Accountants tipped on effective compliance and risk management

Accountants in the public sector have been prepared for effective compliance and risk management when executing their mandate.

Moses Kasakya, the president of the Institute of Internal Auditors (IIA) said effective compliance management in the public sector establishes trust and enhances funding opportunities.

He said it also provides business opportunities, especially to public enterprises, and reduces the cost of doing business as operations are executed ethically. 

Kasakya who is also the director for internal audit with Uganda National Roads Authority (UNRA) was making a presentation during a seminar on compliance, risk management, and taxation organised by the Association of Accounting Technicians of Uganda (AATU) in Kampala.

Most of the participants in the seminar were from local government administrations, cities, and municipalities.

Kasakya who also once worked at Uganda Uganda Revenue Authority (URA) as the manager for compliance and integrity said compliance protects entities and individuals from legal costs, financial penalties, and disrepute. 

"Compliance brightens the individual employee’s career progress as progressive entities want to work with employees who are both competent and of good character," he said.

He said risk management helps create, enhance, and protect value in an orderly and cost-effective manner as events that would impact the objectives of the business are proactively identified and addressed It saves the entity the costs of operating in a crisis mode. 

"Both compliance and risk management work effectively when they are strategically positioned with appropriate authority, adequately facilitated and proactively executed while anchored on committed leadership with a right tone both at the top and middle levels in the organisation," he said.

Kasakya enlightened the members on the importance and benefits of compliance in fostering objectives in public entities, the challenges in compliance enhancement, and the effective ways of compliance enhancement in the public sector.

Participants at the seminar

In his introduction, Kasakya told participants that compliance is all about adherence to requirements in the public sector, which includes International agreements or treaties, laws, regulations, policies, manuals, codes, procedures, staff structures, contracts, standing orders, circulars, and standards, among others.

He emphasized that Compliance must be seen and treated as a means to an end through helping to achieve objectives and not compliance being an end in itself. 

"Compliance should be geared at value creation, value protection, and achievement of objectives.," he said.

He observed that there were many incidences in the public sector where the focus was on compliance as an end in itself i.e. ensuring every provision is ticked off, while not minding the efficiency aspects of costs, quality, and timeliness of service involved. He said that compliance requires men and women of not only the right competence but also integrity.

However strong the systems may be, they can easily be breached if the people involved don’t have integrity.

 He underscored the importance of Technology in enabling compliance in the public sector for example, that the challenges of people successfully manipulating profiles cannot succeed in a well-configured and monitored automated process.
He said compliance enables entities to achieve their objectives efficiently and effectively in that it helps eliminate wastage and inflating of business costs, which is key for public entities that perform duties in the trust of the citizens. 

"Compliance enhances stakeholder relationships & funding opportunities which is necessary for public entities. 

Compliance Improves Business Opportunities and Sustainability," he said.

Participants observed that the Compliance framework in Uganda has some good and strong areas but also significant areas for improvement. It was also observed that Uganda has good and well-documented compliance requirements and, a wide scope of Compliance monitoring centers, both statutory and administrative.

 The compliance monitoring centers were observed to include Parliament and the respective Accountability committees, the Office of Auditor General, Internal Audit, Inspector of Government, Uganda police, various statutory regulatory bodies like PPDA, BoU, UCC, FIA, ERA, UNHCR, UCAA, other Presidential initiatives like Anti-corruption unit, Health monitoring unit and Health monitoring unit and various Ministry Inspections, Monitoring and Evaluation initiatives. 
There are also well-established judiciary services including the anti-corruption court that greatly contribute to compliance in public entities.

Notwithstanding the strong areas observed, there were areas observed to negatively impact compliance in the public sector in Uganda. 

It was also observed that there was a mixed commitment to the implementation of some of the compliance requirements. for example, on the laws to effectively manage the environment. 

There was wide ignorance about the compliance requirements. for example, laws or policies are developed and documented but they are not well disseminated to potential users and even where they are distributed, there is poor reading culture or illiteracy. There are incidences of impunity, and overriding policies without consequences. There are incidences where compliance requirements are instead used to legalize illegalities. Compliance is also impacted when there are conflicting interests of stakeholders. for example, Business or economic developers which is good for the country against environmental degradation or geopolitical dynamics where there are very strong requirements by external partners contrary to the national laws. There were also incidences of inadequate facilitation towards compliance initiatives like Inspectors of schools.

Kasakya advised the participants on five key elements for effective compliance management in the public sector. He said that the specific public entities and the wider government framework in general must establish a conducive environment for Compliance Enhancement; and that it takes Leadership Commitment to Integrity on matters of compliance. that it is exhibited in Deploying Competent and Ethical Staff, Adequately sponsoring Compliance/ Integrity Initiatives and objectively Enforcing accountability requirements including disciplining those in breach. Secondly, it requires every public entity to have a clear record of all the compliance requirements that significantly affect it, regularly review the impact of compliance risks therefrom, and address them promptly. Thirdly, while leveraging technology, institute a compliance & integrity program with the ability to prevent, detect, and correct potential and real elements of non-compliance. 

He said risk management helps create, enhance, and protect value in an orderly and cost-effective manner as events that would impact the objectives of the business are proactively identified and addressed instead of operating in a crisis mode.

James Okurut, the president of AATU encouraged accountants to comply and stick to professional ethics when executing their mandate.