| The importance of governance as a key element of sustainable development and poverty eradication is undeniable. This article takes a look at how the concept of ‘good governance’ is practiced in Iran. |
Governance is as old as human civilization. Governance means to govern, rule and to judge, but nowadays we can describe it as: "the process of decision – making and the process by which decisions are implemented (or not implemented)".
Historical research shows that governments in all kinds of societies (rural, local or urban)and with various attitudes, beliefs and traditions, always have played a basic and leading role in administrative affairs of society. In all governments, there are distinctive and defined roles for managers (democratic and non – democratic ones). But, in the course of time, with the help of scientific inventions and discoveries and communication technologies, people have struggled to take part in (social, political and economic) decision – making and in managing the government. Moreover, in this current era, which is called, the age of information and communication and also considering the process of globalization, the role and duties of governments are totally different from the past. People, as the real owners of the society, demand proper and effective management and development and want governments to have legal powers and authorities to realize their rightful aspirations.
Our country for more than 25 centuries was under rule of despotic kings and except some short periods. People were deprived from basic rights such as social justice, job security, social welfare and accountability of officials. After getting acquainted with Islamic beliefs, our people always desired the establishment of an Islamic government, because they knew that, in the view of Islam, government neither derives from the interests of a class, nor does it serve the domination of an individual or group. Rather, it represents fulfilling the political idea of the people who bear a common faith and outlook, organizing to initiate the process of intellectual and ideological evolution towards the final goal, i.e., yielding to Allah" (From the preamble of the constitution of the Islamic Republic of Inran). Therefore, by believing the Islamic style of government experimented during the life of Holy Prophet and a brief government in the time of the first imam of Shiite, people asked for the establishment of Islamic government. In February 1979, this desire reached fulfillment and the people, freely and with an affirmative vote, chose their government system. The Islamic Republic was then established in our country.
After the revolution, government duties and responsibilities expanded and gained more importance because, on the one hand, people who had been under the rule of despotic governments for centuries, asked for their rightful social, political, cultural and economic claims and on the other hand ,there were special situations arising from nationalization of banks and Industries, capital losses, and also occurrence of the imposed war, resulting in an expansion of the government role in controlling the country.
Some thinkers still believe that government is the main source of development in the society. We may reject this idea but cannot deny the importance of this role of the government. Governments, for executing duties defined by the society (including participation and intervention in diverse social, political and economic fields, establishing social security and equity and even provision of vital goods and services), should possess particular characteristics. These characteristics differ in various societies depending on culture, geography, administrative and political traditions, as well as economic situations and conditions. However, since 1995, when the term "good governance" was introduced, there have been attempts for applying the same frameworks and characteristics. According to "Rajesh Tandon" and "Kumi Naeedoo", these characteristics are as follows:
In a speech in September 1997, the Secretary General of the United Nations stated the key elements of good governance to be:
The World Bank has identified the following key dimensions of good governance:
Asian Development Bank also agrees to the principles of accountability, participation, predictability and transparency and has identified them as being key elements of good governance.
As mentioned above, in our country, good governance, in addition to these principles, must break completely from the system of oppression and entrust the destinies of the people to meet one of people’s aspirations as manifested in the Constitution. We will discuss, later in this article, why government must be a democratic one and people should play a role in country’s decision-making exerting control over their governments.
According to article 56 of the Constitution of the Islamic Republic of Iran, absolute sovereignty over the world and man belongs to God and it is He Who has made man as master of his own social destiny. No one can deprive man of this divine right, nor subordinate it to the vested interests of a particular individual or Group.
In our country, according to article 57 of the Constitution, the powers of government are vested in 3 wings – the Legislature, the Judiciary and the Executive. According to democratic principles, these powers are independent from each other, and segregation and independence of powers reduces chances of potential misconduct.
People in our country are at the head of affairs. The following chart delineates direct or indirect role of people in electing government officials.
