The Supreme Audit Institutions (SAIs) have the onerous responsibility of auditing not only governmental but also quasi-governmental institutions and reporting on the audit to the Supreme Authority whatever form it may take depending on the prevailing political system. Unless the SAIs are assigned appropriate status and given adequate authority they cannot function effectively. The SAIs, by and large have constitutional and/or statutory recognition and the constitutions and the relevant Acts lay down the duties and powers of the SAIs. In an International Training Programme on 'Audit of Rural Development' conducted by the Comptroller and Auditor General of India (CAG) during September-October 1988 an attempt was made to compare the powers of the SAIs in the various countries of Africa and Asia represented in the programme. The relevant material having been available from eleven countries viz. Bangladesh, Gambia, India, Indonesia, Kenya, Libya, Malaysia, Republic of Korea, Sri Lanka, Zambia, and Zimbabwe, this paper sets out an analysis of the material on the subject.
In India, the Constitution envisages an independent position for the CAG to enable him to discharge his functions. The CAG is neither an officer of Parliament nor a functionary of Government. In a foreword to a book on" Government Auditing' published recently, Shri T.N. Chaturvedi, Comptroller and Auditor General of India has pointed out that a unitary audit in a federal setup in India is designed to play a significant role to make for effective financial administration in the overall national interest and added that the position assigned to the CAG is part of the basic structure of the Constitution of India. He further recalled Dr. B.R. Ambedkar's observation in the Constituent Assembly that this dignitary (CAG) was probably the most important in the Constitution of India. According to Dr. Ambedkar the duties entrusted to this functionary were far more important than the duties of even the judiciary.
If in a democracy Legislature, Judiciary and Executive are organs of the State, the SAI could also be regarded equally as an important organ of the State. This has been in a manner recognised in the Act (No. 5 of 1973) on the Audit Board in Indonesia. In terms of Article 1 of the Act, "the Audit Board is a High Institution which in the implementation of its task shall be independent from the influence and power of the Government, but not be superior to the Government." In the Republic of Korea, Article 2 of the Board of Audit and Inspection Act 1963 provides that "the BAI shall be established under the President, but shall retain an independent status in regard to its duties."
There ought to be uninhibited access to documents and information for the discharge of the responsibilities of audit and report thereon. In India, the power of the CAG in connection with his audit include the authority to inspect any office of accounts and any office where initial or subsidiary accounts are kept, to require production of accounts, books, papers and other relevant documents, and to call for such information as he may require from the person incharge of the office. These have been laid down in Section 18 (1) of the Comptroller and Auditor General's (Duties, Powers and Conditions of Service) Act 1971. Earlier under the Government of India (Audit and Accounts) Order 1936, he was to accept a statement of facts authenticated by the highest executive authority in lieu of a book or document if that authority certified that such book or document was secret. There is no longer such restriction. The CAG is however authorised to dispense with, when circumstances so warrant, any part of detailed audit of any accounts or class of transactions and to apply such limited check in relation to such accounts or transactions as he may determine.
The access to documents and information is available to other SAIs also. In terms of Article 128 of the Constitution of the Peoples Republic of Bangladesh, the Comptroller and Auditor General or any person authorised by him shall have access to all records, books, vouchers, documents, cash, stamps, securities, stores and other government property and in the exercise of his functions of audit, the Comptroller and Auditor General shall not be subject to the direction or control of any other person or authority. In Zambia also there is a clear provision in Sub Section (3) of Section 4 of the Public Audit Act 1980 that in the performance of his duties the Auditor General shall not be subject to the direction and control of any other person or authority.
In Malaysia in order to ensure uninhibited access to even secret documents and information it has been specifically provided for in Section 8 (2) of the Audit Act 1957 that notwithstanding oath or declaration of Secrecy a person shall not be guilty of an offence by reason of any compliance with the Auditor General's requirement. On the contrary in Indonesia, Article 4 of the Audit Board Act allows access to information to the Audit Board only in conformity with the relevant law governing the information.
In Kenya, the Constitution makes it specific that in the exercise of his functions including determination of the relevancy of the books, documents etc. to be given access to, the Controller and Auditor General shall not be subject to the direction or control of any other person or authority. However, under the financial orders issued by the Minister of Finance authorised by Section 31(1) of the Exchequer and Audit Act, papers may be withheld from the Controller and Auditor General with the personal approval of the Accounting Officer who must be prepared to satisfy the Public Accounts Committee as to his reasons for doing so. In the Republic of Korea, in terms of Article 24 (4) of the BAI Act, inspection cannot be performed by the BAI "on the matters which have been made clear as falling under secrets of the State by the Prime Minister, and as falling under obstacles in keeping military secrets or for military operations by the Minister of National Defence." However, in Libya, the Dewan of Audit has under Article 24 of the . Reorganisation of Dewan of Audit law, the right to examine any document, books or papers it deems necessary. The clear implication is that no one else can decide whether it is necessary.
