State budget audit organization conducted by the State Audit of Vietnam

State budget audit work still has certain limitations that affect implementation.

The process does not have a mechanism for timely updating, supplementing and adjusting to practical changes, especially changes in the State Budget Law and some budgetary financial management mechanisms such as expenditure allocation and management mechanisms for revenue-generating public service units. The State Budget audit process is mainly built on the basis of compliance audit and financial statement audit, not mentioning the operational audit in State Budget audit. The reality of State Budget audit activities, especially local budget audit, shows that this process can only be applied to some contents such as: audit preparation; audit implementation at some agencies assigned to collect State Budget, while other contents, if applied in audit activities, will not be complete such as audits at State Budget using units, at taxpayers, etc.

The State budget audit process is a highly general and oriented process. This process has not been developed at a more detailed level of operational guidance for each subject of the State budget audit such as the State budget settlement report, local budget audit, budgets of level I budget units under the central government, taxpayers, and units directly using funds. Therefore, the implementation process has not been highly consistent, especially the audit content at general financial agencies and units using funds.

The process does not provide detailed guidance on auditing methods for each state budget audit content right from the assignment of tasks, so the implementation of auditing methods by each auditor does not have a unified direction, causing difficulties in recording as well as checking and reviewing the work of the audit team and audit team management levels. Some financial statement auditing methods have not been specified in the state budget audit process;

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Fifth, the effectiveness of auditing is not high, in the past time, many units still did not fully and seriously implement the conclusions and recommendations of the State Audit. The quality of State budget management has not been consolidated and improved in a proportionate manner in units after being audited. Violations, negativity, waste continue to occur and in some cases,

In many cases, the violations in the following audit year are more than in the previous audit year. Through the State budget audit activities, the State Audit has not discovered many negative and corrupt acts to transfer to competent authorities for handling according to their authority;

Sixth, the State Audit Office has not yet established a process for coordination of work, a process for exchanging and providing regular information between the State Audit Office and the Ethnic Council and other agencies of the National Assembly and People's Councils to promptly and regularly serve the supervisory activities of the National Assembly and People's Councils.

Although the State Audit Office has signed a Coordination Regulation with the Economic and Budget Committee (now the Finance and Budget Committee) and provided audit reports of audits and audit results related to the National Assembly's supervision content, the provision of this information has not been proactive and timely. This situation is partly due to the fact that the State Audit Office's information operation capacity has not met the requirements, but partly due to the lack of specific legal regulations on coordination activities between agencies.

The coordination between the State Audit Office and the People's Councils at all levels in the entire process of auditing the local budget is still limited, not regular, continuous and there are no legal coordination regulations although the State Audit Law clearly stipulates that the local budget audit serves the People's Council's function of supervising the local budget. The auditors have not grasped the issues that the People's Council needs to clarify regarding the items on the final settlement report, and at the same time, the auditors have not had timely information on important issues in the process of supervising and operating the local budget to determine appropriate audit objectives.

Seventh, Facilities and equipment are still limited, especially the information technology infrastructure is in the process of formation, not yet able to apply the utilities of auditing software; although the regime and remuneration policies for auditors have been given attention, compared to the specific nature of the auditing industry, they are still difficult, making it difficult to attract talent.

In addition to the subjective internal problems that the State Audit sector is trying to overcome, the cause of the limitations is that State budget auditing is still a specialized field.

This is a fairly new field in Vietnam, we still do not have enough understanding and do not have much practical experience. Difficulties in state administrative reform, in innovation of economic and financial management, labor use, salary policy... are also factors that hinder timely and effective resolution of problems and difficulties of the State Audit.

Chapter 2 Conclusion

For nearly 15 years of operation, the State Audit has played an important role in inspecting and controlling the revenue and expenditure activities of the State budget and State budget funds to contribute to improving the efficiency of State budget use, providing a lot of practical information to the Government and functional agencies managing and operating the State budget, the National Assembly and People's Councils approving and supervising the budget, and other relevant agencies in ensuring the maintenance of financial discipline. State budget auditing activities have been recognized by society and affirmed its necessity and role with the goal of inspecting and controlling the use, management and operation of the State budget by public agencies, organizations and units related to State budget revenue and expenditure. The organization of State budget auditing work has been increasingly improved in terms of implementing the annual overall audit plan and each State budget audit, professional methods and auditing processes, clearly defining the objectives of State budget auditing. The work of supervising the quality of State budget audits and publicizing the results of State budget audits has received more and more attention. The organization of the State budget audit apparatus has been gradually improved in terms of both scale and auditing capacity. However, the State budget audit organization also faces many arising problems to meet the requirements on the quality of operations and the role of the State Audit agency, especially the capacity of State budget audit operations, the use of specialized and professional methods, the organization of the implementation of the steps of the State budget audit process and the use of auditing types in State budget audits.

