GIZ’S GOVERNANCE FOR INCLUSIVE DEVELOPMENT STUDY TOUR FOR REGIONAL INTERNAL AUDITORS ON BEST PRACTICES IN GERMANY. – Oti Regional Coordinating Council

GIZ’S GOVERNANCE FOR INCLUSIVE DEVELOPMENT STUDY TOUR FOR REGIONAL INTERNAL AUDITORS ON BEST PRACTICES IN GERMANY.

INTRODUCTION

The Accountability and Resource Governance (ARG) is one of the five (5) components under the GIZ Governance for Inclusive Development (GovID) Programme which collaborates with Internal Audit Agency and Ghana Audit Service to provide Capacity Building for Auditors and Audit Committee Members and Heads of Covered Entities, Monitoring of Status of Implementation of Audit Recommendations and other mandatory functions of the two institutions at the national level.

The GovID Programme is also being implemented in eighty (80) partner district out of one hundred (100) partner district across the country through the collaboration with Internal Audit Agency and the sixteen (16) Regional Coordinating Councils to improve the implementation of audit recommendations, complying with guidelines issued by Internal Audit Agency, and accountability mechanism.

The GovID Programme have been supporting these institutions for the pass four (4) years and the programme will be ending by the end of September 2023. Based on that, it was decided to embark on a Study Trip to Germany to benchmark institutions in Germany with shared mandate, to apprise with best practices and strategies that have enable Germany to develop a robust internal control system and structure that ensure effective and efficient use of public resources.

Twenty (20) officers from GIZ, Internal Audit Agency, Ghana Audit Service and Regional Coordinating Council embark on the study trip to Germany from 26th August to 3rd September 2023.

OBJECTIVE

The objective of the study trip to Germany was to visit State Institutions of the Federal Republic of Germany to:

  • Understand the legal and institutional framework that has enable Germany to maintain an effective internal audit structure.
  • Acquire technical knowledge to improve the performance of internal audit in the Public Sector of Ghana.
  • Understand the level of collaboration and cooperation between the internal audit structure and other state institutions responsible for public accountability.
  • Understand the framework and system for ensuring implementation of audit recommendations
  • Build network for sharing information and knowledge on new internal audit practices.

PARTICIPANTS

Twenty-one officers was selected for the study trip, however the officer from the Volta Regional Coordinating Council did not get the visa to Germany due to the information provided by the officer.

Nevertheless, twenty (20) officers had the visa to Germany and embark on the study trip to Germany from 26th August to 3rd September 2023.  Details are below:

NO.NAMEINSTITUTION
1.Harriet GyanGIZ
2.Emmanuel Aboagye OdumGIZ
3.Alhassan FuseiniInternal Audit Agency
4.Philomina Sueley Max-BobieInternal Audit Agency
5.Roberta Naa Amoa NtimGhana Audit Service
6.Abdulai SaaniNorthern Regional Coordinating Council
7.Sheila Rosetta ArthurAshanti Regional Coordinating Council
8.Nsiah Blankson KwekuBono East Regional Coordinating Council
9.Kambey Solomon PiilazaayaUpper East Regional Coordinating Council
10.John E.A.K. Kula FawaazUpper West Regional Coordinating Council
11.Ishmael Akwo KafariAhafo Regional Coordinating Council
12.Yakubu Baba Seidu KamaraNorth East Regional Coordinating Council
13.Ishmael Anum MensahGrater Accra Regional Coordinating Council
14.Stephen QuarshieWestern Regional Coordinating Council
15.Mukaila Waxy BalukiaCentral Regional Coordinating Council
16.Anthony Amartey HadjorEastern Regional Coordinating Council
17.Ali SulemanaWestern North Regional Coordinating Council
18.Eric YanksonOti Regional Coordinating Council
19.Michael Boadum NsiahBono Regional Coordinating Council
20.Mohammed ArimiyawSavanna Regional Coordinating Council

FLIGHT ARRANGEMENT

The GovID Programme made all the flight arrangement for the twenty (20) participants; however, they could not get one flight for all participant but was able to get to two (2) flights (Turkish Airline and KLM) and participants were divided. Details below:

NO.TURKISH AIRLINEKLM AIRLINE
1.Harriet GyanEmmanuel Aboagye Odum
2.Philomina Sueley Max-BobieAlhassan Fuseini
3.Roberta Naa Amoa NtimAbdulai Saani
4.Sheila Rosetta ArthurNsiah Blankson Kweku
5.John E.A.K. Kula FawaazKambey Solomon Piilazaaya
6.Mukaila Waxy BalukiaIshmael Anum Mensah
7.Ishmael Akwo KafariStephen Quarshie
8.Michael Boadum NsiahYakubu Baba Seidu Kamara
9.Mohammed ArimiyawAnthony Amartey Hadjor
10. Ali Sulemana
11. Eric Yankson

STUDY TRIP ACTIVITY

The Turkish airline and KLM airline groups all departed from Accra the capital of the Republic of Ghana on 26th August 2023 evening and arrived at Berlin the capital of the Federal of Republic of Germany on 27th August 2023 afternoon. All participants was checked in to NH Collection Hotel in Berlin.

