General Department of State Audit | ||
National Economic and Social Development | ||
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Office of the State Audit Office | |
TCCB Department | |
General Department | |
Department of Labor, War Invalids and Social Affairs | |
State Audit Office of Vietnam I | |||
State Audit Office II | |||
State Audit Office III | |||
State Audit Office of Vietnam IV | |||
State Audit Office of Vietnam | |||
State Audit Office of Vietnam | |||
State Audit Office of Vietnam VII | |||
KTNNKV I | |
KTNN Region II | |
KTNN Region III | |
KTNN Region IV | |
KTNN Region V | |
State Audit Office of Region VI | |
State Audit Office of Region VII | |
TTKH & BDCB | ||
Information Technology Center | ||
Auditing Journal | ||
KTNN Region IX
State Audit Office of Region VIII
Legal Department | |
Department of International Relations | |
Diagram 2.1. Organizational structure of the State Audit
In more than 15 years of operation, it can be said that the State Audit has created an environment, built mechanisms, plans, and training programs, continuously, diversely, fairly synchronously and comprehensively in terms of training degrees and experts; domestically and internationally; professional expertise, information technology, foreign languages and knowledge, management skills, culture and professional conduct; updating knowledge and training according to civil servant ranks, combined with exams and granting of state auditor certificates. The work of planning, recruiting, training, fostering, rotating, appointing and assigning cadres has always been carried out methodically, scientifically, publicly and transparently in accordance with the regulations of the Party and the State, in accordance with the specific conditions and capabilities of the sector. The current staff, civil servants and auditors of the entire State Audit system currently has over 1,200 people , of which civil servants with university degrees or higher account for over 90% of the total number of cadres and civil servants...
Since its establishment, the State Audit has conducted thousands of audits of various sizes at units using the state budget, money and assets in all fields. With the gradually improved legal framework and enhanced capacity, state audit activities have become increasingly extensive in scale, diversified in types and methods of audit, and improved in audit quality... The results of the implementation of audit functions and tasks are shown as follows:
Firstly, in terms of scale, the number of audits has been gradually increasing each year; since 2006, each year the State Audit has audited from 90 to 130 focal points (ministries, branches, central agencies, provinces, cities, corporations, general companies, group A investment projects, etc.), an average of 2 times higher than the previous period, with the number of audited investment projects in the construction investment sector alone increasing 4 times. In the state budget sector, the number of focal points and total audited budget revenues and expenditures has increased rapidly. If in 2004, audits were conducted at 8 ministries, branches and 22 provinces and centrally-run cities, accounting for
5.38% of central budget expenditure, 29% of total local budget expenditure and 38% of total state budget revenue, by 2008, audits at 20 ministries, branches and 35 provinces and centrally run cities, 29% of total central budget expenditure, 49% of total local budget expenditure and 60% of total budget revenue were audited.
The average interval between two audits of each unit has also been shortened. In the past 5 years, most of the level I budget units under the central budget, provinces and centrally run cities; State-owned corporations, commercial banks, financial and insurance organizations, etc. have been audited every 2-3 years; on average, 50% of provinces and cities have audited the state budget settlement reports each year. Many units are audited regularly every year according to the law, such as the State Bank, the Bank for Social Policies, or audit national target programs at the request of donors, such as Program 135, the National Target Program on Clean Water and Rural Environmental Sanitation, the National Target Program on Education and Training, etc., which have become regular work in recent years of state audit activities.
Second, Regarding the types and methods of auditing, after being supplemented with functions, tasks and organization according to Decree No. 93/2003/ND-CP dated August 13, 2003 of the Government and especially since the State Audit Law took effect (2006), the State Audit has strengthened auditing in both scope and depth, gradually fully implemented all 3 types of auditing: financial reporting, compliance and operations, focusing on assessing the implementation of the Law on Anti-Corruption, the Law on Practicing Thrift and Combating Wastefulness. It has gradually confirmed the main indicators on total revenue, total expenditure, and state budget deficit to provide authentic information and ensure quality for the Government and the National Assembly in reviewing and approving the state budget settlement and deciding on the state budget estimate; providing
information for People's Councils at all levels to approve annual local budget settlements. The State Audit also audits and confirms investment capital settlement reports of construction investment projects, financial reports of enterprises, units and economic organizations to provide objective and honest information and enhance transparency in the management of state budget, money and assets. Implementing legal provisions, especially the Law on Anti-Corruption and the Law on Practicing Thrift and Combating Wastefulness, the State Audit has strengthened compliance audits, thereby clearly identifying violations, addresses of violations, responsibilities of collectives and individuals for violations, and making specific recommendations to relevant agencies for handling in accordance with the provisions of law.
Along with post-audit, in recent years the State Audit has begun to implement pre-audit forms such as appraisal and presentation of opinions on the annual state budget estimates before the Government submits them to the National Assembly, auditing investment projects from the start of construction to the end of investment and putting the project into use, and especially the thematic audit method has also been expanded since the implementation of the State Audit Law to deepen the audit, answer practical issues in the management of the state budget, money and assets that are of public interest and have proposed many valuable opinions to perfect the legal system, policies and management regimes. Typical examples are the thematic audits of the management and use of the budget for science and technology in the period 2001 - 2005; thematic audits of environmental career expenditure in the period 2006 - 2008; thematic audits of oil product loss compensation in the period 2006 - 2008; Special topics on management and use of road traffic fees and charges or special topics on procurement, management and use of assets of project management boards of ministries, branches and localities...