Through practical and theoretical research, the Author would like to discuss specific directions and solutions to improve the organization of State budget audit conducted by the State Audit of Vietnam in the coming time.

Chapter 3

ORIENTATION AND SOLUTIONS TO IMPROVE THE STATE BUDGET AUDIT ORGANIZATION

BY STATE AUDIT OF VIETNAM

3.1. ORIENTATION FOR IMPROVING THE STATE BUDGET AUDIT ORGANIZATION

3.1.1. Some viewpoints on innovation in the organization of State Budget management in Vietnam related to the organization of State Budget auditing

The views on innovation in the organization of state budget management as guiding principles in the national financial development strategy will directly impact the state budget audit activities of the State Audit Office, not only on issues related to professional methods and auditing practices, but also have a profound impact on the organization and operation of the State Audit Office in terms of both practical aspects of auditing activities and the development and promulgation of legal documents on the State Audit Office.

First, the impact of promoting decentralization to local governments, especially the role of managing the local budget and the trend of reforming state administrative agencies.

Resolution No. 17-NQ/TW dated August 1, 2007 of the 5th Conference of the 10th Party Central Committee on promoting administrative reform, improving the effectiveness and efficiency of state apparatus management; Resolution No. 53/2007/NQ-CP dated November 7, 2007 of the Government promulgating the Action Program guiding the implementation of Resolution 17-NQ/TW; Resolution No. 03/2008/NQ-CP dated January 11, 2008 of the Government promulgating the Action Program of the Government for the 2007-2011 term affirms that public finance will be reformed in the direction of strengthening budget management decentralization on the principle of ensuring institutional consistency and the leading role of the central government, decentralizing more strongly and giving more initiative to local authorities, especially in budget decisions. Accordingly, the capacity of the provincial People's Council will be enhanced, this issue also sets out a monitoring mechanism.

The centralization of supervision and the role of the State Audit in assisting the provincial People's Councils to perform their functions well. Each budget level must be responsible for deciding and approving its own budget and the additional amount from its budget to the lower budget. The increased authority of local governments creates an urgent need to strengthen capacity and enhance transparency and financial accountability institutions.

Therefore, the State Audit must clearly identify the subjects providing information through the State Audit results as the National Assembly and the Provincial People's Councils, taking the provincial budget as the main level of auditing the local budget. During the auditing process, it is necessary to establish a relationship of service and coordination with the Provincial People's Councils in all four stages of the auditing process. The auditing process needs to assess the impact on the delegation of the provincial level to proactively decentralize budget management to the district and commune levels. These issues set new auditing objectives, use new types of auditing and analyze the macro-level audit results, towards effective auditing and the role of the State Audit in advising the Provincial People's Councils to decide on decentralization of revenue management and expenditure tasks to the district and commune levels in the locality. In the near future, when there is no longer a District People's Council, the district budget level will be equivalent to a budget unit, reducing the number of budget audit focal points;

Second, the important changes in the gradual shift from input-based state budget management to output-based management, and the change in the budgeting process according to the medium-term expenditure framework will lead to corresponding changes in the budget management method. This will have a major impact on the use of audit types and methods and the determination of the State Audit's audit objectives for the State Budget. The Government is piloting the implementation of budgeting, execution, accounting,

Finalize and evaluate budget implementation based on output results; implement the budget allocation mechanism according to programs and work results. Gradually shifting the state budget management based on input to management based on output results, changing the budget preparation process according to the medium-term expenditure framework will lead to corresponding changes in budget management methods. These issues set the target

State budget audit must have clear changes, focusing on macro-level, medium-term assessments (not just one budget year), especially the budget stabilization period and forecasting for the next medium-term stabilization period. The State Audit must strengthen its advisory work to supervisory agencies and policy makers as an independent agency on priority goals in the medium term. The State Audit must assess the honesty and reliability of information on reports of budget users according to the method of budget management based on outputs, not just the State Budget Finalization report as at present. At the same time, the State Audit must build and maintain an information system and provide comprehensive and continuous information through annual audits to help supervisory agencies such as the National Assembly and People's Councils decide on budget estimates and approve budget finalization. To achieve this, the State Audit Office needs to strengthen thematic, sectoral or state management audits in a priority direction depending on the budget structure, while promoting operational audits to assess the effectiveness of state budget use based on outputs and assess the results of achieving goals from state budget use;

Third, promoting autonomy and self-responsibility for using staff and administrative management budget for state agencies; autonomy and self-responsibility for performing tasks, organizing apparatus, staff and finance for public service units and gradually equitizing a number of public service units will affect the way audits are organized and types of audits are used in the medium term.

