IAE at the District Level

Reforms and decentralisation aimed to provide an integrated policy framework to clarify roles and responsibilities and ensure the efficient use of existing resources with clear goals, enhanced efficiency and equity in Rwandese service delivery. The IAF was introduced as means of enhancing accountability between citizens, policy-makers and service providers. The IAF at the district level facilitates monitoring and makes service providers more accountable (MINALOC 2011). Districts therefore exist as administrative organisations only in local government, with limited powers and responsibilities. However, they are responsible for implementing government program and development plans.

The IAF at the district level is required to evaluate operations and help organisations achieve their objectives. Figure 5.6 illustrates the structure of the IAF at the district level, with 1–3 internal auditor(s) employed in the entire IA functional unit.

Figure 5.6: IA structure at the district level.

The solid lines in Figure 5.6 indicate more than one reporting of an engagement to the district mayor and district council, and the dotted lines indicate that an engagement is

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reported once (these received final copies of the IA reports). The IAF at the district level reports functionally to the district council, which serves as the board of directors for the district. The district council has a subcommittee that acts as the audit committee and receives the final report of IA engagements. However, the IAF has access to the audit committee and can report to the committee all relevant matters. The district executive secretary is the auditee and receives both the draft and final reports. The final reports are then copied to the district council, provincial governor, office of the OCIA and the OAG (Participants 1, 2, 3 District, CEO, Audit Committee and the head of IAF).

Review, monitoring and supervision are conducted by members of the district council, who serve as audit committees. These members are appointed for political motives rather than IA professional considerations. Performing as audit committee for the District council is a task assigned to the members later. Some of them have no background in IA. The other review of IA work at the district level is conducted by the OCIA upon completion of the IA work and the submission of the IA report. The OCIA contribution to IA report reviewed helps the next IA activity not the actual report where the need for collections would be found (Participants 1, 2, 3 District, CEO, Audit Committee and the head of IAF). According to the IA ministerial order, internal auditors in Rwanda have unlimited access to the audit committee, and their intervention is significantly evident in the approval of IA business plans and after the reports have been produced. However, the audit committee’s intervention is always sought when required:

We have a challenge of the IA structure. For example, working alone on the IA structure in this organisation is quiet challenging, if am not careful and objectively focused I can easily be manipulated. I once conducted an IA assignment and the district mayor was not comfortable with the audit findings. He asked me to remove certain items from the report. I refused, then he threatened that I would lose my job and contacted the audit committee. When the audit committee intervened, the situation calmed down, I did not lose my job and the items in the report were maintained. (Participant 3 District, Head of IAF)

This statement reveals the sentiments generated by increased isomorphic pressures in an embedded setting. The conflict between the district mayor and the internal auditor

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is driven by isomorphic pressure. The district mayor wanted a false IA report to create a pleasant sense of identity to higher authorities as a response to coercive pressures, whereas the internal auditor was responding to normative pressures. The statement also suggests that the IAF has a sense of self-worth and aims to improve operations, which confirm staff motivation and a mindset of urgency, ownership and responsibility in service (Chemouni 2016; Mpunzwanall 2016). However, the statement reveals that there is a possibility of IA staff being manipulated.

The challenges of the IA structure at the district level have been stated by institutional agents (e.g., OAG) who advocated for the IAF to have more than one internal auditor. This led to a few districts obtaining two or three internal auditors; however, some still have only one internal auditor, and even those with two or three are all at the same level. One was elected as the team leader, but there were no benefits attached to the role. This person was underemployed and did not carry out the leadership task. This implies that, despite the institutional agents’ advocacy, there is still no review or supervision of internal audit activities conducted at the district level. Lastly, three internal auditors are not sufficient for IA activity demands (Participants 2, 3 District, CEO, Audit Committee and the head of IAF).

This suggests that there are normative pressures given the expectation of the IAF in organisations that engage in diverse activities at their operational centres. Critics argue that it is difficult to find employees with multiple qualifications to conduct or coordinate all activities. Thus, there is a higher possibility of dissatisfied employees, which leads to higher turnover of skilled staff (e.g., interview respondents at the semi- autonomous organisation stated that they lost ACCA-qualified staff because of dissatisfaction; Semi-Au Participant 3, Head of IAF) and poor performance. As a result, stakeholders’ expectations are not achieved, and the IAF is therefore ineffective.