1. PRE-AUDIT/POST AUDIT PRESENTATION
Charles Barugahare
Director Internal Audit

2. PRESENTATION OUTLINE Definitions and back ground of Pre/Post Auditing
Merits and Demerits of pre and post Auditing
Risk assessment in MUK
Pre- Auditing in Makerere University
Post -Auditing in Makerere University
Auditing in the college system
Way forward 1st July 2011 and beyond
Conclusion
Questions/Comments

3. Definition/Back ground to Auditing
Internal auditing (IA) is an independent objective assurance and consulting activity designed to add value and improve organization’s operations (iia definition)
Independence & objectivity aspects are very critical
Consulting refers to furnishing Council, Mgt and staff with analysis, appraisals, recommendations and capacity building aspects
Add value & improving operations covers
recommending use of best practices,
identification of new risks/new required controls
Being able to handle emerging business issues

4. Definition & background of IA Cont’d
IA is aimed at evaluating and improving the effectiveness of;
Risk management,
controls,
and governance processes

5. Definitions cont’d
Pre -Auditing –refers to an examination of documents supporting a transaction or a series of transactions before they are paid for and recorded.
Post- Auditing refers to the review of documents or a series of transactions after the transaction has been recorded or consummated.

6. Rational for pre- Audit
Rising incidents of illegal, irregular, wasteful and anonymous disbursements of public funds
Marked inadequacies in internal controls
Case for Selective pre -auditing
Not all transactions are subject to pre-auditing –only transactions or areas considered to have issues above.

7. Rational for post audit
Able to review more areas than under pre- audit
Possible to assess the organisation's resources and ensure that all resources (human,material, and financial) are utilised appropriately so that the best possible results are achieved;
Able to produce meaningful reports for mgt & Council attention
Able to verify the reliability and suitability of the information systems;
Able to ascertain compliance to policies, laws independently
Able to inform the management of any irregularity or anomaly revealed and to recommend appropriate measures for their elimination;
Able to Follow-up on whether the recommendations by the internal auditors/external Auditors have been implemented.

8. Merits/Demerits of Pre/post audit
Looks at transactions
Some transactions are impractical to pre-audit
Errors are identified & corrected before transaction
Narrow scope
Generally limited or no reports
Auditors are part of operations
Traditional practice
Looks at risks, processes, controls
Its practical to audit for all activities or risky ones
Errors are identified after payment/transaction
Wider scope
Generally reports produced
Auditors independent of operations
Recommended best practice

9. PRE- AUDITING IN MUK The key areas currently pre-audited are;
Verification of all deliveries
Reviewing all payment vouchers
Verification of all pay change reports
Reviewing all accountabilities
Certifying certain project reports

10. Verification of deliveries
Must audit verify all deliveries or critical deliveries?
If some, who verifies the rest?
How do we select those to be verified by Audit and those by the rest?
How do we monitor that those verified by others are actually verified?

11. Verification Cont’d
The Answer to 1 is NO, only critical deliveries require to be verified
Critical deliveries can be determined by amount or nature of delivery-
Nature – All capital items continue to be verified by Audit
Amount – All transactions above 2million ( micro procurements)
In the Colleges- The transactions below 2M, the person responsible for administration receives the items and be verified by Accountant- Reporting.
For Administration Units ???
Audit to review on an going basis stores records and reports
Audit to be represented in opening all procurement bids above 30M

12. Other pre-audit aspects in the schedule
See details in the schedule

13. Post auditing in MUK
The audit structure, staffing and positioning were all planned for a post audit set up
Council has pronounced itself post auditing
The risk assessment and the demands from mgt, Audit committee and stakeholders are driving the post audit approach.

14. Current post audit situation
About 70% pre- Audit and 30% post audit.
No comprehensive risk assessment, Audit areas selected judgementally or using rough assessments
Limited skills and knowledge in most staff
Limited computer skills

15. Post Audit cont’d Limited access to computerized systems
Limited guidelines
Limited exposure by most staff on Audit program set up, identifying and documenting audit evidence, report writing etc.

16. Post audit -Going forward
Staffing with technical/practical skills improved
Strategize to give more attention to post audit
Documentation and marketing post auditing
Refer assessment done by the Committee

17. Auditing in the college System
Auditing will remain a central activity in the university
Post auditing largely influenced this decision.
More in the pre- template

18. End
Questions, comments & remarks!!!!!!! Thank you