On 27th August 2023 evening a welcome dinner was organised for all participants and the consultant for the programme was introduced.

28th August 2023 – Berlin (NH Hotel Conference Room)

Presentation 1

Facilitator: Ingo Sorgatz – Internal Audit Expert (Consultant)

Topic: INTERNAL AUDIT IN PUBLIC SECTOR IN GERMANY

            INTRODUCTION AND OVERVIEW (MINISTRY OF INTERIOR)

This session provided an in-depth examination of the role of internal audit within the Federal of Republic of German Public Administration System. The discussion encompassed various aspects such as internal controls in the Public Sector of Germany, strategies to prevent corruption and fraud, transition from ex ante control to ex post inspection, shifting Focus from legality and regularity to efficiency and economy and emphasis on transparency and prevention.

The session also defined the Internal Control System (ICS) according to COSO (Committee of Sponsoring Organizations of the Treadway Commission). ICS-claims include effectiveness and efficiency of operations, reliability of financial reporting, compliance with applicable laws and regulations, and safeguarding of assets. Additionally, milestones of risk management were discussed, covering risk areas such as risk identification, assessment, coping, and monitoring, with a focus on risk communication.

Presentation 2

Facilitator: Dr. Anna-Maija Mertens – Executive Director

Topic: INTERNAL AUDIT AND COMPLIANCE – “IT’S A MATCH!” (TRANSPARENCY INTERNATIONAL -TI)

This topic focused on the principles of transparency and integrity within the German public sector. It emphasized the art of making individuals adhere to rules and be accountable while empowering them to do so. Compliance’s role in decentralizing democratization and transforming organizations was highlighted. Key elements of a compliance program were outlined, including the establishment of a whistleblower system, adoption of the three lines model, fostering a speak-up culture, and promoting private sector cooperation.

Presentation 3

Facilitator: Major Hendrik Knop – Internal Audit Expert

Topic: AUDITING IN THE FEDERAL MINISTRY OF DEFENCE (FMOD) IN CONSIDERATION OF TRANSPARENCY AND INTEGRITY (FEDERAL MINISTRY OF DEFENCE)

The third presentation concentrated on auditing practices within the Federal Ministry of Defence, particularly in ensuring transparency and integrity. Key strategies discussed included setting clear rules of responsibility, maintaining evidence-proof document filing systems, and establishing robust internal controls. The session shed light on the unique challenges faced when auditing government agencies responsible for national security.

Facilitator: Ms Anne Schwalme

Topic: LOBBYISM BY LOBBY CONTROL

The day concluded with a walking tour around government agencies, accompanied by a discussion on lobbyism by LobbyControl. It was noted that government districts host not only political institutions but also various lobby agencies. The proximity of lobby agencies to political institutions enables more effective lobbying and advocacy for their concerns.

The few key points and learnings.

  • The Internal Audit activities or practice has been done on recommendations from the Government until last two (2) years where the Government issue a directive for all Federal States Institutions to have Internal Audit Units.
  • Ex-ante (Pre-audit) – In Germany Internal Audit Units conducts pre-audit but includes it in the Risk Base Internal Audit Plan.
  • The internal audit’s Risk-Based Annual Internal Audit Workplan is oriented towards managing risks and is approved by the Secretary of State.
  • Germany places a strong emphasis on robust internal audit practices to ensure accountability and efficiency in government operations. The importance of clear structures, methodologies, and continuous professional development in this approach was highlighted.
  • Ministry of Interior oversees Internal Audit Activities in Germany, and they regulate the Internal Audit activities, set standards and methodology for the Internal audit activities.
  • The Federal States do not have Audit Committee in place because the Management of the Institutions ensure the implementation of audit Recommendations.
  • Internal Auditors does follow-up on their own reports to check the status of Implementation of the audit recommendations.
  • The media of the Federal Republic of Germany is very interested in Audit infractions, which makes management of the institutions to implement the recommendations of the audit recommendations to avoid them been mentioned in the media.
  • Germany’s commitment to transparency and integrity is evident through stringent regulations, strict enforcement, and a culture of accountability. The German model serves as a valuable benchmark for fostering ethical practices in the public sector.
  • The TI uses naming and shaming process to get the institutions to be transparent in their activities.
  • For the Institutions to be effective and transparent there is the need of Institutional collaborations and forming of Coalitions.
  • There should be updates on the laws and regulations to support Transparency activities in states institutions.
  • Institutions or employees are to be involve in the process of designing the compliance programme.
  • Auditing in sensitive areas, such as the Federal Ministry of Defence, presents unique challenges but is vital to maintaining transparency and accountability, even in classified operations. Germany’s approach to auditing in such contexts incorporates security measures while ensuring oversight and integrity.
  • The presence of lobby agencies in government districts underscores their influence on government decisions. Proximity to political institutions enhances their ability to advocate for their concerns effectively.