In the Constitution of the Islamic Republic of Iran, central rule is granted to the people (who are true masters of the revolution). Since public participation comes from the principle that people have a central and basic role in development of the country and must participate in fulfillment of government programs and reaching its objectives and at the same time have control over its functions, the Constitution has provided necessary provisions for the participation of people in governance, and electing high-ranking officials in government pyramid. Participation requires awareness of people in order to form and organize a civil society. According to article 100 of the Constitution, ‘control and cooperation of people’ includes establishing Village, Division, Municipality or Provincial councils. The role of the people in electing government officials is evident as:
We can assume the country to be a great corporation in which the stockholders (citizens) directly or indirectly elect General Assembly (Islamic Consultative Assembly), Managing Director and Head of Directors (The President) and the Board of Directors (Council of Ministers). This corporative procedure in electing country’s officials is the base and foundation for principle of accountability of officials against people because participation is related to accountability and, in a democratic system, officials are indeed accountable for their statutory duties.
Participation improves performance of officials and enhances the efficiency and effectiveness of the national economy. Public participation is not confined to right of vote and vote allotting and it has many other dimensions like cooperation with the government and people’s role in economic affairs, as well as the political, social, and economic development of society, which are of great importance. People, through management of the private and cooperative sectors, have the power, ability, and potential necessary for society’s improvement and development. This participation is by establishing trade unions, chambers of commerce, cooperative companies concerned with production, political parties and non governmental organizations, individually or collectively, and in relation to the medias role (T.V., radio and the press) through participating in opinion polls, discussions, debates, seminars and also by supporting or boycotting elections.
The media have an undeniable and important role in civil societies and they not only provide right and sound information but also increase people’s awareness.
In the same manner, they can reflect aspirations in public opinion and obtain responses from government officials.
Therefore, in the laws and regulations of our country, public participation has a crucial role. Stipulation of cooperative and private sectors (besides the public sector) and their coordination and relationships, have been clarified in several articles of the fourth chapter of the Constitution. We refer to some of them as follows:
Predictability refers to the existence of laws, regulations, and policies to regulate society and their fair and consistent application. The importance of predictability cannot be overstated, since without it, the orderly existence of citizens and institutions would be impossible. The rule of law encompasses well – defined rights and duties, as well as mechanisms for enforcing them and settling disputes in an impartial manner. It requires that the state and its subsidiary agencies be impartial and accountable to people and enterprises in the framework of rules and regulations.
The importance of rule – based systems for economic life is obvious. Enterprises, which constitute the base of the national economy, must be able to plan and make decisions for the future. Since these enterprises are not formed for short periods of time and their activities are permanent, according to the going-concern principle, it would be impossible for them to plan and make decisions without knowledge of government plans and policies for the future. Economic actors must be aware of the risks associated with investment, economic, growth rate, human and professional resources, and economic, financial and monetary policies of government for the future. On the other hand, government must predict its plans and policies within various time scales (long- term, mid- term, and short- term) which have their own extensions and their specific difficulties and complexities, and publish them for public notice.
These policies and plans approved by representatives of the people form a legal framework that helps individuals and public or private agencies to assess business risks in a rational way, lower cost of transactions and formulate their future plans. Plans prepared by the government for the future, which include anticipations about growth , inflation and transaction rates and level of risk , employment scales and etc., will minimize sudden and willful decision-making by government. A good government, in formulating future plans, takes into consideration the opinions and recommendations of trade unions, economic and social institutions, and environmentalists. Approving and publishing such plans ensures that people and economic actors will not face substantial and widespread changes (which may have great impact on their plans). Therefore, besides the legal and regulatory framework, consistency of public policy is also important so that economic actors have as reasonable assurance about the future behavior of key variables such as prices, the exchange rate, and employment levels. However, consistency does not mean rigidity and governments do need to respond flexibly to changing circumstances and social and economic conditions ( with regard to the accountability principle) and be able to make mid – course corrections , as necessary.
However, plans that are supported by more precise anticipations of the future conditions, are in conformity with the realities of society. Prepared with cooperation of economic actors, they will be more successful and face fewer changes when implemented. In this respect, openness of government to criticism is of great importance. Also, it must be considered that, in some societies, domestic or foreign economic, social and political pressures may force government to withdraw from executing its programmes, despite having confidence in them.
