Editor's note: This article describes how one SAI carries out its mandate. We invite other SAIs to provide similar write-ups, which we will feature on a periodic basis. This article is based on a presentation originally given at the second EUROSAI/ ARABOSAI conference in March 2009 in Paris, France.
In Saudi Arabia, the practice of financial control began as early as August 1926, when a Basic Law of Governance approved the establishment of a Bureau of Accounts. In March 1954, the Council of Ministers, chaired by the King, issued its first act naming the Bureau of Accounts a state agency. The General Auditing Bureau (GAB), the first independent audit institution, was established in 1971, reporting directly to the King, and in 1995 a royal order approved a new GAB organizational structure.
To perform its oversight role effectively, impartially and objectively, the GAB developed its first strategic plan in 2004, specifying a number of major goals and objectives. The GAB stated its core values as cooperation and dialogue, integrity and fairness, professional competence, objectivity and reliability, and independence.
The strategic plan laid out the following three goals:
Annually providing the King, the Council of Ministers, and the Shura Council (the Parliament) with reliable and objective reports on the performance of state agencies and the financial situation of the state.
Improving the GAB’s professional performance to enable it to become a model organization that performs its mandate independently and efficiently and leads by example.
Assisting state agencies in improving their financial and administrative procedures, living up to new challenges, and meeting requirements of sustainable development plans and reform policies.
The GAB organized an annual seminar on ways to promote cooperation to achieve comprehensive and performance audit objectives. The seminar’s goal is to provide communication and consultation, promote the concept of constructive dialogue, cooperate in correcting errors, and adopt practical solutions to overcome obstacles. The first seminar was well-received and resulted in a set of practical and constructive recommendations that the Council of Ministers approved in October 2004.
Since the Council of Ministers approved the recommendations of the first seminar, the GAB has taken a series of steps to implement those recommendations and contribute to the development of state agencies. The following sections summarize the GAB’s actions.
Improve the Government Accounting System
The GAB formed a task force to study the existing accounting system, identify shortcomings and a suitable update methodology, and propose appropriate terms of reference in compliance with International Public Sector Accounting Standards. These terms of reference were prepared, and a national consultancy firm was commissioned to conduct a comprehensive analytical study.
Create Internal Audit Units within Government Entities
The existence of an internal audit unit within each government entity plays an essential role in safeguarding public funds, improving efficiency, and, most importantly, bridging the gap between pre-audit and post audit and saving the SAI’s time and effort.
Formulate a Unified Regulation for Internal Audit Units
After the Council of Ministers approved the creation of internal audit units within government agencies, the GAB received several inquiries regarding the duties and responsibilities of these units. In the absence of clear rules to govern these units, the Saudi SAI took the initiative, in cooperation with the Institute of Public Administration, to draft a unified regulation for internal audit units in conformity with approved professional standards. The Council of Ministers approved the regulation and entrusted the GAB with monitoring its proper implementation.
Automate Financial and Accounting Processes
To monitor implementation of the relevant Council of Ministers decision, the GAB requested that all government agencies move toward computerizing their financial and accounting processes and present their records and financials for auditing in an electronic form. A number of audited entities responded positively and made good progress toward this end.
The GAB has been eager to keep pace with these developments and enhance the computer skills of its staff by creating an information technology environment, providing updated software, and enforcing information security procedures.
The GAB also contributed to the kingdom’s e-government program (Yesser) through a task force that formulated uniform specifications for accounting records and financial data for all government entities. These specifications meet GAB’s auditing requirements as well as the directives of the Yesser program.
Improve Rules and Regulations
Pursuant to its charter, the GAB contributed significantly to improving the performance of some audited entities by actively participating in formulating and updating rules and regulations on internal audit, financial affairs, government procurements, and public warehousing.
Advance the Accounting and Auditing Profession
As a board member of the Saudi Organization for Certified Public Accountants (SOCPA), the GAB contributes to the development of the accounting and auditing profession in Saudi Arabia. The SOCPA issues accounting and auditing standards for the country and adopts appropriate international standards. It offers various training programs for accountants and auditors as well as a fellowship program.
In 2007, the SOCPA became a member of the International Federation of Accountants (IFAC).
Hold Annual Seminars
Since 2003, the GAB has organized annual seminars on ways to promote cooperation to achieve comprehensive and performance audit objectives. Topics are carefully selected to meet the expectations of participants and help find practical solutions to common problems facing government financial administration and the auditing function.
Build Institutional Capacity
The GAB’s strategic plan emphasizes building institutional capacity and training staff as key factors in promoting the GAB as a model organization that performs its functions independently and with high competence and leads by example. The recommendations of the first GAB seminar addressed the need to provide sufficient financial resources for staff training not only for GAB staff but also for all government finance departments.
Introduce and Implement the Concept of Comprehensive and Constructive Audit
The GAB has adopted the concept of comprehensive and constructive audit and the principle of preemptive control.
Accordingly, the GAB
took part in evaluating and improving performance at health, educational, and municipal facilities;
helped establish contract terms and specifications that reflected realistic needs for the operation, maintenance, and cleaning of service and production facilities to ensure the efficient and optimal use of public funds and properties;
jointly set controls and safety techniques for handling and disposing of chemical wastes;
followed up on procedures for safely disposing of medical wastes at various health facilities;
proposed splitting cleaning and maintenance contracts in major cities, which had a positive impact on fair competition and improved the quality of public health and cleaning services;
emphasized the need to carefully and scientifically assess and allocate required funds to minimize using appropriations for other than their intended purposes; and
asked all audited entities to cooperate and provide the GAB with all the data required to carry out its mandate with full independence and asked that those who do not comply be held accountable.
The GAB’s Role in Fighting Corruption
The GAB took the following actions to fight corruption:
updated its charter in line with the state’s comprehensive reform policy, strengthening the principles of transparency, disclosure, and accountability; protecting integrity; and fighting corruption;
developed audit tools and practices using auditing software and analytical methods;
prepared highly qualified professionals through academic education and professional training;
participated in the Saudi task force and ministerial committee that formulated the National Strategy for the Protection of Integrity and Fighting Corruption, adopted by the kingdom in 2007; and
provided the King, the Council of Ministers, and the Shura Council with credible, reliable, and objective reports on the performance of the state agencies and the financial situation of the state, pointing out shortcomings and proposing appropriate solutions.
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