© Internal Audit Department

First Edition 2014

Published by The Internal Audit Department, University of Ibadan UNIVERSITY OF IBADAN IBADAN, NIGERIA

All rights reserved. No part of this publication may be reproduced, photocopied, transmitted in any form or by means, electronic or mechanical, audio or video recording, or any information, storage and AUDIT retrieval system without the written permissions of the publisher. MANUAL ISBN:

Issued by the Internal Audit Department March, 2014 Printed at Ibadan University Printery Audit Manual Audit Manual Foreword It is apposite at this juncture to appreciate the efforts of the members of the Audit Manual Committees led by the Director, This Internal Audit Manual is a revised version of the 2006 Mr. B.O. Akinremi. Others include Mr. K.A. Davidson, edition. It is in furtherance of the Quality Assurance effort of Mr. A. L. O. Faniran, Mr. O. J. Folorunso, Mrs. O. O. Omisore, the Internal Audit Department of the University of Ibadan Mrs. Y. O. Efuntoye, Mr. R. O. Ibironke, Mrs. C. O. Ogunwole and under the leadership of the current Director of Audit, Mrs. A. A. Atanda. Mr. Babs O. Akinremi. Special appreciation also goes to Professors Kabiru Isyaku, The manual contains 10 chapters. Chapter one presents an B. O. Oke, Labode Popoola and M. O. Abatan, introduction; comprising the definition, objectives and Dr. G. A. Adeniran, Ambassador L. A. Shunni, Prof. J. B. Salka, responsibilities of the Internal Audit Department of the Prof. A. Soyibo and Prof. Kassey Garba, present and past University. It also gives an overview of the organization of the internal and external members of the Governing Council of the Department. In chapter two, issues such as planning, University of Ibadan and the secretariat staff are also duly budgeting process and procedures relevant for auditing are acknowledged. addressed, while chapters three to seven address the general audit assignments and procedures needed to conduct a I believe that this manual will improve the effectiveness and standard audit. Chapter eight focuses on audit assignments in efficiency of its users, thereby ensuring quality areas of revenue to the University while chapter nine is service-delivery to the numerous clients of the Internal Audit basically on the procedures involved in Cash Office Audit. Department of this great University and indeed other Chapter ten ends the manual with specialized audits in such institutions. I therefore, recommend its use to all stakeholders. areas as Teaching and Research Farm, Livestock, Rabbit, Sheep, Goat etc; and finally audit of Investment Centres and Professor Isaac Folorunso Adewole, FAS Final Accounts. Vice – Chancellor

Various materials were sourced and utilized in ensuring completion of the manual. Inputs were also obtained from individuals, institutions and firms. They include: Standard Internal Audit Manual for Nigerian Universities, Obafemi Awolowo University, Ile-ife, University College Hospital, Ibadan, Auditing Standards Committee (Institute of Chartered Accountants of Nigeria) among other sources.

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CHAPTER FIVE- STAFF ADVANCES AND STAFF Table of Contents DEBTORS 5.1 Types of Loans and Advances……...... ….………21 CHAPTER ONE- INTRODUCTION 5.2 Clearance of Salary Advances………….....………………22 1.1Preamble……………………….……………………………...1 CHAPTER SIX- LOCAL PURCHASES, CLAIMS AND 1.2 Definition of Internal Auditing…………...... ……....1 ALLOWANCES 1.3 Objectives of Internal Audit Manual……....…………...... 1 6.1 Treatment of Local Suppliers' Invoices……...... ………...26 1.4 Responsibilities of the Internal Audit Department……...…2 6.2 Payment of Local Suppliers…………....………..………..26 1.5 Organisation of the Internal Audit Department...... …...…3 6.3 Stores Control………....……………………….…..…..…....27 C H A P T E R T W O - P L A N N I N G & B U D G E T I N G 6.4 Fixed Assets……………………………...... …………..……28 PROCESSES 2.1Preamble...... ………………………………………….……5 CHAPTER SEVEN- PENSION AND GRATUITY 2.2Audit Procedure…….……………………………...... 6 7.1 Preambles...... 29

7.2 Gratuity……...... …….…….……...31 CHAPTER THREE- FIXED ASSETS 7.3 Pension (Old Scheme)…....………………….……...... …....33

3.1 Preamble………...... …………………...... ……..8 7.4 Merging of Service……………...... ….…….…..35 3.2 Procedure………..……………………..……………………..9 7.5 Pension Reform Act(2004)………….....…………..….……35 3.3 Capital Projects...... …………………………….……....10 3.4 Scope………………...……………………………….………11 7.6 Posting from Journal to Ledger……...... 38 3.5 Procedure...………………………………………….………12 CHAPTER EIGHT- REVENUE 3.6 Direct Labour Projects…..……...... ………………….……...14 8.1 Objective...... 39 3.7 Minor/Petty Contracts...... …………...... 15 8.2 Scope...... 39

8.3 Procedure ...... 39 CHAPTER FOUR- INTERNAL AUDIT OF PAYROLL 8.4 Remittance of Revenue...... 41

4.1 Definition of Payroll………...... ….………...18 8.5 Lodgement of monies into University Accounts….....….42

4.2 Pre-payment audit of salaries………...... …….……..18 8.6 Federal Government Subventions..…...... ……..43 4.3 Post-payment audit of salaries……...... …...... 19 8.7 Sale of Forms…...... ………43

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8.8 Rent on University Landed Properties (including Staff Housing)…...... ………………….…44 Chapter One 8.9 Electricity Charges from Staff……...... ………45 8.10 Telephone Charges…...... ….…………………………46 1.0 INTRODUCTION: CHAPTER NINE- AUDITING OF CASH OFFICE 1.1 PREAMBLE OPERATION The contents of this manual are consistent with the 9.1 Procedure and Operations in Cash Office…………….…47 requirements of the Standard Internal Audit Manual for

9.2 Auditing of Collections made by Receiving Cashiers….....48 Nigerian Universities set out by the National Universities 9.3 Accountants………………………………………...….....…48 Commission (NUC) and the Auditing Standards Committee

9.4 Banking of all Takings………………………………...... …..49 of the Institute of Chartered Accountants of Nigeria. 9.5 Point of Sales (POS) Terminal...... 50 9.6 Cash Office Payments………………………...………....….52 This document shall serve the purpose of regulating audit processes and practice at the University of Ibadan subject to 9.7 Payment through Mandate to Banks...... ….53 the relevant laws and extant circulars from relevant authorities CHAPTER TEN- SPECIALIZED AUDIT from time to time. 10.1 Teaching and Research Farm……………..……...... …55 10.2 Livestock; Rabbit, Sheep, Goat, Swine, 1.2 DEFINITION OF INTERNAL AUDITING Cow and Fowls…...... 55 Internal Auditing has been defined as “an independent 10.3 Catering Services……...... ………...... …...…56 appraisal within an organization for the review of accounting, 10.4 Publications..……………………………………....…....…57 financial and other operations as a basis for protective and 10.5 Cleaning Services………………………………..….….....57 constructive service management” (International Auditing 10.6 University Rented Quarters...………………….….…...... 57 Guidelines) 10.7 Investment Centres………………………..…....…..…….58 10.8 Posting from Journal to Ledger...... 58 This manual is a type of control, which functions by measuring 10.9 Final Accounts……………………………………...... …..59 and evaluating the effectiveness of other types of control. LIST OF TABLES Table 1...... 60 1.3 OBJECTIVES OF INTERNAL AUDIT MANUAL Table 2...... 61 The main objective of the Audit Manual is to ensure Table3a...... 62 compliance with Audit best practices Table 3b...... 63 University of Ibadan v University of Ibadan 01 Audit Manual Audit Manual