In the laws and regulations of our country, this issue has gained enough consideration, so that in the preamble of the Constitution, under the ‘objectives of national economy’, it is stated that: "in strengthening the foundations of the economy, the fundamental consideration will be fulfilled the needing materials of man in the course of his overall growth and development. This principle, contrasts with other economic systems, where the aim is concentration and accumulation of wealth and maximization of profit. In Islam, the economy is a means, and should be an efficient factor for attaining to the ultimate goal."
According to article 43 of the Constitution, governments have been charged with achieving the economic independence of the society , uprooting poverty and deprivation , and fulfilling human needs in the process of development while preserving human liberty , based on criteria like the provision of basic necessities for all citizens, ensuring conditions and opportunities of employment for everyone with respect for the right to choose freely ones occupation , the prohibition of infliction of harm and loss upon others ; monopoly ; hoarding ; usury ; and other illegitimate and evil transactions, the prohibition of extravagance and wastefulness , the utilization of science and technology and training of skilled personnel , prevention of foreign economic domination over the country’s economy , emphasis on increasing agricultural and industrial production in order to make the country self –sufficient , formulate the country’s economy .
According to section 3 of this article, which lays more emphasis on the principle of predictability, government is charged with structuring the national economy in such a manner that, other economic and social needs stipulated in the Constitution can be implemented.
Also, in terms of Article 5 of the Plan and Budget Act, the Management and Planning Organization is charged with undertaking social and economic research and studies in order to prepare plans, budgets and economic and social reports. Therefore, the said organization prepares long, medium and short–term plans (which include anticipation of future measures of government) and presents these plans to the Islamic Consultative Assembly for review and approval.
In the following we describe briefly the said plans:
It is a plan for yearly operational activities of government, which is prepared on a yearly basis and presented to Parliament with the presentation of the annual budget bills. It includes specific targets and objectives, operational activities of executive agencies and concerned credits for one year, within the framework of policies and objectives of the 5 year development plans.
Therefore, the social, cultural and economic policies of government for coming year are considered in the annual Plan and Budget Law. Also, issues set forth in the single article and items of annual budget law are a guide for forecasting and decision making of private and public sectors.
Government agencies, having presented their needs and suggestions in consideration of their subject of activity and long and medium – term goals, to the Management and Planning Organization, according to the budget law, become informed about their resources and limitations. With this information, they are able to do their planning and decision-making.
Private and cooperative sectors also can consider policies set forth in the annual budget of government such as the amount of increasing in prices of public goods and services, transaction rate, predicted rate of inflation and incentive policies, and make proper and necessary decisions for continuing their economic life.
It is a comprehensive plan prepared for a 5 year period, approved by the Islamic Consultative Assembly. In this plan, objectives and policies of socio – economic development for that period are described. It includes all financial resources of government and also resources of the private sector and public companies allocated to development activities on the one hand and governments current and development credits and expenditures of public companies and private sector on the other hand, provided in order to meet the said objectives.
After the glorious Islamic Revolution, till now two of the 5 year plans have been implemented. Currently, the third 5 year plan is in the course of implementation. With a glance at these plans, we can conclude that government, as the Executive, is required to undertake approved policies. Economic actors with considering objectives specified in 5 year plans such as, administrative and managerial reform programs, reorganization of the state– owned enterprises in order to reduce governments undertakings , the manner of divesting stocks of the state – owned enterprises, regulation of monopolies and promotion of competition in economic activities, employment policies, taxation system, monetary, financial and administrative policies and predictions about government revenues and expenditures, gross national product, inflation rate, composition of gross financial investment in each sector etc., can foresee their future situation and accordingly prepare plans and make decisions.
It is a plan in which social and economic development is envisaged for a 10 year or longer period as a directive and guidance for 5 year plans.
Transparency means increasing people’s understanding of the decisions and internal mechanisms of government. In other words, it means that individuals are informed about government’s policies and actions, and know where to go, when faced with obstacles or disputes. Complying with the principle of information freedom is required to create desired relations between the government and the people. In this respect, necessarily officials’ attitude must change and adjustments in culture and behavior of the administrative system should be undertaken.
We can briefly describe transparency as follow:
"Transparency refers to the availability of information to the general public and clarity about government rules, regulations and decisions."
In fact, government’s decisions must follow certain rules and regulations, and be easily available to people that are affected by those rules and regulations. Transparency results in strengthening and accomplishing the predictability.
