Training on Risk-Based Financial Audit

December 22: Commenced from 20 December till 29 December 2010, the Royal Audit Authority has embarked on imparting training on Risk-based Financial Audit to its officials. About 26 officials are attending the training facilitated by four experts from Deloitte Haskins & Sells, Chartered Accountants, Kolkata, India. The training is divided into two spells covering important aspects of the risk-based approach to Financial Audit. The first spell began from 20 December, 2010 and will end on 22 December 2010. The second spell is scheduled from 27- 29 December, 2010.   (Read More......)

Auditor General of Bhutan to attend XX INCOSAI
 

November 19, 2010: The Auditor General of Bhutan will lead four-member delegation including the Chairman of the Public Accounts Committee to attend the XX International Congress of Supreme Audit Institutions (INCOSAI) that will be held in Johannesburg, South Africa from 22-27 November 2010. Two technical themes; viz. the Value and Benefits of Supreme Audit Institutions (Theme-I) and Environmental Auditing and Sustainable Development (Theme-II) have been chosen for this year’s congress.

Under Theme-I, the congress will deliberate on how member Supreme Audit Institutions can play an important role in strengthening the public finance management and performance by enabling oversight, accountability and governance in a democratic society. Theme-II, environmental auditing and sustainable development is expected to provide an excellent opportunity for SAIs to show support for the growing movement toward responsible behavior in preserving our environment. The Royal Audit Authority (RAA) started conducting environment audit since 2007 and issued five reports as of today. With the participation in the congress, the RAA is expected to derive new avenues of environmental audit, which would further strengthen the environmental auditing approach to benefit the Bhutanese citizenry at large and contribute to global commitment to remain Bhutan as the global carbon sink.

Alongside the discussions surrounding the two official technical themes of the congress, XX INCOSAI will also see the official launch of the International Standards of Supreme Audit Institutions (ISSAI). During the week of the congress, several side meetings will also take place, including the 60^th and 61^st Governing Board meetings. Various committees, working groups, and task forces will report to delegates on the results of their work.  The RAA is a working group on IT Audit and Environmental Audit. In addition to these formal discussions and meetings, informal discussions and networking are also expected to take place.

Strengthening professionalism through Peer Review

November 16, 2010: Section 86 of the Audit Act of Bhutan 2006 requires the Royal Audit Authority (RAA) to undertake peer review by a member peer organisations or other professional bodies from time to time to ensure consistency and high standard of auditing. Accordingly, two senior officers from the Comptroller and Auditor General of India are currently engaged in undertaking the exercise, which has been programmed for a period of one month commencing 10 November 2010.  The RAA decided to conduct such exercise once in every five years, and the first exercise of such kind was undertaken during the year 2004 prior to enactment of the Audit Act of Bhutan.

The RAA has adopted three pronged approaches in enhancing transparency, accountability and professionalism through conducting internal audit, external audit and peer review exercise. While internal and external audits are expected to ensure transparency and accountability to the public of the RAA’s overall management of the public resources, the peer review exercise will inculcate professional approaches to auditing to ensure delivery of demonstrable, coherent and consistent quality audit services to the public.

The review exercise of one month duration has been bifurcated into two spells of two weeks each. The second spell is expected to commence from 13 December 2010. The team will, inter-alia; review the adequacy of auditing standards and manuals, reporting processes and systems of maintaining quality report, organisation and management practices and use of auditing techniques. The team will also review the implementation status of the recommendations of the earlier peer review report of 2004.

Auditor General of Bhutan to New Delhi, India

November 15, 2010: The Auditor General of Bhutan led a two member delegation to New Delhi, India from 14^th November 2010 on invitation by the Comptroller and Auditor General of India. The delegation will attend 150^th Anniversary of the Office of the Comptroller and Auditor General of India. The occasion will be commemorated by holding a seminar on ‘Challenges for Audit’ on 15^th November followed by anniversary event on 16^th November 2010. The Auditor General of Bhutan will present a paper on ‘New Paradigm of Governance and aligning the role of Supreme Audit Institute in fulfilling stakeholders’ expectations’ during the seminar.

