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internal review machinery should report direct to a high level in the organisation concerned. The purpose of such machinery is to increase efficiency rather than to root out wrong doing. Nevertheless, it can lead to the detection of improprieties and its existence is a deterrent against them."
3.15 Forms of internal audit have been practised in Government for several years, e.g. in the Public Works Department. It began with an independent unit charged with responsibility for carrying out spot checks on works contracts, departmental tendering, contractual procedures and routine controls to establish that these conformed to service-wide regulations and internal departmental instructions. After a trial period a policy change resulted in the unit moving towards selective audit studies relating to the effectiveness of the department's resources of staff, equipment and money.
3.16 Later, the concept was again extended and broadened and emerged in the form of
a "Management Services Unit". In addition a number of "Contract Advisers" were appointed to various offices of the Department. The role of the P.W.D. Management Services Unit is to advise the Directorate on all matters relating to the efficiency of departmental activities. The Unit is staffed by officers specialising in "organisation and methods" who undertake assignments related to specific areas of work or procedures common to all Offices of the Department.
3.17 Contract Advisers are required to perform a dual role combining an advisory
service on contractual matters and special internal audit functions which include independent spot checks at work sites on measurements, records, materials for work in progress, etc., either within a particular F.W.D. Office or under the control of consultants, private quantity surveyors or private architects. They are responsible to their Head of Office but are permitted direct access to the relevant Director should this be necessary.
3.18 The general feeling determined from discussions was that the role of Contract
Advisers is desirable and positive, although the need to preserve a balance between their advisory role and their purely internal audit function is recognised in the Public Works Department. It is thought that the concept of Contract Advisers could, by suitable adaptation, be made applicable to any department exercising a range of technical or largely procedural functions.
3.19 Examples of internal audit mechanisms can be seen in other Government
departments. The Inland Revenue Department has an Internal Audit section", the functions of which are to test check assessments for legal validity and accuracy and to ensure that the established departmental principles of interpretation and practice have been followed. It also verifies compliance with departmental policy and procedures and draws attention to areas where it appears that modification to existing procedures could result in an improvement in output and efficiency. The work of this section, in turn, is included in the overall check of the department made by the Director of Audit in the course of his annual audit.
3.20 Yet another form of internal audit structure exists in the Prisons Department. The Inspector of Frisons4 is, among other duties, responsible for carrying out both formal and informal inspections and investigations into the management of all penal institutions. His inspections embrace all aspects of systems of
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"Administration of Capital Works Contracts Let By
2 See C.P.D. Report 37/75
Architectural Office" - 7 April 1977.
Departmental Report 1976-77 Commissioner of Inland Revenue" Para. 63.
3 See
4Based on
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C.P.D. Report 37/75 - "Prisons Department
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Staff" - 25 November 1977
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