In order to meet our clients’ changing needs in the new governance environment, the Australian National Audit Office (ANAO) has moved towards a mix of assurance, compliance, accountability and performance products. These products are designed to be relevant and state of the art. We encourage innovation within a clearly defined auditing standards framework, and we are committed to working closely with our national and international colleagues to ensure that we remain at the leading edge. One of the ways that the ANAO remains at the forefront of the public sector audit field is through the production of Better Practice Guides (BPGs).
BPGs aim to improve public administration by ensuring that better practices employed in some organizations are recognized and promulgated to the whole of the Australian Government public sector. This can involve examining practices in the public or private sectors, in Australia or overseas. The ANAO’s emphasis is to identify, assess and articulate good practice from its knowledge and understanding of the public sector, as well as areas where improvements are warranted. BPGs are regarded as authoritative documents and enjoy a high level of demand from a range of public sector and private sector organizations and individuals.
Following is a summary of the BPGs released by the ANAO in 2003:
Internal Budgeting (February 2003). This guide is designed to assist managers responsible for making decisions on the allocation, use and administration of resources. In particular, it outlines a series of better practice elements that, if adopted, will encourage more efficient and effective achievement of organizational goals and objectives.
Building Capability - A Framework for Managing Learning and Development in the Australian Public Service (APS) (April 2003). This guide has been prepared in conjunction with the Australian Public Service Commission. It aims to provide a better practice model for managing learning and development processes across the APS; foster an APS learning culture for better business outcomes; and provide a source of audit criteria for any future ANAO work in this area.
Managing Parliamentary Workflow (April 2003). This guide has been prepared to provide practical assistance to Australian Government agencies in their management of ministerial and parliamentary support arrangements. This Guide updates and expands on the contents on the previous Guide on this subject, released in 1999.
Goods and Services Tax (GST) Administration (May 2003). This guide, prepared jointly by the ANAO and the Australian Taxation Office (ATO) , is designed to assist practitioners in the Australian Government public sector establish appropriate frameworks for the effective management of GST administration in their organizations.
A MODEL Non-Commercial Authority Illustrative Financial Statements for the Year Ended 30 June 2003 (June 2003) and A MODEL Agency Illustrative Financial Statements for the Year Ended 30 June 2003 (April 2003). These two guides are counted as one product and assist Australian Government agencies and entities in the preparation of their financial statements, by providing examples of better practice in Australian Government public sector financial reporting and disclosure.
Public Sector Governance (July 2003). This very popular guide is designed to assist Australian Government organizations to achieve better public sector governance, by discussing the overarching public sector governance framework, and proposing processes and practices to address commonly-encountered governance problems.
Management of Scientific Research and Development Projects in Commonwealth Agencies (December 2003). This guide has been prepared to provide practical assistance to senior managers in establishing processes and structures to support management of scientific research and development projects, such as rural research agencies and other programs that are funded using public monies.
All of these Better Practice Guides, plus those released prior to 2003, are available on the ANAO’s website: <www.anao.gov.au>. Copies may also be obtained from the Publications Section, email <webmaster@anao.gov.au>, telephone 61 2 6203 7505 or fax 612 62037519.
(Contributed by the Australian National Audit Office.)
Mr Li Jinhua, the Auditor General of China, together with a 5 member delegation, was warmly welcomed to Brunei Darussalam from 24 to 26 October 2003 by the Auditor General of Brunei Darussalam, Datin Paduka Hajah Salmah Bte Haji Hanafiah.
During the visit, Mr Li Jinhua and his delegates were granted royal audience with His Majesty The Sultan of Brunei Darussalam. The delegation discussed matters of mutual interest. It also visited a number of historical sites.
Datin Paduka Hajah Salmah Bte Haji Hanafiah stated that such visits not only strengthen ties between SAIs but also provide opportunities for SAIs to exchange ideas, as well as assist and strengthen one another in the field of auditing and other areas of mutual interest. Datin Paduka Hajah Salmah Bte Haji Hanafiah also expressed gratitude to Mr Li Jinhua who had offered training courses to SAI - Brunei at the training centre of the Chinese National Audit Office.