The Scope of this manual includes: ii) ascertaining that transactions are promptly and - to sensitize the University community of the expectation of completely recorded, the Internal Audit Department. iii) ensuring that the institution is secured against fraud, - to define and describe the regulatory environment of the waste and other avoidable losses, Audit Department. iv) evaluating and ensuring the total compliance with Council - to prescribe the audit processes and procedure instructions, management guidelines and directives of the National Universities Commission, and They also include a) periodic examination of the internal control system, v) reviewing continually, internal control systems applicable to different departments and faculties of the University b) detailed examination of income and expenditure to ensure with a view to ensuring that the controls are adequate, that they are correctly recorded, classified and /or relevant and are strictly adhered to. allocated, 1.5 ORGANISATION OF THE INTERNAL AUDIT c) adherence to established budgets and implementation of DEPARTMENT budgetary control, The Internal Audit Department of the University of Ibadan has d) verification of assets and liabilities, an autonomous status with reporting line to University Council through the Vice-Chancellor. The Department has e) ensuring accurate checks against fraud, errors and gone through several stages over the years with different mistakes,. sections springing up at various points of growth. Currently, it f) appraisal of final accounts prepared by the Bursary prior to has seventeen (17) Resident Audit Offices/Sections with auditing, and Resident Auditors /Sectional Heads reporting to the Director of Audit (Table 1). g) collaborating generally with the statutory auditors on all matters affecting statutory audits. The audit procedure being adopted by the various units/sections is uniform as income and expenditure items are 1.4 RESPONSIBILITIES OF THE INTERNAL AUDIT identical in all forms. However, there are some typical DEPARTMENT situations where specific methods of audit could be applied. i) Ensuring that the University's assets are properly Generally, two forms of audit approach are adopted: safeguarded and accounted for,

University of Ibadan 02 University of Ibadan 03 Audit Manual Audit Manual i The Pre-Audit Approach ii The Post-Audit Approach Chapter Two The former is adopted on Local Purchase Orders (L.P.Os), payroll, advances, contracts certification, pension and gratuities and other vouchers, while the latter is relevant to the 2.0 PLANNING AND BUDGETING PROCESSES examination of imprests, petty cash books, salaries and 2.1 PREAMBLE allowances, ledgers and final accounts. The accounting manual of the University includes the planning and budgeting processes of the University and its Units. Management in addition makes other arrangements to ensure that plans are a product of consensus of the best brains around and that implementation is pursued to achieve optimal results. These processes include: 1) establishing planning and budget preparation and review committees that have their membership drawn from across the University and which are reconstituted from time to time, 2) establishing a planning and budget implementation committee to review and consider progress reports on on- going projects with a view to ensuring that they are progressing according to plan, 3) establishing and running a budgetary control apparatus in the estimates and expenditure control unit of the Bursary Department to ensure that extra-budgetary commitments are not approved unless extra funds are assured,. 4) establishing and running a bills payment system that ensures full division of labour, strict adherence to the rules and regulations and best practice, and which ensures that

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payments are made only in respect of certified and duly submissions from cost centres, comprising expenditure received values, and and income proposals are collated by the Bursar with the 5) keeping and updating all such control records as contract assistance of the Director of Academic Planning. He registers and contract files; local and overseas purchase should ensure that a report is sent to the Finance and registers from where information on the projects and cost General Purposes Committee and to Council to effect plans can be extracted for further control action. necessary adjustments; 2.2 AUDIT PROCEDURE 6) ensure that an objective method of arriving at the cost The Auditor should: centre allocations is observed and that the recurrent 1) start by confirming that call letters for plans and estimates budget maintains balances; are timely and contain all the information and guidelines required; 7) ensure that operation of the budget encourages delegation of authority and strict accountability, on 2) check and ensure that submissions are sent in on time to the part of cost centre managers; schedule officers namely: the Bursar (for recurrent estimates and plans), the Director of Academic 8) ascertain the authorization limits of committees and Planning (for new and modifications of existing officers and by comprehensive vouching ensure that these programmes and academic briefs) and the Director of limits are strictly adhered to; Physical Planning (for infrastructural development). 9) carry out comprehensive examination of the expenditure He/she should ensure that these submissions are control cards or records, especially those for codes on faithfully collated and presented to the appropriate which no transactions have been recorded, those whose committee for consideration and recommendation; allocation have been fully committed early in the budget 3) obtain a list of on-going projects and confirm that they period, and revenue codes that are not performing and passed through due process. For example, competitive issue a report for corrective action; and tendering in all purchases through local purchase orders 10) ensure that the periodic interval reports to vote and and other contract biddings should pass through the project managers are timely, factual and duly acted upon. Expenditure Control Unit of the Bursary Department; 4) ensure that all contracts awarded for supplies, services and construction are properly documented; 5) ensure that in the case of recurrent estimate proposal,

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transactions are carried out in line with laid down regulations Chapter Three and relevant authorizations. In summary, the following will be applied in the auditing of Fixed Assets: Cost, Effectiveness, Documentation of 3.0 FIXED ASSETS Information, Streams and Controls (CEDISC). 3.1 PREAMBLE 3.2 PROCEDURE: The fixed assets of the University are made up of items of capital value with relatively long life spans. These assets 1) Balances brought forward should be checked and agreed include: in relation to the previous periodic fixed assets balances i) Lands and Buildings 2) An asset listing of acquisitions made during the period ii) Laboratory Equipment should be obtained. iii) Motor Vehicles 3) Internal check over the custody of the asset should be iv) Office Furniture examined and ascertained. v) Office and Household Equipment vi) Workshop Equipment 4) The Audit staff should ask for copies of minutes of Finance Committee meetings/Management Committee meetings Audit must ensure that adequate control measures are put in with a view to ascertaining if the acquisition was place by the Management and adhered to. authorized. Balance brought forward: The accumulated value of all 5) Cost of acquisition should be audited for reasonableness classes of assets must first be ascertained and agreed with documentation in the fixed assets register. 6) The auditor should carry out physical verification of all fixed assets and where expert opinions are involved, Additions: This relates to the acquisitions made during a documentation must be sighted and obtained. particular review period relative to all classes of asset. The emphasis here would relate to authorization and physical 7) The audit staff should check the en-coding of the assets controls. and ensure that the right coding pattern is applied. Disposals: Assets can be transferred, sold or scrapped at 8) Request for copies of Local Purchase Order alongside periodic intervals. The audit must ensure that these receipts affirming beneficial ownership.

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9) Disposal of assets must be properly approved. The report of projects, the Contractor, the period of contract, value of of the Board of Survey should be requested and its contract, and variations, if any. authenticity determined. 3.4 SCOPE 10) Audit must ensure that there is proper documentation for The main audit objectives in capital projects management are disposal of fixed assets. to ascertain that capital funds are used for the purpose for which they were granted, and in compliance with guidelines 11) In the case of transfers, the auditor must ensure that there made by donors, and University Management. Other is proper approval from appropriate officers. objectives include the following:

12) On items that require insurance policies such as motor a) The assets with which the funds were built, procured and vehicles, insurance certificates should be requested for used are protected. sighting by the audit staff. b) Due process is followed right from planning to execution stage and all documentations in relation thereto are 13) All advances and I Owe You (I.O.U.) when duly approved adequate and prepared in accordance with government for the purpose of acquisition of fixed asset should be guidelines. properly recorded in the relevant Unit. c) Proper coding of expenditure pertaining to the 14) Clearance of the advances/I.O.U. with the relevant classification of the project is done so that it is properly advance vouchers and supporting documents should be presented in the Final Accounts. sighted. d) Account is fully rendered on all grants and other funds from whichever source(s). 3.3 CAPITAL PROJECTS e) Ensure that payment is made only for work done. Preamble: Funds used for capital projects are usually budgeted and controlled by the University Management. The f) Ensure that payment is made in accordance with the terms Bursar should make payments based on approved certificate of the Contract Agreement. values. In the effective management of capital projects, the g) Ensure (where there is a variation in the conditions of the following documents are essential: Capital Grant Register and agreement) that the variation instructions are properly Contract Register. The former records all Capital Grants documented and complied with and are processed for received from various sources while the latter contains names approval through appropriate organs of the University.

