THE NATURE OF INTERNAL
AUDIT SYSTEM IN EDUCATIONAL INSTITUTION REGULATORY ORGANIZATION
Given today complex and rapidly changing
management climate, most large companies, major institution and governmental
agencies are implementing continuous improvements to achieve efficiency and
assure all concerned parties of solid corporate governance.
The nature of interval audit system simply means
explaining some of the key terms in the
project topic, the internal system.
According to the Institute of Internal Auditors
(IIA) definition of internal auditing the internal audit system should provide
independent, thoroughly timely and objective result of quantitative and
qualitative testing to senor management and in essence, help evaluate
organizational risk management.
Auditing is an independent checking and investigation of the books of accounts
and vouchers of a business with a view
to enabling the audit to report whether the balance sheet and profit and loss account are
properly drawn up so as to show a true and
fair view of the state of the
affairs and the best of the information and explanations obtained by the
Auditors and that they comply with the rules laid down by SSAP (Statements of Standard Accounting
Practice) and other statutory regulations.
Audit is of two types, namely.
Internal audit is a review of the operation
procedures and records of the business internal auditing is itself an internal
control which operates by appraising and reporting on the effectiveness of the
other controls. Thus, its main objectives is to assist management in discharging its responsibilities and to
evaluate compliance with corporate
procedures. The role of internal auditors therefore, is to provide an
overall assurance to management that all key risk within an organization are
managed effectively so that the organization can achieve its strategic
External Audit: The external auditors are officers
from supervisor agency or independent firm to examine accounts, document
independently. However, this project topic is restricted to internal audit
system, taken the National Board for technical education as a case study.
Trust in the process of financial accounting and auditing is been undermined by
our present day high-profile corrupt practices in major institutions and
organizations. Thus as a result is the seeming
failure of internal audit system
not giving value for the finances of the educational institutions and
the resulted effects is responsible for
the poor quality delivery of education. So also is the mechanism put in
place to curb these corruption has not been effective.
In response, it has become necessary to undertake,
examine and evaluate the problematic nature of internal audit system in
educational institution and regulatory organization and to see whether the
process cold be effective or not.
objectives of this resource project are as follows: -
To Evaluate the
nature of internal audit system in an educational institutions regulatory
To determine the
effectiveness or other wise of such internal audit system.
The research study shall proffer answer to the
What is the nature of
the internal audit system in a regulatory authority?
Does the internal
audit system in a regulatory authority effective or not?
Significance of every research project are set of
standard that outlines, the perceived or real contributions of the research.
This research study would be of immense benefit to
the accounting profession, policy makers and leaders at the helm of affairs in
various institutions because, the ideal solution will of course be the
achievement of a proper internal audit
system that will assist public and
private organization to meet overall corporate
objectives by establishing a systematic and discipline approach to
assessing, evaluating and improving the quality and effectiveness of the
Also, this study will provide a rationale for introducing
programmes designed to aid
student and researchers who intend to
make research on internal audit system.
OF THE STUDY
The scope of the study shall be limited to
evaluating the nature of internal audit system and find out whether this system
is effective or not in the educational institution, regulatory authority.
Furthermore, the research study shall cover on the
National Board for Technical
Education (NBTE) Kaduna as a case study.
BACKGROUNDING OF THE CASE STUDY
The National Board for Technical Education (NBTE)
was established by Decree (now Act) No. 9 of
January 1977. The decree empowers the board to among other things: -
Advice the federal
government on and coordinate all aspect of technical and vocational education
falling outside the universities.
on the national policy necessary for training of technicians, craftmen and
other middle level manpowers.
consultation with the National manpower board, the industrial training find and
such other relevant bodies the skill and middle level manpower needs of
the country in the industrial commercial and other relevant field of the
purpose of planning, training facilities etc.
Inquiry into and
advise the federal government on the
financial needs, for both recurrent and capital expenditure of
polytechnics and other technical institutions to enable them achieve the
objective of producing the trained manpower needs of the country.
Receive block grants
in accordance with such formula as may be noted that items iv and v above
particularly require audit control towards ensuring that financial and material
resources allocated to educational institutions under NBTE are done with are
highest conformity to government financial rules and regulations.
