One of the main functions of the Asian
Organisation of Supreme Audit Institutions (ASOSAI) is to encourage and to
promote research and to undertake publication of research papers and
professional articles in auditing and related fields. In pursuance of this
objective, the first ASOSAI research publication entitled "Accountability
and Control of Public Enterprises" was brought out in 1989 which was
followed by a publication on "Financial Accountability and Management in
Government" released in 1992. Encouraged by the success of these two
research publications, the ASOSAI Governing Board, under the Chairmanship of
Mr. Lu Pei Jian, the former Auditor-General of China, at its 19th meeting at
Sydney, Australia in May 1993, decided to launch the third ASOSAI research
project on "Audit of Public Works and Projects". The task was
assigned to a team consisting of Mr. Mohd. Rusli Bin Haji Hussein, Deputy
Auditor-General of Malaysia; Mrs. Zheng Li, Deputy Auditor-General of China
and Mr. Dharam Vir, Deputy Comptroller and Auditor-General of India. This
publication is the culmination of their efforts.
On behalf of ASOSAI, I would like to express
my appreciation of the work done on this project by the team of dedicated
authors. I would also like to thank all the members of ASOSAI, especially
those SAIs who provided country papers for this project; without their
cooperation and support, this publication could not have been brought out in
such a short time. My thanks are also due to the Auditors-General of Malaysia
and China for making available their Deputies for this project, and also
meeting the associated costs involved. I would also like to take this
opportunity to thank Associate Professor D.J.Hardman, Head of the Department
of Financial Accounting and Auditing, at the University of Technology, Sydney
for acting as adviser and technical consultant to the authors.
This publication gives an overview of the
institutional framework for undertaking public works and projects in member
countries of ASOSAI and the scope, objectives, organisation and methodology of
audit of public works and projects by Supreme Audit Institutions in these
countries and will serve as useful reference material for members of the
auditing profession, both in the public and private sectors. I hope this
publication will also prove to be of use to researchers, academicians,
legislators and administrators in increasing their awareness of audit of
public works and projects conducted by SAIs in different countries.
C.G.Somiah
Comptroller and Auditor - General of India and
Chairman of ASOSAI
September 1995
We express our personal appreciation of the
valuable assistance given by the Heads of Supreme Audit Institutions who are
constituent members of ASOSAI in this research project. Without their
co-operation, the extensive work involved in compiling background information
and preparing the text for publication would not be possible.
We would also like to place on record our
appreciation of the assistance rendered to each of us by members of our
respective staffs. Associate Professor D.J. Hardman, Head of the Department of
Financial Accounting and Auditing, at the University of Technology, Sydney,
also rendered valuable advice and guidance in bringing this research study to
completion and in editing the text for publication.
Mr. Mohd. Rush Bin Haji Hussein
Deputy Auditor-General of Malaysia
Mrs. Zheng Li
Deputy Auditor-General of China
Mr. Dharam Vir
Deputy Comptroller and Auditor-General of India
September 1995
1. INTRODUCTION
This research study covers the audit of
construction activities of all kinds undertaken by governments as an integral
part of national development. The need for adequate infrastructure to meet the
pace of development has motivated ASOSAI member countries to invest
substantial funds in public works and projects. Consequently, it is imperative
that the SAI of each country commit the necessary resources for the audit of
public works and projects in order to ensure that accountability exists at all
stages of the planning, implementation, monitoring and evaluation of public
works and projects.
Realising the contemporary importance of the
audit of public works and projects, the Governing Board of ASOSAI at its
nineteenth meeting held on 24 and 25 May 1993 in Sydney, Australia, decided to
undertake the present research project. Any attempt to establish norms for the
audit of public works and projects would be a futile exercise, bearing in mind
the differences in the organisation and structure of governments, political
systems, audit mandates, geographical constraints and the resources available.
Accordingly, this research project was undertaken with a view to studying the
institutional framework for undertaking public works and projects in ASOSAI
member countries and the prevailing auditing practices. Relevant aspects such
as project approval, financing and accounting systems and project
implementation were examined, along with the scope, objective, organisation
and methodology of the external audit function conducted by the SAI.
2. PROJECT APPROVAL
PROCESS
2.1. Government Investment
Criteria
Governments of ASOSAI member countries have
laid down investment criteria in view of the high costs of public works and
projects. Such investment criteria is formulated based on socioeconomic
priorities of the government. In China, the central government is the main
investor for projects which involve several regions and affect the national
economy and the people's livelihood. For other projects, responsibility is
decided according to the principle of "who benefits invests".