(Contributed by: SAI-Brunei Darussalam)
The Government of Vietnam has promulgated a decree on the mandate, functions, duties and organizational structure of the State Audit of Vietnam (SAV) in order to strengthen the capacity and performance effectiveness of SAV.
The promulgation of the Government decree for SAV was a result of the following needs:
a) Requirements of reforming the organizational structure of the Government.
The National Assembly of the S.R. Vietnam has a resolution on restructuring ministries, ministerial level agencies and Governmental offices. SAV is a Government office and is, therefore, included in the restructuring program of the Government.
b) Requirement for developing a strong and transparent financial system.
SAV is an integral part of the strategy adopted by Vietnam Government to strengthen controls and oversight over public sector finances. SAV is an important institution entrusted with the role of preventing and detecting cases of corruption, embezzlement, wastage of public resources or national property and ensuring the effective and economical use of the state budget and other public resources. The promulgation of the new decree on the mandate, functions, duties and organizational structure of SAV is, therefore, a legal step on the Government’s development strategy.
c) Practical requirements and the need of overcoming the shortcomings of past inadequate regulations.
The recent regulations on the SAV do not meet practical requirements and are not in tune with development trends. Therefore , a new legal statute is necessary to adjust the rights and obligations of SAV sufficiently, in areas where the relevant law on SAV does not exist.
d) Requirements of setting up a statute regulating SAV’s mandate, function, duties and organizational structure to be suitable with integration and development tendency and international practice and standards.
The Decree on the function, mandate, duties and organizational structure of SAV is elaborated below:
Auditing subject:
Organizational structure: In order to perform SAV’s auditing duty, its organizational structure has sharply changed. The number of departments and institutions has increased by over 40% and the number of auditing departments have nearly doubled. In particular, a department for the audit of financial – banking institutions was established to audit financial, banking, insurance, stock exchange institutions. In addition, to enhance audit quality and audit performance effectiveness, two departments have been created to advise the Auditor - General on quality management, as well as auditing activities management and promulgation of professional regulations and rules on auditing activities.
International relations: The new Decree authorised SAI-Vietnam to sign multilateral and bilateral agreements with other SAIs in the world and other international accounting and auditing organizations such as ASOSAI, INTOSAI and IFAC.
With its new functions, duties, mandates and organizational structure, SAV’s new organizational structure will be effective from 2004. The new regulations ensure that SAV has sufficient powers to manage and control the use of State resources sufficiently, ensuring the international integration with other SAIs of ASOSAI as well as of INTOSAI.
(Contributed by: SAI-Vietnam)
SAI-Pakistan hosted the 9th Governing Board Meeting and the Extra Ordinary Session of the Congress of ECOSAI from January 26-28, 2004 at Islamabad. ECOSAI is the organization of Supreme Audit Institutions of Economic Cooperation Organization countries, including Afghanistan, Azerbaijan, Iran, Kazakhstan, Kyrgyz Republic, Pakistan, Tajikistan, Turkey, Turkmenistan and Uzbekistan. SAI-Pakistan acts as the permanent Secretariat of the ECOSAI. The Governing Board of ECOSAI meets once’ every year, whereas the Assembly and the international seminar of the ECOSAI are held triennially.
SAI Pakistan held an ASOSAI sponsored Workshop on "Performance Audit of Revenue Agency" from 8-19 December, 2003 at Lahore, Pakistan. Participants from 35 Asian countries attended the workshop. The Workshop covered the basic concepts of performance auditing, audit procedures and techniques in planning, execution and reporting phases in the audit process, and its application in performance audit of a Revenue Agency.
SAI-Pakistan will be holding the 54th Intensive Training Program (ITP) in Performance Auditing at the Audit and Accounts Training Institute (AATI) from Feb 10-March 13, 2004. This international program is offered to the nominees of ASOSAI members and other regional SAls. The Program is meant to impart training in concepts and methodology of performance audit of public sector development projects and programs.
(Contributed by: SAI-Pakistan)
On August 28th, 2003, the Board of Audit and Inspection (BAI) of Korea celebrated its 55th anniversary of establishment. For the past years, the BAI has successfully accomplished its responsibilities entrusted by the Constitution as the verifier of the final accounts of revenues and expenditures of the State, as the external auditor of the accounts of the public sector, and as the inspector of the works performed by government agencies and the duties of their employees.
