Improving Liberia’s Public Sector Management: The Role of the Internal Audit Agency
The increased attraction of foreign direct investments to post-conflict Liberia and the Government’s efforts to reduce poverty and make Liberia a middle-income country by 2030 will have little impact if public sector management remains wanting. Effective public sector performance will greatly determine the extent to which Liberia steadily remains on the road to reconstruction and development.
Corruption and inefficiency continue to be stubborn obstacles to good public sector management. In their efforts to reduce corruption and promote the proper use of public sector resources, multiple government entities—including the Ministry of Justice, the Liberia Anti-Corruption Commission (LACC), the Civil Service Agency (CSA), the General Auditing Commission (GAC), the Governance Commission (GC) and the Public Procurement and Concessions Commission (PPCC)—are severely challenged by entrenched bad practices in the public sector. Many of these institutions are putting up their best fight against public sector corruption and inefficiency, but the battle is overwhelming, to say the least.
Any hope for good public sector management?
Some hope seems to lie in the Internal Audit Agency (IAA), an outgrowth of the Internal Audit Secretariat (IAS), which was created by the Liberian Government to help improve public sector performance. The IAA has the legal mandate to “Establish and direct internal audit functions within all branches of Government including the Executive, Legislative and Judiciary; and all public entities such as, public corporations, autonomous agencies, autonomous commissions, Government ministries and the Central Bank of Liberia.” The mandate also charges the IAA to “Advise and/or provide assurance that financial and operational activities of Government are in compliance with laws, policies, plans, standards and procedures that are applicable.”
In line with this legal responsibility, the IAA has been assuming and reorganizing the internal audit functions of government agencies, and working with them to improve their financial and operational processes. Through risk assessment, assurance, advisory and other audit functions, the IAA works with government agencies to improve performance in priority areas such as payroll and personnel management, bank reconciliations, pre-auditing of disbursements, assets management, accounting and budgetary controls, prior audit recommendations and procurement. These efforts are contributing to better outcomes in the public sector and saving the Government of Liberia huge sums of money and other resources.
In 2011, the IAS—the precursor of the IAA–started the deployment of internal auditors in eight government ministries. Today, IAA is working with 35 government ministries and public corporations. IAA auditors are recruited through rigorous testing and interview processes conducted with the help of diverse panelists. The auditors are predominantly college-educated. Many hold advanced degrees, while some have professional certifications such as Certified Fraud Examiners (CFE) and the Association of Chartered Certified Accountants (ACCA).
The Challenges of Change
The deployment of internal auditors at Government agencies has received mixed responses. Most agency heads have embraced the assistance of the IAA. They generally consult with the internal auditors as often as needed on financial and operational issues. Some agency heads would hardly authorize certain transactions unless the transactions have been cleared by the internal auditors. Understandably, a few other agencies have been struggling with the new phenomenon of independent internal auditors.
The IAA understands and expects these struggles—seeing them as a normal part of the change process. Change can be uncertain, complex and difficult, thereby engendering fears and suspicion. Therefore, the IAA has modified its baseline and continued education training curricula to help its auditors to effectively handle difficult institutional change reactions. Embedded in the new curricula are critical soft skills and other content areas such as conceptual and interpersonal competence, communications diplomacy, organizational culture, group dynamics, complexity of change, resistance to change, fear, stress reduction, conflict resolution and transformational leadership.
GAC and IAA: The Difference
It’s often asked why the IAA is needed when the GAC already exists? The GAC is an external auditor. At specified times, it goes in and audits government entities. Important as this exercise might be, sometimes damage (e.g., falsified information, resource abuse, theft or regulatory breach) has already been done.
In contrast, the IAA is an internal auditor. It operates as an independent but integral part of the institutions in which its auditors are deployed. It goes into a government agency and assumes the internal audit function. The IAA reviews, studies and follows the financial and operational activities of an agency. It then advises and helps the agency to meet the required regulations, policies and procedures. For example, a GAC review may come at the end of a project, while an IAA review may happen in real time, thereby increasing the opportunity for new decisions and actions to be taken for a project to succeed.
The socio-economic development of Liberia depends greatly on the efficiency and effectiveness of the public sector. Due to the current state of Liberia’s public sector, a lot of help is needed to contribute to the transformation of Liberia, as well as raise the nation’s living standard to a middle-income level. The adoption of the IAA concept, which is gaining traction in Africa and other developing regions, could not happen at a better time in post-conflict Liberia. The IAA represents the latest tool in the Government’s toolbox to make the public sector more effective, efficient, transparent and accountable.
About the Author
Zobong consults with the IAA. He also teaches in the Graduate Program in Education at the University of Liberia. Zobong holds a doctorate in Educational Leadership from Northeastern University in the United States.