The EMB’s internal financial audit is its final internal checking mechanism to promote financial probity and integrity. An external financial audit of an EMB reviews the EMB’s accounts to provide an independent opinion of their completeness, compliance, integrity and accuracy. Most EMBs are required to prepare and submit annual audited accounts, which are linked to achievements and activities based on the annual work plan. The report may reflect the level of financial contributions by the state and external sources, where appropriate, and the expenditure of these funds.
Electoral events generate many financial transactions related to acquiring election supplies, materials and equipment and employing large numbers of additional staff. Many EMBs have a relatively large dispersed staff, including thousands of temporary workers, and procure millions of dollars’ worth of electoral equipment, services and materials, often in a very short time. In this environment, corruption and misappropriation of funds may occur if adequate safeguards are not in place.
Financial audits aim to provide reasonable assurance that the financial statements of an audited EMB fairly represent the financial position, the results of operations and cash flows in conformity with generally accepted accounting principles and financial reporting standards. Such audits seek to establish whether all financial transactions have followed the financial compliance criteria, based on either the EMB’s own rules and regulations or on more general public sector financial accountability laws or rules. They also assess and provide an opinion on whether the EMB’s internal control structure for finance and safeguarding assets is suitably designed and implemented to ensure accuracy and integrity in financial management records and to prevent fraud.
Financial audits may cover some or all of the following areas:
- financial statements and information (such as revenue and expenses, cash receipts and disbursements, and the inventory of assets);
- budget requests and variations between estimated and actual financial performance;
- compliance with laws and regulations, especially on procurement, accounting, reporting on contracts and grants, and anti-corruption measures; and
- internal controls on funds, assets and financial reporting.
