blerta mjeda, phd candidate water& waste water supply of shkodra...
TRANSCRIPT
The 3 levels of control
Enterprise Risk Management
The overall Management system including Internal Audit
And Financial Management Control
1
2
3
Internal Audit:Evaluation role:Asseses exciting system, as comparedto referentialIndependent (link to strategic non executive power ) Periodical
FM ControlOperation role
Piloted by executive powerPermanent
Level 2: Monitoring, Framework, &methods, harmonization (organizational; chart templates
& risk register templates …etc)Synthesis(risk map)
Second levelControl (control of key control’s realization)
Level1: The management monitors its activities according to level2 IC’2 methods &monitoring
&its own appreciation of risk &priorities.Control level
Governance in the public sector
Source of power
Strategic/ Legal power
Executive power
The People
Vote for representants
The Parliament
Decides the strategic orientations (budget, laws) by voting them
The Government
Proposes strategic orientations Executes decided orientations
Independence of Audit
Internal Audit
Evaluation role
Independent : reports to strategic power
Periodical
Financial Management Control
Operational role
Piloted by “executive power”
Permanent
1
2
3
“Independence” = independence from executive power
IA – FI role segregation
Internal Audit
Evaluates processes’internalcontrol, not people
Contributes to prevention: good internal control
prevents corruption from happening
Report incidentally found corruption to IF for IF to manage
Financial Inspection
Evaluates people
Seeks to detect fraud
Issues fines
Role of Audit & FMC / change
1Management
2Risk Manager
3IA
• sponsors the development of FMC• evaluates FMC• reports on recommendation follow up to head of unit and CHU
• Monitors FMC• Synthesises risk register at entity level• Animates audit recommendation follow up with line managers
•Implement FMC
Change sponsors
Change makers
Types of audits
Financial audit
Compliance audit
System audit
IT audit
Performance audit
Financial Audit
Two aspects:
1. financial statements, e.g. annual accounts
• In private sector generally performed by external auditors
2. financial controls
Compliance Audit
Objective is to determine to what degree an organization complies to policies, procedures, standards or laws;
Focus is upon testing
of conditions
System audit
In-depth evaluation of the control systems;
Objective is to assess whether these systems are functioning properly;
designed to check upon the adequacy and effectiveness of internal controls in both financial and non-financial systems
IT audit
Assessment of the reliability, integrity, safety of:Information systems;The organization of the IT department andThe infrastructure of data processing
Subjects are operational systems and developing systems
Performance Audit
The role of the public internal auditor
Not just ordinary internal auditor
also …
• On the payroll of the people
• Political and governmental environment
Independence and Objectivity
Is your IA activity independent?
Are you objective?
The 4 Questions of Ethics
Can I be frank with my superiors, colleagues, friends,
relatives when telling them about my activities?
Would it be acceptable to me if a superior, colleague,
friend, relative were to act in this way?
Is an advantage offered to a larger group of persons (f. e.
discounts offered by a company)?
Would I, for example, also receive a specific advantage
if I had a different position/job?
What is the best seat in the plane?
Source: www.seatguru.com
Example Risk CategoriesExternal
Economic
Social
Political
Technological
Natural Environment
Internal
Strategy
Structure
Processes
Personnel
Culture
Technology
Integrity
HISTORY OF THE COMPANY
Based on the Council of Ministers no. 660 dated 12.09.2007, Water Supply and Sewerage Shkodër Company was formally transferred to local government ownership effective on 1 January 2008.Shkoder Water Supply and Sewerage mission is providing drinking water supply, wastewater disposal and maintenance of water supply and sewage to its customers within the area of jurisdiction of the Municipality of Shkodra, but actually water produced by WSSC(Water Supply and Sewerage Company), Shkodër is also used by the inhabitants of the surrounding villages including Municipality Environment, as Dobraçi, Golem, Shtoj i Vjetër, Shtoj i Ri, Vraka and Bërdica Sipërme. Consumption (waste) uncontrolled water from residents of areas outside the jurisdiction of the Municipality of Shkodra,is the most acute problem of WSSC Shkodër.
HISTORY OF THE COMPANY
The main challenges to the functioning of the WSSC Shkodër are:
Functioning as a commercially-oriented and financially independent.
Increase the security and reliability of water supply and sanitation in the area of jurisdiction of the territory in Municipality of Shkodra.
Creation of a company as financially capable as well as from technical.
Increase the efficiency in the management of water resources and the transmission network in order to reduce power losses and costs, one of the most important voices of the costs of production of drinking water.
SWOT Analysis of Company
Strengths/Power
Skilled workforce with low cost.
Water reserves at full capacity.
Favorable geographical position in most regions.
Weaknesses Increased demand for water during the
season April-October is peak demand for water, especially in the period June-August
Lack measurements to conserve water resources
Complete non-coverage of all customers with meters readable
Marketing still a degree not enough for payment and water savings
Problems in reading water meters Updating and tracking time Branch Customer complaints addressed, the return on time and receiving complaints from consumers
Low income per capita Poor infrastructure. The old system. Weak financial sector. An inefficient legal framework for
investments
SWOT Analysis of Company
Opportunities/Options Regional economic integration
(Central European free Trade Agreement CEFTA).
