nrayhw;wif mwpf;if Performance Report

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1 nrayhw;wif mwpf;if Performance Report 201 Kfhikj;Jtf; fzf;fha;tj; jpizf;fsk; DEPARTMENT OF MANAGEMENT AUDIT epjp> jpl;lkply; mikr;r> Ministry of Finance and Planning nrayfk; The Secretariat nfhok;g 01. Colombo 01.

2 Financial and Physical Performance of the Department of Management Audit for the year 2011 is presented by this as per the instructions given in Public Finance Circular No.402. Performance Report - Department of Management Audit CONTENTS Page No. Vision, Mission, Objectives, Functions and Responsibilities of the Department 1.1 Organizational Structure of the Department Financial Administration Physical Performance Contribution to enhance effectiveness of Internal Audit functions of the Public Sector Provision of Guidelines for Internal Auditing Strengthening Internal Audit functions of the Public Sector Through the Treasury Representation in Audit and Management Committees Management Audit Functions of the Ministry of Finance and Planning and Treasury Departments Internal Auditing of the Development Projects implemented by the various Departments of the Ministry of Finance and Planning 3.6 Special Investigations Management of Human Resources and General Administration 2

3 01. Vision, Mission, Objectives and Functions of the Department Vision To be the most outstanding and value adding management audit partner for the best performance and accountability of public service Mission To provide an independent and objective assurance and consulting services design to add value and improve accountability of public services through systematic approach to audit disciplines comprising of Management Audit Compliance and Operational Audit Performance Audit Information System Audit Risk Management and Governance Process Objectives 1. Contributing to enhance the effectiveness of Internal Audit of the Public Sector. 2. Strengthening Internal Audit through Audit and Management Committees 3. Introducing guidelines required to improve the Management Audit. 4. Assisting the top Management by performing Management Audit functions of the Ministry of Finance and Planning and Treasury Departments. 5. Strengthening the process of Management Audit in the Development Projects. 6. Disclosure of irregularities takes place and may take place in the Public Sector through special investigations and introduction of preventive measures and recommendations to curb such situations and occurrences. 3

4 Functions and Responsibilities Performing Management Audit in respect of the Ministry of Finance and Planning, Treasury Departments and projects coming under them. Providing necessary technical support by coordinating Internal Audit Divisions of all Departments under the Ministry of Finance and Planning as well as Internal Audit Units of other Ministries and Departments Performing the following activities to achieve success in Management Auditing Process. Providing necessary guidance by co-ordinating Internal Audit Units. Direct involvement in providing necessary guidance and Treasury representation to strengthen the process of Audit and Management Committees. Review of Internal Audit plans of all Internal Audit Units and guide for necessary improvements. Conducting Special Investigations and reporting those whenever necessary. Taking action to introduce a Manual inclusive of Internal Audit Guidelines and to update it with latest trends. Improving Audit Skills of Internal Audit Units by organizing training workshops on Management Auditing. 4

5 1.1 Organizational Structure of the Department General Additional General Deputy Deputy Deputy Deputy Deputy Deputy Deputy Asst. Asst. Directo r Research Assistant Research Assistant Research Assistant Research Assistant C.M.A M.A M.A M.A M.A M.A M.A M.A M.A M.A M.A M.A M.A M.A M.S V 5

6 2. Financial Administration In the Budgetary Estimates for the year 1, provisions had been made for this Department under Head Programme Project. The expenditure incurred are given in the following table. Particulars of Expenditure Recurrent Expenditure Estimate Rs Actual Expenditure Rs Savings Rs Personnel Emoluments Other Expenditure Capital Expenditure 1 032, ,363 56,637 Building & Structures Furniture & office equipment Plant, machinery & equipment Training & Capacity Building TOTAL Government Officers Advance B Account The following table shows the details of the Government Officers Authorized Advance B Account of this Department for the year. Particulars Maximum Limit of Expenditure Minimum Limit of Receipts Maximum Debit Balance Limit Approved Limit Rs Actual Expenditure Rs

