sai-bhutan royal audit authority auditing and reporting on economy, efficiency & effectiveness

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SAI-BHUTAN Royal Audit Authority ing and Reporting on Economy, Efficiency & Effectiv

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Page 1: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

SAI-BHUTANRoyal Audit Authority

Auditing and Reporting on Economy, Efficiency & Effectiveness

Page 2: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

PRESENTATION ON AUDITING SYSTEM IN

BHUTAN

Page 3: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness
Page 4: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Auditing system in SAI Bhutan

Area = 38,394 sq. Area = 38,394 sq. kmskms

Population = Population = 0.647 million0.647 million

National Language = DzongkhaNational Language = Dzongkha

Major Exports = Major Exports = Electricity, Timber, Electricity, Timber, Cement, Cement,

Agricultural Agricultural Products, Products, handicrafts etc.handicrafts etc.

Density = Density = 16/sq.km16/sq.km

Page 5: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

(Audit Act of Bhutan, 2006)

(16th National Assembly proposed for Auditing System in Bhutan)

1963 - Accounts and Audit Organization

1970- Royal Audit Office

1974 – Department of Audit (Financial manual 1974)

1985 – Royal Audit Authority - autonomous & independent)

2005 – Constitutional Body

Kashos (Royal Edict) Issued

1970 – 4 Royal Auditors

1985 – RAA autonomous & independent)

1997

1999

2000

2005 – Constitutional Body

Reiterating independence of the RAA

Page 6: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Independent views on the quality of public sector activities and the stewardship of Public Funds

(People’s Representatives)

(Executing Agencies)

Page 7: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Independent views on the quality of public sector activities and the stewardship of Public Funds

.

Auditing & Reporting without fear, favor and prejudice on the economy, efficiency and effectiveness in the use of public resources.

Page 8: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Article 25.1, Constitution

of the Kingdom of

Bhutan

Article 3, of the Audit

Act of Bhutan

2006

There shall be a Royal Audit Authority to audit and report on the Economy, Efficiency and Effectiveness in the use of Public Resources.Article 44 (c), Audit

Act It shall be the duty of the Authority to promote Economy, Efficiency and Effectiveness in the use of public resources through its reports and recommendations.ACHIEVE ULTIMATE

OBJECTIVE

WHAT HAS BEEN DONE

WHAT HAS NOT BEEN DONE

Page 9: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Government or any of its instrumentalities

Legislature & related institutio

ns

Judicial and Judicial Bodies

Zhung Dratshang, Rabdeys & related institutions

Constitutional

Bodies

Defence & Security Services

Corporations & Financial Institutions established under the laws of the Kingdom in which the Government has an

ownership interest.

All entities fully or partly funded by the Government &

NGOs

All entities whose loans are approved or guaranteed

by the Government

All entities receiving funds, grants and subsidies directly or through the Government

Collections and contributions from the people & fund raised

through lottery

Any entity or activity upon command of the Druk Gyalpo

The RAA shall conduct without fear, favour or prejudice, the audits of the following:

Page 10: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Not withstanding the provisions of any laws relating to the accounts and audit of any public authority, the Parliament, if satisfied that the public interest so requires, shall direct that the accounts of such authority be audited by the Auditor General.

Page 11: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Section 39 of the Audit Act of Bhutan 2006“The Authority shall conduct without fear, favour or prejudice the audits of the following”

a. Government or any of its instrumentalities which include, Ministries, Departments,

Divisions, Units, Dzongkhags, Gewogs, Thromdues, autonomous bodies, foreign-assisted or special projects of the Royal Government;

Audit Jurisdictions

Page 12: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

b. Zhung Dratshang, Rabdeys and all related institutions;

c. Judiciary and Judicial Bodies;d. Legislature and related institutions;e. Constitutional bodiesf. Defense and Security Services;g. All corporations, Financial Institutions including

the Central Bank and their subsidiaries established under the laws of the Kingdom in which the Government has an ownership interest;

Cont. Audit Jurisdictions

Page 13: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

h. All entities including non-governmental organizations, trusts, charities and civil societies fully

or partly funded by the government; whose loans are approved or guaranteed by the government; and those receiving funds, grants and subsidies directly or through the Government and collections and contributions from people and fund raised through lottery

i. Any entity or activity upon Command of the Druk Gyalpo

Cont. Audit Jurisdictions

Page 14: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Scope of Audit

The Authority shall audit the following matters to ascertain whether:

