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

1. Presentation by Mr. Shankar Narayan, ASOSAI representative (SAI India) During AGM of ARAPAC, October2012 Asian Organisation of Supreme Audit Institutions (ASOSAI)

2. ASOSAI • Established in : 1979 with 11 members • No. of Member SAIs : 45 SAIs (as of October 2012) • Objectives : • To promote understanding and cooperation through exchange of ideas and experiences; • To provide facilities for training and continuing education for government auditors; and, • To serve as a regional link with other relevant organizations in the field of public audit, etc.

3. Organisation • Governing Board- 11 Members SAIs of India (Chair), Korea, Bangladesh, China, Japan, Malaysia, Pakistan, Philippines, Russia,Saudi Arabia, & Thailand • Secretary General SAI Korea • Training Administrator SAI Japan • Audit Committee Members SAIs of Turkey & Jordon

4. Role of SAI India in ASOSAI Comptroller & Auditor General of India hosted the 12th ASOSAI Assembly and became the Chair of ASOSAI, Governing Board on 29 Feb. 2012 Publishes the ASOSAI Journal of Government Audit twice (April & October) in a year Member 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”

5. 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. 5

6. ASOSAI and ARAPAC • All the countries represented in ARAPAC also represented in ASOSAI except Timor Leste • Common goal of promoting accountability, transparency and good governance • ARAPAC Secretary General, Parliament of Bhutan made a presentation during 12th ASOSAI Assembly in India

7. UN General Assembly Resolution • Adopted by 66th General Assembly Resolution no. A/RES/66/209 on 22nd Dec. 2011 • Promoting the efficiency, accountability, effectiveness and transparency of public administration • By Strengthening SAIs

8. Emphasis of Resolution • Need to improve the efficiency, accountability, effectiveness and transparency of public administration. • Need for capacity-building as a tool • Cooperation of the INTOSAI and UN

9. Emphasis of Resolution • Necessity of SAIs independence • Important role of SAIs in promoting efficiency, accountability, effectiveness and transparency of public administration. • Appreciate the work of INTOSAI • Appreciate Lima Declaration & Mexico Declaration

10. 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)

11. 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.

13. Democracy and Accountability • Legislature should be able to ascertain the manner in which public policy laid down by it is implemented. • Public financial accountability in India is established through two agencies: legislative oversight committees like PAC and CoPU and Comptroller & Auditor General of India(CAG/SAI).

14. 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 the system of Parliamentary oversight over national finances.

15. 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

16. 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).

17. Functions of PAC • Examination of accounts appropriated by the executive as certified by CAG • Study the SAI’s Audit Report on accounts

18. 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.

20. CAG’s Functions Duties 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

21. Relationship between PAC and CAG • A legal relationship as spelt out in Rules of Procedure & Conduct of Business. • CAG of India is a constitutional authority mandated to audit expenditure and receipts of government and place the Audit Report in Parliament

22. PAC and CAG • CAG’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.

23. PAC Procedures • PAC 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. CAG briefs the PAC and also gives a list of questions (Memorandum of Important Points). • PAC questions the witnesses. • After examination is complete PAC finalizes recommendations.

24. PAC Procedures • Printed PAC report or recommendations placed in Parliament. • Government accepts recommendations and takes 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.

25. Synergy - Best Practices • PAC/ CoPU need the Audit Report to work and CAG needs the PAC/ CoPU to optimize output and effectiveness. • A convergence of interests, objectives coterminal.

26. Synergy - Best Practices • A continuous dialogue between PAC and CAG • CAG should establish its reliability and integrity- audit standards, training, peer review. • 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.

27. Synergy - Best Practices • Continuity 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 Fisheries, Transport, Education, Agriculture, Mining, Health, etc.

28. Synergy - Best Practices • Finally, 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 a Report.

29. Synergy - Best Practices • CAG seconds staff to PAC and CoPU for manning their secretariats. 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.

30. Role of CAG vis a vis PAC • Accounts certified by CAG and Audit Reports- the basis of PAC’s working • CAG helps the PAC select audit material for detailed examination • CAG briefs the PAC before oral examination

31. Role of CAG vis a vis PAC • CAG scrutinizes the material submitted by government • CAG 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 recommendations

32. Role of CAG vis a vis PAC • PAC and CAG thus work together with PAC being a mini Parliament overseeing Government expenditure and the SAI providing the necessary inputs in the form of certified accounts and Audit Reports. • Oversight of the executive by Parliament is important in a democracy and that over sight is the main function of PAC.

33. Role of CAG vis a visPAC • In India PAC looks upon CAG as friend, mentor and guide.

34. PAC and CAG • Thus , SYNERGY

36. Interaction -Board of Audit of Japan (BAI) & Diet (Legislature of Japan) • BAI submit Audit Reports to the Diet • Provides Explanation to Ministry of Finance • Training courses for auditee Ministries • Briefing Audit Report to each Ministry • Analyses auditees internal control

37. Reporting procedure • The Board prepares Audit Report yearly with audited final accounts • Submits Audit Report to the Cabinet • Cabinet submits Audit Report to the Diet • Audit results inform public the execution of state budget.

38. Board of Audit & Inspection (BAI), Korea • BAI as an agency under the President • Report audit results to the President and the National Assembly • Full audit results publishes on BAI's website and distributed the press release • National Assembly may request the Board of Audit and Inspection to conduct the audit

39. Board of Audit & Inspection (BAI), Korea • BAI shall report the audit results within 3 months from the date of receiving the request

40. Comptroller and Auditor General of Bangladesh & PAC • CAG has fully independent audit mandate • Submits audit reports to the President • President 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)

41. Comptroller and Auditor General of Bangladesh & PAC • To account for the audit findings, audit opinion and recommendations. • After discussion the committee gives directions to executives or auditee on each audit para. • Sometimes the PAC may ask the CAG to make a review on the implementation of the directions given by PAC.

42. National Audit Authority, Cambodia • NAA is an independent public entity and has own budget • The NAA reports directly to the National Assembly, Senate, and royal government • 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.

43. National Audit Authority, Cambodia • If 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 relevant ministries.

44. National Audit Authority, Cambodia • Report to the Parliament and Senate are discussed by the Second Commission of finance, banking and auditing • Follow up procedure of examination on the audit report will be done by the Second Commission

45. 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 issue circulars about their audit findings to the relevant government departments

46. National Audit Office of the People’s Republic of China (CNAO) • The work report is submitted to the Standing Committee of the National People’s Congress and made available to public at the same time except for state secrets or business secrets of the auditees

47. PAC and CAG Thanks