7 Physical Performance Contribution to enhance effectiveness of Internal Audit Functions of the Public Sector Capacity Building of Internal Auditors Department of Management Audit is constantly providing necessary assistance to the internal auditors working in the various Ministries and Departments to improve their professional knowledge. With that objective, the Department conducted the following Workshops during the year A two day training workshop was conducted at the National Institute of Co-operative Development (NICD) at Polgolla on and on the topic of special investigations which is a major component of internal auditing. The lectures were conducted by the experts in the subject, covering a number of topics such as nature of special investigations, planning of inquiries and legal background. A workshop was conducted to make the Government Internal Auditors aware on current changes in Information Technology used in the government sector on.2011 at the Randora Auditorium of the Ministry of Finance and Planning Preparation of an Internal Audit Manual Formulation of a manual inclusive of guidelines for internal auditing was started with the assistance of Finance Management Reforms Project FMRP). The manual drafted by the consultant appointed for this task by the project, has been handed over to the Department. This manual is basically formulated considering the policy matters related to internal auditing. 7

8 Provision of Guidelines for Internal Auditing Assisting the heads of institutions to establish an efficient internal control system is a major duty assigned to the internal audit. The Department of Management Audit drafted a guideline with the aim of forming a qualitative improvement of this task. A meeting of internal auditors who are working in the various Ministries and Departments was held on at the auditorium of the Ministry of Finance and Planning in order to discuss this drafted guideline and to identify the changes that should be made. The following circular was issued including the ideas emerged at that meeting. Management Audit Circular No. DMA The Guideline on the Evaluation of Internal Control Structure Having a proper internal control structure is an essential factor for an efficient performance in Ministries, Departments and Projects of the Government. In order to ensure this, internal audit has to carry out a proper evaluation having discerned the internal control framework which runs through out the entire system. As a guidance to perform this task, a model questionnaire prepared for identification and evaluation of the internal control structure is introduced with this guideline. This guideline will be useful in internal auditing to assure the importance of the control structure of the organization. Strengthening Internal Audit Functions of the Public Sector through the Treasury Representation in Audit and Management Committees The staff officers of this Department actively participate in the Audit and Management Committees established in all the Ministries of the Government. As Treasury representatives, those officers provided guidance and guidelines to conduct these committees effectively and having discussed the audit reports of the Auditor General and Internal Auditor, necessary instructions were given to each ministry on the preventive measures to be taken. 8

9 At least one Audit and Management Committee meeting should be held per quarter by each Ministry. Accordingly, the number of Audit and Management Committee meetings held by the respective Ministries during the year 2011 is shown in the following table. Serial No. Ministry Ministry of Defense and Urban Development Ministry of Finance and Planning Ministry of Ports and Highways No. of meetings held Ministry of Economic Development 3 Ministry of Buddha Sasana & Religious Affairs Ministry of Irrigation & Water Resources Management Ministry of Health Ministry of Petroleum Industries Ministry of Livestock & Rural Community Development Ministry of Water Supply and Drainage Ministry of Traditional Industries & Small Enterprises Development Ministry of Local Government & Provincial Councils Ministry of Industry & Commerce Ministry of Power & Energy Ministry of Construction, Engineering Services, Housing & Common Amenities Ministry of Justice Ministry of Telecommunication & Information Technology 9

10 Serial No. Ministry Ministry of National Languages & Social Integration Ministry of Higher Education Ministry of External Affairs Ministry of Public Administration & Home Affairs Ministry of Parliamentary Affairs Ministry of Postal Services Ministry of National Heritage Ministry of Environment Ministry of Child Development & Women s Affairs Ministry of Labour & Labour Relations Ministry of Education Ministry of Plantation Industries Ministry of Fisheries & Aquatic Resource Development Ministry of Land & Land Development Ministry of Social Services Ministry of Sports Ministry of Agriculture Ministry of Mass Media & Information Ministry of Transport Ministry of Youth Affairs & Skills Development Ministry of Co-operatives & Internal Trade Ministry of Rehabilitation & Prison reforms No. of meetings held 10

