Nosipho’s challenge is to get everyone on board for internal audit findings

Nosipho’s challenge is to get everyone on board for internal audit findings

While company boards and senior executives generally understand the critical role internal audit plays in promoting good governance that does not mean everyone else always does. If Nosipho Kabeni had her way, everybody at Transnet Freight Rail would be fully on board in appreciating the value that internal audit adds.

“People don’t always understand that when we don’t close internal audit findings quickly and effectively, the consequences can be very serious for our revenue, reputation and certification,” says Kabeni. “For instance, if the external auditors come in and find an unresolved audit issue around quality, we could lose our ISO certification.”

Although she no longer works in internal audit, having moved on to Integrated Management Systems at Transnet Freight Rail, Kabeni retains a keen interest in the field and a firm believer in its business-critical nature. So when the time came to choose a topic for her work-based challenge as part of her BCom degree in Risk Management through Da Vinci, internal audit sprang to mind.

Seeking answers to niggling questions

“It has always niggled at me that people struggle to close internal audit findings timeously and effectively, and I wanted to find out why and come up with ways to change that,” says Kabeni, who originally trained as an analytical chemist and worked in a laboratory.

Targeting all six-business units of Transnet Freight Rail, Kabeni conducted an electronic survey among line managers, administrators and specialists. “I sent out 50 questionnaires and received 35 back,” she says, adding that the best response was from the administrative group, who load the findings of internal audits, followed by specialists who conduct audits. Line managers had the lowest response rate.

Her findings revealed a lack of enthusiasm among some line managers when it came to audits and audit findings affecting their business units. “They referred to heavy workloads and felt they are here to do transport; audits are not seen as core to their business,” she says. “Some said there are too many audits, while others said audit reports were full of jargon and were not written in a way that is understandable.”

A big problem that she identified was the “silo mentality”, especially when audit findings had to be addressed through inter-divisional collaboration.

Value of training and communication

Most of Kabeni’s recommendations for addressing the shortcomings revolved around training and raising awareness, particularly among line managers. She also recommended improving the simplicity and clarity of audit reports and involving line managers in the timing of audits so that these would not be conducted in their busiest periods.

Finally, she suggested that line managers’ performance in closing audit findings timeously and effectively be assessed as part of their annual performance reviews. Admittedly, this would not be easy to achieve. “We would need to put together a robust business case first,” she says, adding that she is still pondering how to take the findings of her challenge further. 

One thing she does know is this: she has a much better understanding of Transnet Freight Rail’s business than before. “My BCom studies and work-based challenge have helped me understand the culture and organisational dynamics, and also how to engage and relate to people. It takes an effort to work and study, but is definitely worth it.”