International Journal of Auditing - July 2004
Audit Profile: Control and Audit Office of Afghanistan
By Mr. Muhammad Sharif Sharifi, Auditor General
The Control and Audit Office (CAO) is the supreme audit institution of Afghanistan. It reports directly to his Excellency the President of Afghanistan in an independent and impartial way.
The main objectives of the CAO are to
- protect public funds and take action against errors and irregularities regarding financial carelessness and the misuse of public property;
- prevent illegal expenditures;
- review the systems of control over government receipts and payments;
- identify fraud and ensure that accused individuals are brought to justice;
- certify the financial statements of government;
- identify shortfalls in the government budget and provide guidance to minimize errors, shortcomings, overpayments, and poor estimation for construction projects; and
- guarantee the accuracy of aid and grants provided by donor countries.
Because of political changes in Afghanistan during recent years, the CAO’s membership in several international auditing organizations had been suspended. Fortunately, the CAO has now regained its membership in INTOSAI, ASOSAI, and ECOSAI.
The Auditor General is the CAO’s most senior official (equivalent to a minister). He establishes policies and guidelines for the CAO and is directly responsible to the President of Afghanistan . The Auditor General is assisted by two deputy auditors general, who are responsible for implementing the CAO’s audit plans and evaluating its audit findings. They also consider proposals to improve the CAO’s work processes.
The CAO’s rules and regulations are based on international standards, and its objectives encompass financial, accounting, and economic monitoring of institutions such as ministries, public offices and organizations, government commissions, municipalities, and banks.
The CAO’s audit work is intended to ensure
- transparency in accountability and accounting,
- effective performance,
- standardized audits that comply with international auditing standards,
- protection of property (goods and cash),
- reliable accounting and reporting,
- proper implementation of the government’s socioeconomic development plan,
- rules are followed and community and current needs for special sectors are met, and
- accuracy in the expenditure of aid provided by donor countries.
The CAO’s methodology for monitoring and auditing is based on INTOSAI international auditing standards. The auditors’ main tasks are to ensure
- public accounting is accurate;
- financial and accounting control by ministries, offices, municipalities, government commissions, banks, organizations, and mixed companies is accurate;
- government income is properly controlled;
- the government’s socioeconomic development plans, the development budget, and the annual budget are properly implemented;
- audits are undertaken in a way that promotes and develops the national economy, the special sectors, and the growth of community;
- public capital is safeguarded;
- government decrees, approval of decisions, and orders are properly substantiated and implemented;
- allocated resources are used effectively; and
- illegal activities are prevented.
To achieve its objectives, the CAO is committed to auditing more than 670 budgetary units each year. The following CAO directorates undertake the audits.
• Directorate of Planning and Analysis : This key directorate coordinates and organizes the audit programs and plans of the audit directorates. It provides quarterly reports to the cabinet and the President. It also evaluates and analyzes the findings of audit groups, including errors and irregularities, and provides guidelines and direction for fur the r improvements to the CAO’s audit processes.
• Directorate of Documentation : This directorate is responsible for executing managerial orders, safeguarding special and secret letters, and organizing agendas for consultative and steering committee meetings. It also executes all o the r related orders given by administrative authorities.
• Audit Directorate for Public Enterprises and Organizations : This directorate is responsible for the audit of public enterprises, government organizations, government companies, and banks. It works as a separate department in the CAO’s organizational structure.
• Audit Directorate for Central Budgetary Organizations and Audit Directorate for
Local Budgetary Organizations and Municipalities : These directorates substantiate the government budget, including the proper use of financial and material resources, the protection of government property, the design of accounting issues, and the proper assignment of government activities.
• Audit Directorate for NGOs : Since the majority of aid is provided to Afghanistan through nongovernmental organizations (NGO), the CAO has established this directorate to ensure that this aid is expended properly and legally.
• Audit Directorate for Technical Affairs : The development budget is the largest portion of the government’s annual budget. This directorate audits construction, industrial, agricultural, and o the r projects.
• Internal Audit Directorate : According to CAO legislation, the internal audit directorates of government ministries must cooperate with the CAO. The CAO Internal Audit Directorate monitors the se directorates. Its auditing methodologies are currently being standardized.
• Directorate for Quality Assurance : This directorate monitors the performance of CAO audit groups and helps the m prepare work plans and review audit issues.
Eighty percent of CAO employees have been educated at the tertiary level. Recently established employment requirements call for candidates to have at least higher education and also pass a qualifying examination. Recruits are trained in audit courses based on international auditing standards and may be employed in any one of a variety of posts: chief auditor, deputy chief auditor, senior auditor, auditor, or junior auditor. Qualified personnel are entitled to promotion after demonstrating that the y can perform the responsibilities of a higher grade. Promotion requires the approval of a designated commission.
Two decades of civil war in Afghanistan have damaged the core of the CAO (and o the r institutions) and have diminished opportunities for effective and continuous training. To overcome this problem and to rebuild the capacity of CAO staff, the Transitional Government of Afghanistan has awarded a project to PKF, an international firm of accountants and auditors. This project is funded by the World Bank and provides technical support to the CAO to enable it to carry out audit functions in accordance with international auditing standards.
For additional information, contact: Control and Audit Office, fax: ++93 0 20 210 1757; e-mail: auditoffice_afghanistan@yahoo.com.