However, local projects for energy, transport, post and telecommunications and
urban public facilities are mainly funded by the local governments concerned.
In India, only projects with an economic/ internal rate of return in excess of
12 per cent are likely to be authorised.
2.2. Feasibility Studies
Good planning is most of the time synonymous
with good implementation. The importance placed on planning invariably
increases the likelihood of ensuring the viability of a particular project.
Towards this end, all ASOSAI member countries have made it a prerequisite to
undertake feasibility studies, especially for projects where the capital
investment is substantial. The feasibility study that is carried out
encompasses financial, economic, social, technical and environmental aspects.
2.3. Levels of
Authorisation
Levels of authorisation envisaged in the
project approval process serve as management controls to ensure that adequate
consideration is given before individual projects are approved. Accountability
is present where responsibility can be clearly identified. However, management
control should not be too stringent that it is counter productive to the
extent that it restricts the smooth implementation of a project. Most ASOSAI
member countries advocate more control at a higher level where major
investment is involved. In Australia, projects costing over A$6 million are
also subjected to prior scrutiny at a public hearing.
3. PROJECT BUDGETING,
FUNDING AND ACCOUNTING
Public works and projects involve long-term
as well as short-term planning. All undertakings of this nature are initially
approved by the executive authority responsible for planning. In most
countries, the long-term plans are prepared on a five-year cyclical basis.
Short-term plans are shown in annual budgets which are prepared within the
framework of long-term plans. These annual budgets are subject to legislative
approval before funds can be spent. The sources of funds to finance the
expenditure in these budgets are surpluses of government current account,
domestic loans and foreign aid received as grants or loans in the form of
equipment, materials, services or cash. Most government ministries and
departments operate on a cash basis, whereas statutory bodies and government
companies operate on an accrual basis.
4. PROJECT IMPLEMENTATION
4.1. Organisation
In most ASOSAI member countries, the Public
Works Department (or similar technical unit of the government) is solely
responsible for the implementation of public works and projects. However, in
some member countries, public works and projects are implemented by government
ministries, government departments and public enterprises independently, with
the Public Works Department sometimes acting only in an advisory capacity. In
countries where there are three tiers of government - central, state and local
- the respective governments are responsible for the implementation of public
works and projects within their areas of responsibility. Implementation may be
by a single agency or by several agencies jointly coordinated through the
central government. Design and supervision are either undertaken by the Public
Works Department or by private consultants appointed for that purpose. The
actual construction is usually undertaken by contractors appointed through
public tender.
4.2. Execution of Work
4.2.1. Design and Bills of
Quantities
Professional expertise should be exercised
and careful attention given to the translation of the construction concept to
its detailed design, supported by the bills of quantities involved. The
accuracy and sufficiency of the information used at the design stage of
project implementation minimises the possibility of cost and time over-runs.
Frequent interaction between the user and the designer should be standard
practice, with government supervision where necessary. In Japan, the
government has established and published standards for works and project
design and for the preparation of relevant bills of quantities and - through
the appropriate public body - ensures that consultants and contractors comply
with these standards. A similar practice is adopted in some of the other
countries.
4.2.2. Tender Documents
Tender documents should be carefully prepared
to ensure that no disputes arise when the contract is entered into and
subsequently performed. The tender documents generally should include the
notice inviting tenders, the form offender to be used along with a set of
conditions, the schedule of quantities of work, list of drawings and
specifications. The tender documents should also set out the manner in which
work will be measured and payments made to contractors and the important
conditions regarding time, variation in quantities and price, penalties for
delays, labour regulations and security deposits.
4.2.3. Invitation,
Evaluation and Award of Tenders
The common types of tenders are open
competitive tenders, restricted tenders and negotiated tenders. Restricted
tenders are confined to the limited number of contractors able to meet the
requirements of a particular tender. Such tenders are classified as selective
tendering, using a register of eligible contractors and prequalification
tendering. Negotiated tenders are implemented in special circumstances, such
as where the project is to be completed within a short time frame, where there
is only one supplier or contractor who has the necessary supplies or
expertise, where the technical and other parameters may not be capable of
precise definition and where security projects of national importance are
involved. In Jordan, representatives of the SAI participate in meetings
offender committees in an advisory capacity, whereas in Cyprus they are
present only as observers. Where projects are financed through foreign aid,
the tender procedures as required by the donors should be complied with.