The Royal Audit Authority (RAA) and the Office of the Comptroller and Auditor General (C&AG) of India signed a Memorandum of Understanding (MoU) in the year 2001 to strengthen the Capacity Building of the RAA. This MoU got extended to another five years in 2007.

Both the Office of the C&AG of India and the RAA are one of the active members of the International Organization of Supreme Audit Institution (INTOSAI) and the Asian Organization of Supreme Audit Institution (ASOSAI).
 

RAA host IDI-ASOSAI Instructors’ design meeting

September 2, 2010: The Royal Audit Authority will host IDI (International Organization of Supreme Audit Institutions)-ASOSAI (Asian Organization of Supreme Audit Institution)Instructors’ Design Meeting in Lango, Paro from 6-17 September 2010.  The meeting will be attended by representative from IDI, Norway; Board of Audit of Japan, and  six instructors from Philippines, Mongolia, Nepal and Bhutan and design a course and a draft Quality Assurance Handbook in Performance Audit. The course developed in this meeting will be delivered in November 2010 in one of the ASOSAI region, followed by review meeting in April 2011.

This is the third such meeting held in Bhutan since the year 2006.
 

His Majesty appoints Ugen Chewang as the Auditor General UNDER THE CONSTITUTION of the KINGDOM OF Bhutan

His Majesty the King issued a Royal Decree on July 22, 2010 appointing Ugen Chewang as the Auditor General under the Constitution of the Kingdom of Bhutan. On August 6, 2010, His Majesty conferred the ceremonial dhar to the Auditor General following which he was administered the Oath of Affirmation of Office by the Chief Justice of the Supreme Court.

Ugen Chewang was initially appointed as the Auditor General on December 31, 2005 through a Royal Decree. The Royal Decree issued then specifically directed him to further strengthen the functions and responsibilities of the Royal Audit Authority in keeping with the provisions under the Constitution. In line with the Royal Decree, the Royal Audit Authority underwent a major organizational and functional adaptation processes. Following the Organisational Development Exercise and the Capacity Building Need Assessment, functional divisions like Performance & System Audit Division, Thematic Audit Division and the Office of the Assistant Auditor General, West (now relocated to Phuentsholing) were established. Recognising the importance of maintaining quality in its products and services, a quality assurance and research unit was also instituted under the direct supervision of the Auditor General.

The Constitution required the Royal Audit Authority to audit and report on the economy, efficiency and effectiveness in the use of public resources. As such, the Royal Audit Authority geared its functions towards performance auditing while balancing its efforts on the financial audits.

The Vision and the Mission of the Authority was identified and a strategic plan was documented covering a period of five years. The other most significant achievements during the past four and half years was the development and adoption of the Auditing Standards, the Financial Audit Manual, the Auditor General’s Standing Instructions, the Continuous Professional  Development Policy, the Information Disclosure Policy, the Handbook on the Quality Assurance Review Process and various other handbooks and guides such as the Handbooks on Audit Criteria,  Audit Working Papers, Audit Recoveries Account and Audit Clearance Certificates. An Auditor General’s Advisory Series on Procurement & Construction was also issued in 2007 on the eve of the implementation of the 10^th Five Year Plan.

During the tenure, the Royal Audit Authority conducted 2,231 audits and issued 2,428 reports including 26 performance audit reports and five special audit reports. The Royal Audit Authority also issued five Annual Audit Reports during the period.

The Annual Audit Reports and the Performance Audit Reports received intense Parliamentary deliberations.  The Royal Audit Authority also saw drastic increase in audit recoveries during the period.
 

The audit recoveries in 2006 increased by 53.34% as compared to 2005, while it increased by 74.37% in 2007 over the 2006 figure.

