Audit and Accounts - World Banksiteresources.worldbank.org/PSGLP/Resources/Audit... · Audit and...

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PIFRA Audit and Accounts Issues Challenges Audit and Accounts Audit and Accounts Issues Issues Challenges Challenges Khuram Khuram farooq farooq , PMP , PMP Director PIFRA Director PIFRA [email protected] [email protected] [email protected] [email protected]

Transcript of Audit and Accounts - World Banksiteresources.worldbank.org/PSGLP/Resources/Audit... · Audit and...

PIFRA

Audit and AccountsIssuesChallenges

Audit and AccountsAudit and AccountsIssuesIssuesChallengesChallenges

Khuram Khuram farooqfarooq, PMP, PMPDirector PIFRADirector PIFRA

[email protected]@[email protected]@hotmail.com

PIFRA

6 Domains of change and its management

7 Going Forward

AgendaAgendaAgenda

3 PIFRA- Design, Objectives and Basic Concept

5 Audit Objectives, Vision and Achievements4 Vision of Financial Management, Status and Roadmap

2 Issues and Challenges1 Context of Audit and Accounts

PIFRA

Context of Audit and AccountsContext of Audit and Accounts

Fundsauthorization

AuditReport

AG

P Line D

epartments

MOF/Legislature

CGAFinancial Reporting

Execution

Process Technology PoliciesPeople

PIFRA

Inconsistent processes

Chart of accountsChart of accounts-- Transparency of informationTransparency of information

Institutional Arrangements of AccountingInstitutional Arrangements of Accounting

Budget execution reports

Accounts- IssuesAccountsAccounts-- IssuesIssues

Project Accounting

Accuracy, reliability, comprehensiveness, timelinessAccuracy, reliability, comprehensiveness, timeliness

Reconciliation Liabilities, Assets, Commitments

Integration of budgeting with accountingIntegration of budgeting with accounting

Capacity of accounting officialsCapacity of accounting officials

Revenue accounting, Bank reconciliation

PIFRA

Capacity of auditing staff

Modern tools and techniquesModern tools and techniques-- CAATS/AMSCAATS/AMS

Transaction based audit approachTransaction based audit approach

Audit- IssuesAuditAudit-- IssuesIssues

Time lag in the discussion of reports at PACTime lag in the discussion of reports at PAC

Audit MethodologyAudit Methodology

Weak Internal ControlsWeak Internal Controls

PIFRA

PIFRA II: DesignPIFRA II: DesignPIFRA II: Design

PIFRA II

$ 94 m

FABS

(Financial Accounting and

Budgeting System)

Capacity Building

Of

OAG

(Office of the Auditor General)

Capacity Building of

CGA

Project Management

Support

AGP/CGA/MOF

PIFRA

ObjectivesObjectivesObjectivesAccurate, timely public financial informatioAccurate, timely public financial informatio

--Efficient resource management Efficient resource management --Improved fiscal spaceImproved fiscal space--Increased international credibilityIncreased international credibility--Improved Investor ConfidenceImproved Investor Confidence

Strengthened internal controls- Increased trust and confidence

Better quality audit through risk-based approach - Improved support for legislative oversight through PAC- Strengthened accountability framework- Increased confidence in audit process

R/3 other International Standards ComplianceInternational Standards Compliance••GAAP, IPSAS II, ISA, bestGAAP, IPSAS II, ISA, best--practicespractices

PIFRA

Process -New Accounting/Auditing Model

ImplementationImplementation-- Technology and Capacity BuildingTechnology and Capacity Building

RestructuringRestructuring

Separation of Audit and Accounts

Basic ConceptBasic ConceptBasic Concept

o/o CGA Created 2001

PIFRA

MODIFIED CASH BASISACCOUNTING

CASH BASED ACCOUNTING

ACCRUAL ACCOUNTING

International Public Sector Accounting Standard (IPSAS II) Compliance

IPSASCASH BASIS ACCOUNTING

PIFRA

Vision- Financial Reporting by CGAIntegrated, On-line, Real-Time, Govt-wide, multi-tieredVisionVision-- Financial Reporting by CGAFinancial Reporting by CGAIntegrated, OnIntegrated, On--line, Realline, Real--Time, Time, GovtGovt--wide, multiwide, multi--tieredtiered

DAO/TMAs

DAO/TMAs

DAO/ TMAs

District/Sub District/Sub districtdistrict

ProvincialProvincial

FederalFederal

DAOsDAOsDAOs

AG

AGPR

CGA

Roll up

and

Roll up

and

aggr

egati

on

aggr

egati

on

PIFRA

Productive Sites- Province WiseProductive SitesProductive Sites-- Province WiseProvince Wise

NW

FP

Punj

ab Sind

h

Bal

uchi

stan

PIFRA

Outcome Indicators FABS-Roadmap Outcome Indicators FABSOutcome Indicators FABS--Roadmap Roadmap

May 2005PIFRA I

30 Sites

25 sites

Aug 06 Sep 06 Dec 07

All NWFP +30 % Punjab)

All Punjab/Sindh

Baluchistan….

