Risk management in Maltese government departments and the internal auditor's role

Abstract

Change in the public sector is ongoing. With change come new risks and new dynamics that create new risks. In view of the new challenges and opportunities facing the Maltese economy, it is essential that the public sector considers the handling of risk in all its forms. The objectives of this study are to determine and assess the level of awareness of the directors of government departments with respect to risk management; and to evaluate the actual and potentially changing role of public internal financial control auditors with respect to risk management. To achieve these objectives, questionnaires were sent to directors of government departments and to the public internal financial control auditors within the internal audit and investigations directorate. A case study was also carried out, based on an interview conducted with the risk profiling manager within the customs division. The main conclusion derived from this study is that Risk Management is still in its infancy phase within the majority of Maltese government departments. government departments suffer from lack of resources which is limiting them from adopting a strategic approach to risk management. The public internal financial control auditors' role remains that of facilitating and providing assurance on risk management but the ultimate responsibility of risk assessment and risk management rests with the management of government departments. Moreover, the public internal auditing profession in Malta appears to be keeping pace with foreign developments as the importance to the internal auditor's role as a consultant has increased. A number of recommendations are provided in order to improve the local situation with respect to risk management in government departments and the public internal auditing profession.