A quiet revolution is underway in the Middle East, one which will help determine how governments are viewed by their citizens in the future, according to Deloitte.
In Deloitte Middle East’s latest issue of the periodical publication, A Middle East Point of View, the point is raised that accountability in the use of public money and efficiency in the delivery of services must be demonstrated as governments move toward higher levels of transparency. At the same time, larger and more complex operations demand greater competency and professionalism from internal auditors to minimize and manage risk.
“Whereas internal auditing in the public sector was once regarded as a simple administrative checking procedure, it should now be a cornerstone of good governance as it provides unbiased, objective assessments of whether public resources are responsibly and effectively managed to achieve intended results and also by promoting the appropriate ethics and values within the government entity. Internal auditors help government organizations achieve accountability and integrity, improve organizational performance management and instill confidence among citizens and stakeholders,” it said.
“However, to make the transition from merely ensuring compliance with rules and regulations to truly delivering added value requires more than just organizational changes,” said Hani Mounir Khoury, partner leading the Internal Audit service line at Deloitte in the Middle East. “A substantial shift in culture is required. In many settings, public sector staff is poorly paid and unmotivated, work ethics are weak and governance practices are ineffective. Additionally, many organizations lack the support from senior management and regulatory bodies, and the internal audit function is often not as independent as desired.”
There are five main pillars that are considered critical for building an effective internal audit function in the public sector. These are perception and ownership, improved processes and governance, legislative support, improved incentives and a commitment to change.
Countries just beginning to make the change to value added internal auditing may benefit from studying the experiences of those that have recently made the transition. Crucial elements that should be examined include leadership ethics, government support, a proactive focus and staff development.
“Bringing about the necessary changes in culture, perception, or even internal audit services themselves demands a long-range commitment from leadership at the highest level,” said Hani Mounir Khoury. “Strong, active leadership support to improve governance is the over-whelming prerequisite for successful reform of internal auditing in the public sector. For sustained change, internal cooperation is not enough. External stakeholders and policy- and decision-makers need to be supportive and must be kept aware of changes, reforms and improvements in internal auditing, so they will take into account the contributions internal auditing can offer.”
The issue of internal audit in the public sector is one of nine hot topics explored in depth in the latest issue of Deloitte’s Middle East Point of View.