Posted by Mario Pessoa
The National Audit Department (NAD) created a ranking system to measure effectiveness of administrative controls. NAD is the Malaysian Supreme Audit Institution responsible for evaluating management performance of all ministries, departments, and autonomous entities at the central, states and local governments in Malaysia. To respond to concerns of the government on the repeated cases of non-compliance and weak internal controls mentioned in the annual audit reports, NAD developed a detailed rating system to measure control performance according to eight major criteria: (i) organizational management control; (ii) budgetary control; (iii) receipts control; (iv) expenditure control; (v) bank accounts control; (vi) asset and inventory management; (vii) investment and loan management; and (viii) financial statements. The methodology used is based on a four-star rating classification of a set of indicators and sub-indicators to indicate if performance is considered excellent, good, satisfactory, and not satisfactory. The Accountability Index is a very objective way to measure and compare control effectiveness across the entire government. The information since 2007 is available at NAD webpage www.audit.gov.my under the label “Accountability Index”.