NATIONAL DEVELOPMENT PLANNING

COMMISSION

INTERNAL AUDIT REPORT 2ND QUARTER 2008: PERSONAL EMOLUMENT

INTRODUCTION
We submit below the Internal Audit Report for the 2nd Quarter for your information.

Purpose of Internal Audit

The purpose of Internal Audit is to assist the Commission’s management to achieve the
programme and organizational goals and objectives of the Commission through the
conduct of Audit and Professional Evaluation of the Commission’s activities and timely
communication of audit results.

Responsibilities of Management
To set policies, establish standards, design system and establish control within the legal
framework of the Commission to ensure that:

• Policies, standards and applicable Laws are complied with.

• Resources are safeguarded and use judiciously with due regard to economy and
efficiency
• Reported financial and programme information may be relied upon.
• Commission’s programme and operational goals and objective are being met.

It is Internal Audit Unit’s responsibility to determine whether:

• Statutory provision and Commission’s policies, standard procedures are complied

with.
• Commission’s established controls are adequate and provide the necessary degree of
reasonable assurance that resources are in fact safeguarded and use judiciously with
due regard to economy and efficiencies.
• Reported financial and programmes information are reliable
• Commission programme and operational objectives have been met.

PERSONAL EMOLUMENT

Trust Areas
The key thrust for the quarter is:-
• To pre-audit all payment vouchers.
• To conduct an Audit on Personnel Emolument.
• To ensure that salaries are paid to legitimate staff.

Scope of Audit:
• Our audit for the quarter was based on controls and compliance of salary payment.

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• The audit examination include review of salaries payments made to legitimate staff
under the following assertion:

- Occurrence
- Completeness
- Measurement
- Presentation and disclosure

• To test check the Arithmetical accuracy of records, the maintenance and accounting
for documents.

Methodology
• We extracted sample data of the salaries paid.
• Inspection of input data for additions and deletions.
• We observed distribution of pay slips to staff
• We investigated staff complains of anomalies in salaries payments.

AUDIT EVIDENCE OBTAINED

Occurrence:
• We examined documents that are required prior to mechanization to determine the
level of compliance and conformity to Internal Control procedures.
• We sighted authorized approved mechanization inputs of salaries.
• We confirmed that abstract of salary register is maintained.
• We verified whether the above-mentioned register is updated on monthly basis.
• We observed the distribution of pay slips to staff on monthly basis.
• We assisted in reporting anomalies to the Paying Agency
• We verified correction effected by CAGD.
• We ensured that all staff salaries were processed and paid by Controller and
Accountant General Department during the relevant period.

Completeness:
• We verified to ensure that all staff engaged fill New Entrant Form.
• We checked compliance and control of submission of all mechanized documents to
Controller and Accountant General Department (CAGD) for processing.
• We computed to ensure that appropriate rates of effecting statutory deductions have
been applied in conformity with the Laws.
• We confirmed that all mechanized payment vouchers (PV) are checked and certified
by the appropriate authorities monthly and returned to CAGD.
• We checked to ensure that all staff of the Commission are on the Mechanized Payroll.

Measurement:
• We checked to ensure that all Net Salaries are correct and within limited
• We checked to confirm that correct amounts (Net Salaries) are paid and located to the
period.

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Presentation and disclosure
• We ensured that salaries are described as personal emoluments in accordance with the
applicable reporting framework.

Exit Conference
We discussed our findings and observation with the Chief Accountant for his
comments/explanation.

WEAKNESS
The reportable condition is:-

Condition:
Our inspection of the mechanized payroll revealed that Mr. R. Y. Geraldo, a former
employee of the Commission who have been posted to other organization has his name
on the Commission payroll as at 31st May 2008.

Criteria:
Management practice requires that employee should have his/her name on the payroll of
the organization posted/ transfer red to.

Cause
Oversight on the part of Account Unit.

Effect:
Personal Emoluments Cost would be overstated in relation to actual labour force, leading
to misstatement of personal emolument cost in the Finance Statement as well as an
increase in the staff strength of the Commission.

Recommendation
We recommend that management should delete his name from the Commission’s payroll
and sent it to the organization transferred/posted to.

Response
We have taken steps for the deletion of his name from the Commission payroll and
ensured that he had not been overpaid his salary.

CONCLUSION
We are of the opinion that, with the exception of reporting, the Commission has adhered
to sound payroll management as well as standard/Procedures compliance.

ACKNOWLEDGEMENT
We wish to take this opportunity to express our sincerest appreciation to the Account
Unit for their contribution to the success of the Unit’s plans.

Submitted, Madam.

ISAAC A. AYIKWEI
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(INTERNAL AUDITOR)

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