University of Ibadan 10 University of Ibadan 11 Audit Manual Audit Manual h) Ensure that necessary deductions e.g. retention, tax, p a y m e n t s d u e t o a n y c o n s u l t a n c y , mobilization refund are made. Electrical/Mechanical, Quantity Surveyor or any other discipline stated in the booklet; i) Ensure that Advance Payments or Down Payments are 6) the Bill of Quantities on the projects should be obtained; adequately insured by bond and with adequate stamp duty. 7) ensure that the certificate issued for payment to the contractor is thoroughly examined to ascertain the j) Ensure that the genuiness of the bond is confirmed. correctness of the computations of the following: k) Enforce non-fluctuation of contract unless provided for i) Gross valuation figures: This should agree with the and approved by the appropriate organ of the University. documents attached to the certificate.

Audit Objectives ii) Retention Fee of 5% (or as the case may be) must be Ensuring that: worked out and deducted from gross valuation figure. i) payment is made in accordance with the terms of the contract agreement; iii) Previously certified figures on the certificate should ii) payment is made only for work done; agree with the figure on the last certificate. iii) where there is any variation in the conditions of the agreement, that such variation instructions are properly iv) Amount due to sub-contractors stated on the details documented and complied with; and attached to the certificate issued for payment must be iv) necessary deductions e.g. retentions, tax, mobilization supported with certified documents. refund are made. v) Accuracy of every detail of the documents attached to the 3.5 PROCEDURE certificate must be ascertained. 1) The file of each project should be thoroughly read so as to understand the terms and conditions of the contract; vi) Nothing should be taken for granted in the process of pre- 2) it must be ensured that contract agreements have been auditing the capital project vouchers. Auditor must entered into and signed accordingly; ensure that he is kept abreast of the systems guiding the 3) ensure thorough review of terms and conditions of payment of contractors' bill. contract; vii) A visit must be made to the site of the project to determine 4) examine the letter of Award of Contract to ascertain that the extent of work done and compare with payments the conditions stipulated had been strictly adhered to; already made (i.e. audit must be done beyond the books). 5) approved rate of Professional Fee must be applied on all

University of Ibadan 12 University of Ibadan 13 Audit Manual Audit Manual viii) Ensure that all transactions are recorded. 2) inspection of all items bought with the advance should be ix) Periodically agree the records in the Audit with value of carried out; capital project with the Finance Officer or Bursary. 3) sending profile with accompanying documents should be x) Ensure that correct taxes are deducted and remitted. vouched; 8) ensure that the mobilization fee is paid only when there is 4) certificates of honour should be demanded for un- evidence of commencement of the works; and receipted expenses; and 9) Request for site Quantity Surveyors' and Architects' 5) ensure that unspent balance is returned to the cash office drafts to ensure proper monitoring of progress of work. 10) Obtain Minutes of Project Monitoring Committee 3.7 MINOR/PETTY CONTRACTS Audit Objectives DIRECT LABOUR PROJECTS 3.6 1) Ensure that materials to be paid for are supplied and These are projects which in the opinion of the Vice-Chancellor used for the project; are capable of being executed internally. 2) ensure that cash advances taken are spent for the purpose These may be done through:- for which they were taken; and 3) ensure that daily-paid workers and/or adhoc support a) Local Purchase Orders (LPOs) staff were properly employed and that they work during b) Cash Advances the period.

The major audit focus are:- Procedure- 1) Purchases through the Central Stores: a) ensuring that materials paid for are supplied and used for Same as the procedure for checking Central Stores the project; purchase. b) ensuring that cash advances are utilized for the purpose for 2) Purchases through L.P.Os:- which they are taken; and. Same as the procedure for checking departmental L.P.Os. c) ensure that workers are properly recruited and perform 3) Purchases through Cash Advance: optimally i) Obtain a copy of the duly approved cash advance Procedure application form; 1) A copy of the duly approved cash advance form should be ii) inspect all items bought with the cash advance before obtained; they are used;

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iii) vouch the spending profile with the accompanying 8) ensure that correct tax is deducted and remitted to relevant documents; and tax authority; and iv) ensure that the unspent balance is paid to the Cash 9) record all transactions. Office.

Audit Procedure 1) read contract letter and understand the logical interpretation; 2) ascertain that there is adequate authority for the award of the contract; 3) check the accuracy of the calculations on the contractors' vouchers after ensuring that the contract was duly awarded; 4) check the L.P.O. or letter of award to ascertain that every payment falls within the period of payment so as not to pass vouchers prepared for expired contract; 5) contact Head of Department concerned where necessary for job carried out in any section to ensure that the job was done satisfactorily; ensuring that responses are documented, appropriately. 6) visit the site or section where the job was carried out and confirm satisfactory completion by measuring the volume of such work done. Invite an officer of relevant discipline to confirm satisfactory completion where necessary; 7) discuss any observations with the officer connected with the processing of the payment vouchers;

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schedule indicating the name of the receiving bank; Chapter Four - ensuring that the name of the receiving bank is as indicated against the bank code number on the bank schedule summary and cross-checking the amount on the 4.0. INTERNAL AUDIT OF PAYROLL voucher with the amount on the bank summary; 4.1 DEFINITION OF PAYROLL - ensuring that the narrations are properly written, indicating the period, category of staff with the amount in Payroll simply means a register of all employees in the figures corresponding with the amount in words; and University, permanent or temporary indicating their profiles and remunerations in conformity with the relevant labour - ensuring proper authorization of the payment, the level laws and conditions of employment. of authority of the person giving the approval, and the document duly stamped; The Salaries and Wages System in the University of Ibadan covers the policies and procedures for authorisation, payment 4.3 POST-PAYMENT AUDIT OF SALARIES procedure and accounting for salaries and wages paid to the This is carried out after payment of salaries has been made. University employees. It is done using the current and immediate past payrolls. Payment of salaries is made to three categories of regular staff The procedure involves the following: on the University pay-roll namely Academic staff, Senior Staff - verifying the name and department of the staff; and Junior Staff. Auditing of salaries can be divided into two viz:pre and post payment audit of salaries. - verifying the cadre and the step the staff should be in the salary schedule; 4.2 PRE-PAYMENT AUDIT OF SALARIES - verifying the basic pay and other allowances due to the This is the verification of staff salaries before actual payment is staff; made. This covers the following areas: - ascertaining the gross pay and identifying any variation - collection of input working papers used in the therein; preparation of the salaries for new entries e.g. leave - where any variation exists, ascertaining the reason for the allowance, promotion arrears, etc.; variation and the amount involved; - checking and cross-checking of figures and the additions - verifying the various deductions made; and with the working papers; - ascertaining the net pay due. - ensuring that payment voucher is attached to each bank

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Where the verification is for a new staff, the procedure in addition with the general procedure indicated above, will Chapter Five include the following: - ascertaining the cadre of the staff as indicated on the letter of appointment. 5.0 STAFF ADVANCES AND STAFF DEBTORS - ascertaining the correctness of the salary placement as These are guided by the manuals of financial and/or contained in the appointment letter. administrative regulations approved by the Council including - ascertaining the date of assumption of duty and the Accounting Manual and the Condition of Service for Staff. ensuring that the payment is prorated accordingly. These manuals, together with the minutes of Council meetings, accounting standard and guidelines, auditing standard and guidelines, communications from the Federal Government and other regulatory agencies, provide rich sources of information on controls that regulate various aspects of financial and other transactions, including loans and advances to staff, in the universities.