Accessing accurate and timely information about the economy and government policies can be vital for economic decision – making in private sector and accessibility of citizens to this information is one of their civil rights. Clarity and accessibility of government rules, regulations and decisions will increase public assurance about country’s good governance, and will result in reinforcing and strengthening the government. Also transparency in government decision – making and public policy implementation, reduces uncertainty and can inhibit corruption among public officials. In other words, if there is no transparency, there will be no accountability and in the end we will have financial corruption.
Therefore one of citizens’ rights is requesting accountability of elected governments and urging government to present clear and timely information to them and their legal representatives. This information must be simple, correct, clear and easy to understand and users of this information should be able to evaluate and judge government’s accountability. To this end rules, regulations and procedures that are straightforward and not susceptible to different interpretations don’t provide discretionary powers to government officials.
However, it is not always rational and proper for all information and regulations to be clearly and freely accessible to public, because some information or decisions, if promulgated or publicly disclosed, may cause economic and financial loss or political, cultural and social hazard to society and jeopardizing national security. In all countries, such information is classified and becomes accessible only to individuals who, according to the laws and regulations are responsible and authorized to have access to such information. Also, in order to protect property and non-property rights for innovators and inventors and their encouragement, the concerned information may not be disclosed without permission of the interested individuals. So, it may be helpful to distinguish ‘information as a commodity’ from information as a process’.
In our country, the transparency principle has been well thought-out in the Constitution and also is considered in the compilation of laws and regulations. This is specially important in regulatory agencies. Laws and regulations evidently have charged executive agencies to prepare their financial statements according to specified standards and present them to the Supreme Audit Court. The Supreme Audit Court is legally authorized to access classified documents and top secret information. For example, according to the item z of note 45 of Budget Law for 1981, which is one of permanent laws, the report for expending credits for defense items, should be presented to the board, of which one of the members is the President of the Supreme Audit Court.
One of the characteristics of good governance is the existence of a legal framework which must avail appropriate conditions providing government with authority and resources commensurate with determined objectives and missions, that are necessarily in the direction of the country’s development. Practical guidelines for reaching to objectives must be clearly specified and responsibility and accountability of government for its powers and undertakings must be defined.
Without a legal framework, transparency of required information for citizens and establishment of control structures would not be realized and we cannot assure accomplishment of the accountability process.
Some necessary aspects of legal framework for good governance are as follows:
Within such a legal framework, people’s expectations from government become more clear and government also knows how meet these needs and which approach to choose for the country’s development. It is laws and regulations that determine who is answerable to whom and how is the relation between them . Finally, within such a legal framework, we can review whether the objectives have been attained or not and fairly and objectively judge about diversions from planned performance. In addition, if necessary, reviewing or amending laws and regulations will be promptly and precisely possible. We can say that the capability of government is measured by the effective execution of rules and regulations ratified by people’s representatives. But laws and regulations must be ratified in a manner that, while considering the principles of flexibility and creativity, do not permit officials and the administrator to be assigned with too much power, in a manner that jeopardizes achievement of objectives or harms regularity or accountability.
In the Islamic Republic of Iran, the government’s objectives are clearly defined in the Constitution, which has been approved by people’s vote. Being a permanent law, its revision is achievable only by approval of an absolute majority vote according to a national referendum. In the Constitution, objectives are too general to be of much use, but in the legislation passed by Islamic Consultative Assembly, methods of attainment to objectives are specified. The Guardian Council examines the compatibility of the legislation passed by Islamic Consultative Assembly, with the Constitution and Islamic ordinances.
We refer to a number of articles of the Constitution as examples:
There are applicable laws and regulations about above- mentioned objectives to help people and government recognize their duties and responsibilities.
Legislation passed by Majlis (Islamic Consultative Assembly) and also results of popular votes according to article 1 of the Civil Law, must follow legal steps for conveying to the President.
The President must endorse it within five days from its receipt and convey it to related officials and also issue an order for publishing it. The Official Gazette must publish it within three days of its receipt. Also in article 3 of the Civil Law, publishing Legislations in the official gazette has been emphasized. Therefore, easy access to laws and regulation’s context is possible. To ensure that ratifications and by-laws of the government are in conformity with legislations, according to article 138 of the Constitution, they shall be brought to the notice of the Speaker of the Islamic Consultative Assembly.