In India there is no specific provision for access of CAG to documents and information relevant to audit available with those other than the auditees. This is so in Bangladesh, Gambia, Kenya and Libya. In Indonesia, the Audit Board has authority to request information in connection with the implementation of its task which any person or any private entity shall be obliged to furnish in so far such shall not be in contravention with the law. In Malaysia, also, Auditor General may call upon any person for any explanations and information which the Auditor General may require in order to enable him to discharge his duties. In the Republic of Korea Article 50 of the BAI Act specifically provides that the BAI may, if necessary, request the presentation of materials or attendance or reply from a person other than the agencies subjected to audit and inspection. In Sri Lanka, the Finance Act No. 38 of 1971 lays down in Section 13 (5) in relation to Public Corporations that the Auditor General shall have the right to summon any person for examination or for the production of any documents where such examination or production is considered necessary for the purposes of audit. In Zambia, Section 8(1) of the Public Audit Act lays down that every contract for construction work or for the supply of equipment, machinery or materials involving the expenditure of Public funds to which the Government, a Public Company or Statutory Corporation is a party, shall contain a provision empowering the Auditor General or any person authorised by him to have access to, and examine all books, records, papers, reports and other documents relating to such contract.
Although the powers to have access to documents of the auditees may be there, in practice there may be problems unless there is proper responsiveness on the part of the auditees and the question therefore could be one of enforceability of the requirements of audit authorities. Some of the SAIs have powers of search and seizure. In Gambia, in terms of Section 13(1) of the Finance and Audit Act the Director of Audit may without payment of any fees cause search to be made in and extracts to be taken from any book, document or record in any public office, in exercise of his duties under the Act. Similar powers are vested in the SAIs of Kenya, Malaysia and Zimbabwe. In Libya, the Dewan of Audit may hold surprise examination or inspection and impound any documents, instruments, records or papers considered necessary as authorised by Article 24 of the relevant Law. In Korea the Board of Audit and Inspection may seal warehouses, safes, documents and articles limited to a minimum extent necessary for conducting audit and inspection.
Audit is quasi-judicial in nature. In fact in some countries the SAIs are designated as courts of audit. In some others the SAIs hold court, examine the persons concerned and witnesses to decide on cases relating to financial matters. In Malaysia, the Auditor General may examine upon oath or affirmation any person whom he may think fit to examine respecting all matters and things whatever necessary for the due performance of his functions. In Zimbabwe, the Comptroller and Auditor General has been given similar powers.
Audit is normally conducted with reference to the relevant books and documents. However, it may become necessary to physically verify the assets-current and fixed, to satisfy in audit of the correctness of the accounts. Some of the SAIs have been given statutory powers to have physical verification of the assets. In Gambia, Section 13(2) of the Finance and Audit Act provides that in exercise of his duties, the Director of Audit or any person duly authorised there to by him shall have access interalia to cash, stamps, securities, stores or other Government property of any kind whatsoever in the possession of any public officer. The SAIs of Bangladesh, Kenya, Malaysia, Sri Lanka and Zimbabwe have similar authority.
In modern times Government activities are becoming more and more diversified and complicated. Governments have embarked upon massive developmental efforts in the realms of science and technology and have entered business. Audit of governmental efforts calls for not only conventional knowledge of finance and accounts but also expertise in various disciplines such as economics, sociology and engineering besides general management. SAI should therefore have free access to the expertise whenever warranted. This has been clearly recognised in the relevant audit mandate of Sri Lanka. Article 154 (4) of the Constitution of the Democratic Republic of Sri Lanka provides that if the Auditor General is of the opinion that it is necessary to obtain assistance in the examination of any technical, professional or scientific problem relevant to the audit, he may engage the services of
In Zambia, section 6 of the Public Audit Act directs that whenever the exigencies of public audit services so require, the Minister responsible for finance may, at the request of the Auditor General, engage such agents or specialist consultants as are necessary to assist the Auditor General in the execution of his duties. However, in terms of Section 7 (2) of the Act an agent or specialist consultant other than a Public Officer cannot be authorised to assist in audit if it is likely to (i) prejudice the security, defence or international relations of the Republic of Zambia or the investigation or detection of offences or (ii) involve the disclosure of any matters or deliberations of a secret or confidential nature of the Central Committee or the Cabinet or any Sub Committee thereof. In any case an agent or specialist consultant cannot have access to any books, records, returns, reports or other documents or enter upon any premises of any component of the Defence Force or the Zambian Security Intelligence Service.
