Audit of Contracting Arrangements of Public Services State Audit Bureau Compliance Audit Department Audit of Contracting Arrangements of Public Services

Title State Audit Bureau Audit of Contracting Arrangements in Public Sector Introduction to State Audit Bureau – Qatar (SAB) Compliance Audit Department Approach in Compliance Audit Significant Risks to be covered by Contracts Compliance Audit Examples of Observations in Contracts Compliance Audit

Title State Audit Bureau Establishment Presentation Presentation Presentation Presentation

Title State Audit Bureau State Audit Bureau The state audit bureau of Qatar was established in 1973 under Law No. 5 of 1973 In 1995, a new law was passed in order to improve upon the shortcomings of the previous law. Mainly concerning the administrative and financial independence of the bureau. Law No. 11 of 2016 and No. 7 of 2017 was a major milestone in the Bureau’s history as it helped further develop the mandate and independence of the Bureau The state audit bureau of Qatar was established in 1973 under Law No. 5 of 1973 Article 1 of the law states “An independent body shall be established for the control of the State's funds called the Audit Bureau (hereinafter referred to as “the Bureau”), the President of which shall report directly to the Emir.” In 1995, a new law was passed in order to improve upon the shortcomings of the previous law. Mainly concerning the administrative and financial independence of the bureau. Law No. 4 of 1995 granted the State Audit Bureau of Qatar administrative and financial independence from the state. The new law increased the credibility of the bureau and enhanced its status as an independent juristic body reporting directly to the Emir. Law No. 11 of 2016 and No. 7 of 2017 was a major milestone in the Bureau’s history as it helped further develop the scope and goals of the Bureau and increased its responsibilities by focusing on a more broad range of audit topics instead of solely focusing on financial materiality and compliance. It also extended the scope of the entities subject to the SAI’s control as well as restructured the organizational structure of the Bureau. Presentation

Title State Audit Bureau Objectives Presentation Presentation Presentation Presentation

Title State Audit Bureau Safeguarding public funds and verifying the utilization and management of such funds. Verifying entity’s compliance with applicable laws and regulations. Improving the use of state resources to achieve sustainable development and welfare of the society. Improve the principles of accountability and transparency of the entities. Presentation Presentation Presentation

Title State Audit Bureau Auditable Entities Presentation Presentation Presentation Presentation

Title State Audit Bureau Auditable entities Law No.11 of 2016 increased the scope of the State Audit Bureau by bordering the number of the government and non-government institutions that are subject to it’s review under Article (4) Presentation Presentation Presentation Presentation

Title State Audit Bureau Auditable Entities Ministries and Governmental bodies State owned Companies State backed private companies Pension Funds The Bureau shall exercise audit over the following entities: 1- Ministries and other governmental bodies, general authorities and public corporations, and entities that manage public funds or those having their budget funded by the State, regardless of the type of budget from which it is funded. Matters falling within the scope of military secrecy and security requirements of the accounts of Ministry of Defense, Ministry of Interior and other military and security agencies as determined by their competent higher command, shall be excluded from the Bureau review and audit. 2- Companies and establishments that are fully owned by the State or by a public legal entity or having at least 51% of their share capital owned by the State or a public legal entity. 3- Private companies and establishments to which the State guarantees a minimum profit or provides them with financial subsidies or which are licensed to utilize or manage a public facilities or granted a concession to utilize a natural wealth source. The scope of audit over these companies and establishments shall be limited to the extent of support provided or the scope of license use, management, or concession of the State facilities and natural resources. 4- Private institutions of public benefits to which the State allocates financial aids or benefits in kind. The scope of audit over such institutions shall be limited to the financial aids or benefits in kind granted thereto. 5- Accounts and funds of Pension Funds. The State Audit Bureau shall audit and review the accounts and activities of any entity not subject to its audit under the provisions of this law, if a special assignment is issued in this regard thereto by the Emir. If the assignment does not determine the extent and scope of audit, such audit shall be comprehensive and conducted only once. The Bureau may include in its annual report any observations concluded from the findings of the audit and review of such an entity. The Council of Ministers may have recourse to the State Audit Bureau to audit and review the accounts and activities of any of the entities which are not subject to the audit of the Bureau. The provisions of the second and third paragraphs of this Article shall be applied in this case. Presentation Presentation Presentation Presentation

Title State Audit Bureau Audit Types Presentation Presentation Presentation Presentation