PIFRA

Objectives- Audit ComponentObjectivesObjectives-- Audit ComponentAudit Component

Availability of audited accounts to the PAC within 12 Availability of audited accounts to the PAC within 12 months of financial closemonths of financial closeAssurance to the stakeholders about the reliability of Assurance to the stakeholders about the reliability of the financial statements and Controls the financial statements and Controls Enhance trust and confidence of the stakeholders in Enhance trust and confidence of the stakeholders in the audit process through adoption of best practicesthe audit process through adoption of best practicesPAC reporting by exceptions through focus on only PAC reporting by exceptions through focus on only the critical risks in the accountability processthe critical risks in the accountability process

PIFRA

Vision- Risk based audit and IT ToolsVisionVision-- Risk based audit and IT ToolsRisk based audit and IT Tools

District Audit

Federal Audit

Auditor GeneralOf Pakistan WAN

Auditee 2 Auditee 1

Pre-defined verifications

by audit

Centralized Planning and Coordination

Of audit

Systems based IT

Audit

Expenditures,Salaries, vendor

data available on line

Use of Modern Audit Tools,

methodologies

Shift towards risk based auditing

PIFRA

Implementation Status of AuditImplementation Status of AuditImplementation Status of AuditDeveloped New Audit Methodology:

Sector wise audit guidelines developedSector wise audit guidelines developed

Financial Audit Manual developedFinancial Audit Manual developed

Electronic working paper kit developedElectronic working paper kit developed

Procured audit management and CAAT softwareProcured audit management and CAAT software

Live IT audit at 10 sitesLive IT audit at 10 sites-- A historical landmarkA historical landmark

Trained 100 master trainers on IT based Audit ToolsTrained 100 master trainers on IT based Audit Tools

Developed AMIS ArchitectureDeveloped AMIS Architecture

ReRe--engineering audit process: engineering audit process: Systems analysis doneSystems analysis done

Web Portal: Transparency: Concept paper doneWeb Portal: Transparency: Concept paper done

PIFRA

Domains of ChangeDomains of ChangeDomains of Change

Technology

Business Process Change Management

Re-structuring

Coverage

Capacity Building

The human dimension

PIFRA II

PIFRA

SAP IntroductionSAP IntroductionCreative Usage

Creative Usage

ResistanceResistanceBoycottBoycottR

esul

ts /

Suc

cess

/ P

erfo

rman

ceR

esul

ts /

Suc

cess

/ P

erfo

rman

ce

Organizational StructureWorkflowCooperation / CommunicationQualification / Competencies

Old SystemsOld Systems

Stagnation IntegrationChange

Management

Goal: Creative Usage via constant Change ManagementGoal: Creative Usage Goal: Creative Usage via constant Change Managementvia constant Change Management

Conservative UsageConservative Usage

PIFRA

Next Challenges: Data and adoption of new processessNext Challenges: Data and adoption of new Next Challenges: Data and adoption of new processessprocessess

Budgeting at spending levelBudgeting at spending level

Project AccountingProject Accounting

GP Fund and PensionGP Fund and Pension

Bank data for reconciliationBank data for reconciliation

Additional HR data for HRMIS of provincesAdditional HR data for HRMIS of provinces

Debt Reconciliation between CGA and EADDebt Reconciliation between CGA and EAD

Receipt accounting through CGAReceipt accounting through CGA

PIFRA

Going Forward- Fundamental IssuesGoing ForwardGoing Forward-- Fundamental IssuesFundamental IssuesProposed Mitigation actionProposed Mitigation actionIssueIssue

Current Civil Service HR Policies

Promotion Policy

Professionalism

Retention

Objective Performance Benchmarks

Develop benchmarks for audit

Remuneration, Professional Growth, etc

IT Security Govt. wide IT Security manual: IT Division

Resistance to adopt new systems Continued Executive Support

PIFRA

Thank YouThank You

PIFRA

PIFRA IIPIFRA IIPIFRA II

FABS, 47.543OAG, 16.727

CGA, 17.827PM, 4.343

Total $ 94 m