11 Serial No. Ministry Ministry of Indigenous Medicine Ministry of Disaster Management Ministry of Resettlement Ministry of State resources & Enterprise Development Ministry of Technology & Research Ministry of Public Management Reforms Ministry of Culture & Art Affairs Ministry of Productivity Promotion Ministry of Minor Export Crop promotion Ministry of Foreign Employment Promotion & Welfare Ministry of Civil Aviation Ministry of Coconut Development & Janatha Estate Development Ministry of Agrarian Services & Wildlife Ministry of Public Coordination & Public Affairs Ministry of Private Transport Services No. of meetings held 11

12 Management Audit Functions of the Ministry of Finance and Planning and Treasury Departments Management Audit functions of the Ministry of Finance and Treasury Departments were continuously conducted by this Department in the year This facilitates the heads of these departments to maintain an efficient and effective internal control system in their institutions. Having considered this objective, internal audit functions were conducted in the following Departments in All sections of the Ministry of Finance and Planning 02. Department of Import and Export Control 03. Department of Public Finance 04. Department of Fiscal Policy 05. Department of Management Services 06. Department of Management Audit 07. Department of State Accounts 08. Department of Legal Affairs 09. Department of National Budget 10. Department of Development Finance 11. Department of National Planning 12. Department of Treasury Operations 13. Department of Public Enterprises 14. Department of External Resources 15. Department of Trade, Tariff and Investment Policy 16. Department of Project Management and Monitoring Management Audit reports were submitted to the Heads of the respective Departments according to the time schedule given in the Table

13 Serial No. Department Ref.No. of the report Date on which preliminary evaluation report was submitted Date on which st quarter report was submitted Date on which 2nd quarter report was submitted Date on which 3rd quarter report was submitted Date on which th quarter report was submitted Dept. of Import and Export Control DMA/IA/2011/ Dept. of Public Finance DMA/ADM/2011/ Dept. of Fiscal Policy DMA/IA/2011/ Dept.of Management Services Dept. of Management Audit DMA/IA/2011/ DMA/IA/2011/ Dept. of State Accounts DMA/IA/2011/ Dept. Of Legal Affairs DMA/IA/2011/ Ministry of Finance and Planning Dept. Of National Budget Dept. of Development Finance DMA/IA/2011/ DMA/IA/2011/ DMA/IA/2011/

14 Serial No. Department Ref.No. of the report Date on which preliminary evaluation report was submitted Date on which st quarter report was submitted Date on which 2nd quarter report was submitted Date on which 3rd quarter report was submitted Date on which th quarter report was submitted Dept. of National Planning Dept. of Treasury Operations Dept. of Public Enterprises Dept. of External Resources Dept. of Trade, Tariff and Investment Policy Dept. of Project Management and Monitoring DMA/IA/2011/ DMA/IA/2011/ DMA/IA/2011/ DMA/IA/2011/ DMA/IA/2011/ DMA/IA/2011/

15 Observations of the Heads of the Departments on quarterly reports were obtained and Audit and Management Committee meetings were held under the chairmanship of the Secretary to the Treasury to take required decisions to prevent shortcomings and deficiencies. Three Audit and Management Committee meetings (AMCs) were thus held in the year, chaired by the Secretary to the Treasury and the AMC meeting for the last quarter will be held in the first quarter of the year Moreover, the important matters revealed by the Internal Audit Units and the Auditor General on the following Departments which are under the purview of the Ministry of Finance and Planning were directed to the Audit and Management Committee and were brought to the attention of the Secretary to the Treasury. 1. Department of Sri Lanka Customs 2. Department of Inland Revenue 3. Department of Excise 4. Department of Valuation 5. Department of Census and Statistics Apart from this, the management audit functions of the Academy of Financial Studies (AFS) which is established under the Ministry of Finance and Planning for training the government officers, and the Sri Lanka Insurance Board under the same Ministry were carried out by the Department of Management Audit for the year Internal Audit of the Development Projects implemented by the various Departments of the Ministry of Finance and Planning This Department carries out the internal audit functions of the foreign funded projects implemented by the various Departments of the Ministry of Finance and Planning. In addition, this Department carries out the internal audit functions of the development projects throughout the whole project period, in the occasions where the internal audit functions are assigned to this 15