All ASOSAI member countries carry out
separate technical and price evaluations, except for Japan where tenderers are
requested to submit only price proposals. In India, the two-stage system is
also sometimes practised, where the technical bids are invited first and then
price bids from technically acceptable tenderers, with the contract being
awarded to the most financially and technically acceptable tender. In some
cases, the single stage two-envelope system is followed, where the bids are
submitted at the same time, i.e. the technical and price bids in separate
envelopes. The price bids are opened and evaluated only when the corresponding
technical bids are acceptable. Strict confidentiality should be observed
throughout the tendering process.
4.2.4. Supervision
The authority to supervise construction by a
government representative - either a government officer or an appointed
consultant - should be clearly specified in the contract document, so that
supervision of work is not questioned. Records of supervision in the form of
site diaries, written instructions, documentation of quality tests and minutes
of site meetings should be properly maintained, as evidence of actual
supervision. The frequency of examining work carried out and the requirement
for the superintending officer's prior approval, usually vary according to the
nature of the work involved.
4.3. Quality Control
Quality control encompasses the whole process
involved in the construction of public works and projects, i.e. planning,
design, execution, supervision, monitoring, operation and maintenance.
Gathering sufficient and accurate information, undertaking feasibility
studies, considering alternatives and past experiences are characteristics of
good quality control at the planning stage. The designers should ensure that
the views of the users at all levels are given adequate importance.
Supervision on the part of government representatives does not absolve the
contractor of the responsibility of ensuring that quality control prevails
throughout the construction phase in the materials used as well as the quality
of work. Work programmes, construction schedules and critical path monitoring
are effective tools that should be used. Supervision by the government and
contractors' representatives should always be properly documented.
4.4. Project Monitoring
An efficient and up-to-date monitoring system
facilitates managerial identification of shortfalls in progress and thus
enables timely corrective action. In ASOSAI member countries project
monitoring is done by the implementing agency in addition to the central
agency responsible for planning and monitoring.
4.5. Procurement of
Construction Machinery and Equipment
Procurement practices vary among ASOSAI
member countries. For example, in Indonesia, most private contractors do not
own their construction machinery and equipment but the Department of Public
Works does own such construction resources. In Malaysia, it is common practice
for machinery and equipment to be included as a separate item where public
works and projects are undertaken by contract. Where equipment is procured and
supplied by government, the auditors are required to ascertain whether the
equipment has been procured at the most competitive rates and also whether
various types of equipment are procured in quantities which are necessary as
well as mutually compatible. Utilisation of equipment, fuel consumption and
fixation of rates for recovery of user charges from the contractors are also
looked into by audit. In Japan, contractors for the construction of public
works and projects lease the necessary machinery and equipment. The leasing
costs, however, are carefully checked to ensure that the machinery and
equipment have been used for the particular contract involved.
4.6. Procurement of
Construction Materials
As in the case of machinery and equipment,
the procurement of construction materials varies among ASOSAI member
countries. As an example in Indonesia, the Department of Public Works supplies
both raw construction materials (such as water, sand, stones and gravel) and
finished construction materials (such as cement, bricks, wood, iron and
asphalt). Audit of the procurement of materials involves examination or
assessment of requirements, placement of purchase orders, storage,
consumption, utilisation and cost recovery from the contractors. In Malaysia,
the procurement of construction materials such as cement, steel, fuel and oil
subject to frequent price fluctuations is covered by a price variation clause
in the contract. Contractors are also paid 75% of the cost of materials on
site in their progress payments. In China and Japan, construction materials
are also procured by the contractors themselves.
5. GOVERNMENT MANAGEMENT
AND CONTROL OF PUBLIC WORKS IMPLEMENTATION
Government management and control of public
works implementation are exercised at the planning stage through long-term
development plans and annual budgets. At the implementation stage, the laws,
regulations and procedures require implementing agencies to obtain prior
approval from prescribed agencies at various stages. The implementing agencies
are also required to submit the reports of the financial and physical progress
of the projects. Delegation of authority is complemented with accountability
through reporting and evaluation.
6. OPERATION, MAINTENANCE
AND UTILISATION OF PUBLIC PROJECTS
Proper operation and maintenance would
increase not only the efficiency but also the life of the assets. The
operation and maintenance of public projects are normally the responsibility
of the various ministries, departments or public enterprises responsible for
that particular government activity. Public projects can be classified into
profit-earning projects such as the supply of water and power, railways and
port services, nonprofit-earning projects such as libraries, schools and
health services. In the case of profit-earning public projects, the pricing
policies are decided after taking into consideration the capital invested, the
period of expected cost recovery, the operation and maintenance charges and
profit element, if any. In the case of nonprofit-earning public projects,
utilisation fees are only nominal.
