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Completing legal framework on State audit to build the socialist state governned by law (*)
2/2/2014 21:32' Send Print
Logo of the State Audit Office. Picture: kiemtoannn.gov.vn

The leading point of view for completing the legal framework on state audit

For nearly 20 years of building and developing of state audit sector, legal documents on organization and operation of state audit have been supplemented and completed. Especially, at the 7th session of the 11th National Assembly, the State Audit Law was approved ushering in a big step in terms of law making in this sector. After nearly eight years of implementing the Law, the legal status of state audit service has been enhanced with clear functions and tasks. Awareness of levels, branches and society on the State Audit Office and state audit service have become better particularly after the State Audit Office makes public auditing results. Audit activities have been strengthened in both scale and quality. Conclusions and recommendations of the State Audit Office have been implemented more seriously and completely by audited offices.

To institutionalize resolutions of the Party into State regulations to create legal basis for promoting effectiveness and efficiency of state audit activities, the revision and supplementation of the State Audit Law should follow the following leading points of view:

First, fully institutionalize the Party’s points of view, orientations and lines on state audit development, develop the service into an effective tool of the Party and State in the check and supervision of the State on management and utilization of the State budget, money and assets, support activities of the National Assembly and People’s Councils in their oversight function and decisions of important issues of the countries and localities.

Second, ensure high independence of state audit activities, complete the legal status of state audit service to be worthy of the highest public finance control agency of the State set up by the National Assembly which operates independently and only observe legislation clearly differentiate the position and functions of the state audit with other supervision, control and monitoring agencies of the State for better management of state budget, money and assets in the renovation process.

Third, succeed and promote the strong points of the current State Audit Law, supplement unrevised contents or unclear and inconsistent contents, remove inappropriate regulations, ensure appropriateness and synchronism between the State Audit Law with the Law on National Assembly Organization, Law on Government Organization, the Law on State Budget and other related legislation in the legal system of the Vietnamese State.

Fourth, expand scale and objects of state audit to ensure the control and supervision of all financial resources of the state and public assets; expand corporate audit to include current auditing activities and audit the management and use of state capital and assets in businesses where the state does not hold major security.

Fifth, selectively learn international experiences in organization and operation of state audit and make sure they are appropriate to the Vietnamese situation.

Some contents need to be revised and supplemented in the State Audit Law

Legal status of State Audit Office

On the basis of the Constitution adopted by the National Assembly, revise Article 13 of the State Audit Law on the legal status of State Audit so that it conforms to the Constitution. This is the foundation for the organization and operation of state audit and the legal basis for regulating the legal status of state audit in the State Audit Law as the highest state financial auditing office established by the National Assembly which operates independently and is abide only law.

Audit target and scale

Current major constraints are incomplete identification of scale and target of audit which does not include all state financial resources and public assets. Based on orientations of the International Organization on Supreme Audit Institution (INTOSAI) and from Vietnam’s auditing practices, over the past period, there is a need to supplement regulations to expand audit objects to account for all state financial resources and public assets: state budget, money, assets, land, mineral resources and other objects of state ownership or management as stipulated by laws.

Tasks and power of the State Audit

- Supplement the task of tax control:

Tax payment is obligation of economic organizations which embark on economic activities. Whether the tax is paid or has not been paid, it belongs to the state budget. Supplementing the task of auditing tax for the office conforms to the Lima Declaration, creating legal basis for the State Audit Office to carry out audits of objects which have to pay tax and other revenues of the state budget. This regulation helps establish the authority to audit the finance of the State in its capacity as a public authority which can mobilize the contribution from economic organizations to the state budget.

- Supplement the task of corruption prevention:

To heighten the role and responsibilities of the State Audit Office in corruption prevention, supplement the task of corruption prevention into Article 15 of the Law with the following content: “Prevention and discovery of corruption cases through audit activities; when corruption cases are discovered, competent authorities will settle them according to laws”.

- Supplement the task of public debt audit:

Supplement the task of public debt audit conforms to international practices and demands for international integration while promoting the role of state audit in reviewing national loans, debts and public debt safety, recommend solutions for effective public debt management and use for socio-economic development.

- On the task of submitting state audit budget estimate for approval by the National Assembly:

The stipulation in item 4 of Article 15 on the tasks of State Audit Office: to submit opinions of the State Auditor General to the National Assembly for reviewing and determining on the State budget estimates is unclear in terms of audit objects and subject which have responsibility of providing information and document for auditing, hence difficulties in implementation. To overcome the situation, there is a need to study and revise this stipulation as follows: the State Audit Office audits estimates of state budget, projects and important national projects for the National Assembly’s approval.