In the Republic of Korea, Article 14 of the BAI Act specifies that the council of the commissioners of the BAI may, where necessary, request a person of knowledge and experience to give expertise. In India, though there is no such clear provision in the Audit Mandate, since under the Company Law the CAG can authorise any person to do the audit of government companies on his behalf, a procedure has been evolved whereby experts in relevant disciplines have been associated with the Audit Board for the comprehensive audit appraisal of central public enterprises which is being gradually extended to the state public enterprises. In Zimbabwe the Comptroller and Auditor General may authorise any person to conduct on his behalf any examination, enquiry, inspection or audit of any books and documents and, such person shall report thereon to him in such manner as he may direct. In Bangladesh, the Comptroller and Auditor General, in Malaysia the Auditor General and in Kenya, the Controller and Auditor General have similar authority. This authority can perhaps be used to make for expert examination. In Gambia also there appears to be similar possibility but the person engaged has to be a public officer according to its audit mandate.
Generally the audit mandates specify the powers of the SAIs in relation to their audit. It is but rarely they spell out the consequences of non-compliance with the requirements of the SAIs. Such provisions are as follows:
In Indonesia, the penal provisions are contained in Article 18 of the Audit Board Act passed in pursuance of the provisions of Article 23 of the 1945 Constitution of the Republic. Whoever intentionally fails to fulfil the obligation to furnish information and other material for audit, refusing or refraining from furnishing information, likewise by preventing, obstructing or frustrating an audit, shall be punished by imprisonment for not more than one year and six months or by a fine of not more than one million Rupiah. Whoever intentionally furnishes false information and material for audit shall be punished by imprisonment for not more than three years or by a fine of not more than two million Rupiah. Keeping in mind the important part the Audit Board plays in promoting Constitutional life in the country and making a success of national development, acts which frustrate the effort of the Audit Board in performing its task are made punishable by sentences designed to have an effective deterring force. For this reason, the criminal acts specified in this Article have been declared to be felonies. Furthermore, the penal provisions are more severe than those specified in the penal code with regard to acts of similar nature.
In the Republic of Korea, under Article 51 of the BAI Act, the persons who fall under one of the following shall be subject to a penal servitude for not exceeding one year or fine not exceeding 100,000 won:
In Zambia, in terms of Section 13 of the Public Audit Act, any person who obstructs or resists the Auditor General or any Public officer, agent or specialist consultant authorised by him, in the exercise of his power of access or power to call for relevant information under the Act shall be guilty of an offence and shall be liable, upon conviction, to a term of imprisonment not exceeding one year or to a fine not exceeding one thousand Kwacha, or to both such imprisonment and fine.
In Zimbabwe, the penal provisions are contained in Section 57 under part VI of the Audit and Exchequer Act. According to these provisions any person who:
In India, a person incharge of any office inspected and audited by the CAG shall have to afford all facilities for such inspection and comply with requests for information in as complete a form as possible and with all reasonable expedition. In Malaysia, every person called upon for any explanations and information by the Auditor General or a public officer authorised by him, shall be legally bound to furnish such explanations or information as the case may be vide Section 7 of the Audit Act. Although similar provision does not exist in other audit mandates it is implied and legal action for non-compliance could be initiated.
Audit throws up cases of neglect, improprieties losses, overpayments, and other deficiencies and irregularities. It is a moot point whether the SAIs should have power to surcharge which could be regarded as belonging to the executive. Some of the SAIs have been vested with this power. In Libya, under Article 33 of the relevant Law, the Head of the Dewan may request any official employed by the authorities subject to the Control of the Dewan or any person charged with Public Service to pay any amount, if in his opinion such official or person has paid or ordered to be paid from Public Moneys any amount without proper authority or in contravention of laid down procedures, or to pay compensation in respect of any losses of money or damage to stores or properties or other damage affecting Government or any Public Organisation or Public Corporation or any other authority subject to its control, caused by the official's or the person's negligence or his wilful wrong act. The amount of such compensation shall be determined by the Head of the Dewan of Audit.
In the Republic of Korea, Article 31 of the BAI Act requires the BAI, after reviewing the result of an audit, to examine and adjudicate as to whether or not accounting official or any other person is liable for compensation in accordance with the provisions of laws. The BAI should then transmit to the competent authority wherever necessary a written adjudication for compensation in which persons liable, amount of compensation and reasons therefor are clearly specified. The competent authority should serve it on the person liable for compensation within 20 days from the date of receipt and order him to make compensation within the period appointed by the BAI. In case the person concerned fails to fulfil his liability for compensation, the competent authority should commission the chief of the pertinent tax office to execute collection thereof by applying mutatis mutandis the provision concerning the disposition of taxes in arrears in the National Tax Collection Act.