5.1 TYPES OF LOANS AND ADVANCES Various types of loans granted to staff include the housing loan, vehicle loan, car refurbishing loan, and short-term salary advances for newly employed staff or those in need of financial assistance.

5.1.1 HOUSING LOAN This is granted to members of staff upon the presentation of relevant documents and evidence of approval by the Housing Loan Committee.

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5.1.2 VEHICLE REFURBISHING LOAN month as indicated, liaise with the Salary Section in order to This is granted to members of staff if approved by the ascertain the reason. University management and committee saddled with the 5.2.2 Cash Advance responsibility. These types of advances are meant for official use. They are Key roles of Audit are to ensure: used for the procurement of items which are for immediate use or which cannot be delayed for Local Purchase Order (LPO) to i) proper deduction from the beneficiaries at source as be raised because of the exigency. These advances are to be contained in the agreement; and retired and cleared within a prescribed period. Failure to do ii) prompt remittance of appropriate amounts deducted to this would lead to deduction from the salary of the concerned the participating banks or sources of the loan funds. staff. The clearance procedure involves the following: - checking and cross-checking the name on the clearance 5.2 CLEARANCE OF ADVANCES form with the name on the application form; There are two types of advances namely: salary advance and - ensuring that the amount is within the approval limit of cash advance. the approving officer; 5.2.1 Salary Advance - where the amount involved is beyond the Head of This is granted to individual staff for personal use and it is D e p a r t m e n t / U n i t ' s a p p r o v a l l i m i t , t h e deductible from the salary of the beneficiary from the source in approval of the Departmental Finance Committee (DFC) six equal installments with accrued interest deducted together should be attached to the clearance; with the first deduction. The work to be done includes the - ensuring that the appropriate authorisation is sought and following: obtained from the Bursar and the Vice-Chancellor where - obtain a copy of deduction form duly signed by the required; beneficiary indicating the amount collected, the accrued - ensuring that the advance is spent for the purpose for interest and the period of deduction; which it was required to avoid misapplication of funds; - ascertain whether the deduction together with the - casting and cross-checking the attached receipts with the accrued interest is deducted in the first month of amount obtained and the analysis of expenditure on the deduction as contained in the deduction form; and clearance form together with the budget or estimate - where no deduction was made for any of the period or earlier submitted;

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- where there is variation in the above, adequate and satisfactory explanation should be given; Chapter Six - where the amount obtained was not fully spent, the excess should be paid into the Finance Office, receipt obtained and attached to the clearance form; 6.0 LOCAL PURCHASES, CLAIMS AND ALLOWANCES

- every supporting document should be adequately This involves checking the genuineness and the authenticity of endorsed (e.g. by crossing) to forestall representation; claims. There are various forms of claims namely: honorarium, and Local Purchase Order (LPO), overtime, imprest, night - ensuring that a copy of the clearance form together with a allowance, mileage, grants, out-of-pocket expenses or refund, copy of the application form is kept in a file. among others. The procedure includes: i) checking and crosschecking the name of the recipient or claimant with the name on the supporting document; ii) verifying the nature and the genuineness of the claim together with the necessary approval obtained; iii) checking for the proper authorisation of the claim by the head of department or unit involved; iv) ensuring that the vote from which the payment is to be made is sufficiently indicated on the payment vouchers; v) checking the narration and ensuring that there is no variation in the amount written in figures and in words; vi) ensuring that no single person initiates and processes the payment to the end; and vii) ensuring that the voucher carries proper authorisation of the relevant officers. For Local Purchase Order (LPO), the following additional actions are required:

University of Ibadan 24 University of Ibadan 25 Audit Manual Audit Manual i) Ensuring that minimum of three quotations are obtained Procedure and attached to the voucher; i) ensure that the actual amount is paid; ii) ensuring that items have been received and inspected by ii) check the mandate or cheque register that the right the Audit with the satisfaction of the user departments suppliers are actually paid; ascertained; and where necessary guarantee can be iii) obtain price list of goods that are regularly required from obtained on the asset; suppliers for comparison with figures in the LPO; iii) ensuring that the name of the unit or department is iv) ensure that payment is not made before verification of written on it; and goods supplied; and iv) seeking for professional advice where professional v) ensure that all purchases are made from most competitive opinion is necessary and required. suppliers. 6.1 TREATMENT OF LOCAL SUPPLIERS' INVOICES 6.3 STORES CONTROL The role of the auditor is to ensure that all local suppliers' Stores control is one of the controls established by invoices are monitored through proper inspection. management. The auditor has a duty to ensure that controls Auditors must be in attendance at Tenders Board Meetings. put in place are adhered to. Procedure: Procedure: The auditor shall: The Auditor shall: i) check and test-check the accuracy of the invoice; ii) ensure that at least three quotations are received and the i) ensure there is proper documentation.(Stock card, best picked; Goods-Received-Notes and Goods-Issued-Notes etc.); iii) ascertain that the goods are not over-invoiced; and ii) ensure that goods in store are safeguarded; iv) ensure that goods supplied and works carried out are iii) ensure that receipt and issue of items are properly done according to specification. accounted for; 6.2 PAYMENT TO LOCAL SUPPLIERS iv) ensure that all issues from the store are supported by SIV After the auditors have ascertained that the goods and work (Store Issue Voucher); done are actually carried out according to specification, he v) ensure that all goods received are supported by SRV shall monitor the payment. (Store Receive Voucher);

University of Ibadan 26 University of Ibadan 27 Audit Manual Audit Manual vi) ensure that physical stock verifications are carried out in Chapter SEVEN conjunction with the Bursary Department; vii) take proper notice of slow moving items or obsolete items; 7.0 PENSION AND GRATUITY and 7.1. Preamble viii) carry out annual stock-taking in Faculties, Departments Pension schemes are contracts, formal or informal (formal in and Units in the University. most cases), between employer and employees specifying what benefits accrued to employee upon the attainment of a 6.4 FIXED ASSETS specified age or length of service and other obligations and Procedure responsibilities of the parties. The Auditor must: A pension is a contract for a fixed sum to be paid regularly to a i) examine the internal checks put in place by enquiring for person, typically following retirement from service. the authorization of purchase. i) There are many types of pensions, including ii) ensure that there is proper documentation; and defined benefit plans, defined contribution plans, as well iii) ensure approval limit is strictly adhered to. as several others. ii) Pension should not be confused with severance pay; the former is paid in regular installments, while the latter is paid in one lump sum. The terms retirement plan and superannuation refer to a pension granted upon retirement of the individual. iii) Retirement plan may be set up by employers, insurance companies, the government or other institutions such as employers associations or trade unions. A funded retirement scheme (defined contribution plans) is one in which there is a periodic payment by the parties concerned to an agency that manage the plans. Unfunded scheme (defined benefit plans) on its part does not require periodic payment. That is, whenever pension liability