16 Department by the project agreement which is signed between the Government and the Funding Agency. Accordingly, the Department carried out the internal audit functions of the following projects during the year 2011 Statistical Capacity Upgrading Project (STATCAP) This project is implemented by the Department of Census and Statistics with World Bank assistance. Small and Medium Enterprise Development Facility Project (SMEDeF) - The Department of Development Finance implements this project under the assistance of the World Bank Financial Management Efficiency Project (FMEP) This project is implemented by the Ministry of Finance and Planning with ADB assistance. The procurement process related to RAMIS and ITMIS systems was audited and reported. Special Investigations The complaints made to His Excellency the President as the Honourable Minister of Finance and Planning and to the Secretary to the Treasury are forwarded to the Department of Management Audit with the instructions of the Secretary to the Treasury for investigating and reporting. The reports of the investigations handled are submitted to the Secretary of the relevant Ministry or to the Head of the relevant institution for necessary actions, as per the instructions of the Secretary to the Treasury and its objective is to prevent repetition of deficiencies and irregularities revealed through the investigation. The investigations Conducted by the Department of Management Audit in Investigations were conducted and reported regarding the complaints received by the Secretary of the Ministry of Finance and Planning related to the undermentioned matters. 16

17 01. Investigation on misusing government assets by Kurunegala Plantation Company. 02. Investigation on Improper Stores Management of the Department of Inland Revenue. 03. Investigation on the affairs of Sri Lanka Export Credit Insurance Board. 04. Investigation on renting out a house for Ampara Regional Office of the Geological Survey and Mines Bureau 05. Investigation on misappropriation of public finance by Institute of Sugarcane Research 06. Investigation on the effort made to have a salary increase limited only to executive officers of the Agriculture and Agrarian Insurance Board 07. Investigation on the disposal of inventory items by the Department of Fiscal Policy. 08. Investigation on irregularities of the Local Loan and Development Fund. 09. Transferring provisions to the Treasury General Deposit Account Submission of a report reviewing experiences of last few years 10. Investigation on complaints made about the Superintendent of Excise in Kandy - Special Investigation Unit of the Department of Excise 11. Investigation on serious financial and administration irregularities occurring at present in the Building Material Corporation. 12. Investigation on irregularities in printing of diaries for the year 2012 by the Employees Trust Fund 13. Investigation on construction works of Kandy Court Complex 14. Investigation on VAT fraud and non payment of Government approved salary and Employees Provident Fund by the Falcon Security Services Private Limited. 15. Investigation on irregularities made losing the revenue of the Department of Customs. 17

18 Management of Human Resources and General Administration Staff The approved cadre of this Department functioning under the purview of the -- General of Management Audit is 41 and the detail of the staff relevant to the year 2011 is given below. Post Cadre Approved Actual Vacancies General Additional General - SLAcS - Deputy SLAcS) Assistant SLPS/SLAS) - Research Assistant Public - Driver - K.K.S - Total Officers transferred in to the Department in 1 Name Post 01. Mrs. S.A..Chandrika Kulathilaka 02. Mr.H.C.D.L.Silva Deputy 03. Mr.S.K.Kusalakumaran Deputy 04. Miss A.K.Gunasekera Assistant 05. Mrs.H.D.D.S.Gunasekera 06. Mr.K.D.N.Premalal K.K.S 18

19 07. Mr.R.A.K.Karunajeewa Driver 08. Mrs.E.M.G.L.Ekanayaka 09. Miss.K.A.B.M.Gunarathna 10. Mrs.Anuruddhika Weeraratna 11. Mr.S.A.A.Weerasinghe Driver 12. Mr.W.J.Ranjan 13. Miss.M.M.T.P.S.Perera 14. Mr.B.K.D.Kodituwakku Driver 15. Mr.S.A.M.A.Nimal 16. Mr.T.Subasinghe Driver 17. Mrs.R.Kandasamy 18. Mr.B.D.S.Chandralal Driver Officers transferred out of the Department in Name Post 01. Mr.S.A.A.Weerasinghe Driver period June-September 02. Mr.W.J.Ranjan period June-December 03. Miss.M.M.T.P.S.Perera period July-September 04. Mr.S.A.M.A.Nimal period September-December 05. Mr.T.Subasinghe Driver period September-December 06. Mrs.R.Kandasamy period November-December ) 19