In addition, if any legislation has ambiguities in its context or is not fully clear, it is possible to ask the body which has ratified it to give its interpretation, as it is stated in article 73 of the Constitution that "the interpretations of ordinary laws falls within the competence of the Islamic Consultative Assembly. The intent of this article does not prevent the interpretations that judges may make . . ."
Also, if the context of by-laws and circular notes, issued by judicial or executive agencies, is in conflict with laws and regulations, people have the right to put up their complaints and objections in the Court of Administrative Justice and demand the annulment of any such Regulations.
Every administrative organization and government as a whole (government being a set of administrative organizations) can be measured with its accountability performance. In fact, accountability is a criteria for measuring performance of government officials. In other words, it is the key criteria for good governance. Government is as an agent of people and is elected by them to accomplish (according to laws and regulations) their demands, as described in the Constitution and other legislations. People have the right to know about managing their country’s resources, collecting revenues and paying expenditures, designing and executing social, economic and cultural development plans by government and reviewing their outcomes and impacts. Government should be accountable to the public and regulatory bodies that, on behalf of the people’s representatives, have been assigned authority for control and supervision.
According to the accountability principle, the person answerable, is required to present clear, correct and comprehensive information wanted by questioner.
The questioner must specify precisely the framework of required information so that the persons answerable are able to present useful, relevant and timely information reflecting facts about objectives, activities and legal duties assigned to them. In connection with financial affairs, information must be such that auditors are able to give their opinions about accuracy, transparency and comprehensiveness of information presented by responsible persons.
It is obvious that accountability is promoted by diversifying government duties and responsibilities and increasing delegation of authority.
The degree of accountability of government in different societies depend on many factors, some of them being :
Benefits of accountability for society are as follows:
Absence of accountability and being careless to public opinions have many harmful consequences which, if continued, may cause irretrievable damage.
We refer to a number of these consequences:
In our country, people can exercise accountability in different ways (through trade unions, political parties and organizations, media etc.). In addition, there are statutory organizations and foundations that scrutinize the performance of public officials and, in other words, assess and evaluate their performance by specific criteria. Since accountability is always associated with control, requesting responses from officials about their responsibilities is one of the duties of regulatory bodies. Therefore, if regulatory bodies are to be able to exercise their controls in the most excellent way and publish clear , accurate , impartial and updated reports, people will be informed about the performance of executive agencies and know how to behave with employees and responsible officials .We first discuss about governance and different aspects of good governance with an eye to Supreme Audit Institutions’ responsibilities concerning financial control and then introduce regulatory bodies in our country, before finally discussing the role of the Supreme Audit Court in governance and accountability.
In the world conference on governance held in 1999 in The Philippines, governance was described as: "A system that is transparent, accountable, fair, democratic, participatory and responsive to people’s needs".
The World Bank states simply that: "Governance is the exercise of political power."
Importance of governance as a key element of sustainable development and eradicating poverty and its role in behavior and performance of employees and responsible officials in all societies is undeniable. According to our religious belief, we suppose that God witnesses our behavior and deeds and the main governance belongs to Him. The first leader of the Shiite, who exercised extreme care and concern in choosing his agents at all times, asked them to be careful in choosing their managers and have control over them, as he says "Then, investigate their deeds and employ your honest inspectors to watch them because your covert surveillance causes them to be pious and get along with other people."
Imam Ali (P.B.U.H), says on another occasion, "Do scrutiny in tax affairs in the benefit of tax payers" Also, he says to one of his agents who has committed treason "You don’t believe in resurrection day and return to God or you don’t have any fear about scrutiny in accounts and investigation ?"
This care and concern of religious leaders shows the valuable and critical role of control in government. Of course, we must consider that with the ever-increasing share of government’s responsibility in society and complexities resulted by expanding human relations, proximity of human societies and tendency toward globalization, technical achievements, and undesired crisis now and then taking up countries or regions of world, the role of regulatory bodies gains more significance.