In its illustrious history of serving the nation, the year 1993 may be cited as the starting point for the conduct of performance audits to meet the growing needs for the promotion of economy, efficiency, and effectiveness in the public sector. Based on past experiences and achievements, the BAI is trying to gear up for a new take-off.
First of all, the organizational structure of the BAI was realigned effective on December 22, 2003. The reshaped structure was designed to be conducive to performance audit including program evaluation. Though BAI assigned the majority of its manpower to performance audits other than financial audits in recent years, more efforts will be made in future to examine the effectiveness of the policies and programs of the central government. Also, the post of Deputy Director General for External Relations was established to meet the rising expectations from the general public and the National Assembly. In the meantime, two bureaus which had been responsible for the audit of provincial and local governments were reduced to one. The new organization chart of the BAI is currently available on the BAI’s website (http://www.bai.go.kr).
Second, Performance Audit Guidelines (PAGs) have been established. For the past one year, a 10-member ad hoc task-force reviewed audit manuals and more than a hundred performance audit reports of a dozen countries such as the U.S. and Canada to come up with the PAGs. The Guidelines detail the whole process of performance audit from the selection of audit issues to reporting, and include notably detailed guidelines for quality assurance.
Third, with the recently established Regulation on the Disclosure of Audit Results, it became mandatory to make public audit reports in their entirety from August 2003. This arrangement is expected to lend an impetus to the acceleration of quality assurance efforts.
(Contributed By: SAI-Korea)
The financial year in Bhutan is from 1st July to 30th June. During the months of June and July all the government agencies are busy settling the accounts for the past one year and submitting the budget for the coming year. Therefore SAI-Bhutan decided to cease auditing from mid June till the end of July. During these one and a half months, the SAI concentrates on developing the professional skills of the auditors by organising the Annual Audit Conference and various In-house trainings.
One of the major features of this year’s In-house Training was the 3rd Indo Bhutan Audit Training on ‘Audit of Income Tax’. The Indo-Bhutan Audit Trainings have their root in the Memorandum of Understanding signed between the SAIs India and Bhutan in December 2001. The MoU was aimed at building a long-term relationship and improving professional skills of the staff members of the two parties in the field of audit both by exchange of experiences and by strengthening their knowledge. The first two Indo -Bhutan Audit Trainings were on ‘Public Works & Technical Auditing’ and ‘Audit of Grants, Aids and Loans/Certification Audits’.
Personal Income Tax was introduced in Bhutan only from January 2002. Therefore, SAI-Bhutan felt it necessary to train auditors in this field. A total of 32 participants, including 4 internal auditors and 6 officials from the Department of Revenue and Customs attended the training. The instructors from the SAI-India were Mr. P. Sesh Kumar, Pr. Director (Direct Taxes) and Mr. C.M Sane, Sr. DAG from the Office of the Pr. Director of Audit (Central) Mumbai.
The training was conducted at Bumthang in Central Bhutan
Other in-house trainings organised during this period were Audit Interviewing Skills, Construction Audits and Audit Programmes and Working Papers. All the instructors were from the SAI-Bhutan. The ASOSAI Training Specialist from Bhutan designed and delivered the course on Audit Interviewing Skills.
During the period, a competition of the most significant audit observations for the year was also organised. Many team leaders participated in the competition, which was judged on planning, approach, analysis, benefit (actual/expected), amount involved and presentation. Almost all the auditors were present during the competition. The motive behind organising this competition was to share one’s best observation with all the other auditors.
During the period, a 3 day long 6th Annual Audit Conference on the theme ‘Auditing Beyond Books of Accounts’ was also convened. HRH Dasho Jigme Khesar Namgyel Wangchuck, the Crown Prince of the Kingdom of Bhutan, was the Chief Guest for the Opening Ceremony. During the conference, the in-house training co-ordinator presented a report on the in-house Training 2003. The participants and instructors for the training were awarded certificates by the Hon’ble Chief Guest, His Lordship, the Chief Justice of Bhutan, during the Closing Ceremony of the 6th Annual Audit Conference. The General Governance Division was awarded Nu.15,000 for making the maximum audit recovery during the year.