Third, Regarding the disclosure and provision of audit results, implementing the provisions in Articles 58 and 59 of the State Audit Law, Decree No. 91/2008/ND-CP
The Government's Decree dated August 18, 2008 on publicizing audit results and results of implementation of audit conclusions and recommendations of the State Audit, the State Audit periodically holds press conferences to publicly announce audit results and results of implementation of audit conclusions and recommendations, creating good public opinion both domestically and internationally. In addition to the form of press conferences to announce annual audit results, the State Audit also announces the results of the audit through press conferences or posting on the Electronic Information Page and Auditing Magazine as prescribed. In addition, periodic and ad hoc audit reports are reported, sent, and provided fully and promptly to the National Assembly, the National Assembly Standing Committee, the Government, the Prime Minister, audited units... as prescribed by law. Therefore, the implementation, reporting, and synthesis of audit conclusions and recommendations are becoming more substantial and systematic...
Synthesizing the audit results over the past 15 years, the State Audit has discovered and recommended financial settlement with a total amount of VND 56,412 billion, of which increasing tax revenue and other revenues by VND 14,858 billion, reducing state budget expenditure by VND 7,838 billion, recording revenue - expenditure for management through the state budget by VND 12,747 billion and recommending other financial settlement of VND 20,969 billion. In addition, the State Audit has recommended the cancellation and amendment of hundreds of legal documents that are inconsistent with regulations or not suitable to reality. From 2006 to present alone, it has recommended that ministries, branches and localities cancel 109 documents, amend and supplement 25 documents (decrees, resolutions, decisions, circulars, etc.).
2.1.2. Overview of performance auditing in Vietnam
2.1.2.1. Overview of the legal basis for performance auditing in Vietnam Although the idea of performance auditing appeared in the early 1990s,
1940, but it was not until the late 1960s that it was implemented in some countries in the world such as the United States, Canada, the United Kingdom, and Sweden. Initially, performance auditing was closely related to the concept of program budgeting. The concept of program budgeting is to improve efficiency by forming
to form a control and management system to gradually increase the need for economic thinking and financial responsibility at all levels. The basis of program budgeting is to divide activities into programs and determine the tasks that ministries and branches must undertake. This means that objectives must be specifically defined for each program and each ministry and branch, and it emphasizes the need for a system to evaluate the completion of objectives. Therefore, a type of audit is introduced to meet the above requirements, which is performance audit.
Auditing in general, and performance auditing in particular, in Vietnam began to appear in the 1990s, first with the birth of independent auditing in 1991, then with the birth of state auditing in 1994 under Decree 70/CP dated July 11, 1994 of the Government. Article 1 of Decree 70/CP stipulates:
The State Audit Office is now established to assist the Prime Minister in performing the function of checking and confirming the correctness and legality of accounting documents and data, and settlement reports of state agencies, public service units, state economic units, and mass groups and social organizations using funds allocated from the state budget[9].
Thus, the functions of the State Audit agency according to Decree 70/CP mentioned above are only compliance audit and financial audit, while the performance audit function was initially formed in Decree No. 93/200/ND.
– Decree No. 93 dated August 13, 2003 of the Government, but also very vaguely regulated through the regulation on economic auditing in Article 1 of Decree No. 93 as follows:
The State Audit is an agency under the Government, performing the function of auditing, confirming the correctness and legality of state budget settlement reports at all levels and the general state budget settlement report; settlement reports, financial reports of agencies, units, and organizations.
organizations using the state budget; auditing compliance with the law and economic efficiency in the management and use of the state budget and public assets according to the annual plan approved by the Prime Minister and extraordinary tasks assigned by the Prime Minister or requested by competent state agencies[10].
Performance audit in Vietnam is officially regulated in Article 4 of the State Audit Law as follows: "Performance audit is a type of audit to examine and evaluate the economy, effectiveness and efficiency in the management and use of the state budget, money and assets"[81]; Article 39 of the State Audit Law stipulates the contents of performance audit including:
Implementation of operational objectives and tasks; assurance, management and use of resources; internal control system; programs, projects and activities of the audited unit; impact of the external environment on the economy, effectiveness and efficiency of the audited unit's operations[81].
2.1.2.2. Overview of the organization of operational audits conducted by the state audit
The State Audit of Vietnam is organized according to the model of the Central State Audit and the Regional State Audit. The Central State Audit has units directly performing annual audit tasks (including 07 units: State Audit Specialty I; State Audit Specialty II; State Audit Specialty III; State Audit Specialty IV; State Audit Specialty V; State Audit Specialty VI and State Audit Specialty VII, headquartered in Hanoi). The Regional State Audit (including 09 units: State Audit Specialty I; State Audit Specialty II; State Audit Specialty III; State Audit Specialty IV; State Audit Specialty
Region V; State Audit Region VI; State Audit Region VII; State Audit Region VIII and State Audit Region IX, headquartered in 9 localities nationwide). 07 specialized State Audits conduct audits of budgets of ministries, branches; programs, projects; enterprises and credit financial institutions with state capital (over 51% state capital); national security and defense sector. 09 regional State Audits conduct audits of budgets, money and state assets of 63 provinces and centrally-run cities.
When the State Audit Law came into effect, the State Audit has strengthened its audits in both breadth and depth, conducting all three types of audits: financial statement audits, compliance audits and performance audits. Performance audits are implemented in two forms:
One is to conduct operational audits integrated into annual financial statement audits and compliance audits. This method is applied to audits of state budgets, money and assets in provinces and centrally run cities; audits of budget management and use of ministries and branches; audits of projects, national target programs and state-owned corporations.
When conducting operational audits in this form, auditors mainly use knowledge and skills in auditing financial statements to collect audit evidence as well as make assessments on the economy, efficiency and effectiveness of the management and use of state budget, money and assets. The procedures and methods applied in the audit process are the methods used for auditing financial statements. Therefore, the auditor's comments, assessments and recommendations on the economy, efficiency and effectiveness of the use of resources at the audited unit are still limited, not really profound and not of high practical value.