Title State Audit Bureau Audit Types An important development in the Law No. 11 of 2016 is the addition of new Audit types to be carried out by the State Audit Bureau by adding additional specialized Audit departments in face of the new economical and social developments in the country. An important development in the Law No. 11 of 2016 is the addition of new Audit types to be carried out by the State Audit Bureau in face of the new economical and social developments in the country. Previously the SAI’s main focus was financial or compliance related audits. Article (13),(14) and Article (15) further added Performance and Information Technology audits respectively. Law No. 7 Article (15) of 2017 expanded this further to include the internal audit review department, which specialized in auditing the internal audit function of the auditable entities. Presentation Presentation Presentation Presentation

Title State Audit Bureau Audit Types Financial Audit Performance Audit Internal Audit Review Compliance Audit An important development in the Law No. 11 of 2016 is the addition of new Audit types to be carried out by the State Audit Bureau in face of the new economical and social developments in the country. Previously the SAI’s main focus was financial or compliance related audits. Article (13),(14) and Article (15) further added Performance and Information Technology audits respectively. Law No. 7 Article (15) of 2017 expanded this further to include the internal audit review department, which specialized in auditing the internal audit function of the auditable entities. Information Technology Audit Fraud Investigation Prior Audit Presentation Presentation Presentation Presentation

Title State Audit Bureau Audit Types New Audit Departments Performance Audit Department Compliance Audit Department Information Technology Audit Department Internal Audit Review Department An important development in the Law No. 11 of 2016 is the addition of new Audit types to be carried out by the State Audit Bureau in face of the new economical and social developments in the country. Previously the SAI’s main focus was financial or compliance related audits. Article (13),(14) and Article (15) further added Performance and Information Technology audits respectively. Law No. 7 Article (15) of 2017 expanded this further to include the internal audit review department, which specialized in auditing the internal audit function of the auditable entities. Presentation Presentation Presentation Presentation

Institutional Compliance Title State Audit Bureau Compliance Audit Department Compliance Audit Contracts Compliance Institutional Compliance Contracts Compliance: Concerned with mainly with the review of procurement contracts and verifying their extent of compliance with the laws, policies and procedures. Point of reference: (i) Law No. 24 of 2015 Promulgating Law on Tenders and Auctions (ii) Cabinet Resolution No. 22 of 2016 Issuing Executive Regulation of Tenders and Auctions. Institutional Compliance: Centralize on a wider scope which are bestowed mainly on verifying the compliance on the effectiveness of governance, internal controls, risk assessment, management of conflict of interests, decision making process and prevention, detection and response of fraudulent conducts. Presentation Presentation Presentation Presentation

Title Approach in Compliance Audit Planning the Audit Establish audit objectives and determine the scope, timing, resources and conduct of the engagement based on the risk assessment. Executing the Audit Conduct process understanding. Execute work programs. Validate findings and issues. Reporting the audit Prepare and issue draft audit report. Discuss and finalize management responses. Prepare and issue final audit report. Presentation Presentation Presentation Presentation Closing and Follow up Update knowledge database and permanent audit file (PAF). Archive working papers. Perform quality assurance on closing.

Title Significant risks covered by Contracts Compliance Audit Absence of compliance approved framework. Absence of adequate procurement planning. Lack of effective contract monitoring system. Vague contract terms. Long procurement process or weak renewal planning. Lack of transparency in selection process of the bidders Major contract variations and amendments. Weaknesses in follow up of the complaints with the contractor. Monitoring contract executions, milestones and payments. Non-application of penalty articles. Presentation Presentation Presentation Presentation

Title Examples of Observations in Contracts Compliance Audit Internal policies and procedures of the entity Lack of transparency in bidder selection process Irregularities in the submissions of commercial warranties. Irregularities in the application of the contract terms and conditions. Prolonged procurement and non-adherence to the approved KPI timeline standards. Contracts established not in compliance with the approved template by the legal department. Presentation Presentation Presentation Presentation

Thank You State Audit Bureau P.O. Box: 2466, Doha - Qatar Tel: +974 4020 0000, Fax: +974 4020 0200 Email: sab@sab.gov.qa Website: www.sab.gov.qa ص.ب : 2466، الدوحة - دولة قطر هاتف : 974 4020 0000+ , فاكس : +974 4020 0200 البريد الالكتروني: sab@sab.gov.qa الموقع الالكتروني:www.sab.gov.qa