The conference focussed on review of the plans, programmes, problems and accomplishments of the SAI during the last one-year. Discussions were also held on the theme of the Conference ‘Auditing Beyond the Books of Accounts’, and the standardisation of the Audit Memo Format. The guest speaker from the National Environment Commission of Bhutan, briefed the auditors on the Environmental Legislation of the Kingdom of Bhutan.
It was decided that the theme for 7th Annual Audit Conference would be ‘Barriers to Effective Auditing –Finding Solutions’.
(Contributed by SAI-Bhutan)
Mr. Asif AIi, the Comptroller & Auditor General of Bangladesh, accompanied by Mr. Abul Kalam Azad, Asst. Comptroller & Auditor General, officially visited the State Audit Bureau during 5-9 September, 2003 upon an invitation of Mr. Barrak Kh. Al-Marzouq, the President of SAB. During the visit , the delegation was briefed with SAB functions and activities in the financial field. It also met SAB top management and exchanged opinions on developing cooperation between the two SAIs in the financial audit field.
An official delegation from SAI-Oman, headed by Mr. Sayyid Abdullah bin Hamad bin Saif AI Busaidy, the president of SAI- Oman, accompanied by a number of officials, visited the State Audit Bureau during the period 28-30 September 2003. During the visit, the delegation met the SAB President and top management. The delegation was briefed on the SAB’s operational systems and discussions held on means to develop relations between the two SAIs.
The State Audit Bureau of Kuwait started the implementation of the training plan for the financial year 2003-2004. It began on April lst, 2003 and will continue until March 31st, 2004. The plan includes:
Twelve fundamental programs covering issues on accounting and auditing standards, examination of final accounts and analyzing budgets and internal audit.
Fourteen specialized programs covering issues on methods and ways of auditing fraud and corruption, auditing maintenance contracts, developing auditor ethical skills, evaluating the investment fund and portfolio management and other specialized issues.
Six general programs covering issues on administrative and ethics systems for the updated secretariat, presentation skills, developing administrative and supervising skills, effective administrative authorization, strategic planning and management.
Six symposia on environmental issues, financial markets, research skills and other important issues.
A number of programs in the field of developing the employees computer skills.
All levels of SAB staff participated in these programs in accordance with their specialties and the training needs.
(Contributed by: SAI-Kuwait)
To be a prime contributor towards the enhancement of public sector accountability and to promote excellence in financial management for the public sector.
To carry out its responsibilities in a professional and independent manner and to submit a balanced report to Parliament and Legislative Assemblies towards enhancing public accountability.
To carry out audit activities on the basis of fairness and independence with the ultimate objective of producing a balanced report.
To fulfill the needs and aspiration of stakeholders and auditees.
To manage audit activities in the most efficient and effective manner using available resources economically.
To be a role model for other departments.
Professionalism
To achieve a high degree of professionalism in the performance of audit work through staff discipline and commitment to quality of work.
Independence
To undertake duties without external influence, restrictions or pressure so as to ensure that given observations and opinions are independent and in accordance with the requirements of the Audit Act 1957.
Quality
To maintain high standards of quality in the performance of our duties by promoting a good working culture and continuous professional development.
Integrity
To observe professional code of ethics in the conduct of the audit work and reporting of audit findings.
Esprit de Corps
To emphasize the importance of teamwork by creating a productive working environment which emphasis on esprit de corps and innovativeness.
Responsibility
To be responsible in all our actions either as an auditor or staff of the department.
We Pledge :-
To carry out audit work professionally and in conformity with the International Accounting and Auditing Standards.
To certify Financial Statements and issue audit certificates within a period of four months after receiving the Annual Financial Statements.
To prepare Balanced Audit Reports without prejudice.
(Contributed by: SAI-Malaysia)
On Thursday, March 6, 2003 through Act No. 17 of 2003, Parliament approved the state financial act, which is meant to ensure transparency and accountability In managing state finance. It is hoped that this important bill will help curb corruption by public officials and government ministries, institutions and agencies. This move will also pave the way for meeting "international best practices", standards and legislating and implementing good governance principles. This is part of the government’s efforts to install good governance with regard to state financial management, which needs to be carried out in a professional, transparent and accountable manner.