In Zimbabwe, under Section 13 of Part II of the Audit and Exchequer Act the Comptroller and Auditor General may surcharge against any person who is or was in the employment of the State, the amount of any sums not collected or accounted for or the amount of any deficiency in or improper payment, payment not duly vouched or loss or destruction of Public moneys, if an explanation satisfactory to him is not, within a period specified by him, furnished to him. He may notify it to the accounting officer. The appeals against surcharge lie with the President. The surcharge raised which has not been withdrawn or from which the person concerned has not been released in appeal shall be debt due to the State.
In Sri Lanka the Auditor General has the Power of surcharge only in relation to his audit of local bodies and universities in terms of the relevant ordinances and Acts governing them.
Normally SAIs report to the appropriate authorities and ultimately to the Supreme Executive Authority on the results of audit. It is for the authorities concerned to take remedial action including disciplinary action against delinquent officials as warranted. However, some of the SAIs have been empowered to demand remedial and disciplinary action. In Libya, the Head of the Dewan of Audit is empowered to ask appropriate authorities to suspend any public official or to take disciplinary action against him for any financial contravention by him and the request is expected to be responded to within 10 days under Article 32 of the relevant Audit Law.
In the Republic of Korea, under Article 32 of the BAI Act, the BAI may request the pertinent Minister or the appointing authorities to take disciplinary action on Public officials who fall under causes for disciplinary action as provided for in the National Civil Service Act or other laws and decrees, or who have refused the audit and inspection or neglected the submission of documents under this Act without any proper reason. The competent authority who has received the request of dismissal as a disciplinary action shall require the decision thereof of the pertinent disciplinary committee within 10 days from the date of receipt of the request and notify the result to the BAI within 15 days from the date of its decision. Under Article 33, in case the BAI has found a fact which seems illegal or improper as a result of audit and inspection, it may request the competent authority to correct or pay more attention to it. The competent authority should fulfil such request within the period set by the BAI.
State Audit is no substitute for internal financial control. As part of internal control it is necessary to have internal audit arrangement. External audit adjusts its work depending upon the coverage, intensity and efficacy of internal audit. SAIs have access to the results of the internal audit and in some cases have even a say in the organisation of the audit. In Sri Lanka under the Finance Act No. 38 of 1971 the Auditor General has the right to require the Public Corporations to settle their minimum internal audit programmes by agreement with him and the right to give any directions to the corporations with regard to the conduct of the programmes and the manner of reporting by the internal audit. The corporations are obliged to comply with any request made by the Auditor General in exercise of these rights.
In order that an SAI may perform its duties without fear or favour, affection or ill will it should not only have the appropriate status, powers and privileges but also certain immunity. It is seldom that the immunity of the SAI is clearly spelt out. For instance in India there is no specific provision relating to the Comptroller and Auditor General either in the Constitution or in the relevant Act corresponding to Article 105 (2) of the Constitution relating to Parliament and its members which stipulates that no member of Parliament shall be liable to any proceedings in any court in respect of anything said or any vote given by him in Parliament or any Committee thereof, and no person shall be so liable in respect of the publication by or under the authority of either House of Parliament of any report, paper, votes or proceedings. However, the Zambian Public Audit Act contains a unique provision in Section 12 thereof which states: 'No action or other proceedings shall lie against the Auditor General or any public officer, agent or specialist consultant authorised by him for or in respect of the findings of any audit examination or inspection carried out by him in the exercise or purported exercise of his functions under this Act'. Unless there is such an immunity clearly provided for, the audit and the report thereon could be somewhat inhibited.
The SAIs have the unity of aim namely of making the administration to be accountable to itself first and finally to the Supreme Executive Authority. In this they function essentially as an aid to administration in the overall Public interest. Each country has assigned the position, the duties and the powers to its SAI in the light of its own ethos. There can be no comparison of the effectiveness of the SAIs. Further, the actual operation of the various constitutional and legal provisions of the SAIs will have to be studied as an adjunct to this study. However, it is necessary to assess periodically the changes needed in the legal framework to make for more effective discharge of the duties and responsibilities of the SAIs. In fact in Gambia, the relevant Act authorises specifically the Director of Audit to send at any time as appears desirable to him a special report on any matter incidental to his powers and duties under the provisions of the Act to the Speaker for presentation to the House of Representatives. In Malaysia also there is similar provision in the Audit Act under which the Auditor General may at any time submit a report to the Yang dipertuan Agong upon any matters arising out of the performance of any of his duties or the exercise of any of his powers under the Act or under any written law, and may submit a copy of any such report to the Ruler or Yang Pi-Pertua Negeri of a State or to a Minister. This attempt to analyse the comparative position of the powers of the SAIs in relation to audit in eleven countries will be worthwhile if it helps in a manner a review of the powers on the basis of the actual experience gained in each country.