University of Ibadan 28 University of Ibadan 29 Audit Manual Audit Manual arises; the employer will have to look for where to source fund Statutory age of retirement (internal or external). a) Every officer shall retire upon attaining the age of sixty five (65) years and seventy (70) years for Professors and The common use of the “word” pension is to describe the shall give the University three month notice prior to such payments a person receives upon retirement, usually under retirement. pre-determined legal or contractual terms. A recipient of a b) If an officer upon attaining the age of retirement in either retirement pension is known as a pensioner or retiree. case fails to serve the University three month notice prior to his retirement, the University shall send the officer on Eligibility compulsory retirement, after three months notices of his Old Scheme (Defined Benefit Plans) retirement to do so. All permanent employees of the University who have c) Retirement could commence anytime on attainment of age completed the normal Probationary period are eligible for forty-five (45) years and above for which pensions would Pension and Gratuity. commence immediately. However, if retirement occurs The period of qualifying for pension is ten (10) years while the before age forty-five (45), pension would be deferred to period of qualifying for Gratuity is five (5) years. age forty-five while the gratuity will be paid immediately after retirement. Circumstances in which pension and gratuity may be granted Pension and gratuity shall be granted to an officer on his New scheme (Defined contribution pension plan) retirement in any of the following circumstances: Here all retiring officers are eligible to pension depending on a) On voluntary retirement after qualifying for circumstances of retirement upon attaining the age of fifty (50) pension and gratuity. years. b) On compulsory retirement after attaining the statutory age of retirement. 7.2 Gratuity c) On advice of a medical board certifying that the This is governed by the Pension Act 102 (1979) with the table of officer is no longer mentally or physical capable of computation attached to the Act. In addition to the various carrying out the function of his office. provisions as contained in the Act, it is also guided by the d) On total or permanent disability while in service. various pronouncements and regulations as released by the e) On compulsory retirement for the purpose of facilitating Federal Government from time to time. improvement in the organization of the department so Gratuity is payable to any permanent employee who that greater efficiency may be achieved. disengaged from the services of the University with service

University of Ibadan 30 University of Ibadan 31 Audit Manual Audit Manual period of 5years and above but less than 10years. Where the employment i.e. permanent, temporary or contract; affected employee has served for a period of more than 5years v) examine the letter of withdrawal of service; but less than 10years, he shall be paid gratuity only at the vi) check for the date the disengagement takes effect; entitled rate between 100 percent and 132 percent of his last vii) in case of an officer who died while in active service, check gross emolument (Table 2). for the date of death as contained in the notification; viii)determine the number of years for which he has served the Death gratuity University; Where an employee died while still in active service and has ix) ensure that the last payslip of the officer is attached in only served for a period of more than 5years but less than order to know his last gross pay; 10years, he shall only be entitled to death gratuity at the x) determine the correctness of the computation based upon appropriate rate payable to his next-of-kin or designated the last salary gross pay; survivor as contained in record of service. xi) ascertain the amount owed to the University by the affected officer (if any) and ensure that such amount is Before 1st of June 1992, the minimum period of qualification deducted from his entitlement(s); for gratuity was 10years with the maximum amount payable xii) ensure proper authorisation of the payment. at the rate of 140 percent. However, this has been reduced to 5years effective from that date i.e. 1st June 1992 with the Where the employee died while still in active service but due maximum amount payable at the rate of 132 percent. for gratuity, the following additional document shall accompany the personal file: After ensuring that all the internal controls have been - a letter of administration duly signed and issued by adequately adhered to, the internal auditor shall, upon the court stating the name of the next-of-kin or receipt of the personal file of the disengaging officer, carry out administrator or beneficiary or designated survivor; the following: - a death certificate from a medical practitioner who has a i) verify the name of the disengaging officer and his last registered office; place of work as appropriate on the personal file; - a passport photograph of the next-of-kin or ii) ensure that the name on the personal file is in no way administrator or beneficiary or designated survivor for different from the name on the record of service; record purpose. iii) establish the corrections of the rank of the disengaging officer upon which computation is based; 7.3 Pension (Old Scheme) iv) examine the terms of employment as contained in the This is also governed by the Pensions Act 102 (1979) with the letter of appointment together with the mode of table of computation attached to the Act (Table 2). It is also

University of Ibadan 32 University of Ibadan 33 Audit Manual Audit Manual guided by the various pronouncements, circulars and who shall receive the balance of the 5years pension. This shall regulations as released by the Federal Government from time be in addition to the gratuity payable at the appropriate rate. to time in addition to the various provisions as contained in the Act. 7.4 Merging of service Where the retiring officer had worked in any University or Pension is payable to any officer who has served for 10years other government establishment before joining the University, and above but for maximum of 35years or has attained pension and gratuity payable shall be paid by the University compulsory retirement age of 60years (for non teaching staff) after apportionment based on the years spent in the various and 65years (for teaching staff) which ever comes earlier. establishments and after acceptance of liability by other The amount payable shall be a function of his last gross establishments where he/she has served. emolument which shall be based on the appropriate percentage between 30 percent and maximum of 80 percent. 7.5 Pension Reforms Act (2004) The maximum rate of pension was increased from 70 percent Before 25 June, 2004, government had been solely responsible to 80 percent of terminal final pay with effect from 1 June 1992. for the payment of pension and gratuity of its retired However, where the retiring officer is a teaching staff and has University employees as it had been operating unfunded non- served for 15years or more as a professor, he shall be entitled to contributory pension scheme. However, the new Pension Act 100 percent of his final pay as pension. which was promulgated on 25th June 2004 is fully funded and In addition to the pension due to the retiring officer (where an contributory. The Act, among other things, stipulates that a officer qualifies for pension), such officer shall also be entitled minimum of 15 percent contribution is to be made by both the to receive gratuity at the appropriate rate of 100 percent and employer (the government) and the employee. In other words, maximum of 300 percent subject to the qualified years of the employer is to contribute 7.5 percent and the employee to service. contribute additional 7.5 percent Framework: Where an employee retired from the University service and he is entitled to pension but has not attained the age of 45years, he The new pension scheme is expected to be operated as follows: shall not receive pension until he attains age of 45years. - it is contributory; - it is fully funded; Death benefit - every employee participant is to have an individual For an employee who died while still in active service, he shall retirement savings account (RSA); be paid a guaranteed pension for 5years payable to his next-of- - it will be privately managed; kin or administrator or beneficiary or designated survivor

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- the pension assets are fully secured and in custody of a letter of appointment together with the mode of third party; and employment i.e. permanent, temporary or contract; - it will be strictly regulated by the National Pension Commission (PENCOM). v) examine the letter of withdrawal of service where the Objectives employee voluntarily withdrew his service; vi) check for the date the disengagement takes effect; The new pension scheme is to be operated based on the following objectives: vii) in case of an officer who died while in active service, check for the date of death as contained in the notification letter; i) to ensure that every employee has a stake in the pension scheme; viii)determine the number of years for which he has served the University; ii) to make it mandatory that every retiree receives his benefits promptly; and ix) ensure that the last payslip of the officer is attached in order to know his last gross pay; iii) to encourage savings in order to guarantee sustainable x) determine the correctness of the computation based upon livelihood during old age. the last gross pay; For employees on the old scheme: xi) ascertain the amount owed to the University by the After ensuring that all the internal controls have been affected officer (if any) and ensure that such amount is adequately adhered to, the Internal Auditor shall upon the deducted from his entitlement; and receipt of the personal file of the disengaging officer carry out xii) ensure proper authorization of the payment. the following: i) verify the name of the disengaging officer and his last Where the employee died while still in active service but place of work as appropriate on the personal file; due for gratuity, the following additional document shall ii) ensure that the name on the personal file is in no way accompany the personal file: different from the name on the record of service; i) a letter of administration duly signed and issued iii) establish the correctness of the rank of the disengaging by a court stating the name of the next-of-kin or officer upon which computation is based; administrator or beneficiary or designated survivor; iv) examine the terms of employment as contained in the