7. PRIVATISATION OF PUBLIC
WORKS AND PROJECTS
With ever-increasing expenditure demands on
the public sector, some governments have resorted to privatisation to lessen
their financial burden. There are various types of privatisation including
build, operate and transfer (BOT); build, own and operate (BOO); build,
operate, lease and transfer (BOLT) and trade-offs. During negotiations for
privatisation, particular attention should be given to the terms and
conditions relating to risk sharing, pricing, sale, accountability and
monitoring. To quote from the World Development Report 1994
"Infrastructure for Development":
"In the move from a Government monopoly
to a more competitive system, enforceable contracts are required to balance
the interests of various parties in specific projects and to provide the
stability needed in long-term investment. Also required are comprehensive,
transparent and nondiscriminatory rules of the game.............. Regulation
itself is imperfect because the 'right' regulatory mechanisms are not always
evident. It is also imperfect because effective implementation of economic
regulation requires an information base and sophistication that are rarely (if
ever) attainable. Regulators are therefore vulnerable to manipulation."
Since the inception of its privatisation
policy in 1985, the Malaysian government has privatised many public works and
projects. In India, the private sector is making a major entry in the power
sector. The governments of Cyprus and Sri Lanka have no privatisation
programmes, so far.
8. FOREIGN-AIDED PROJECTS
Where projects are partially or wholly funded
by foreign agencies, a stringent project clearance process is necessary with
these agencies conducting their own appraisals before agreeing to supply the
required finance. The funding agencies also insist on the adoption of their
own tendering procedures and impose restrictions on materials and other
procurement. Monitoring is done through review missions at periodic intervals
and the submission of progress reports and audited annual statements. Most
ASOSAI member countries receive foreign aid for the construction of public
works and projects. In the case of Japan, which provides assistance to other
countries, internal aid agencies such as,the Japan International Cooperation
Agency and the Overseas Cooperation Fund are audited by the SAI and audit
teams also visit work sites, where necessary, in countries benefiting from
Japanese aid.
9. AUDIT MANDATE
The public sector audit mandate of the SAI in
ASOSAI member countries originates in either a national constitution or a
legislative statute, or both. The audit mandate should be supported by
appropriate regulatory authority to ensure effective audits and safeguard the
independence of auditors. Accordingly, the rights and powers of auditors in
accessing information, requesting explanations, copying documents and
reporting should be specified. The rights and powers of auditors may be
far-reaching, as in China should the SAI finds serious irregularities, it is
empowered to suspend payments from bank accounts, close accounts, seal
financial records, confiscate properties and levy fines in accordance with
relevant laws. In Japan, the mandate of the Board of Audit extends to matters
of loss indemnification and disciplinary action.
10. AUDIT OBJECTIVES
The audit objectives of public works and
projects are to ascertain whether
(i) works and projects have
been properly authorised
(ii) accounting and
financial rules and regulations have been complied with
(iii) construction has been
undertaken economically and efficiently
(iv) the objectives of
implementing the public works and projects have been achieved.
11. SCOPE OF AUDIT
11.1. Auditors engaged in
the audit of public works and projects should ensure that the following areas
are included in the scope of their audits:
(i) feasibility studies of
the works and projects
(ii) evaluation of
alternative proposals
(iii) designs and estimates
(iv) availability of funds
(v) procedures for
tendering, evaluation and award of contracts
(vi) project
administration, financial accounting and cost control
(vii) contract management
(viii) procurement and
utilisation of construction materials and equipment
(ix) verification of assets
(x) post-completion
evaluation of financial and physical performance.
11.2. Technical Audits
A special feature of audit of public works
and projects arises out of the highly technical and specialised nature of
auditees subjects. SAIs have different approaches to audit of designs,
estimates and completed works. Generally speaking, SAIs do not conduct an
audit of designs qua designs, though design inadequacies causing premature
failure of projects or avoidable extra expenditure do attract audit comment.
SAI Australia through the engagement of specialised expertise may assess the
cost effectiveness of design solutions and efficacy of design features in
meeting the specialisations and requirements of the projects. SAI Brunei
Darussalam, which has one civil engineer and one surveyor in its Technical
Unit undertakes the audit of architectural and building design, road pavement
design, concrete and bitumen mix design and concrete test procedures, but SAI
audit does not extend to such specialised areas as structural design,
formulation/geotechnical design and hydraulic water and structure design,
which require the input of specialists or experts in these areas.