In our country, there are a variety of controlling systems and a number of regulatory bodies which control, measure and evaluate efficiency and performance of agents, responsible officials and government employees. These controls which are in existence in the course of performance, at the end of work, or during monitoring and follow up, come about in the three branches of the government and even the heads of these branches are not exempted from these controls.
A. Guardian Council
Guardian Council is an independent body whose main responsibility is to safeguard the Islamic ordinances and Constitution by examining their compatibility with the legislation passed by the Islamic Consultative Assembly. With regard to article 94 of the Constitution, the Islamic Consultative Assembly must send all legislation passed by it to the Guardian Council; the Guardian Council must review it within a maximum of ten days from its receipt with a view to ensuring its compatibility with the criteria of Islam and the Constitution. The Said council, again according to article 99 of the Constitution, has the responsibility of supervising the elections of he Assembly of Experts for leadership, The President of the Republic, the Islamic Consultative Assembly and direct recourse to popular opinion and referendum. Existence of this council ensures people that their representatives are obliged to act in accordance with articles of the Constitution and Islamic ordinances in the law making process. In other words, a regulatory body reviews results of representatives’ works and gives its opinion about them and has the right of supervising over the elections; thus, assurance is given to people that the elections will be held soundly and accurately.
The Guardian Council has 12 members. 6 of them are fair jurisprudents conscious of the present needs and the issues of the day selected by the Leader. Another six are Jurists, specializing in different areas of law, elected by the Islamic Consultative Assembly from among the Muslim Jurists nominated by the head of judicial power.
B. The Executive power
1. Audit organization
This organization acts as the internal auditor of the executive power. It performs financial audits in public sector enterprises and reports to the general assembly (general assembly of public enterprises consist of one or a number of the ministers). According to article 151 of the Commercial Law, Audit Organization must inform the general assembly of any violation or non-observance of law in the affairs of public enterprises, and if, while performing its duties, encounters public offences, it shall report the same to the legal authorities.
2. Planning and Management Organization
The most important duties of this regulatory body are as follows:
3. Ministry of Economic and Financial Affairs
The duties of the Ministry of Economic and Financial Affairs are: continual monitoring prior to payment of expenditures of ministries, government institutions and public enterprises from the viewpoint that they comply with financial rules and regulations; examination and ensuring of correctness and accuracy of financial activities by comptrollers dispatched to these agencies; and responsibility of preparing, compiling and representing financial accounts.
C. The judiciary
According to article 156 of the Constitution, the judiciary is responsible for protecting the rights of individuals and society, implementing justice and supervising the proper enforcement of laws. Two regulatory bodies operating under its supervision are:
1. Court of Administrative Justice
This court, according to article 173 of the Constitution, is required to investigate the complaints and objections of the people with respect to government officials, organs and regulations passed by executive agencies and issue commands. Indeed, this court after objection of people, asks questions about the performance of public officials and according to the law, they are required to answer these questions.
2. National General Inspectorate
According to article 174 of the Constitution, this organization has been constituted in accordance with the right of the judiciary to supervise the proper conduct of affairs and the correct implementation of laws .This organization controls all financial, administrative and managerial affairs of all ministries, institutions, government companies, and other non-governmental institutions and foundations like Municipalities and also institutions which are managed by government. It investigates the complaints of people about the performance of above –mentioned agencies. Employees and officials of those agencies are required to be answerable against it.
D. The legislative power
Better governance is realized in the legislative power, because "principle of accountability to public" is more evident in this power.
In fact, ‘people’, who delegate the sovereignty right to government, also delegate with their votes, the right of asking for accounts and demanding explanations to their elected representatives in the Islamic Consultative Assembly and ask them to have control over country’s affairs and administration. The Islamic Consultative Assembly (Majlis) has only one regulatory body. In addition, the Majlis itself has the ways and means of exercising control and demanding explanations which are as follows:
1. The Committee of Article 90 of the Constitution
Members of this committee, which are representatives of Majlis, according to article 90 of the Constitution, are required to investigate complaints of individuals and organizations concerning the work of the three branches of the government. Therefore, Majlis can investigate complaints received concerning the work of the Judiciary and the Executive and ask for necessary and sufficient responses by them.
2. According to article 176 of the Constitution, the Islamic Consultative Assembly, has the right to investigate and examine all the country’s affairs.
