International Journal of Government Auditing – April 2003
Audit Profile: Office of the Comptroller and Auditor-General of BangladeshBangladesh —a rapidly developing nation of 123 million people—has made significant progress since gaining its independence in 1971. The country has a 1000-year-old history, culture, and literature. Its economy depends largely on agriculture and the export of ready-made garments, raw jute, jute manufactures, hides and skins, leather products, tea, newsprint, and seafood.
History
The Office of the Comptroller and Auditor-General (CAG), the supreme audit institution (SAI) of Bangladesh , was created in 1973 in accordance with the Republic’s constitution. The CAG has been responsible for both the auditing and accounting of public receipts and expenditures. However, the office has been relieved from the accounts-keeping function based on an amendment to the act that was made in 1983.
The basic structure of the SAI was inherited from the British system following the Exchequer and Audit Department Act, 1866, of the United Kingdom. The office of the Auditor-General was created under the Government of India Act, 1935.
Government
The government is divided into three branches: the executive (the President is the head of state and the Prime Minister is the head of government), the legislature (the Parliament or Jatiya Sangshad) and the judiciary (the Supreme Court and the subordinate courts). The Office of the CAG is administratively under the executive branch but is functionally independent.
Legal Authority
The constitution of Bangladesh empowers the CAG to audit and report on the Public Accounts of the Republic to the legislature through the President. The Comptroller and Auditor-General (Additional Functions) Act of 1974 gave the CAG additional responsibilities, including keeping the government accounts, preparing appropriation and finance accounts, auditing the accounts of statutory public and local authorities, and preparing commercial accounts and general financial statements. In 1975, an amendment to the act gave the CAG further responsibility to audit public enterprises that have at least a 50 percent share or interest to the government.
Independence
The constitution allows the CAG to function with complete independence, stating that the “Comptroller and Auditor-General, in the exercise of his functions, shall not be subject to the direction or control of any other person or authority.” SAI auditors have full, unrestricted access to all records and documents of any government department or government-owned entities. The President of the republic appoints the CAG to serve until the age of 60. Only the President, based on the recommendation of a Supreme Judiciary Council, can remove the CAG.
Organization of the SAI
The SAI of Bangladesh is functionally organized into 10 audit directorates, each headed by a Director General. The audit directorate is responsible for conducting audits of different agencies and departments of the government. All serious financial irregularities relating to different governmental agencies that the audits identify are reported on both a yearly and an issue basis and submitted to the Office of the CAG for approval. The Deputy Comptroller and Auditor-General (Accounts and Reports) is responsible for coordinating with the Directors General to (1) ensure timely generation of audit reports and (2) obtain the CAG’s approval of those reports. Currently, the audit staff totals 3,600. Auditors are recruited from various disciplines so that the staff will have complementary and multidisciplinary skills. All professional staff are recruited by an independent National Commission. Qualified staff of the SAI have academic and professional backgrounds in such fields as accounting, finance, economics, business administration, public administration, agriculture, engineering, and medicine.
Mission of the SAI
The mission of SAI is to conduct independent audit and evaluation of public sector operations to provide reliable and objective information and assurance to the Parliament. The SAI is committed to promoting accountability and transparency in government to achieve good governance, an issue of great concern to the government as well as the taxpayers. SAI products attempt to offer insight into the government’s functioning.
Reporting and Follow-up
The SAI of Bangladesh publishes a number of reports each year that reflect the results of its annual audit operations. The reports focus on compliance and financial audits of a very large number of government, local government, and public enterprises. However, a modest beginning has been made to adopt value-for-money audits in areas of public interest with the submission of four audit reports.
The CAG submits ministrywide annual audit reports to the President of the Republic who, in accordance with constitutional requirements, causes them to be laid before the Parliament. Annual audit reports up to the year 2000-2001, including 75 issue-based special audit reports, have already been submitted to the Parliament. The CAG also submits reports on the budget performance of the national accounts and the annual finance accounts regarding the total financial activities of the government. The Public Accounts Committee, a select body of Parliament, discusses these reports and then provides necessary directives and recommendations to the executive branch. Other audit findings not included in the audit reports are discussed bilaterally with respective executive agencies in order to settle them.
Professional Development
The Office of the CAG is responsive to the vital need for human resource development in order to maintain high professional standards. Because the SAI is committed to both the professional development of its staff and continual improvement in audit quality, it is actively pursuing ongoing audit reforms. These reforms were implemented through capacity-building projects under the technical assistance of the United Nations Development Program and the Department for International Development, United Kingdom . Under these capacity-building programs, various institutional developments — including computerization, updating audit code, preparing audit standards and manuals, and developing audit methodology and intensive foreign training—were provided.
International Liaison
The office has maintained liaison with various international audit organizations, such as INTOSAI, the Asian Organization of Supreme Audit Institutions (ASOSAI), and various SAIs of other countries. Such involvement has helped the office improve its performance and results. Bangladesh became a member of INTOSAI in May 1973.
The Office of the CAG was elected to the Board of Governors at the Triennial Assembly of ASOSAI held in October 2000. In recognition to its commitment and contribution, the Office of the CAG has been included in the following standing committees of INTOSAI:
- Internal Control Standards Committee,
- Working Group on Environmental Auditing, and
- Working Group on Audit of Privatization.
Future Challenges and Prospects
At the beginning of the 21st century, the office is preparing to meet the challenges of the new millennium. The office discharges oversight as a watchdog, providing assurance to the Parliament and the government of the economy, efficiency, and effectiveness of government business. The office tries to be professional, objective, fair, honest, and ready to face the following challenges:
- Completing separation of auditing and accounting functions to enhance the credibility and quality of the audits.
- Developing performance audits—beginning with those on issues of public interest—to enhance the financial accountability process in the country.
- Ensuring high-quality financial and compliance audit, with the quality of the audit meeting changing needs and demands, and introducing modern audit standards and audit methodology to ensure timely, up-to-date, high-quality products.
- Reforming audit and undertaking improvement of Audit Standards, Codes, and Manuals.
- Accelerating the pace of computerization and computer networking, including initiatives to develop a Management Information System for monitoring the audit information.
- Undertaking an elaborate training initiative to teach staff the latest auditing concepts and techniques.
For additional information, please contact the Office of the Comptroller and Auditor- General, Audit Bhaban, 189, Shaheed Syed Nazrul Islam Sarani, Kakrail, Dhaka-1000, Bangladesh; fax: ++880-2-8312690; e-mail: saibd@citechco.net; Web site: http:www.cagbd.org; telephone: ++880-2-8321447.