Audit Voice On Internal Controls


It is a system of administrative control, financial and otherwise, established by the Management, for the purpose of maintaining the business of the organisation in an orderly and efficient manner. It is primarily targeted at ensuring adherence to Management policies, safeguard the assets and secure as far as possible, the completeness and accuracy of records.

It is a process, designed to provide reasonable assurance regarding the achievement of objectives in:

  • Effectiveness and efficiency of operations
  • Reliability of financial reporting Compliance with law and regulations

Types of Internal Controls

  1. Segregation of Duties
  2. Physical Control
  3. Authorization and Approval
  4. Arithmetical and Accounting Control
  5. Personnel Control
  6. Supervision
  7. Management Control
  8. Acknowledgement of Performance
  9. Budgeting


Areas Expected Of Efficient Internal Control System

  1. Expenditure Control
  2. Revenue/Income Control
  3. Salaries and Wages Control
  4. Grants and Endowment
  5. Pension and Gratuities
  6. Non-Financial Areas



What Is Expenditure?

Expenditure could be described as the disbursement of fund to procure goods and or services.

Classification of Expenditure

i. Recurrent Expenditure: these are payments made in respect of day to day running of an organiorganisation. Salaries and wages are also classified as recurrent expenditure.

ii. Capital Expenditure: these are payments made in respect of acquisition of assets and other items other than the day-to-day running cost.


Expenditures other than personnel emoluments are incurred through any of the following:

  1. Local Purchase Orders
  2. Imprest
  3. Advances – Purchase; Research; Salary Advances
  4. Payment on Delivery



Local Purchase Orders are documents issued to supplier(s) as agreement indicating contractual obligations between the University and the supplier/contractor to facilitate the supply of goods and services to the University.

LPO is the most acceptable contractual document in civil/public service. It stipulates terms and conditions upon which supplies are to be made. Details, such as description of items, quantities, qualities, etc must be specified in the LPO. Any aggrieved party may exercise legal right upon breach of agreement, using the LPO.

Letters of award may also be issued in place of LPO where further conditions shall be clarified particularly for technical and capital projects.

Procedures for LPO Approval of relevant authorities such as the VC, Dean, HOD/HOU, etc. to incur expenditure, must be obtained.

Relevant Officers must ensure that quotations were obtained from a minimum of three (3) suppliers independently. A preferred supplier will be selected, after a critical and objective analysis of the various quotations. Specifications, models and other details must be stated on the quotation.

All LPO must be endorsed by the Bursar or his approved representative.

Procured goods/services must be verified by the Internal Audit before usage.

2. Imprest

The term ‘imprest’ is applicable to all sums advanced to a public officer to meet expenditure for which vouchers cannot immediately be issued. Imprest are particularly meant to meet urgent petty financial requirement of department and Colleges in the University.

Types of Imprest
Standing Imprest: this may be replenished from time to time during a financial year by submission of paid vouchers to appropriate officers for reimbursement.

Special Imprest: this is granted for a particular purpose and must be retired in full when the purpose has been achieved.

Procedures for Operating an Imprest

  1. Every imprest must be approved by appropriate authorities.
  2. Every imprest holder will keep a cash book/imprest register and ensure entries are made on the day they occur.
  3. All imprest payment shall be supported by appropriate receipts/petty cash vouchers.
  4. All imprest must be retired after which reimbursement may be processed.
  5. Items procured must be verified by Internal Audit before being put to use.

To be concluded in the next edition

Last Updated on October 25, 2010 by admin

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