Presentation by Mr. Shankar Narayan,ASOSAI representative (SAI India)

During AGM of ARAPAC, October 2012

Asian Organisation of Supreme Audit Institutions (ASOSAI)

ASOSAI

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• Established in : 1979 with 11 members

• No. of Member SAIs : 45 SAIs (as of October 2012)

• Objectives : 1) To promote understanding and cooperation

through exchange of ideas and experiences;2) To provide facilities for training and continuing

education for government auditors; and,3) To serve as a regional link with other relevant or-

ganizations in the field of public audit, etc.

Organisation Governing Board- 11 Members SAIs of India (Chair), Korea, Bangladesh, China, Ja-

pan, Malaysia, Pakistan, Philippines, Russia,Saudi Ara-

bia, & Thailand

Secretary General SAI Korea

Training Administrator SAI Japan

Audit Committee Members SAIs of Turkey & Jordon

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Role of SAI India in ASOSAIComptroller & Auditor General of India hosted the 12th ASOSAI Assembly and became the Chair of ASOSAI,

Governing Board on 29 Feb. 2012Publishes the ASOSAI Journal of Government Audit

twice (April & October) in a yearMember of ASOSAI, Working Group on Environment

Audit (WGEA)Member of 10th ASOSAI Research Project (ARP) on

“Audit to Detect Fraud and Corruption: Evaluation of the

Fight against Corruption and Money Laundering”

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Institutional Set-up for Capacity Building Activities

• Article I, the Charter of ASOSAI:

- “To provide facilities for training and continuing education for

government auditors with a view to improving the quality of their

performance.”

• The ASOSAI Strategic Plan for 2011-2015:

- Goal 1: “Institutional Capacity Building”

- Goal 2: “Knowledge Sharing and Knowledge Services”

• The ASOSAI Budget:

More than 95% of the budget has been used for ASOSAI-sponsored

capacity building activities since 1992 when ASOSAI launched capacity

building programs for its member SAIs with its own funds.

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ASOSAI and ARAPACAll the countries represented in ARAPAC

also represented in ASOSAI except Timor Leste

Common goal of promoting accountability,

transparency and good governanceARAPAC Secretary General,

Parliament of Bhutan made a presentation

during 12th ASOSAI Assembly in India

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UN General Assembly Resolution

Adopted by 66th General Assembly Resolution no. A/RES/66/209 on 22nd

Dec. 2011

Promoting the efficiency, accountabil-ity,

effectiveness and transparency of public administration

By Strengthening SAIs 7

Emphasis of ResolutionNeed to improve the efficiency,

accountability, effectiveness and transparency of public adminis-tration.

Need for capacity-building as a tool

Cooperation of the INTOSAI and UN 8

Emphasis of ResolutionNecessity of SAIs independence Important role of SAIs in promot-

ing efficiency, accountability, effect-

iveness andtransparency of public adminis-tration.

• Appreciate the work of INTOSAI• Appreciate Lima Declaration &

Mexico Declaration

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SYNERGY Defined

Interaction or cooperation of two or more organizations, substances or agencies to produce a combined effect greater than the sum of their separate effects. (COD)

Democracy and Accountability

Democratic governance and accountability basic principles of Indian Parliamentary system

Accountability of the executive to legislature is required as legislature embodies the will of the people. Accountability and oversight invariably signify good governance.

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Democracy and Accountability

Legislature should be able to ascertain themanner in which public policy laid down by it is implemented.

Public financial accountability in India is established through two agencies: legislative oversight committees like PACand CoPU and Comptroller & Auditor General of India(CAG/SAI).

Democracy and Accountability

The legislature sanctions money to Government through the Budget and then supervises its expenditure, through the Public Accounts Committee and Committee on Public Undertakings.

CAG’s audit was envisaged as part of thesystem of Parliamentary oversight over national finances.

Democracy and Accountability

The Public Accounts Committee is often called the mother of all committees.

PAC is the oldest committee of Parliament and is constituted every year under Rule 308(1) of the Rules of Procedure and Conduct of Business in Lok Sabha

Objectives of PAC

To see that

Money voted by Parliament was actually spent by the executive for the purpose decided by Parliament.

All re-appropriations were done under the rules framed for the purpose.

All excesses/savings are regularized

(Constitutional Responsibility- Art. 115).

Functions of PACExamination of accounts appro-

priated by the executive as certi-fied by CAG

Study the SAI’s Audit Report on accounts

SAI of India (CAG)Comptroller and Auditor General of India is

the Supreme Audit Institution (SAI) of the country.

An officer of the Constitution, his duty is to audit all expenditure and receipts of the Union and the States, and UT Governments, and also various bodies and authorities set up by Government.

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CAG’s FunctionsDuties of CAG

Sole auditor of Federal & State governments

Sole auditor of urban and rural local bodies

Sole/auditor of govt. authorities –statutory

Auditor of government companies

Relationship between PAC and CAG

A legal relationship as spelt out in Rules of Procedure & Conduct of Business.

CAG of India is a constitutional author-ity mandated to audit expenditure and receipts of government and place the Audit Report in Parliament

PAC and CAGCAG’s reports form the basis of the

Committees’ working, though they are not precluded from examining issues not brought out in the reports.

In actual practice very rare. Only a few cases of CoPU, in India, commissioning studies and doing work independent of CAG.

PAC ProceduresPAC and CAG decide upon course of action

for the year and selection of material for oral examination

PAC summons witnesses (Secretaries to Government) for oral examination. CAGbriefs the PAC and also gives a list of questions (Memorandum of Important Points).