Ugen Chewang joined Civil Service in 1979 as a Trainee Officer in the Royal Audit Authority. He completed his Bachelor’s Degree from the Punjab University in 1978 and his Master in Business Administration in Business Management and Accounting from Syracuse University, New York, USA in 1985. From 1992 to 1993, he also underwent a one year comprehensive auditing course at the Canadian Comprehensive Auditing Foundation. He was the Chief Executive Officer of the National Pension & Provident Fund from 2000 to 2005 before he was appointed as the Auditor General.

He also served as a member of the Royal Commission responsible for the selection and recommendation for the appointment of the First Chief Justice of Bhutan and the Justices of the Supreme Court of Bhutan. In 1999, he worked as the Committee Member of the Good Governance Committee set up by the Royal Government for the purpose of restructuring the Government Organizations and in 2002 as the Committee Member of the Special Committee set up by the Government to study the possibility of making pay revision for the civil servants. In 2004, he worked as a member of the Good Governance plus Committee. Currently, he is also the Chairman of the newly established Accounting & Auditing Standards Board of Bhutan. As the chairman, he looks forward to promote quality financial reporting and auditing standards consistent with best international practices.
 

‘RAA’s Approach towards Risk-based Auditing’

The 13^th Annual Audit Conference on the theme ‘RAA’s Approach towards Risk Based Auditing’ will be convened from 21^st to 23^rd July 2010, at the YDF Hall, Thimphu. Hundred and seventy auditors including auditors from the Regional Offices will be attending the Conference. The opening ceremony will be graced by the Hon’ble Minister, Ministry of Works & Human Settlement. As usual, sixteen new members who have joined the RAA will take Oath of good conduct, ethics and secrecy from the Venerable Tshugla Lopen from Zhung Dratshang during the opening ceremony.

“Risk based auditing is an auditing technique that responds to the risk factors in an audit by assessing the levels of risk attached to different areas of an organisation’s system and using the results to devise audit tests. The purpose is to focus audit on the areas of highest risk in order to improve the chances of detecting the errors”.

While the Royal Audit Authority had embarked upon conducing risk-based audit as a new functional approach in the recent past, it has not been able to fully implement it. For this reason the theme for this year’s conference had been adopted as ‘RAA’s approach towards risk-based auditing’, wherein the initiatives already undertaken to address the risk-based auditing will be reviewed and new strategies will be adopted to further strengthen the risk-based audit. With this approach, it is expected that the audit resources in terms of time and costs will be utilised efficiently and effectively, and would add more value to the agencies being audited.

Amongst others, the three day conference will also witness the launching of the Financial Audit Manual and the Auditor General’s Standing Instructions during the opening ceremony. The agenda of the conference also includes presentation and deliberations on: Construction Audit Manual, Performance audit of Farm Roads, Field Audit Monitoring System, Planning & Monitoring System (PLAMS) and Accelerating Bhutan’s Socio-economic Development Project by GNHC among others.

10^th Indo-Bhutan Audit Training

June 10, 2010: The 10^th Indo-Bhutan Audit Training on ‘Audit of Public Debt’ will convene from 14-18 June 2010 at the Bhutan Chamber of Commerce and Industry (BCCI), Thimphu. A week long training will be attended by more than thirty participants including Auditors from the Regional Offices, Royal Audit Authority and nine Internal Auditors from various Ministries and agencies.

The training is in continuation with the Memorandum of Understanding (MoU) signed between the Office of the Comptroller and Auditor General of India, and the Royal Audit Authority initially in 2001. This MoU got extended to another five years in 2006.

Ms. Hema Munivenkatappa, Sr. Deputy Accountant General, and Ms. S. Ahalladini Panda, Director from the Office of the Comptroller and Auditor General are the resource persons.
 

