Employee perceptions of the function of internal auditing in municipalities within the West Coast District

Abstract

According to the Institute of Internal Auditors (IIA) Global Internal Audit Survey on measuring the value of internal auditing (IA), "the fundamental principle of an IA role is that its significance is defined by its organisational value" and its value is expressed in its perceived contribution to the employees. The concern therefore arises whether the employees' regard the internal auditing function (IAF) at South African municipalities as adding value and whether such facilities can be considered helpful to them. South African municipalities are formed through the provisions of law, offering service to residents of South Africa by delivering a variety of basic services. IA activities in municipalities help with enhancing transparency and improving the quality of public services and efficient administration. Thus, IA activities are crucial within local governments (LGs) for continuous assessment of their operational plans and recommended business processes to assure that citizen's goals are achieved. The role of the IA department or unit (IA in short) in every municipality is to support the municipal management by reviewing, assessing and assisting to improve and ensure adequate internal monitoring systems and achieving its goals. IA goals include the provision of primary services by means of assessing risk management, control and governance procedures as well as the efficiency of the different insurance and consulting facilities outlined in the assessment report in each municipality (IIA, 2016:23). The research problem statement reads as follows: IA in the West Coast District municipalities is adversely affected by the perceptions of employees of the internal auditing function (IAF) within these municipalities. A clear understanding within the context of this study is achieved through issuing standardised questionnaires to employees of the WCDMs, enabling them to describe their experiences and expectations of the IA function within the WCDMs and to share the employees' views of the barriers affecting IA activities. A total of 200 questionnaires were issued to employees within the 5 WCDMs. From the data analysis and findings derived in this study, the IA function performed by municipalities within the West Coast District has become clear and are thoroughly understood by employees. The expectation arising from the results of the study is that the experiences and expectations shared by the participants will improve the strategic role of the IA function' within IA (referring to IA departments) and enhance IA operations across the WCDMs. This will add value to the IA departments' operations, enhance risk management effectiveness, and achieve successful process control and governance implementation.