Under the new law, if any irregularities in the use of state funds are uncovered, not only officials in charge of the funds are regarded personally accountable but also have to pay for the loss incurred. They can also be sentenced to prison terms for their crimes. Irregularities are defined as any differences occurring in the use of state funds between the financial figures set out and the amount used in the implementation of the budget, which was not properly accounted for.
The bill also emphasizes the principle of equality before the law, meaning that any officials including ministers or managers of ministries, institutions, agencies that have committed offences against this bill will be punished, and held accountable for any shortcomings. Before the enactment of this law, any irregularities often used to go unpunished, simply because of unwillingness to provide a legal basis to back them up. This explains why various findings of irregularities uncovered by audit institutions and agencies are rarely followed-up.
The new law, however, has yet to stipulate detailed information on sanctions and punishment in terms of fines and prison terms because these matters will be discussed during the deliberations on the draft Treasury Law and the State Audit Law, as part of a package forwarded by the Government on September 30, 2000.
The new state financial act regulates the following matters:
Government must submit macro-economic assumptions of the following year to Parliament no later than May (this must be implemented in the next five years at the latest);
Government must propose a bill on state budgets to parliament for the following year no later than August (this also must be implemented in the next five years at the latest);
Regional governments must propose budgets for the following year to the regional parliaments in the first week of October
The central government may:
The President must submit an accountability report on the implementation of the budget to Parliament after audit by the Audit Board, six months after the end of the budget year (this scheme will become effective by the year 2006).
Governors, Regional Heads and Mayors must deliver similar reports to the regional parliaments, six months after the end of the budget year
This new bill has already received positive as well as negative reactions. Economists say that requirements for seeking Parliament’s approval for obtaining foreign aid will be considered as too much interference from legislators. By such a ruling, the ability of the government to keep maximum flexibility would be minimum in determining fiscal policies. The requirement that all foreign loans should also be transparent to the general public is considered positive, but will, at the same time, slow down the government’s capacity to improve the economic situation of the country.
The new law on state finance and the draft laws on treasury and audit are meant to improve and change the existing regulations dating back to the period of Dutch-occupation. The draft audit law should become a supplement to Law No.5 of the year 1973, which regulates, how the audit should be carried out, including planning, executing and reporting.
After the fall of the New Order, amendments have been made on the 1945 Constitution, which, among others, confirmed the Audit Board’s mandate to audit the finances of the National Government, and the provincial governments at the first and second level administration. The audit findings must be reported to the national Parliaments and the two level Parliaments at the provinces, and each Parliament must consider follow-ups recommended by the Audit Board. These changes in the constitution have also caused changes in the current Act No.5 of 1973.
The Audit Board has proposed a new draft law, which will change the current Law No.5 of 1973. The most important changes include restating the mandate, function, position, and responsibility of the Audit Board, enlarging the number of members from 7 (seven) to 13 (thirteen), establishing regional offices in all provinces and confirming its position as the only external auditor of the republic. The Status of the Audit Board will stay the same, acting like an external auditor and also having jurisdictional competency.
Discussions on the draft law on treasury are currently still going on. A crucial issue, among others, includes clearly defining the role and responsibilities of key agencies in the budget implementation to ensure budget documentation and reporting requirements for the Government, so that the Audit Board can fulfill its function as the external auditor to assist the Parliament in controlling the government, by focusing not just on expenditures but also on inputs and outcomes.
The draft law should also regulate a process that involves major stakeholders, including the minister of finance, line ministries, Parliament, the Audit Board and non-governmental organizations using public funds.
The audit function should guarantee the existence of an effective constitutional framework for audit reporting and follow-ups. Also important is the independence of the Audit Board, including security of tenure and legal immunity in the formal discharge of its duties. The mandate and unrestricted access to information should be as such that it can make audit effective. The right and obligation of the audit institution to report to Parliament and the public should be guaranteed and the existence of effective follow-up mechanism for the Audit Board should be formalized.
Under the current era of reforms, principles like checks and balances, accountability, transparency by all persons, ministries, institutions, and agencies using public funds are the most important issues that must be reestablished in a variety of acts, regulations and procedures. This process will be slow and time-consuming but it is the best hope that the Republic can aim at.
(Contributed by: SAI-Indonesia)