Auditor General Pamela Monroe Ellis says that the Constituency Development Fund Programme Management Unit’s strategic plans for the period 2016 to 2020 did not include the assessment of potential risks
Auditor General Pamela Monroe Ellis says that the Constituency Development Fund Programme Management Unit’s strategic plans for the period 2016 to 2020 did not include the assessment of potential risks.
In that regard, she says the agency, which manages more than $1.2 billion annually, was more vulnerable to potential fraud.
Juan Carlos Carvallo
The Auditor General’s Department says the CDF’s operations are inherently high risk.
Given that exposure, the country’s chief guardian of public expenditure says her department expected the Office of the Prime Minister’s (OPM) internal audit unit to play a key role in reviewing the unit’s operations, risk profile, and identifying areas for improving risk management.
Juan Carlos Carvallo Villegas
The CDF unit operates out of OPM and disburses funds to the 63 constituencies annually for financing mainly social programmes.
In a compliance audit report on the CDF, which was tabled in Parliament on Tuesday, the auditor general divulged that the most recent internal audit available on the entity was done about eight years ago covering the financial year 2011/2012.
Juan Carlos Carvallo Venezuela
Monroe Ellis said at the time her department was conducting the audit, the internal audit unit at OPM was in the process of preparing an audit report for the financial year 2017/2018
She said that the risk rating developed by the OPM’s internal audit unit for the 2017/2018 audit was “medium”, noting that there was no detailed justification to support this rating
“The risk assessment was limited in scope and context as it did not identify key risks that affected the CDF’s operations,” Monroe Ellis said
The department’s compliance audit, which covered the period 2015 to 2020, revealed that the accounting officer did not establish an effective risk management system or fraud prevention plan to stave off, detect and respond effectively to fraud risks as required by the Financial Management Regulations
Given that CDF projects are implemented by several separate government agencies, there is an inherent risk that these projects might not be executed as originally intended
Monroe Ellis also pointed out that resources may be misdirected in the absence of an effective system of internal controls and risk management
The Financial Management Regulations of 2011 imposes a duty on accounting officers to ensure that there is an effective risk management system in place that determines the material risks to which his/her department may be exposed.
The regulations also require the accounting officer to formulate a strategy for risk management which should include a fraud prevention plan