Internal audit recommendations highlights

2010/2011 

1. The Institute should carry out vendor pre-qualification and registration for the supply of goods and services as the exercise is long overdue. It should develop a vendor list and ensure that all new suppliers to be added to the vendor list undergo the pre-qualification process as outlined in the Supply Management Manual (SMM) and ensure all vendors sign a vendor disclosure form.
2. A formal and comprehensive accounting manual for ILRI Finance should be developed and used. This should be reviewed periodically and revised and updated as necessary. This should be done after ILRI has changed to One Common System by July 2012.
3. The Farm Manager should, establish up to date accurate stocks record for rabbits and all animals in the Unit which should reconcile with physical animals throughout the year. The information should be readily available to management, scientists, stores management, auditors, accountants and other relevant staff when required for decision making and assurance that ILRI assets are efficiently used and safeguarded.
4. As at December 31, 2010 USD 419,468.00 is shown as stock in ILRI Addis Ababa. Reorder level and reorder quantities for continuously consumed items are developed by the store. However there are large quantities of maintenance and office supplies stocks that are not consumed within a year. The reorder quantity and reorder level of most of these goods in the store is not revised frequently. A large number of inventory items hold the institute working capital and also may result in obsolescence and damage of the goods. The reorder level and quantity and lead time of these inventory items should be reviewed at least quarterly so that the items that are purchased are consumed within the reasonable time. This will mitigate the risk associated with extra quantities of stock items held in store.
5. ILRI Budget and Grants Unit (B&G) should develop guidelines to carry out due diligence reviews on the finance, administration, management and reporting capabilities of research collaborators and partners before engaging them. To address this situation the B&G unit should develop and document guidelines for carrying out a formal review on finance, administration management, and reporting capabilities of the collaborators/partners before engaging them.
6. The KMIS department should develop an adequate management control system for monitoring and measuring the economy and efficiency of the Graphic unit. Furthermore, the Graphic unit should document internal control procedures and the management should provide sufficient oversight of the Graphic unit.
7. Assessing ILRI Addis Security Unit of the sufficiency of the available staff to cover all the security areas in the campus should be made. Provisions of additional staff and resources should be considered if the current level is not sufficient.
8. The Corporate Services Director/DFO and the Head of Services in Addis should review the efficiency and effectiveness of the current supply chain structure and reporting relationships where Stores and Procurement unit are separate and headed by different managers ( for Nairobi), in Addis both managers report directly to the Head of Services The current structure lengthens decision making process with inefficiencies emanating from the current structure. Internal Audit opinion is that both Stores and Procurement units remain separate but headed by one manager will improve efficiency and effectiveness of the supply chain and fasten decision making
9.  All voluntary (and non- voluntary- legal or any other) deductions requested by employees or any other entity should be certified by the HR unit and relevant accountants before the Payroll units process them in the system; this will eliminate/minimize instances of staff with net pay not less than 1/3 of basic salary as legally required, or deductions not exceeding 2/3 of basic salary
10. Due to changes to job classifications, with new job classification announced in October 2010 management should clearly state which job classification are eligible for overtime payment in the PPM.

 
OCTOBER 2011
INTERNAL AUDIT MANAGER