Transcript SAI INDIA Evaluation of the Role of Audit to Detect

SAI INDIA
Evaluation of the Role of Audit to Detect
Corruption
P.K.Tiwari -Principal Director
Kulwant Singh - Director
O/o Comptroller and Auditor General of India
New Delhi – India.
PART I: LEGAL STATUS, STRUCTURE AND MANDATE OF SAI
• Legal Status of SAI India.
• Organizational structure of SAI India.
• Established by virtue of the Constitution and
enjoys a permanent legal status
• Westminster model - The Office of the
Comptroller & Auditor General is an independent
body that reports to the Parliament
• Tenure of the head of SAI
• Fixed term under the Constitution
• Independence or relationship of SAI
with the other branches of the
government.
• Independent of the executive, legislative and
judicial departments of the state.
 Fiscal autonomy or financial
independence .
• Budget of office of SAI head is not subject to
vote in Parliament and is a charged
expenditure.
Part I - Contd…
• SAI have legal mandate
and authority to audit
the following entities.
• Central or national government agencies, bureaus, offices,
instrumentalities and local government units at all levels
• State-owned and controlled corporations, universities, colleges and
enterprises
• Privately-owned public utilities company
• Private entities and non-governmental organizations receiving loans,
subsidy or grants from the state
• Social undertakings that enjoys financial support from the state
Part I - Contd…
• Audit services rendered by SAI India.
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Fraud/Forensic Audit
Real Time or a priori audit
Performance Audit
Compliance Audit/Regularity Audit
Financial Audit
Environmental Audit
Value for Money Audit
IT Audit
PART II - ROLE OF SAI IN THE PREVENTION AND DETECTION OF
CORRUPTION
• Constitution, law or regulation contain specific articles on anticorruption?
• NO
• Whether SAI’s “anti-corruption strategy” in sync with the
national anti-corruption strategy
• Yes
• Strategic Plan of SAI contain strategic goals and action
concerning fight against corruption?
• Yes
• Detecting corruption already embedded in the regular audit
services
• Yes
Part II - Contd…
• Special departments, offices or units within SAI with specific
functions and/or powers in the prevention, detection and
investigation of corrupt activities
• Audit personnel that have specific skills.
• No
• SAI provide regular trainings to auditors.
• Yes
• Specific manual or guideline on anti-corruption or anti-fraud
• No
• Yes
 SAI approach in detecting corrupt activities and transactions in the  Proactive
government?
Part – II Contd…
•
Available courses of action upon discovery of red flag.
• Referred
•
UNCAC peer review
• Yes
• Mechanism to promote and intensify prevention and detection of corrupt activities
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Citizen help desks
Anti-corruption researches
Anti-corruption educational/training programs
Promulgation of accounting and auditing rules and regulations
Declaration of assets and liabilities of public officials
Governing Code of Ethics for Government Accountants and Auditors
Public Information Office with linkages to all sorts of media
Updated publication of audit reports through the SAI’s website
Part – II Contd…
• Audit mandate, tools and techniques to detect relevant
cases of the following types of corruption with SAI India.
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• Audit services are most instrumental in the detection and
prevention of corruption
• Performance Audit
• Compliance Audit/Regularity
Audit
• Financial Audit
• Audit tools and techniques – to detect F & C.
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Abuse of position/power
Conflict of Interest
Fraud
Asset misappropriation
Influence peddling
All types of Illegal activities in
public procurement procedures
Risk Analysis.
Data Mining and extraction
IDEA Data Analysis Software
Statistical Sampling and
analysis
Part – II Contd…
• Reporting any encountered and/or detected corrupt
activities
• Regular audit report.
• SAI submit the audit report containing findings on corrupt • Entity’s management
activities and transactions – to !
• Legislative body
• What legal actions, if any, can your SAI initiate against the
perpetrators of corrupt activities and transactions?
• Recommendatory role.
Part – II Contd…
• Mechanism - SAI adopt to ensure that the audit findings and recommendations
contained in your audit reports are properly acted upon by the concerned body .
• The Reports of the Comptroller and Auditor General of India are submitted to the
President, who causes them to be laid before each House of the Parliament.
• These Reports stand referred to the two Parliamentary Committees: Public Accounts
Committee and the Committee on Public Undertakings for further consideration.
• The Secretaries of the Ministries concerned are required to intimate the Committees, the
remedial action taken by them on the cases of irregularities, frauds, loss, mismanagement
of resources etc., brought out in the Audit Reports.
• As per the agreed timeframe, such remedial ‘Action Taken Notes’ must be submitted by
the Secretaries within four months of the tabling of the Audit Reports in the Parliament.