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ii) a death certificate from a medical practitioner who has Chapter Eight a registered office; and iii) a passport of the next-of-kin or administrator or beneficiary or designated survivor for record purpose. 8.0 REVENUE 8.1 OBJECTIVE 7.6 POSTING FROM JOURNAL TO LEDGER The main Audit objective for revenue is to ensure that all The auditor has a duty to ensure that: monies generated by and all allocations to the University are i) all journals and vouchers are properly coded; ii) each document carries proper authorization; adequately collected and documented in line with the extant iii) all postings are done accurately to the relevant ledgers; Federal Government Financial Regulations. iv) reconciliation of cashbooks with bank statement is 8.2 SCOPE carried out as at when due. v) discrepancies observed in both cashbooks and bank 1) ensure proper internal control systems, mostly in statements are immediately addressed. the area of printing, issuing and keeping custody of receipts; 2) ensure that the objectives for which funds are made available to the University are met; 3) ensure that rules, regulations, policies and procedures are complied with; 4) ensure the prevention of loss of cash through fraud or theft; and 5) ensure adequate collection of all monies from all revenue sources by authorized persons using official receipts. 8.3 PROCEDURE 1) identify the sources of revenue generated by the University.

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These include but not limited to: e x p e c t e d t o p r i n t r e c e i p t s f o r o f f i c i a l a) Federal Government Subventions. operations/tranactions except through the Internal b) Hall accommodation fees. Audit Department; c) Sales of Postgraduate application forms. 3) ensure that all cancelled receipts are in triplicate and are d) Rent, telephone and electricity charges. retained in the booklet; e) Disposal of unserviceable fixed assets. 4) identify any alteration and cancellation of a receipt; f) Postgraduate and foreign students' tuition fees. 5) ascertain that the number of receipts collected from the g) Income from investments. Internal Audit tallies with the receipts registered in h) Undergraduate fees. each accounting Unit; i) Research Grants. 6) identify any loss of receipt booklet and make official j) Change of course fees. report to the Director of Audit who will take necessary k) Institution application forms. action; l) Graduation fees. 7) ensure proper hand-over procedure between revenue m) Tender fees. collectors; chief cashier as regards all receipts booklets, n) Donations/Benefactions and other legitimate cash and all other security documents; and revenues; 8) identify any un-explained cash surplus and write to report to the Director of Audit for necessary action. 2) ensure that the source of official receipts used for 8.4 REMITTANCE OF REVENUE collection of revenue is from Internal Audit Role of Audit Department of the University; that such receipts are a) examine and ensure proper internal control systems in collected by authorized accounting officers who will be relation to the remittance of revenue; in custody of the receipts and stock registers and also be b) ascertain the accuracy of the amount on each booklet and held responsible for any loss of used and unused confirm the total amount collected; receipts booklets. On no account should unofficial c) compare the register of receipts in the Internal Audit with receipts be used and no Faculty, Department or Unit is that of the accounting unit; also compare account unit

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7) identify any loss by reason of neglect or fault of any register of receipt booklets with that of each officer, and ensure refund. In case of any default, Department; report should be made to the Director of Audit for d) compare the balance on each receipt booklet with the necessary action. Chief Accountant's cash books to confirm adequacy of records; 8.6 FEDERAL GOVERNMENT SUBVENTIONS e) examine every revenue collector's cash book and receipt Federal Government Subventions to Federal Universities are books submitted to the Chief Cashier to confirm intervals paid monthly through the Federal Ministry of Finance. The at which collection is paid; and monthly remittance received by the Bursar should be audited f) confirm and vouch lodgements of University monies to confirm adequacy and authorization. collected by an officer who is neither a Revenue Collector 8.6.1 Procedure: nor a Chief Cashier in the course of his official duties. 1) request for copies of “Payment Advice” from the Federal Ministry of Finance and evidence(s) of payment into the 8.5 LODGEMENT OF MONIES INTO UNIVERSITY University Account. ACCOUNTS 2) trace the evidence to University's official receipts issued for collection of such amount; and Role of Audit 3) investigate the investment of unutilized cash into time or 1) examine and ensure proper internal control systems call deposits accounts (if any). in relation to the lodgement of revenue into the various University accounts; 8.7 SALE OF FORMS 2) trace all receipt balances to the Chief Cashier's NOTE: Forms are sold either electronically (scratch card, pin ledger and cash book; buying payment platform such as e-transact inter-switch etc) 3) trace all the balances in the cash book to bank tellers. or physically (bank-draft, direct payment to University Cash 4) confirm that all monies are paid to the bank. Office). 5) identify each payment as a component of total Audit procedures: collections before payment into the bank and write a Procedure of auditing revenue from sale of forms is the same report on it; as in normal revenue generation as follows: 6) ensure that no deduction is made from any collection to adjust a previous over credit (in case a) examine the adequacy of internal control over the forms there is any); and being issued; b) check draft register or e-payment report and trace this to

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the number of receipts issued in favour of each applicant; payments are due and as well review necessary c) trace the list of drafts in the register to bank teller to adjustment made to rent payable; confirm payments to bank; d) trace “b” & “c” to receivable register of non-University d) check for accuracy and proper recording of all drafts staff to confirm its recording in account; collected; and e) check through debit note or demand note files and e) report any variance or deviation to the Director of Audit. confirm timely collections; and f) vouch the necessary documents and trace officially issued 8.8 RENT ON UNIVERSITY LANDED PROPERTIES receipts to Cash Office. (Including Staff Housing). Objectives 8.9 ELECTRICITY CHARGES To ensure that all rents are paid into the University accounts Objective and ascertain the expected amount chargeable and actually To ensure that all necessary deductions in relation to electricity paid by each tenant. charges are made from source and remitted adequately to the Procedure for rent payable by University staff. bank. 1) collect staff allocation list to know the number of staff on Procedure payroll for rent deduction; a) check field meter card to ascertain monthly recording of 2) check the rate of deduction for each level of meter reading; accommodation and vouch to confirm accuracy of b) check individual domestic electricity account sheets on recording; which electricity consumption is cast and billed to the 3) trace the amount payable by each staff to deduction affected staff with a copy each to the staff and general schedule on the payroll to confirm that adequate section for deduction from staff salaries; deductions are made; and c) check field meter book to confirm authorization and 4) confirm the total deductions made and trace the adequate approval by the Electrical Engineer; remittance to the designated account. d) vouch the bills prepared by Executive Officer (Accounts) Procedure for rent paid by non-university staff to confirm adequate recording and authorization; and a) obtain the correspondence file for affected tenants; e). in the case of pre-paid meter, ensure that the revenue is b) ascertain in advance, details of the amount payable remitted. annually as recommended by the Director of Works and 8.10 TELEPHONE CHARGES Maintenance; Telephone charges is another source of revenue which the c) ascertain details of last rent payments made, date next Auditor should audit.

