Michael Finucane
Ceist:35 Mr. Finucane asked the Minister for Finance if he has any plans to require the Department of Health to operate an internal audit system; and if he will make a statement on the matter.
Written Answers. - Departmental Internal Audits.
Edward Nealon
Ceist:51 Mr. Nealon asked the Minister for Finance if he will outline (1) the functions of accounting officers in Government Departments and (2) the part which internal audits should play in the carrying out of accounting officer functions.
Donal Carey
Ceist:55 Mr. Carey asked the Minister for Finance the plans he has to set up internal audit units in Government Departments to ensure that the expenditure of £5.8 billion of annual voted moneys, at present not covered by internal audit, is subject to such scrutiny.
Madeleine Taylor-Quinn
Ceist:96 Mrs. Taylor-Quinn asked the Minister for Finance if internal audit units in Government Departments have worked satisfactorily; and if he has any plans to modify the manner in which they operate.
I propose to take Questions Nos. 35, 51, 55 and 96 together.
My Department's publication Public Financial Procedures (1990), refers to internal audit in the context of financial management in Departments. It states:
Internal audit is an independent appraisal within a Department which operates as a service to management and particularly to the Accounting Officer by measuring and evaluating the effectiveness of the internal control system.
My Department is at present finalising detailed guidelines for internal audit which will be issued to all Departments/ Offices, including the Department of Health, which already operates a number of control procedures and where it is intended to establish a performance audit unit to assist the Minister in assessing the efficiency and effectiveness of the health services.
In this context I note that the Comptroller and Auditor General in his most recent annual report indicated the need for a strengthening of the internal audit function in Government Departments and Offices. He recognised that "the ultimate decision on the need for internal audit units where they do not already exist rests with Accounting Officers who, with the advent of administrative budgets, will have the necessary flexibility to deploy resources to the setting up of internal audit units if it is cost effective to do so".
As the Deputies will be aware, expenditure on the Supply Services has to be accounted for ultimately to Dáil éireann. For each Vote, an accounting officer is appointed by the Minister for Finance under section 22 of the Exchequer and Audit Departments Act, 1866. The Accounting Officer is personally responsible for the safeguarding of public funds and property under his control, for the regularity and propriety of all the transactions in each Appropriation Account bearing his signature and also for the efficiency and economy of administration in his Department. The Accounting Officer is normally the Civil Service head of the Department or Office responsible for the Vote.
Clearly an Accounting Officer cannot be expected to be familiar with the details of every financial transaction affecting his Vote, but he is expected to satisfy himself that adequate arrangements and systems exist within his Department to ensure the correctness of all payments, the bringing to account of all receipts connected with the Vote or with any fund for which his Department is responsible and the economy and efficiency of his Department's operations. Internal audit can make an important contribution to this process.
Finally, I would emphasise that internal audit is a service to the management of Departments. The £5.8 billion referred to in the C & AG's report and in the Deputies' questions is the subject of systems in Departments designed to check and verify payments and receipts. In addition, of course, payments and receipts are audited on an ongoing basis by the Comptroller and Auditor General. Internal audit, where introduced, will concentrate primarily on examining systems and procedures and reporting to the Accounting Officer on any shortcomings identified.