In addition, Decree (now Act) it of August 1985 entitled: National minimize
standards and establishment of institution” further empowers NBTE to prescribe
minimum standards, entry qualifications and accreditation of all academic programmes
on all the institution under purview or supervision of the Board. Another
amendment to the above decree (Now Act)
gave birth to decree number a of January 1993 which empowers the board of recommend the establishment of polytechnics,
college of agriculture and technical colleges in Nigeria.
The membership of the board cut across ministries of education, labour, agriculture,
industry, college of agriculture and some professional bodies among others.
It has six (6) standing committees namely.
promotions committees (A&PC)
and development committees (PE&DC)
Academic planning and
Research committee (A&RC)
Finance and financial
purpose committee (which has a lot to do with this research project) and
Each committee has specific function relevant to
the smooth administration and the discharge of the statutory functions of the board assigned to it.
boards organization indicated
that it has four operational department namely:
department comprising establishment management services and manpower and
comprising polytechnics, colleges of agriculture and science, technical
institution and post HND/Polytechnics
Planning Research and
statistics department comprising academic planning, physical planning, research
and statistic divisions and three (3)
other units, computer services, maintenance and transport and SIWES,
Finance and supplies
department comprising main Account Budget and Budgetary and stores divisions.
The above four operational department are being
over-seen and coordinated by the office of the executive secretary
Internal Audit unit (
the unit that is directly relevant to this research project, and which we will
study further in the course of this project).
UNESCO – Nigeria/TVE
As indicated in term iii. Above, the internal
audit unit of NBTE is a very vital unit or Division of the Board under the
office of the executive secretary. The unit is structural into four sections in such a way that all the
function of the internal audit system are clearly defined and appropriately
staffed to take care of the various activities of the board. The
sections were not rigidly structured and
have been subjected to review in a number of items. Such
reviews were usually approved by
the management to handle some recurring work of internal auditing programmes
which comprehensively covers all aspects of internal audit system that are
equally subject to review.
The main structures of the board internal audit
system unit division are as follows.
section: This section directly review the operational control associated with administering the overall
activities of the board.
section: this section directly review
the activities related to resource allocation utilization and the control
process to provide the assurances that financial resources are obtained
economically and used efficiently and effective in the accomplishment of the
and down rules and objectives. It also deals with the provision
acquisition of stores.
section: this section deals with control
within and around the accounting system installed
to ensure that all financial transaction
and activities are accurately recorded in the system, completely and promptly,
carryout a complete and continuous audit of the account and records of
revenues, expenditure, stores and other properties of the board towards
ensuring accountabilities and as in insurance against fraud and other
section: This section deals with the review of physical control for the
protection of the boards assets and
ensuring some safeguards assets and properties.
staffing of the internal audit
unit of the board is said to be
fairly good with a principal internal auditor heading the
unit assisted by seven other
officers varying ranks and cadres of
HATISS 07 to HATISS 11 and some seven other supporting staff. The summary of
the numerous functions of the board internal
audit and in line with the traditional audit functions and objectives
include among others:
provision of timely
advice to the executive secretary on government financial regulations and audit
checks to prevent, detect and report any observation irregularities.
payment vouchers with proper supporting document
reporting cases of malpractices
of terminal benefit of retired/deal staff.
Pre-auditing of all
staff claims to ensure that they were in
line with the financial various
standing ad-hoc committee staff
workshop/accreditation cost estimate
retraining of board internal auditors
Liasing with external
the revenue base of the board
salaries before payment
all goals purchased by the board before
And any other audit
functions that may be assigned by the executive secretary from time to time
i. Audit: Accounting to
Webster business dictionary is an examination of accounting document and of supporting
evidence for the purpose of reaching propriety fairness, consistency and
conformity with accepted principles.
ii. Internal audit: This
refers to the institutionalized examination of accounting procedures with an
audit control: they are measure adopt for effective auditing in an organization
board: National Board for technical
regulation: these are rules, regulations and
guideline governing financial transition.
: It refers to confirmation
of goods and merchandized supplied in terms of value for money quality and