The State Comptroller's Office in Israel has
recently endeavoured, with the aid of external consultants, to compare various
planning and construction solutions to bridge engineering problems. The
intention is not to set up alternative solutions but to examine the
decision-making process, including the examination of alternatives and
determine whether the preferred solution is reasonable from the viewpoint of
efficiency, economy and effectiveness. The Board of Audit, Japan examines
public structure design mainly from the viewpoints of economy and safety. The
Auditor-General of Malaysia examines, inter alia whether information on
specific needs of users was gathered for design purposes and whether
alternative designs and cost implications were analysed and considered. The
scope of audit by SAI China includes examination of the qualifications of
units in charge of design as well as preliminary designs and construction
drawings. In Iraq, designs of the various project features by the consultants
are subject to audit in order to ascertain their suitability for the purposes
of the project and to determine fee extent to which these designs have been
incorporated in the project. In Indonesia, the audit of design and plan is
aimed at ascertaining whether the work being done is supported by appropriate
and accurate studies so that the work may be carried out in an economic,
efficient and effective manner.
SAI's examination of estimates involves
review of expenditure and analysis of cost overrun. In the audit of estimates,
SAI China examines the authenticity and accuracy of construction costs and
whether the preparation of estimates is in compliance with regulations. In
Indonesia, audit of owner's estimates is aimed at ascertaining whether the
work involved has been carried out at reasonable prices beneficial to the
State. The Auditor-General of Australia assesses the performance of project
management in meeting budgets and targets and examines the analysis of any
department to ascertain the accuracy of the original estimates and reasons for
any shortfall in planning. The scope of audit of estimates by Board of Audit,
Japan includes not merely whether the estimates are properly costed but also
the appropriateness of the selected construction method. In Malaysia, the
audit of estimates involves the comparison of estimates with approved or
standard rates of work to ascertain the accuracy of computation.
SAIs generally rely on technical examination
of works by government agencies. SAI India has a system of close collaboration
with the Chief Technical Examiner, who is independent of the project executing
authority and whose work is also vigilance-oriented. The Auditor-General of
Australia does not undertake the technical examination of works by government
as an in-line function, but may review technical aspects as part of an
external performance audit.
In Brunei Darussalam, the auditor should be
aware of the progress of various projects through regular site visits and
arrange interview with project officers on noting problem indicators, which
may in appropriate circumstances be followed by detailed investigation into
the quality of construction materials, workmanship, testing and inspection
procedures among others. In Cyprus, on-the-spot audit or field audit
encompasses quality and measurement of work besides confirmation that the work
certified for payment corresponds to the work actually done by the contractor.
In Japan, the Board of Audit also inspects physical progress at construction
sites; the construction field audit physically examines completed structures
with special emphasis on checking by tape measure, transit and theodolite
whether the completed structure is in accordance with the design sheet and is
built on the specified location or in the correct position, checking the
number and types of steel bars and concrete pilings by photographs taken
during construction or by drilling cores and checking the quality of concrete,
steel bars and other materials by photographs or by drilling cores where
necessary.
In Iraq, audit staff are accompanied by site
engineers during field visits to examine physical progress and technical
features of the work implemented. In Kuwait, the State Audit Bureau engineer
examines the technical reports attached to the final account prepared by the
technicians who had supervised the project execution to see that the works
were completed according to the required specifications. In Jordan, the
engineers of the Audit Bureau not only inspect projects under construction,
but also participate in the taking over of completed works and projects.
12. AUDIT PROCEDURES AND
METHODOLOGIES
Audit procedures and methodologies vary among
ASOSAI members countries according to differences in laws and regulations,
geographical constraints, available resources and volume of transactions.
However, most countries have adopted system-based auditing, audit sampling and
computer-assisted audit techniques in the audit of public works and projects.
A common problem is the increasing number of construction undertakings to be
audited with the limited auditing resources available. The SAIs of both
Malaysia and Brunei Darussalam have addressed this problem by adopting two
audit approaches. In the first approach, contracts above a certain value are
selected for comprehensive audit of the construction undertaking throughout
implementation, i.e. from the planning stage to the completion stage. In the
second approach, the auditor examines only those works or projects with
specific problems - their cause, impact and implication. SAI India conducts
audit of public works and projects sending audit teams to executing agencies
at periodical intervals and also comprehensive audit of selected works and
projects to ascertain whether the public works and projects are executed
economically and efficiently and whether they serve the intended purpose. In
contrast, the Jordanian SAI undertakes the pre-audit of all progress payments
relating to contracts for public works and projects. Audit procedures and
methodologies should generally include:
i) planning the audit
ii) formulating audit
programmes
iii) conducting audits
iv) formulating audit
conclusions
v) preparing management
letters and audit reports.
