Audit profile: Office of the Comptroller and Auditor-General of Bangladesh

International Journal of Government Auditing, Apr 2003 by Shamsuzzaman, Mohammad, Rahman, Niaz

Bangladesh-a rapidly developing nation of 123 million people-has made significant progress since gaming 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.