance Discussing accountability procedures in the Public Sector Framework for governance Elements of a good ethics program Developing a code of ethics for the organisation Defining unethical behaviour at all levels within the organisation Interaction between Internal and External Auditing Reporting Standards Requirements of risk reporting
Conducting In-Year monitoring and reporting (control) based on the operational plan Guidelines when reporting to the Auditor General Establishing performance measures Advantages and disadvantages of monitoring and evaluation Implementing an early warning system Budget Reporting Standards Medium Term Expenditure Framework (MTEF) Understanding the importance of - Revenue - Expenditure - Assets - Liabilities Developing of Medium Term Expenditure Framework (MTEF) Revision of MTEF annually The Audit Program Preparation for an Audit Internal Audit and IT o IT Risks o IT General Controls o Application Controls o IT Audit skills Internal Audit and the Audit Committee o Relationship between Internal Audit and Audit Committee o Role of Audit Committee