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Audit objective: To ascertain the total amount payable from telephone charges Chapter Nine and total remittance to University of Ibadan account. Audit procedure: i) check the record of telephone traffic; 9.0 AUDITING OF CASH OFFICE OPERATIONS ii) check telephone traffic data for the computation of Audit objective Revenues and examine the details of telephone records; To ensure proper documentation of all financial transactions iii) vouch the receipts used for collection of cash proceeds; in the cash office. iv) check the debit note file to confirm total amount charged and disbursement made to appropriate quarters; and REVENUE COLLECTION v) trace record of payment to General cashier (Cash Office) Audit objective: for proper auditing. To ensure that all revenue generated from all Units in the Cash Office are officially receipted on behalf of the University.

9.1 PROCEDURE AND OPERATIONS IN CASH OFFICE a) ascertain that source of official receipts used in the Cash Office is in line with financial regulation (i.e., collection of all official receipts must be from Internal Audit and every used booklet should be submitted to the Director of Audit; b) ensure that a general receipt is used for collection of Federal Government Subvention as well as for payments by the general public; and c) ensure that students' receipts are used for all monies received from students: i) to ensure that master receipts are used for receipts of money from cashiers; and ii) confirm that every official receipt is in triplicate, and each with University crest

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9.2 AUDITING OF COLLECTIONS MADE BY RECEIVING a) Master Receipt Number CASHIERS b) Amount Objective: c) Bank Account Number To ensure compliance with financial regulations as regards d) Name of paying-in-officer collection of revenue in Cash Office by receiving cashiers. e) Signature and Date Procedure: f) Payment verified by 1) Request for the underlisted documents: g) Date verified. a) Daily Income book 3) trace bank paying-in-slip to bank lodgments book; and b) Stubs of receipt booklets. 4) confirm bank authorization to check “payment” verified c) Evidence of remittance of cash collected daily to by column of the bank signed and dated on bank payee chief cashier. only. d) Daily income return file. 9.4 BANKING OF ALL TAKINGS e) File of duplicates of receipts detached showing Objective daily batches. To ensure that all takings are banked at the appropriate time 2) a) Carry out substantive test on the above to and place confirm accuracy, authorization and efficiency. b) Carry out compliance test to ascertain operation Procedure of Internal Control System. 1) examine the relevant internal control procedure over c) Trace all the receipts in usage to Chief Cashier’s lodgments and confirm its adequacy; receipts register and report any missing receipt 2) trace the cash book balances to the bank tellers with to Director of Audit for necessary action. pay-in slip to ascertain date and amount deposited in d) Trace all the daily collection to Chief Cashier’s the designated bank; ledger to confirm collection of monies by the 3) compare the amount received as per cash book balances Chief Cashier. with total amount deposited in bank to confirm any e) Cast receipt collected. deviation; 4) in case of any deviation, clarify reason for the deviation 9.3 ACCOUNTANTS and report to the Director of Audit; 1) confirm the status of banking officer if different from 5) confirm daily takings and confirm prompt banking approved officer; every morning; 2) check the entries into bank lodgments book as below:- 6) trace all cheques received through the mail to cheque register and also to bank pay-in-slip; and

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7) check attestation of the Chief Cashier to confirm proper f) Eliminates the inconveniences of cheque confirmation checking of bank pay-in-slip. and clearing period. However, despite the merits of this system, necessary controls BANK LODGMENTS should be put in place to take full advantage of POS resource. Objective As such, adequate and proper controls must be put in place in 1) To ensure proper documentation of all relevant order to address the issue of access, operations, maintenance information related to bank lodgment book; and contingency plans of Point of Sales Terminals (POS). 2) to see that it is done by qualified staff; and 3) to confirm that all revenue collected are paid as gross. Objectives Procedure To ensure that all POS transactions (receipts) are duly 1) Ascertain total amount lodged by the banking officer; captured or reflected appropriately on the bank statement; and and are properly reconciled. 2) confirm authorization for banking by Chief Cashier or Audit Procedure Cash Office. 1) Ensure that there is control over access to users’ log-on 9.5 POINTS OF SALES (POS) TERMINAL identification codes and passwords. POS terminal is a portable device that allows local debit 2) Ensure that other features of the POS system are properly cardholders make payment for goods and services in a retail secured. environment. This system is advantageous to the University 3) There should be unique system access POS cashier and like any establishment in the following ways: the supervisor. a) Improved efficiency, minimises cash handling and aids 4) A senior and responsible officer should be assigned the reconciliation. responsibility for overseeing the day-to-day operations b) Increase in income as an organization has access to both of the POS system. As such, confirm that he/she monitors cash and card-carrying customers. the functioning of operational controls like repair, c) Instant confirmation of payment. replacement, servicing and monitoring of security equipments. d) Reduces cost of personnel and equipment for handling cash receipts. 5) Ensure a routine analysis of POS system logs, routine system audits or edit checks. e) Reduces exposure to loss due to armed robbery or pilferage by staff. 6) Ascertain that daily receipts reports are generated and

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timely action taken on observed exceptions or deviations; 9.7 PAYMENTS THROUGH MANDATE TO BANKS which should be communicated to the management Objective 7) Daily POS print-outs (duplicate copies) is being To ensure that mandates are properly prepared, authorised reconciled with the amount on the bank statement daily and paid to beneficiary in accordance with financial to ensure that there is no transaction failure. regulations of the University. 8) Ensure that the POS terminal is properly maintained by Audit Procedures the contractor to avoid destructive system breakdown. Vouching of the payment vouchers needed to prepare 9.6 CASH OFFICE PAYMENTS mandates by ensuring Objective 1) the level of internal control in the operation of preparing To ensure proper processing of payment vouchers in payment mandates. compliance with University regulations from any University 2) that payment vouchers have been audited before being account. brought to the Cash Office for payment. Audit procedure 3) that “CHECKED AND PASSED” has been applied on the i) confirm the source of payment voucher; payment voucher and duly signed by staff of the Internal ii) ascertain that the stamp of the Internal Audit Department Audit Department. and signatures are on every officially approved payment 4) that the correct number on the payment voucher should voucher. be indicated on the mandate. iii) check for the account code from which the money is to be paid; 5) that the name of the claimant and account details is iv) ascertain whether the amount requested for payment is specified on the mandate correctly. within the limit of amount to be paid in cash (as stated in 6) that the mandate is appropriately dated. University Financial Instruction) otherwise any other 7) that a number is allocated to the payment voucher and is payment shall be made by crossed cheques and stamped indicated with marker and that such payment voucher A/C payee only – Not negotiable. In case of any deviation number is serialized and in yearly order. from the above, report to the Director of Audit; and e-RECIEPTS AND PAYMENTS v) check all attached receipts & invoices for reimbursement Appropriate procedure for auditing should be adopted as of petty cash for Audit stamps and signatures with applicable in (1) to (7) above, using Computer Aided date and names of auditor. Technologies (CAATs)