13. REPORTING
The culmination of the audit process is the
reporting phase which summarises the evidence gathered during audit and
communicates the audit opinion and related findings. It is important for the
auditor to design his report in such a way that audit observations and
recommendations can be understood easily by readers. Timeliness of the report
is also important because delay may render the report irrelevant to the
existing situation so that corrective actions are no longer practicable. The
system of audit reporting is similar in most ASOSAI member countries. During
the course of audit, queries are raised with the auditee and the responses are
considered by the auditor. Discussions are held with senior officials of the
auditee during and on completion of audit. Significant audit findings
involving major instances of irregularity, impropriety, noncompliance, waste
and extravagance of expenditure are detailed in the annual report of the SAI.
14. PROBLEMS AND
LIMITATIONS
Audit of public works and projects invariably
involves areas which are technical in nature. Decisions regarding these
technical aspects not only entail quality considerations but also have cost
implications. Most ASOSAI members have faced constraints in auditing technical
aspects in the absence of appropriately-trained personnel in their
establishments. In China, the SAI has experienced difficulty in evaluating the
use of complicated technology. A limitation which is peculiar to the SAI India
is the total reliance on documentary evidence to the exclusion of physical
evidence from construction site inspections. Some SAIs are also experiencing a
shortage of staff to audit the increasing number of public works and projects,
while in Sri Lanka the absence of suitable information systems impedes the
measurement by the SAI of the projected and actual benefits involved in the
construction of public works and projects.
15. LOOKING AHEAD
While most SAIs have increasingly come to
practise value for money audit ranging over economy, efficiency and
effectiveness of expenditure beyond its regularity and formality, it needs to
be recognised that far greater economy of expenditure can be secured through
efficient and economical design which will cut down the costs and meet the
users requirements. SAIs need to develop, consistent with their mandate and
resources, capabilities to examine the designs, the alternatives considered
and the pre-design studies conducted. This is by no mean an easy task
involving as it does a choice between the options of locating technical
expertise within the SAI or contracting audit of designs to private
specialised agencies or a combination of both. While the former may bristle
with problems of effective staff managements capable of meeting the
aspirations for advancement of engineering and technical personnel appointed,
the latter raises questions of confidentiality and meticulous assurance of
impartial, unbiased and independent opinions which must characterise SAI's
reports for commanding credibility.
SAIs also need to give greater attention to
cost recovery and charges for supply and services rendered. These are
frequently determined on extra financial considerations and involve subsidy or
transfer of resources between different sections of the population of the
country. But when resources are scarce and subsidy transfers lead to
inefficiencies and even wasteful use of services, SAIs may have to look into
and comment upon the adequacy of charges for supply and services rendered.
This will be in additon to SAIs examination of the system of assessment,
recovery and accounting of prescribed charges as currently practised.
With the progressive withdrawal of the State
from direct economic activity and the transfer of responsibility for
construction and maintenance of projects hitherto undertaken by government to
private sector in several countries, SAIs face another challenge. SAIs have
not merely to examine the terms and conditions on which private sector is
permitted into these areas but also the functioning of the regulatory
mechanisms, which may have been set up by government for the overview of
privately executed/ maintained projects. A question which the SAIs will
increasingly face is their rights of access to the books and records of the
private owners of public utilities with a view to examining the reasonableness
of costs of services provided. SAIs also need to look into environmental
implications of public works and projects, which may take a long time to
surface.
16. CONCLUSION
As the economies of ASOSAI member countries
continue to grow and the public become more concerned with the value for money
of public works and projects, there will be increased demands for SAIs to
improve audit techniques and methodologies. It is expected that the
information contained in this research document will not only provide an
impetus to think further of the problems but also help to build up a scenario
for improved audit practices. Consistent with the objectives of ASOSAI, it is
hoped that this research programme will be followed by further exchange of
ideas and experiences in the fileld of audit of public works and projects
through joint seminars, study tours, etc. among member SAIs. To recall the
INTOSAI motto, "mutual experience benefits all".