3. According to articles 88 and 89 of the Constitution, which are of progressive nature, concerned with the accountability principle, necessary means are provided for representatives (individually or collectively) to pose questions to ministers on subjects relating to their duties. Whenever at least one – fourth of the total members of the Islamic Consultative Assembly deem it necessary, they can pose questions to the President. In such a case, the President or the minister is obliged to attend the Assembly in due time and answer the questions. Also, representatives can interpolate the Council of Ministers or an individual minister in instances they deem necessary. Interpolations can be tabled if they bear the signatures of at least ten representatives. The Council of Ministers or the interpolated minister should be present in the Assembly, within ten days after the tabling of the interpolation, in order to answer it. After that, it is the Assembly who can give them a vote of confidence or declare a vote of no – confidence and dismiss the minister or ministers interpolated. For interpolating the president, at least one – third of the representatives should agree with interpolation.
4. The Supreme Audit court
The role of Supreme Audit Institutions in democratic governance is increasing each day and gaining more importance. In our country, this role is played by the Supreme Audit Court.
It is an independent regulatory body which is known as the highest regulatory body in financial affairs and management performance and is directly under the supervision of the Islamic Consultative Assembly. We will discuss its role in controlling, accountability and good governance.
However, before discussing its supervisory arrangement and procedures, it is necessary to describe briefly accountability and governmental accounting systems in Islamic Republic of Iran. As we said, governments should be accountable to the public and electors in all matters, including economic affairs and financial management. In Islam, the economy is not an end by itself, but is a means for meeting high goals like those envisaged in the preamble of the Constitution, which is: strengthening the foundations of the economy for fulfilling the necessary material for man in the course of his overall growth and development. Therefore, economic laws and regulations should conform to people’s ideological principles and government must find strategies for improving management procedures and removal of economic difficulties. Nowadays, governmental accounting is considered as an element that promotes efficiency in use of resources. Within conceptual framework, the objective of accounting is preparing necessary information for economic decision – making. On the other hand, public officials are responsible for the authorities delegated, and available resources and should be accountable against public and people’s representatives for their financial activities and each Rial (equivalent of one eightieth of one cent) that they receive or pay and must represent financial accounts containing useful, accurate, reliable and documented information to the Supreme Audit Court, who is indeed Constitutional inspector of the system and acts like a watchdog for people’s representatives .
This organization, as a Supreme Audit Institution, with its potential capabilities, has a central role in good governance and has the necessary wherewithal for the desirable relationship between a Supreme Audit Institution and regulatory arrangements. These requirements are as follows:
Independence is a necessary requirement for rendering professional services in auditing and control. If auditors or audit organizations lack necessary independence in conducting their auditing functions, they will lose their professional competence. An auditor deals with financial statements and documents and study information and his judgment is formed according to such information. Dr Ninkhah Azad believes that, one of fundamental principles in assessment of financial statements by auditor, is the existence of potential or actual conflict of interest between management and users or stakeholders. When users of information think that there are potential and actual conflicts of interest between them and the information providers, they suppose that, the received information has the probability of being self-interested, intentionally or mistakenly. So, the information received, is considered suspect and users deem it necessary that audit be conducted by an independent auditor who is free of the conflict of interest.
So auditors, as members of an audit institute, must conduct audits according to generally accepted standards, be independent and have no financial or political interest or any other interests in the auditee and also not be concerned about possible threats arising from issuing their professional opinion. For this reason, Supreme Audit Court, according to article 54 of the Constitution, is directly under the supervision of the Islamic Consultative Assembly and in organizational, administrative and financial affairs, is independent from Judiciary and Executive
powers, which must be accountable for their managerial and financial performance against the Supreme Audit Court as the Constitutional inspector of the system. According to articles 11 and 14 of the Supreme Audit Court Act, the President and the Public Prosecutor of the Supreme Audit Court are elected by Islamic Consultative Assembly and approval of peoples’ representatives. Also, according to article 9 of the before-said Act, in support of Supreme Audit Court’s independence, its required budget, after being approved by concerned committee of the Islamic Consultative Assembly, is included separately in the general budget bill of the country. In other words, these legal provisions guarantee its independence from government.