- On authority to settle violations of legislation on state audit:

Supplement the authority of the State Audit Office in settling violations of legislation on state audit by organizations and individuals concerned according to laws, create legal basis for building legal document of competent authorities (Ordinance of the Standing Committee of the National Assembly or decree of the Government) on settling administrative violations in the field of state audit.

On State Auditor General

Item 3 of Article 17 of the State Audit Law stipulates: “The tenure of the State Auditor General shall be seven years, being eligible for re-election of not more than two terms”. This stipulation is proved to be suitable as it ensures continuity, in-depth and succession between the terms of the National Assembly and conform to international practices. It also ensures the review and confirms state budget balance sheet according to the Constitution and laws (the Constitution stipulates the tasks and authority of the National Assembly: “… rectify state budget balance sheet…” (item 4 Article 84); Item 1, Article 67 of the Law on State Budget regulates : "The National Assembly ratifies the state budget balance sheet at least 18 months after the end of the financial year”).

On state auditor

Conduct research to replace stand-by auditor to ensure conformity and compatibility with the Law on Public Employee and overcome constraints in recruitment and use of auditors.

On State Audit activities

- Supplement by institutionalizing tasks and authority of the heads of specialised State Audit units and state audit in different sectors in all steps of auditing process, enhancing responsibility of heads of audit groups in leading survey, collecting information for audit plan preparation, selecting and arranging members of the auditing team to submit to the State Auditor General for decisions on time, personnel, content and scale of audit.

- Identify objects, scope and scale of an audit, clearly stipulate criteria on time, personnel and budget for an audit for successful auditing.

- Supplement stipulation on content and forms of audit quality control and responsibility to control audit quality of concerned objects. The control of audit quality is an extremely important measure to improve audit quality and control of professional ethic of state auditors, and build the Party, State and people’s confidence in auditing results.

- Heighten the responsibility of audited units and related organizations and individuals in fully and timely implementing recommendations of the State Audit office.

On revision and supplement of related laws and completion of audit norms and process

Study and revise the State Audit Law and other related legislation to clearly identify the role and functions of state audit with other inspection, control and monitoring agencies and to ensure the synchronism and compatibility of the State Audit Law with the Law on National Assembly Organization, Law on Government Organization, the Law on State Budget. Continue to build and complete the auditing norms and procedure. By 2015, the State Audit sector will have completed systems of norms and procedure for auditing finance, observance, operation and developed specialized audit prodedure for different forms of audit to improve auditing quality and professionalism.

Promulgate legal document of competent authorities on administration punishment of violations in state audit sector

In audit activities, there are unintentionally or intentionally violations of state regulations on state audit. These violations, despite their characteristics or extends, should be punished. Those which pose danger to society and constitute crimes should be put to criminal trials. However, most of violations in the field of state audit are not crimes but administrative violations, thus early promulgation of legal document on administrative punishments in state audit is very necessary, focusing on the three major administrative violations as follows:

First, deeds by audited units and related organizations and individuals which are prohibited and violate legal obligations according to stipulations of the State Audit Law.

Second, deeds by audited entities and concerned organizations and individuals which violate regulations on implementation of conclusions and recommendations of state auditors.

Third, deeds by audited entities and related organizations and individuals which violate regulations on disclosure of state audit report.

To develop the State Audit Office into the national highest controller of state finance which operates effectively and efficiently, the completion of legal framework for organization and operation of state audit is of extremely great importance of decisive significance. However, this is difficult and complicated task which requires synchronous solutions. Some of the solutions should be implemented urgently and in time. Others need attention of the Party and State, and the close coordination of levels and branches. With high responsibility entrusted by the Party, State and people, the State Audit Office has striven to live up to expectation, providing consultancies to the Party and State and closely coordinating with agencies of the Party, the National Assembly, and the Government to supplement regulations on state audit in the Constitution, revise and supplement the State Audit Law and other related laws, create legal basis for developing the State Audit Office into a prestigious and responsible finance controller, contribute to making the national finance transparent and healthy, practice thrift, fight against waste and corruption and strengthen socio-economic development for “Prosperous people, strong country, democracy, equity and civilization”./.

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(*) Published on Communist Review No 853 (November 2013)

Nguyen Huu VanPh.D. Member of the Party Central Committee, State Auditor General