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MANDATE SIGNATORY Objective Chapter Ten To ensure that the mandates raised by the University carry endorsements of the authorised signatories of Officers of the University. 10.0 SPECIALIZED AUDIT 10.1 TEACHING AND RESEARCH FARM Procedure Objective: Confirm the process of payment vide mandates to the payee I) to ensure that all expenses by the farm are authorized by: and that value is received for money spent; and 1) Ascertaining that payment is made in favour of the right ii) to verify purchases of, and the and use of animal feeds Payee’s Name and Amount on the Payment Voucher. and drugs. 2) Ensure completion of register and containing the Procedure following information: Feeds i) Inspect deliveries of feeds and animal drugs to the farm (a) Date (b) payee’s name (c) amount (d) payee’s and ensure that all necessary documents are prepared; signature (e) payment (PV) voucher no. and remarks ii) pay surprise visits to the Units and Feed Depot from (if any) where feeds are distributed to various Units; 3) Confirm the acknowledgment of receipts by writing the iii) occasionally check request form for supply of feeds from amount received in words with full signature and date of the Units to quantity supplied by the Feed Department; receipt portion of the PV. iv) there is always a chart of number of animals in each unit. 4) Check whether the PV with other supporting documents This should be compared occasionally with the quantity are stamped with “PAID” stamp and dated. of feeds supplied to find average consumption of the 5) Check for proper posting of transactions original and animals either daily or weekly; and duplicate PV together with supporting documents into v) ensure that control cards are used in all the Units. the main cashbook of the respective accounts. 10.2 Livestock; Rabbit, Sheep, Goat, Swine, Cow and Fowls. 1) Ensure that there are adequate records of each animal. These records must include. a) Weekly weight checks

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b) Pregnancy and confinements 10. 4 PUBLICATIONS c) Deaths The publications unit of the University collects request for d) Culls for sale or slaughtering; printing matters i.e. Faculty handbooks, journals, University 2) ensure that records for new intakes either by birth or wall calendars, diaries, greeting cards, gazettes and others purchase are maintained; The University Publications Panel then invites quotations 3) ensure that there are adequate authorized areas for from reputable contractors and awards the contract culling of any of the animals or removal from pens; accordingly. The Internal Audit ensures that the contractors 4) ascertain the rate of sale per unit of live weight of these perform strictly to specifications and in accordance with the animals; terms of the contract. Delivery of printed materials is subject 5) ensure that there are adequate records for the animals to physical inspection and all expenditure documents are kept as well as produce, drugs and other relevant checked before payments. material; 6) ascertain average of egg production per day; 10.5 CLEANING SERVICES: 7) make unscheduled visits to the farm at the time of Audit Objectives: collection; 1) to ensure that the terms of the services are complied 8) ensure proper entry of collection into the records; and with; and. 9) ensure that there are adequate records of culled animals. 2) to ensure that the contractor has paid the cleaners by cross-checking their signatures on the monthly payroll. 10.3 CATERING SERVICES Objective PROCEDURE This unit was created to provide catering services to the Vice- 10.6 UNIVERSITY RENTED QUARTERS Chancellor's lodge, official visitors, official meetings and other 1) Audit shall regularly update the list of staff occupying Departments/Units in the University. The Audit objective is University quarters with a view to ensuring to monitor the operations of the Unit to ensure compliance. accountability. 2) For such Units as DLC, process the vouchers of landlords Procedure whose properties were rented:- The section operates mainly with imprest account. a) check current tenancy agreement between the Occasionally, it uses Cash Advances and L.P.Os for specific University and Landlord to ensure that the contract purchases as the need arises. All foodstuff purchased should is still valid; be inspected physically before processing and use. b) cross-check the contract sum with the amount prepared;

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c) ensure adequate authorization for the payment; v) discrepancies observed in both cashbooks and bank d) ensure arithmetic accuracy of the payment; and statements are immediately addressed. e) ensure that double payments are not made for 10.9 FINAL ACCOUNTS the same period. Objective: The final accounts should be subjected to review to 3. ensure that all rented quarters are being utilized by ensure the following: periodic inspection. a) That the notes which form an integral part of the accounts are in agreement with the financial statements; 10.7 INVESTMENTS CENTRES b) that the accounts are in conformity with the approved The Audit is involved in the following ways:- standards and regulations; and IMPREST:- Same as the procedure for checking c) that the account gives a true and fair view of the state of departmental imprest. affairs of the University. SALARIES:- Same as the procedure for checking salaries paid Procedure: by voucher(s). 1) obtain a copy of the final accounts as prepared by CASH ADVANCE:-Same as the procedure for checking Cash Bursary; Advances. 2) obtain schedules or relevant break downs of significant OPERATIONS:- Carry out periodic examination of the ledger balances; operation of investment centres as follows:- 3) reconcile balances on schedules to ledger balances; 1) check duplicate of receipts into the books of Accounts; 4) check prime books of accounts and verify accuracy and 2) compare and reconcile daily sales with lodgments into completeness of records; banks; 5) raise relevant journals arising from review of accounts; 3) check and reconcile withdrawals with underlying 6) ensure that these journals are effectively incorporated records; and into the accounts before the final statements are 4) advice the investment centre's management on methods produced for Management; and of improvements. 7) liaise with external auditor where necessary during statutory audit. 10.8 POSTING FROM JOURNAL TO LEDGER The auditor has a duty to ensure that: i) all journals and vouchers are properly coded; ii) each document carries proper authorization; iii) all postings are done accurately to the relevant ledgers; iv) reconciliation of cashbooks with bank statement is carried out as at when due. University of Ibadan 58 University of Ibadan 59 Audit Manual Audit Manual

Table 1 S Table 2 PENSION AND GRATUITY TABLE T N E S U L S YEARS OF GRATUITY AS PENSION AS U O O R O Y C R E

O QUALIFYING PERCENTAGE OF FINAL PERCENTAGE OF FINAL T T C H C I

T N I A N

U SERVICE TOTAL EMOLUMENT TOTAL EMOLUMENT

G E O T D L N I C D A A U

I R H E S A N 5 100 -

E S I E R G I

F T C

R L U I

& N

B 6 108 - F T & F S

I E F E N U S O I

D D O P T O

S I R 7 116 - I N L N S & S H A E

L . S E A L P N

B 8 124 - A R A R X I E A E C L P S H G

...... 9 132 - 1 2 3 4 5 6 7 1 1 1 1 1 1 1

M 10 100 30 T A

N 11 108 32 S R R E T S I S O

R 12 116 34 G R D T O I N O U M S T D T I T A O R ) I 13 124 36 I

U T D A T F O D D I A U T

O U N U D I

R A L 14 132 38 D S

A A U D

A L R A F A U L A

N A O A O A A 15 140 40 L

R T N G P R N A L E C B R T R R O E A E I E R

E 16 148 42 T T

R N T N I I T C

N R N D F E I L N E

D O E

I

17 156 44 R

C A Y T R I ( F P T O N O I D E L T I I I

U

C 18 164 46 I P N H N E A E Y I C S D R D 19 172 48 T P N I U O S 20 180 50 I A R

T 21 188 52 W E L A A Y E L 22 196 54

V A C R I R & T

A

. 23 204 56 L E N N E M E N C E O R C T P S : R

C O

24 212 58 S A U N U L E T H O G R A H A I

I C P N O T N T

25 220 60 I . S . C E S

T E . T I D N L O T N E N H I E S R

D 26 228 62 H

A

N I , L V C I A

U M & S N .

E

T O E L A T A E F O T 27 236 64

L N

O I O

R R M O T

T O & E H O A

O I

E N &

A 28 244 66 C C F E

T H F

E G S . S N N

C C A O E D C

F K R S . A I I N C 29 252 68

L F . R E T C S E R L U I T A S G O E

A G I O D . C T 30 260 70 N R F

A E S C P D W I S

.

...... 0

31 268 72

1 2 3 4 5 6 7 8 9 1

32 276 74 F F /

A 33 284 76 Y T R S

A 34 292 78 T T R E R O 35 300 80 P C P E S U S

University of Ibadan 60 University of Ibadan 61 Audit Manual Audit Manual

Table 3a PENSION HARMONIZATION TABLE w.e.f 2000 Table 3b PENSION HARMONIZATION TABLE w.e.f 2000

University of Ibadan 62 University of Ibadan 63