European integration. Reform of the water supply system. Rebuilding infrastructure. The highest concentration towards big
businesses and institutions in the service area.
Higher fees and favorable in this category consumers.
Full utilization of all capacities as drinking water sources, plant and wells
Increasing the number of contracts signed for customer categories.
Threats The lack of economic stability. Law and order is unstable. The new administration reform (still no
instructions, law, or a decision on the new administrative reform).
Economic reform and alignment of prices with costs.
Failure of payment of arrears. Increasing the price of electricity. Unwillingness of police authorities in
providing assistance (physical security personnel) during closing).
Insufficient support from local authorities and ministries to influence consumers to pay water bills.
Scale low or zero charge of the administrative unit already New Territory, which is the biggest abuse and whether customers do not pay.
CONCLUSIONS AND RECOMMENDATIONS
Good governance requires constant engagement and strategic cooperation of the main actors. Internal audit should implement a strategic approach in order to provide added value for citizens and taxpayers. For this, they should focus on three main pillars, which are:
The Management of Human Resources,
Guaranteeing the independence and objectivity of the audit on the performance of his function
Strategic cooperation with stakeholders. Such an approach would enable an effective contribution to national governance in terms of a more complex reality of challenging for the society.
Facts and figures collected by an internal auditor to meet the objectives of the audit (findings), the conclusions drawn by the intern audit’s findings, and courses of action suggested by the internal audit in accordance with the audit objectives are important to the organization.
Organization of media events to inform the public about environmental protection and responsible use of the payment need of drinking water, intensive awareness campaigns and continuously.
Improving Customer relationship - friendship, this will help separate department (Customer Care), which will manage the complete relationship with the company's customers.
In cooperation with local authorities and the media, to develop and implement a sustainable program of education of the public to raise awareness of clients regarding the costs of water supply and sewerage system, and the necessity of paying bills as vehicles to support this vital service.
Following closely all customers who do not pay the bill of water, and to inform policy to close the connection of the water, if they do not pay the amount of their debt on behalf of the Company.
All debit customers can negotiate about sharing installment of arrears and extending the time for payment of dues.
CONCLUSIONS AND RECOMMENDATIONS
CONCLUSIONS AND RECOMMENDATIONS
Use billing system to better analyze and report on total data base. Information of data to the billing system, to enable the design work plans to reduce the number of debit customers.
Expansion and service quality improvement of water supply and sanitation.
Water service orientation towards the principles of control and full cost recovery.
Progress towards the harmonization of national legislation with EU directives on water strategy.
CONCLUSIONS AND RECOMMENDATIONS
Based on SWOT analysis as well as in-depth interviews with open questions made by leaders of Shkodra Water and sanitation should I suggest doing some
improvements: Improving consumer exact reading of drinking water. Reduction of arbitrary billing parallel with installation of meters. The implementation of a new supply scheme for system houses and alleys
dwellings with supplies in series, in order to enable the installation of individual meters for each customer.
Reduce misuse of water, through the identification and illegal cutting ties along the main pipelines and distribution to them and taking legal action against the illegal clients.
Further improvement of quality of work and increase the control of groups of employees’ that work in the surface.
Work on improving the supply system. Surveillance continuous zones billing, to identify buildings that are not on the
list of customers of the Company, to determine whether they are connected to the network or not, and act to legalize connection with a gauge, or disconnect.
Improve management system.
REFERENCES
Bahram Soltan , 2007, “Auditing an International Approach” Marlene Davies, John Aston, 2010 “Auditing Fundamental”Michael C.Knapp, 2012, “Contemporary Auditing “Karla Johnstone Audrey Gramling, Larry E.Ritterberg, 2013, Auditing: A Risk-Based Approach to Conducting a
Quality AuditRick Hayes, Philip Wallage, Hans Gortmaker, 2014 “An Introduction to International Standards on Auditing”International Professional Practices Framework (IPPF) 2009Ligji “Për Kontabilitetin” Nr. 7661, dt. 19.01.1993; Ligji “Për Kontabilitetin dhe Pasqyrat Financiare” Nr. 9228, dt. 29.04.2004; Ligji “Për Auditimin dhe Kontabël të Miratuar” Nr. 1091, dt. 05.03.2009; Direktiva 4, 7 dhe 8 e KE (Këshillit të Europës) CEE – Commission recommendation the definition of minor, small
and medium – sized 20.03.2003; IASB (2010).”Who We are and what we do”. International Accounting Standards Board (IASB) and IASC Foundation
Publications Department;Auditimi Shtetëror në Bashkimin Europian, 2005;Standartet e kontrollit të brendshëm të qeverisë federale të publikuara GAO;Standartet e kontrollit të brendshëm sipas INTOSAIT paketa përmbledhëse për kontrollin e brendshëm Botuar nga
KLSH;Manual për Auditimin Financiar botuar nga Kontrolli i Lartë i Shtetit viti 2009;Manual për Menaxhimin Financiar dhe Kontrollin botuar nga Ministra e Financave dhe Bashkimi Europian viti 2010;
www.ukshkoder-al.com
www.klsh.org.al
www.minfin.gov.al