SAI-BHUTANRoyal Audit AuthorityAuditing and Reporting on Economy, Efficiency & Effectiveness

PRESENTATION ON AUDITING SYSTEM IN BHUTAN

Auditing system in SAI Bhutan

(Audit Act of Bhutan, 2006)(16th National Assembly proposed for Auditing System in Bhutan)1963 - Accounts and Audit Organization 1970- Royal Audit Office1974 Department of Audit (Financial manual 1974)1985 Royal Audit Authority - autonomous & independent)2005 Constitutional BodyKashos (Royal Edict) Issued1970 4 Royal Auditors1985 RAA autonomous & independent)1997199920002005 Constitutional BodyReiterating independence of the RAA

Independent views on the quality of public sector activities and the stewardship of Public Funds(Peoples Representatives)(Executing Agencies)

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.

Article 25.1, Constitution of the Kingdom of BhutanArticle 3, of the Audit Act of Bhutan 2006There 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.

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

Government or any of its instrumentalitiesLegislature & related institutionsJudicial and Judicial BodiesZhung Dratshang, Rabdeys & related institutionsConstitutional BodiesDefence & Security ServicesCorporations & 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 & NGOsAll entities whose loans are approved or guaranteed by the GovernmentAll entities receiving funds, grants and subsidies directly or through the GovernmentCollections and contributions from the people & fund raised through lotteryAny entity or activity upon command of the Druk Gyalpo

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.

Section 39 of the Audit Act of Bhutan 2006The 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

Zhung Dratshang, Rabdeys and all related institutions;Judiciary and Judicial Bodies;Legislature and related institutions;Constitutional bodiesDefense and Security Services;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

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 GyalpoCont. Audit Jurisdictions

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;

ContScope 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;

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.

Performance AuditFinancial AuditCompliance AuditPropriety/Regularity AuditSpecial AuditIndividual reports to the agenciesCertification Report of the consolidated financial statementsAnnual Audit ReportAGs Advisory series AGs Occasional PaperDirect AccountabilitySupervisory AccountabilityTeam levelDivisional LevelCommittee levelPAC/ParliamentOur Audit FrameworkSystem AuditEnvironment AuditThematic Audit

REPORTSAudit Reports Issued after completion of each audit & after providing 1 month to respond to initial audit observationsAudit Reports addressed to:The concerned Minister & head of the audited entityThe Speaker of the N.A for the audits of the Legislative OfficesThe Chairman of the NC for the audit of the National CouncilThe Minister of Finance for audit of Defence and certification of donor funded projectsThe Chief Justice of Bhutan for audits of the courtsThe Chairperson of the Board for the audits of the corporations and financial institutions

Audit Clearance Certificate Promotion Further Studies Training Post Retirement Benefits Elections Contract Extension Secondment

ContentsResult 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 agenciesAnnual Audit Report

Cases where the Authority did not receive acceptable responses or cooperationCases where the follow-up reports are not adequate or are not being carried out as recommendedCont. Annual Audit Report

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

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

Relations with stakeholdersParliament through PACAnti-corruption CommissionOffice of Attorney GeneralContinuous relations with agenciesAwareness programme at the grass root levelsAwareness programme with ministries, departments and DzongkhagsPACs hearing RAAs participation in the conference organized by other organizations

BHUTAN THE LAND LOCKED COUNTRY

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