The Supervisor or person who requires explanation should function within the framework of laws and regulations which determine the relationship between two parties. According to the accountability principle, the person answerable is required to produce and present required information to person who calls to account and this relationship must be clearly defined by laws and regulations. Although the Supreme Audit Court enjoys a great deal of independence, it is also obliged to act in accordance with laws and regulations. The Supreme Audit Court, which benefits from the state budget, is accountable to the Majlis and people about its funds and performance. Therefore, its function and structure should be determined by law. It was noted before that the Supreme Audit Court is constituted according to article 54 of the constituted. In the Supreme Audit Court Act (approved in 1982), the organization of the Supreme Audit Court was clearly specified. During the course of time, defects and weaknesses of the above-mentioned Act were detected. As a result, a proposal for amendment of the Supreme Audit Court Act has been recently offered to the Majlis.
Duties of the Supreme Audit Court are mentioned generally in article 55 of the Constitution. In the Supreme Audit Court Act, duties, objectives and powers of this organization are described in detail. They include examining or auditing the receipts and payments of all the ministries, organizations, institutions and government companies. In fact, the objective of Supreme Audit Court is the exertion of continuous financial control and supervision, in the manner specified in the State Audit Act, in order to safeguard the Bait-ul-mal (Public Treasury).
In performing its responsibilities, and manifesting accountability principle in good governance, it has been empowered by the Legislature with necessary powers such as the following:
With the endorsement of this article, one of accountability principles, which is the legal relationship between person answerable and person who calls for account, is defined.
Considering that supervision and control process is a means for reaching to objectives and not an end by itself, the Supreme Audit Court, by performing its duties in a proper and accurate manner, can help the government in attaining its political, social, cultural, goals, particularly the goal of economic development.
The following items are important and notable in this respect:
From an audit perspective, greater responsibility and flexibility in decision – making needs to be matched by at least a commensurate focus on strengthening accountability arrangements to ensure that decisions are appropriately made and that those people who make decisions, are properly accountable. For creating an environment conductive to accountability and ensuring officials that the aim is not exclusively detection of fraud and corruption, auditors can help them in reaching the objectives of the auditee. In fact, financial statements and reports should be applied for the purpose of interpreting economic impacts of financial activities, and if these statements and reports are sound and accurate, they can help the government in performing its functions. Therefore, officials should be informed about the purpose of reporting. Through the following efforts, the Supreme Audit Court has been able to provide proper conditions to such an extent that auditees financially become accountable:
According to article 55 of the Constitution, the Supreme Audit Court collects, in the manner determined by law; financial statements, accounts and related documents and evidence from executive agencies. In other words, according to the accountability principle, units under its jurisdiction must present required reports to the supervisor (the Supreme Audit Court, who acts as the peoples’ indirect representative). The Supreme Audit Court, after examining and analyzing financial statements and reports, in addition to preparing reports mentioned in article 55 of the Constitution, must prepare annually the Budget Liquidation Report and present it together with its own comments and recommendations to the Islamic Consultative Assembly. This report should be made available to the public. As we can see, this article has a particular importance because with the dissemination of information to the people, people find answers to questions such as: How are economic and financial resources obtained and spend to? What has been the managerial and financial performance of each individual agency? Have expenditures exceeded the allocations approved or not? Have all the funds have been spent for their specified purposes or not? Of course, the efficiency and effectiveness of the Budget Liquidation Report will be promoted if it is complete and comprehensive, its issues are stated clearly and it contains correct information and scientific / technical analysis and also has feasible/ rational recommendations. In recent years, in addition to preparing Budget Liquidation Reports and presenting them to the Majlis, in a timely manner, the Supreme Audit Court has been successful in improving their quality and making them more transparent, accurate, useful and comprehensive to meet the users’ needs.
Chart 2: agencies under the Supreme Audit Court’s jurisdiction
1 and 2: Supervision and juridiction of the Supreme Audit Court in these units is limited to credits received from the state budget
Chart 3 shows the scope of the SAC according to its legal mandate.
References
Governmental Framework" Pat Barrett, paper presented at ASOSAI’s 8th Triennial Assembly and symposium, October 2000, Chiang – Mai, Thailand