29th August 2023 – Gottingen (Private University of Applied Sciences)

Presentation 1

Facilitator: Prof. Dr. Angermuller – Financial Management, Hochschule Harz

Topic: CURRENT DEVELOPMENTS IN INTERNAL AUDIT: GLOBAL INTERNAL AUDIT STANDARDS AND HOT TOPIC.

This lecture addressed the effects of the Corona-Pandemic on the work environment, leading to significant changes such as remote work, shorter planning horizons, and increased digitalization. It delved into current developments in internal audit, focusing on the Global Internal Audit Standards (formerly known as The International Standards for the Professional Practice of Internal Auditing) milestones and other pressing topics.

The few key points and learnings.

  • The pandemic has reshaped the work environment, necessitating adaptations like remote work, shorter planning horizons and accelerating digitalization.
  • Global Internal Audit Standards: Understanding the evolving standards for the professional practice of internal auditing.
  • Top Risks: Awareness of the top risks organizations currently face, including cybersecurity and data security, changes in laws and regulations, supply chain vulnerabilities, organizational culture, and health, safety, and security.

30th August 2023 – Bonn (Bundesanstalt fur Immobilienaufgaben – BimA) Institute for Federal Real Estate

Presentation 1

Facilitator: Mr. Jorg Uffelmann – Head of Internal Audit – Institute for Real Estate

Topic: INTERNAL AUDIT IN A PRIVATIZED PUBLIC ENTITY

The third day’s first lecture introduced us to the organizational structure of the Institute for Federal Real Estate (BImA), Germany’s central services provider for federal government property. The Audit and Governance division reports directly to the Executive Board. The Institute of Internal Auditor’s three lines model was highlighted, with internal audit positioned as the third line, playing an independent and objective assurance and advisory role in achieving objectives. The following topics were covered:

  • Audit planning process
  • Audit process circle
  • Audit process sequence
  • Audit reporting with risk-based monitoring and implementation of measures.

Presentation 2

Facilitator: Mr. Ahmed Demir / Ms. Christine Rabenschlag

Topic: THE ROLE OF THE SUPREME AUDIT INSTITUTION, BUNDESRECHNUNGSHOF (FEDERAL COURT OF AUDIT)

The second lecture took place at the office of Bundesrechnungshof (Supreme Audit Institution), the supreme federal authority for audit matters in the Federal Republic of Germany. The lecture centered on its role, scope of activities, and mandate to audit the accounts and examine the performance, regularity, and compliance of the Federal Government’s financial management. It reports to both houses of parliament and the federal government. The lecture further explored the organizational structure of Bundesrechnungshof, its extensive audit rights, relationship with the Public Accounts Committee (PAC), the triangle of financial control, its involvement in the budget cycle, key role in cooperation with parliament, content of the annual report, and the processes of PAC’s deliberations on the annual reports.

The few key points and learnings.

  • Government Assets Portfolio: Understanding the total assets portfolio of the government.
  • Enforcement of Audit Recommendations: The Federal Court of Audit lacks the authority to enforce its recommendations. The responsibility for enforcing the implementation of audit recommendations falls to the Public Accounts Committee (PAC).
  • Information Dissemination: The Federal Court of Audit provides the public with information regarding their audit reports as soon as they are laid before the house of parliament.
  • Independence of Supreme Audit Institution: The Federal Court of Audit (Supreme Audit Institution) is not subordinated to the federal government, ensuring its independence and insulation from political influence.