20 Staff Training Local Training Officers were participated in local and foreign training programmes in the year 2011 with the objective of enhancing the professional skills of the staff for the Human Resource development of the Department. Local Training - The officers of the Department participated in local training programmes in the year 2011 as follows. Training Period Training Programme Name of the Officer Designation - Basic Tamil Mrs.H.K.C.Priyadarshani Mrs.G.D.K.Liyanage Enhancing Productivity and Quality of the Public Service Mrs.G.D.K.Liyanage - Master of Public Management Mr.H.C.D.L.Silva Deputy Sri Lanka Accounting Standards Mrs.K.V.C.Dilrukshi Assistant Advance B Account Mrs.H.K.C.Priyadarshani - Results Based management for Sustainable Development Good Governance & Human Resource Management Mr.D.G.G.S.Dayanath Miss.A.K.Gunasekera Mrs.W.K.P.H.N.S. Rodrigo Mr.S.H.R.I.B. Senanayaka Assistant Assistant Research Assistant - Project Management Mrs.W.K.P.H.N.S.Rodrigo Research Assistant 20

21 Training Period Training Programme Name of the Officer Designation Mr.K.W.G.Ajith De Silva Basic Computer Training Mrs.H.D.D.S.Gunasekera - Pension Affairs Mr.S.H.R.I.B. Senanayaka English for Stenographers Mr.W.G.T. Chanaka Salary Conversions Mr.S.H.R.I.B. Senanayaka CIGAS Mrs.G.D.K.Liyanage Payroll Mr.S.H.R.I.B. Senanayaka Basic Tamil Mrs.A.Weerarathna Advanced Tamil Mrs.H.K.C.Priyadarshani Mrs.G.D.K.Liyanage Salary Conversions Mrs.A.Weerarathna Office Management Mr.U.D.S.Jayalath K.K.S - DIPPCA Mrs.K.V.C.Dilrukshi Assistant Disciplinary Actions Mr.S.A.M.A.Nimal - Driving Practical Training - Driving Practical Training Mr.H.M.M.Rathnasiri Mr.R.A.K.Karunajeewa Driver Driver Government Auditing Mrs.A.Weerarathna 21

22 Training Period Training Programme Name of the Officer Designation Induction Training Miss.K.M.B.M. Gunarathna Mrs.E.M.G.L.Ekanayaka CIGAS Mr.S.H.R.I.B. Senanayaka Disciplinary Actions Mrs.H.D.D.S.Gunasekera - Business English Language Mr.K.M.Jayathilaka Mrs.S.A.C.Kulathilaka Mr.R.R.K.Nugapitiya Mrs.M.A.K.P. Wijewantha Mr.S.M.Dayarathna Mrs.G.C.N.Fonseka Mr.H.C.D.L.Silva Mr.S.K.Kusalakumaran Mrs.K.V.C.Dilrukshi Miss.A.K.Gunasekera Mrs.W.K.P.H.N.S. Rodrigo Addl. General Deputy Deputy Deputy Assistant Assistant Research Assistant 22

23 Foreign Training Officers have participated in foreign training programmes in the year 2011 as mentioned below. Name of the officer Designation Country Training Programme Period Mr.Wasantha Ekanayake General Singapore Public Sector Leadership Programme. Mrs.M.A.K.P. Wijewantha Thailand Second Country Study visit of Master of Public Management Mrs.S.A.C.Kulathilaka Mr.R.R.K.Nugapitiya Singapore Strategic Management Mr.Wasantha Ekanayake General Singapore Public Finance Mr.S.M.Dayarathna Philippines New Issues in Trade Policy Mr.D.G.G.S.Dayanath Assistant Japan JDS Masters Programme - Mrs.G.C.N.Fonseka Deputy China Finance & Economic Administration for Developing Countries. Mr.S.M.Dayarathna Quatar Enabling Private Sector Growth Mr.R.R.K.Nugapitiya Mr.S.K.Kusalakumaran Deputy India Framework for Internal Control, Internal Audit and related Capacity Building 23