Part III - ASSESSMENT OF SAI’s PERFORMANCE AND INTEGRITY IN
THE PREVENTION AND DETECTION OF CORRUPTION
• Field of the anti-corruption efforts - SAI
contribute best
• Preventive actions by providing
recommendations to improve entity’s
anti-corruption and internal control
system and sharing best practices and
benchmarking information to assist
decision-makers
• Performance of SAI in combating corruption • Very Good
• IntoSAINT Methodology.
• No
PART IV: AUDIT LIMITATIONS IN THE PREVENTION AND
DETECTION OF CORRUPTION
• Types of controls do not have a sufficient
level of maturity .
• Response to integrity violations.
• Accountability
• Changes in the legal framework and
organizational structure.
• None
• Factors which hampers your SAI’s role in the • Corrupt people are not severely
fight against corruption.
punished
• Rules and regulations guarantee that those
conducting fraud/forensic audits the rights
to the following.
• Immunity from harassment cases.
• Access to government offices’
accounting records, financial
statements, contracts and other
legal instruments
PART V: COOPERATION AMONG SAIs AND ANTI-CORRUPTION
AGENCIES
• The role of your SAI towards creating awareness and promoting good governance
• We promote accountability, transparency and good governance through high quality
auditing and accounting and provide independent assurance to our stakeholders, the
Legislature, the Executive and the Public, that public funds are being used efficiently
and for the intended purposes.
• Has your SAI ever cooperated with foreign counterparts in
fighting corruption-
• Yes
• Legal instruments in your country that provides for a joint
undertaking among your SAI and anti-corruption agencies
• No
Evaluation of Role of Audit to Detect
Money Laundering
PART I: ORGANIZATIONAL STRUCTURE AND LEGAL MANDATE
OF SAI
• Constitution, law or regulation creating and/or dealing with
your SAI contain specific articles about its roles and
responsibilities on the prevention and detection of money
laundering?
• No
• SAI have its own “anti-money laundering strategy” .
• No
• Detecting money laundering embedded in the regular audit
services.
• No
• Special departments, offices or units within SAI .
• No
PART II: ROLE OF SAI IN THE DETECTION AND INVESTIGATION OF
MONEY LAUNDERING
• Approach of SAI, if any, in the detection and investigation of
money laundering.
• Not included in the
mandate of our SAI
• The available courses of action – on discovery of red flag.
• Referred by the SAI to
the anti-money
laundering agency
• SAI have available facilities or mechanism to promote and intensify detection of
money laundering.
 Promulgation of relevant accounting and auditing rules and regulations
 Governing Code of Ethics for Government Accountants and Auditors
 Public Information Office with linkages to all sorts of media
 Updated publication of audit reports through the SAI’s website
Part II – Contd…
• SAI have sufficient audit mandate, tools and techniques to detect
money laundering -Placement, Layering and Integration.
• No
• SAI have a specific manual or guideline on anti-money laundering .
• No
• SAI have adequate number of audit personnel that have specific skills
• Very few
• SAI provide regular trainings to auditors about anti-money laundering • No
.
 How SAI report any encountered and/or
 Incorporated in the regular audit
detected money laundering incidents.
report.
 SAI submit the audit report containing findings  Entity Management and Legislative
on money laundering to body.
• SAI’s role is recommendatory in nature.
 Legal actions, if any, can your SAI initiate
against the perpetrators of money laundering-
PART III: ASSESSMENT OF SAI’s PERFORMANCE AND INTEGRITY IN THE
DETECTION AND INVESTIGATION OF MONEY LAUNDERING
• Field of the anti-money laundering efforts of your country does your
SAI contributes best.
• Preventive
Actions.
• Rate the performance of your SAI in combating money laundering
• Fair
• Method used to assess the above.
• In – house research and survey.
PART IV: AUDIT LIMITATIONS IN THE PREVENTION AND DETECTION OF
CORRUPTION
• Do the relevant laws, rules and regulations authorize your SAI to have • NO
full access to bank records of government officials and private
individuals who has/had transactions with the government?
• Factors which hampers your SAI’s role in the
fight against money laundering.
• Corrupt people are not severely
punished
• Necessary course of action to improve the role
of SAI in the fight against money laundering.
• Need for professional training
PART V: COOPERATION AMONG SAIs AND ANTICORRUPTION
AGENCIES
• Does your SAI have exchange of information and experience
with other SAIs.
• NO
• NO
• Are there legal instruments in your country that provides for a
joint undertaking among your SAI and anti-corruption agencies .
• SAI have any close cooperation with other enforcement agencies • NO
to acquire investigative skill, knowledge and experience in the
fight against money laundering.
Thank You 