31st August 2023 – Frankfurt (Ministry of Finance – Rhineland-Palatinate State)

Presentation 1

Facilitator: Peter Weis

Topic: INTEGRITY BEST PRACTICE IN THE STATE

The Secretary of state (Rhineland-Platinate) Dr. Stephan Weinberg gave a welcome address on behalf of the State and assure participant of their continue support to Internal Audit practice in the State.

The day continued with lectures on integrity best practices in the state of Rhineland-Palatinate. The Federal of Republic of Germany have 16 Federal State and they are called Landers as well. The Rhineland-Palatinate is one of the Landers. The Landers are autonomous by having their own Government, Judiciary, Parliament, and Administrations. The Administration of the Rhineland – Palatinate have ten (10) Ministries, Upper Authorities, Basic Authorities and State Own Enterprises. The Ministry of Finance of Rhineland-Palatinate have six (6) Departments, State Agency in charge of Salaries and Pensions, Administration Tax Agency in Charge of tax, Upper Tax office in charge of HR, Organisation, tax laws, data centre, central treasury, Tax Offices in charge of local tax collection, School for Tax in charge of education for junior civil servant etc. Key areas covered included:

  • Understanding the structure of Germany as a whole.
  • Examining the administrative structure of Rhineland-Palatinate.
  • Insights into internal control and compliance practices.
  • The role of internal revision in the landers’ Ministry of Finance and its significance.
  • Cross-border cooperation with other landers.
  • The establishment and functioning of a transparency platform.
  • Details of the whistleblower protection act.
  • Risk management in the context of corruption.
  • Systematic risk management from gross risk to target risk.
  • The integrity plan for risk management.
  • The action plan for risk management.

Presentation 2

Facilitator: Peter Weis – Ministry of Finance – Rhineland-Palatinate State

Topic: WHISTLEBLOWING – HOW TO ESTABLISH AN INTERNAL REPORTING

            POINT

The Federal of the Rublic of Germany have a Whistleblower Protection Act which started from a Directive to Act. The Federal delayed in passing the law and was charged to pay a fine established by the European Union Commission.

There are Reporting guidelines and procedures for protecting the reporter.

Presentation 3

Facilitator: Mr. Alexander Beer – Ministerial Councillor

Topic: The Court of Auditors of the State of Hesse (CASH): Auditing Experiences (On the Basis of Last Published Annual Reports) – Hessen Land

The second lecture covered the primary role, legal basis, tasks, organization, and activities undertaken by the Court of Auditors of the state of Hesse (CASH). The lecture also delved into the history of CASH and shared auditing experiences based on its last published annual report.

The few key points and learnings.

  • The Ministry have Internal Revision in 91% in institutions under the Ministry.
  • Internal Audit (Internal Revisions): All Ministry of Finance (MoF) in the 15 landers are subject to internal audit (internal revision) except the MoF in Rhineland-Palatinate, which is subject to only external audit control by the Court of Auditors. The absence of internal audit in the Rhineland-Palatinate MoF is due to the lack of a legal provision to establish internal audit in this ministry.
  • Rhineland-Palatinate has established a transparency platform where 14 legal fact groups, such as ‘Grants to the public sector from an amount of EUR 1,000,’ among others, are published. Citizens can also request information as long as it does not violate privacy or confidentiality.
  • The Ministry annual meetings on Internal Revision and it is in two (2) groups, Ministry and Tax Administration.
  • The Ministry give Benchmarks or targets to the Tax office which oversees local tax collection.
  • The School for Tax build the capacity of the Junior Civil Servants in the Lander.
  • Transition from Whistleblowers Directive to Whistleblower Protection Act: The Whistleblower directive was enacted on 23/10/2019 and has transitioned into a Whistleblower Act, which came into force on 02/07/2023.
  • Platforms for exchanging information, experiences, and knowledge-sharing among internal auditors (internal revisions) of the landers are established at annual conferences.
  • CASH is an independent part of state financial auditing, subordinate only to the law and free from political directives. Adequate budgetary allocations are made to support CASH.
  • The staff of CASH consists of professionals from various backgrounds, including lawyers, economists, engineers, technical college graduates from diverse disciplines, and specialists from all administrative areas.
  • CASH submits a report on the budgetary and economic management of the State of Hesse to the Federal Parliament and the State Government. The findings are also shared with the public at a press conference.
  • CASH lacks executive authority and, therefore, does not possess direct authority to impose sanctions. Issues requiring prosecution are referred to the appropriate prosecutors for further action.
  • Independence of the Landers (Regions): Each region (lander) operates independently and may be governed by different laws.

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