The delegation of more authority to budget spending units is an important development in the management of state budget expenditures in Vietnam. This delegation is being promoted and carried out in parallel, but separately between administrative units and revenue-generating public service units. This mechanism requires close monitoring, evaluation and management of the delegation of autonomy with independent assessments of the results of public service activities compared to the invested state budget costs. These changes lead to the subjects of state budget audit (especially revenue-generating public service units will gradually narrow) and

The objective of State budget audits will gradually shift from the objective of confirming settlement data and assessing compliance with the law to the objective of assessing the effectiveness and efficiency of State budget use (by output) or assessing the quality of public services and gradually shift the type of financial statement audit and compliance audit to focusing on operational audits with the enhancement of the advisory function. State budget audits will focus more on auditing at consolidated units or level I budget units and gradually meet the requirements of regular audits of provincial and central budgets. The auditing methods used in State budget audits will have major changes and the training and recruitment of State budget audit auditors must be more diverse;

Fourth, the impacts of modernizing the State budget management through the implementation of the "Public Financial Management Reform" project can have a major impact on the way State budget audits are implemented.

The Government has decided to implement the Public Financial Management Reform Project . This project aims to build a Treasury and Budget Management Integrated Information System (TABMIS) to replace a series of current systems to support the budget, control, supervision and accounting processes at the Central Government level and local government levels. TABMIS is used by all Treasury units, State budget management units from the Central to local levels, administrative and public service units, management units, and State budget users. The Government has committed to unifying and integrating the treasury accounting system, budget accounting and accounting systems of budget users in the unified accounting system. In the near future, the TABMIS system will be able to extract complete reports and settle accounts at the end of the year in a timely and accurate manner, and store information for analysis. This system ensures that the Ministry of Planning and Investment, specialized ministries and localities have direct access to the State Treasury's data on budget revenue and expenditure implementation at all levels of government.

Thus, when the TABMIS system is synchronously deployed (expected in 2010), it will have a profound impact on the organization and implementation of the State budget audit work.

Audit plans, information review and evaluation, and initial audit evidence collection can be accessed on-site through this system. The reporting regime of the State budget settlement of each budget level (even the budget-using unit) in a consolidated account system is established quickly and synchronously, requiring the State Audit to prepare a plan for auditing the State budget in an information technology environment. Auditing at the audited unit will be minimized and mainly audited at the synthesis agencies; information analysis will be more multi-dimensional in comparing data between many subjects, requiring the State Audit to use modern auditing methods in auditing the State budget. At the same time, this system will help the State Audit collect information systematically and continuously, which is very convenient for comparing and checking or monitoring unusual events to select the scope and limits of the audit;

Fifth, the State Budget Management is increasingly innovating the method of budget management and use in the direction of linking state budget investment with social efficiency; implementing administrative reforms in budget preparation, implementation and settlement; strictly controlling state budget revenue and expenditure activities through regulations on enhancing responsibility, inspection, examination and auditing associated with handling of violations. This requires synchronous and comprehensive innovation in the State Audit's state budget audit work in the direction of: Strengthening compliance audit, detecting and proposing timely and strict handling of organizations and individuals who violate the State Budget Law; innovating audit work to keep up with the innovations and reforms of the public finance sector in general and the budget in particular; in addition to financial statement audit and compliance audit, it is necessary to promote research and application of operational audit forms in the state budget sector;

Sixth, Resolution No. 03/2008/NQ-CP affirmed that it is necessary to organize internal audits at agencies, units, and organizations that manage and use the state budget, money, and assets to protect the safety of assets; assess the quality and reliability of economic and financial information; inspect the compliance with the laws, regimes, and policies of the State and the internal rules and regulations of the unit to contribute to practicing thrift, fighting corruption, and improving the efficiency of using the state budget. Therefore, the State Audit needs to

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