PAC questions the witnesses.After examination is complete PAC finalizes

recommendations.

PAC ProceduresPrinted PAC report or recommendations

placed in Parliament.

Government accepts recommendations andtakes action. This is given to PAC as Action Taken Note (ATN).

PAC and CAG study ATN and either conclude session if satisfied or go in for further examination.

Synergy - Best PracticesPAC/ CoPU need the Audit Report

to work and CAG needs the PAC/ CoPU to optimize output and ef-fectiveness.

A convergence of interests, ob-jectives coterminal.

Synergy - Best PracticesA continuous dialogue between PAC and

CAGCAG should establish its reliability and in-

tegrity- audit standards, training, peer re-view.

CAG to assure complete independence.PAC and CAG to work together to set year’s

agenda and prioritize subjects.CAG could brief PAC at beginning of year on

processes and procedures.

Synergy - Best PracticesContinuity in PAC –Chairman for two

years, half the Members to change every year.

CAG could conduct seminars, workshops for PAC and offer reading material to members interested in specific subjects.

PAC could constitute sub committees to study different departments like Fish-eries, Transport, Education, Agriculture, Mining, Health, etc.

Synergy - Best PracticesFinally, PAC Chairman must finalize

recommendations immediately after examination, achieve consensus, have PAC report signed by all members and place it before Parliament.

Till recommendations are presented to Parliament, discussions are inconclusive. Report could be on a department, a programme or an Audit Report or part of aReport.

Synergy - Best PracticesCAG seconds staff to PAC and

CoPU for manning their secretar-iats. The staff, being familiar with Audit work, could help the Chairman a great deal.

There is a lot to commend this practice, especially when most PACs are starved of staff.

Role of CAG vis a vis PACAccounts certified by CAG and

Audit Reports- the basis of PAC’s work-ing

CAG helps the PAC select audit material for detailed examination

CAG briefs the PAC before oral examination

Role of CAG vis a vis PACCAG scrutinizes the material submitted

by governmentCAG can, with permission of the Chair,

offer or seek clarification during oral examination.

CAG vets the draft report of PAC for factual accuracy

CAG vets the government’s Action Taken Report on PAC’s recommenda-tions

Role of CAG vis a vis PACPAC and CAG thus work together with

PAC being a mini Parliament overseeing Government expenditure and the SAI providing the necessary inputs in the formof certified accounts and Audit Reports.

Oversight of the executive by Parliament is important in a democracy and that oversight is the main function of PAC.

Role of CAG vis a vis PAC

In India PAC looks upon CAG as friend, mentor and guide.

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PAC and CAG

Thus , SYN-ERGY

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Interaction -Board of Audit of Japan (BAI) & Diet (Legislature of Japan)

BAI submit Audit Reports to the Diet

Provides Explanation to Ministry of

FinanceTraining courses for auditee Min-

istriesBriefing Audit Report to each Min-

istryAnalyses auditees internal con-

trol

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Reporting procedureThe Board prepares Audit Report

yearly with audited final accountsSubmits Audit Report to the Cab-

inetCabinet submits Audit Report to

the DietAudit results inform public the

execution of state budget.

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Board of Audit & Inspection (BAI), KoreaBAI as an agency under the President

Report audit results to the President and the National Assembly

Full audit results publishes on BAI's web-site and distributed the press release

National Assembly may request the Board of Audit and Inspection to conduct the au-dit

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Board of Audit & Inspection (BAI), KoreaBAI shall report the audit results

within 3 months from the date of receiving the

request

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Comptroller and Auditor General of Bangladesh & PACCAG has fully independent audit man-

dateSubmits audit reports to the PresidentPresident causes them to be laid before the Parliament. • Public Accounts committee of the Parliament acts upon the audit reports• PAC calls upon the concerned Principal Accounting Officer (the secretary of

the ministry)

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Comptroller and Auditor General of Bangladesh & PACTo account for the audit findings,

audit opinion and recommendations.After discussion the committee

gives directions to executives or audi-

tee on each audit para.Sometimes the PAC may ask the

CAG to make a review on the im-plementation of

the directions given by PAC.

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National Audit Authority, Cam-bodiaNAA is an independent public entity and

has own budgetThe NAA reports directly to the National

Assembly, Senate, and royal govern-ment

Royal Government submits budget state-ments to the NAA for auditing. NAA certify these statements and issue the audit

reports to the National Assembly and the Senate.

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National Audit Authority, Cam-bodiaIf the Government fails to submit

budget settlement to NAA within a period of 9 months after the end of the financial year. Auditor-General have to report this delay to the National Assembly and the Senate.

The Auditor-General issues report to the National Assembly, the Senate, the

Council of Ministers, Ministry of Economy and Finance and rele-vant ministries.

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National Audit Authority, Cam-bodiaReport to the Parliament and

Senate are discussed by the Sec-ond Commission of

finance, banking and auditing• Follow up procedure of examina-

tion on the audit report will be done by

the Second Commission

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National Audit Office of the People’s Republic of China (CNAO) Auditor General is a member of

the State Council and CNAO is under the direct

leadership of the Premier of the Council

CNAO is authorized by law to is-sue

circulars about their audit find-ings to the relevant government departments

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National Audit Office of the People’s Republic of China (CNAO) The work report is submitted to

the Standing Committee of the Na-

tional People’s Congress and made

available to public at the same time except for state

secrets or business secrets of the auditees

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PAC and CAG

Thanks