(a) The amount appropriated have been expended for the specified programs and tasks within the approved

budget limits;(b) The financial transactions comply with the existing

laws and the evidence relating to items of income and expenditure are sufficient;

(c) The accounts have been maintained in the prescribed forms and such accounts fairly represent the position of the transactions;

(d) The program implementations are adequately monitored to avoid incidences of cost and time overruns;

Page 15: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Cont…Scope of Audit (e) The inventory of public properties is accurate and upto- date, and custody, control, management and physical safeguard measures instituted are adequate;(f) Physical assets and infrastructures reported actually exist and confirm to the required specifications and standards;(g) The available resources including human, financial and other assets are properly utilized;(h) The accounting and related system of controls, financial or otherwise including the arrangements for internal audit and internal control of cash, kind and other public property against any loss, damage and abuse are adequate;

Page 16: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Conti….Scope of Audit

(i) The accounts of revenue, taxes, other incomes and deposits are accurate and the systems relating to assessment, realization, recording and methods of

reporting are adequate;(j) The debts, liabilities and specific purpose funds are

recorded accurately and managed properly;(k) The ICT and other technological systems developed

are appropriate and adequate controls and security measures are instituted to prevent unauthorized access to the system; and

(l) The implementation of programs and activities are as planned and the intended objectives achieved.

Page 17: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness
Page 18: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness
Page 19: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Performance Audit

Financial Audit

Compliance Audit

Propriety/Regularity Audit

Special Audit

Individual reports to the agencies

Certification Report of the consolidated financial statements

Annual Audit Report

AG’s Advisory series

AG’s Occasional Paper

Direct Accountability

Supervisory Accountability

Team level

Divisional Level

Committee level

PAC/Parliament

Our Audit Framework

System Audit

Environment Audit

Thematic Audit

Page 20: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Role of RAA

Prior to 2006

1. Auditing

2. Investigatio

n

3. Prosecution

Page 21: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

REPORTSAudit Reports – Issued after completion of each audit &

after providing 1 month to respond to initial audit observations

Audit Reports addressed to:

The concerned Minister & head of the audited entity

The Speaker of the N.A for the audits of the Legislative Offices

The Chairman of the NC for the audit of the National Council

The Minister of Finance for audit of Defence and certification of donor funded projects

The Chief Justice of Bhutan for audits of the courts

The Chairperson of the Board for the audits of the corporations and financial institutions

Page 22: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Audit Clearance Certificate

Promotion

Further Studies

Training

Post Retirement Benefits

Elections

Contract Extension

Secondment

Page 23: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Contents Result of the audit of the Annual Financial Statement of

the Government;

the overall financial condition and recommendation to improve the economy, efficiency and effectiveness of the govt.

Significant audit findings and recommendations for improvement of agencies

Annual Audit Report

Page 24: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Cases where the Authority did not receive acceptable responses or cooperation

Cases where the follow-up reports are not adequate or are not being carried out as recommended

Cont. Annual Audit Report

Page 25: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Follow-up of Audit Reports

Section 76 of the Audit Act of Bhutan 2006

“The Lhengye Zhungtshog, Ministries, and other concerned authorities shall be responsible to take timely follow-up actions on Audit Reports”

Dedicated Follow-up Division

- Issue reminders

- Up date the status

Page 26: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Audit Information Management System

Audit Information Management System (AIMS)

- All Audit Reports

- Accountability for each lapses

- Up dated on a continual basis

- Generates latest status of individual audit reports

- Produces Audit Clearance Certificate

Page 27: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

Relations with stakeholders

Parliament through PAC Anti-corruption Commission Office of Attorney General Continuous relations with agencies Awareness programme at the grass root levels Awareness programme with ministries, departments and

Dzongkhags PAC’s hearing RAA’s participation in the conference organized by other

organizations

Page 28: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness

BHUTAN THE LAND LOCKED COUNTRY

Page 29: SAI-BHUTAN Royal Audit Authority Auditing and Reporting on Economy, Efficiency & Effectiveness