Press Release

(Issued in concurrence to the release of the Annual Audit Report 2009)

May 26, 2010: As mandated under the Article 25.5 of the Constitution of the Kingdom of Bhutan and the Sections 69 to 73 of the Audit Act of Bhutan 2006, the Royal Audit Authority (RAA) is pleased to issue the Annual Audit Report (AAR) 2009. The AAR 2009 is a summary of significant unresolved findings detected during the year.  

The Annual Audit Report 2009 is compiled from 609 audit reports issued during the year. The total unresolved significant irregularities reported in the Annual Audit Report amounted to Nu. 348.34 million compared to Nu. 151.00 million reported in the Annual Audit Report 2008. The higher figure this year is mainly due to huge overdue advances in some of the agencies particularly under the Ministry of Education and Tourism Council of Bhutan. The advances in these two agencies pertained to major procurement and ongoing construction activities. The other reason is attributable to the substantial increase in the number of reports issued during the year. As compared to 450 reports issued in 2008, the RAA issued 609 reports in 2009.

As required under the Audit Act of Bhutan 2006, the Annual Audit Report in its draft form was circulated to all the agencies concerned in January 2010 and a sum amount of Nu. 252.943 million consisting about 42% were resolved during the process of finalisation of the report.

As we commit and gear towards yet another fruitful year, we would like to acknowledge the continued supports and cooperation rendered by all the agencies in our endeavours.

The Auditor General of Bhutan will be leading a two member delegation to Beijing, China to attend the 19th Working Group on IT Audit Meeting from 15th April to 17th April, 2010. The Working Group is an arm of International Organization of Supreme Audit Institutions (INTOSAI) dedicated to support developing knowledge and skills in the use and audit of Information Technology. The Group also serves as a forum to share experiences and best practices for IT related audits.

The meeting, besides getting updates on the working group website and its journal ‘intoIT’, will discuss on the progress of ongoing projects like measures taken to counter fraud in IT Environment, risks for E-governance projects and mitigation strategies to address them and IT tools for Electronic Audit Papers.  The Auditor General will be making a presentation on IT Auditing in Bhutan on the second day of the meeting.

The meeting will be attended by 37 member countries.
 

March 12, 2010: The Auditor General of Bhutan, Mr.Ugen Chewang will be leading a two member delegation to attend the International Conference on environmental audit in New Delhi, India on 15^th and 16^th March, 2010. The conference will be addressing issues concerning pollution of lakes, pollution of rivers and pollution of ground water. The Auditor General besides delivering a key note address will chair the session on “Pollution of rivers”. The Auditor General will also join Comptroller & Auditor General of India, Bangladesh, Maldives, Oman and Secretary General of INTOSAI as member for the panel discussion on “The way forward for Supreme Audit Institutions in auditing environmental issues”.

February 2, 2010: The Royal Audit Authority conducted a two-day Mid Term Review Meeting at the Office of the Assistant Auditor General, Tsirang on 28^th & 29^th January 2010. The meeting chaired by the Auditor General of Bhutan was attended by the Department heads, the Assistant Auditors General of the regional offices, Division Chiefs and the Team leaders.

The meeting reviewed the progress of the Annual Audit Plan 2009-10 for the last six months and also the status of various resolutions of the monthly Policy, Planning & Consultative Meeting (PPCM) and Annual Audit Conferences. The meeting also deliberated on various contemporary issues and challenges relating to the auditing profession. A series of presentations were made for disseminating information on institutionalization processes that have come up by way of various manuals and guidelines. The agenda also included the presentation by different groups on development of data bank on the audit objective, criteria and detailed audit procedures on all the budget heads of the Royal Government of Bhutan. The outcome of this brainstorming session was expected to enable the Royal Audit Authority to come up with comprehensive data bank on the audit procedures to be followed while auditing the budgetary agencies. Further, it is also expected to serve as basis for periodic evaluation and monitoring of the audit assignments.

The Mid-Term Review Meeting is an annual feature conducted to take the stock of achievement of the 1^st half year, identify and remedy the bottlenecks, if any and to reaffirm the commitments for the rest of the plan period.