Shortage of Govt internal auditors

The shortage of internal auditors in Government ministries contributes to the escalating audit issues.

Ministry of Finance permanent secretary, Shiri Krishna Gounder while admitting the shortage, pointed out that the root cause lies in broader capacity limitations within the public sector.

Mr Gounder made the revelation during the ministry’s submission to the Standing Committee on Public Accounts yesterday.

He was outlining the Ministry’s ongoing efforts to address audit and financial management challenges within government.

“It’s not just about having internal auditors. The issue we’ve found is more about the capacity of staff, particularly within finance teams across ministries,” Mr Gounder said.

“When ministries hire accounting staff, they often lack sufficient experience with the intricacies of government operations. Some are appointed to managerial positions without adequate training or have deep understanding of government financial practices.

“This results in a trial-and-error approach to address financial matters, often leading to errors and inefficiencies.”

The ministry is ready to assist ministries in building internal audit teams provided budgets are available.

“Strengthening the capacity of accounting teams should be the primary focus,” he said.

“The real problem is that accounts teams across ministries lack the capacity.”

The ministry maintains an internal audit division and a treasury team that oversees financial activities across government agencies.

This division is tasked with flagging issues related to reconciliations and financial reporting.

However, despite the ministry’s guidance, agencies are ultimately responsible for implementing recommendations, which can be challenging without adequate staffing and skills.

Over the years, according to Mr Gounder, the ministry has identified systemic capacity issues affecting the whole public sector.

“We need to strengthen the capacity of finance teams across all agencies,” he said.

“Many issues could be easily resolved if the right expertise are in place yet current staffing shortages make it difficult to tackle even basic financial challenges effectively.”

One of the key challenges is the lack of centralised control over government finances.

In the past, finance teams were centrally managed by the Ministry of Finance; today the decentralised structure places control in the hands of respective finance secretaries in each ministry.

While this decentralisation has its advantages, it has also introduced complexities in managing financial operations consistently across the entire government.

“We need to explore options for some form of centralised oversight, especially in terms of staffing. This would help address some of the ongoing challenges we face,” he said.

As the Ministry of Finance continues to support government agencies in addressing financial management issues, Mr Gounder emphasised that the key to resolving them lies in building stronger, more capable finance teams within the public sector.

“Without these improvements, progress would continue to be hindered by systemic capacity limitations,” he said.

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