Massive project defects detected by audits

Boitshepo Majube | Wednesday February 26, 2014 00:01

 

 

Kedikilwe stated that audits carried out from December 2010 to March 2013 uncovered 62,717 minor and major project defects.

He stated that the Quality Audit Teams in place to scrutinise claims have had substantial positive effect.

“It is estimated that the first year of inspections saved Government well over P100 million,” he said.

He pointed out that without auditing this would have been resources gone down the drain, and government is committed to continue monitoring and improving on the country’s compliance to auditing standards. 

“In this regard auditors should be friends of all and sundry; for promotion of transparency, best practice, ethical standards, efficiency and viability,“ he urged.

Kedikilwe said Botswana has an active, growing and buoyant Bourse, in the form of the Botswana Stock Exchange. “Like anywhere in the world, stock exchanges subsist on accurate information,” he pointed.

He further stated that since information is the lifeblood of capital markets, any deliberate effort or failure to disclose to the investing public, pension funds and venture capitals, information that has integrity about where they are from; where they are and what the future holds, is bound to create anxiety among investors and eventually distort share prices.

“This state of affairs is not desirous to our Stock Exchange,” Kedikilwe said pointing out that in this regard, it is critical that internal auditors should be thorough to ensure the integrity of company information, in particular, as well as in contributing to the overall economic development of the country.

“I therefore underscore the importance of a harmonious working relationship between the profession on the one hand and investors in the Botswana Stock Exchange, on the other,” he said.  Kedikilwe said parastatals are conscious of government expectations as to what they ought to deliver in terms of revenue or earnings.  “Sometimes the pressure to meet a certain level of revenues, or to attain a certain target of profits, can be too much to bear for management in such State Corporations,” he said, noting that in some instances the job security and remuneration packages might be dependent on the achievement of such targets.

Kedikilwe said this pressure could be so exacting as to lead to the temptation, by management, to doctor financial reporting to present the appearance of meeting such targets and goals.  He said this therefore calls for sustained vigilance by Internal Auditors, to ensure that what the government receives as financial performance is actually accurate.

“The need for accuracy is even more imperative in this instance because public institutions are owned by the nation at large and the nation has a right to truthful information,” he said.

In this respect, Kedikilwe said internal auditors should be pro-active in organisations where they are professionally based, to ensure development of fraud response plans and the establishment of whistle-blowing structures.