The Board of Audit was established in 1880 as a State audit body attached to the Cabinet.
The 1946 promulgation of the present Japanese Constitution and subsequent enactment of the Board of Audit Law strengthened the power and the position of the Board, and it today enjoys total independence from the Cabinet. The Board was also empowered to present opinions and to demand actions whenever it deems necessary to secure the appropriate financial and accounting activities of the Government and other public bodies. Further, the present constitution specifically entitles members of the Board to attend the Diet deliberations on State revenue and expenditure accounts.
Under the present Japanese Constitution :
The Board of Audit Law stipulates, among other things, that the Board shall constantly audit accounts of both present and past fiscal years, and supervise and rectify the financial activities. Besides the State Government, the Board's audit coverage presently extends to 5,417 bodies out of which 92 bodies are subject to Board's compulsory annual audit.
The Board enjoys autonomy in conducting its audit. It specifically establishes Accounts Verification Regulation which requires the accounting officials of the State Government and other public bodies to submit to the Board monthly/ yearly statements of account. The Board received approximately 230,000 statements of account and 69,650,000 sheets of attached vouchers and evidences. The Board audits by examining these statements of accounts and attached vouchers, and by field audit i.e. audit through interviews and physical examination in project sites.
The Board presently has approximately 700 auditors who play principal role in its field audit. The Board traditionally has placed specific emphasis on technical examination of Government projects such as public works and scientific projects. In view of the wide range of knowledge required for this type of audit, the Board has continuously hired university graduates who majored in technology and science, and they presently number approximately 170. Further, separate from these technical staff, the Board constantly hires two or three experts from outside public bodies to advise auditors on specific technical matters. Also, the Board is entitled to seek views and opinions from outside experts and entrust specific examination to outside organizations in the case of highly technical matters.
From November 1989 to October 1990, the Board spent approximately 44,000 man-days for field audit which covered 2,000 (40.8%) of the 4,900 major accounting units throughout the country. The Board sent 900 official inquiries to auditee agencies based on its audit findings in the same period.
The Board sends its annual Audit Report to the Cabinet normally in December. The Cabinet submits to the Diet the final State revenue and expenditure accounts together with the Report. The Audit Report is often referred to in the Diet Public Accounts Committee deliberation on government financial activities.
The President, Commissioner, or other management staff of the Board attend Diet Committees and explain the result of its audit.
The audit findings on individual Government agencies and other public entities make up the substantial and key part of the Board's annual Audit Report and they are categorized as:
The Board reported in its 1989 annual Audit Report:
The Board comprises the Audit Commission, a decision-making organ, and the General Executive Bureau, an executive organ.
Audit Commission : The Audit Commission consists of three Commissioners, who are appointed by the Cabinet with the consent of both Houses of the Diet. The appointment of Commissioners is attested by the Emperor as in the case of State Ministers and Supreme Court Judges. A commissioner's official term is seven years, and his status is guaranteed during the term to secure the Board's independence from the Cabinet. The President of the Board of Audit is appointed by the Cabinet based on mutual election among the three Commissioners. He presides over the meetings of the Audit Commission and represents the Board.
The Audit Commission is a decision-making organ which decides all important matters such as enactment of the regulations of the Board, designation of bodies to be audited by the Board, audit findings to be reported in its annual Audit Report, and appointment and dismissal of personnel.
General Executive Bureau : The General Executive Bureau is composed of a Secretariat and five Bureaus and is responsible for executing audit works under the direction and supervision of the Audit Commission. Under the five Bureaus are a total of 34 audit divisions, each being assigned audit of individual Government Ministries/Agencies and other organizations. The Secretariat has 14 divisions and carries out mainly administrative work. Besides administrative work, it is also in charge of adjudication of accounting officials. The total number of the staff of the General Executive Bureau stands at 1,237 as at the end of March 1991.
Meeting with budget-making authority : The Board regularly holds meetings with the budget-making staff of the Ministry of Finance. The meetings are intended to reflect the Board's audit findings on the budget-making processes and also to get background information on the state budget for the Board's impartial and unprejudiced audit work.
Information exchange with outside audit organizations: The Board exchanges information with outside audit organizations such as the Administrative Inspection Bureau of the Management & Coordination Agency.
Further, the Board regularly holds "Public Audit Forum" attended by outside auditors such as internal auditors of local governments public bodies and certified public accountants for better cooperation and coordination in audit.
Training : The Board implements numerous training programs every year for its auditors, assistant auditors and administrative staff.
Besides internal training courses, the Board regularly implements a number of training programs for accounting officials and internal auditors of outside public bodies such as Government-invested bodies and local governments for better management of public finance.
International Relations : The Board has played an important role in international scene, especially as a member of the INTOSAI and Asian Organization of Supreme Audit Institutions (ASOSAI).
The Board hosted the ASOSAI Third Assembly and Second International Seminar in 1985.
The Board has continuously held the ASOSAI Governing Board membership since the establishment in 1979, and functioned as its chairman for the three-year period 1985 to 1988. Mr.Kiyoshi Nakamura, the present President of the Board has been elected as Secretary General by the ASOSAI Assembly held at Beijing in May 1991.
The Board has hosted seminars on government auditing under the sponsorship of the Japan International Cooperation Agency (JICA) every year since 1983.
"ASOSAI has become an established, well-reputed institution organising international training courses and promoting the transfer of knowledge with the aim to enhance public accountability and government auditing."
Dr.Heinz Gunter Zavelberg
President, German Court of Audit
and Chairman, INTOSAI