1. SAI INDIA SAI INDIA Evaluation of the Role of Audit to Detect Corruption P.K.Tiwari -Principal Director Kulwant Singh - Director O/o Comptroller and Auditor General of India New Delhi – India.

2. PART I: LEGAL STATUS, STRUCTURE AND MANDATE OF SAI Legal Status of SAI India. Established by virtue of the Constitution and enjoys a permanent legal status Organizational structure of SAI India. Westminster model - The Office of the Comptroller & Auditor General is an independent body that reports to the Parliament Tenure of the head of SAI Fixed term under the Constitution Independence or relationship of SAI with the other branches of the government. Independent of the executive, legislative and judicial departments of the state.  Fiscal autonomy or financial independence. Budget of office of SAI head is not subject to vote in Parliament and is a charged expenditure.

3. Part I - Contd… SAI have legal mandate and authority to audit the following entities. Central or national government agencies, bureaus, offices, instrumentalities and local government units at all levels State-owned and controlled corporations, universities, colleges and enterprises Privately-owned public utilities company Private entities and non-governmental organizations receiving loans, subsidy or grants from the state Social undertakings that enjoys financial support from the state

4. Part I - Contd… Audit services rendered by SAI India.  Fraud/Forensic Audit Real Time or a priori audit Performance Audit Compliance Audit/Regularity Audit Financial Audit Environmental Audit Value for Money Audit IT Audit

5. PART II - ROLE OF SAI IN THE PREVENTION AND DETECTION OF CORRUPTION Constitution, law or regulation contain specific articles on anti- corruption? NO Whether SAI’s “anti-corruption strategy” in sync with the national anti-corruption strategy Yes Strategic Plan of SAI contain strategic goals and action concerning fight against corruption? Yes Detecting corruption already embedded in the regular audit services Yes

6. Part II - Contd… Special departments, offices or units within SAI with specific functions and/or powers in the prevention, detection and investigation of corrupt activities No Audit personnel that have specific skills. Yes SAI provide regular trainings to auditors. Yes Specific manual or guideline on anti-corruption or anti-fraud No  SAI approach in detecting corrupt activities and transactions in the government?  Proactive

7. Part – II Contd… Available courses of action upon discovery of red flag. Referred UNCAC peer review Yes Mechanism to promote and intensify prevention and detection of corrupt activities Citizen help desks Anti-corruption researches Anti-corruption educational/training programs Promulgation of accounting and auditing rules and regulations Declaration of assets and liabilities of public officials Governing Code of Ethics for Government Accountants and Auditors Public Information Office with linkages to all sorts of media Updated publication of audit reports through the SAI’s website

8. Part – II Contd… Audit mandate, tools and techniques to detect relevant cases of the following types of corruption with SAI India. Abuse of position/power Conflict of Interest Fraud Asset misappropriation Influence peddling All types of Illegal activities in public procurement procedures Audit services are most instrumental in the detection and prevention of corruption Performance Audit Compliance Audit/Regularity Audit Financial Audit Audit tools and techniques – to detect F & C. Risk Analysis. Data Mining and extraction IDEA Data Analysis Software Statistical Sampling and analysis

9. Part – II Contd… Reporting any encountered and/or detected corrupt activities Regular audit report. SAI submit the audit report containing findings on corrupt activities and transactions – to ! Entity’s management Legislative body What legal actions, if any, can your SAI initiate against the perpetrators of corrupt activities and transactions? Recommendatory role.

10. Part – II Contd… Mechanism - SAI adopt to ensure that the audit findings and recommendations contained in your audit reports are properly acted upon by the concerned body. The Reports of the Comptroller and Auditor General of India are submitted to the President, who causes them to be laid before each House of the Parliament. These Reports stand referred to the two Parliamentary Committees: Public Accounts Committee and the Committee on Public Undertakings for further consideration. The Secretaries of the Ministries concerned are required to intimate the Committees, the remedial action taken by them on the cases of irregularities, frauds, loss, mismanagement of resources etc., brought out in the Audit Reports. As per the agreed timeframe, such remedial ‘Action Taken Notes’ must be submitted by the Secretaries within four months of the tabling of the Audit Reports in the Parliament.

11. Part III - ASSESSMENT OF SAI’s PERFORMANCE AND INTEGRITY IN THE PREVENTION AND DETECTION OF CORRUPTION Field of the anti-corruption efforts - SAI contribute best Preventive actions by providing recommendations to improve entity’s anti-corruption and internal control system and sharing best practices and benchmarking information to assist decision-makers Performance of SAI in combating corruption Very Good IntoSAINT Methodology. No

12. PART IV: AUDIT LIMITATIONS IN THE PREVENTION AND DETECTION OF CORRUPTION Types of controls do not have a sufficient level of maturity. Response to integrity violations. Accountability Changes in the legal framework and organizational structure. None Factors which hampers your SAI’s role in the fight against corruption. Corrupt people are not severely punished Rules and regulations guarantee that those conducting fraud/forensic audits the rights to the following. Immunity from harassment cases. Access to government offices’ accounting records, financial statements, contracts and other legal instruments

13. PART V: COOPERATION AMONG SAIs AND ANTI-CORRUPTION AGENCIES The role of your SAI towards creating awareness and promoting good governance We promote accountability, transparency and good governance through high quality auditing and accounting and provide independent assurance to our stakeholders, the Legislature, the Executive and the Public, that public funds are being used efficiently and for the intended purposes. Has your SAI ever cooperated with foreign counterparts in fighting corruption- Yes Legal instruments in your country that provides for a joint undertaking among your SAI and anti-corruption agencies No

14. Evaluation of Role of Audit to Detect Money Laundering

15. PART I: ORGANIZATIONAL STRUCTURE AND LEGAL MANDATE OF SAI Constitution, law or regulation creating and/or dealing with your SAI contain specific articles about its roles and responsibilities on the prevention and detection of money laundering? No SAI have its own “anti-money laundering strategy”. No Detecting money laundering embedded in the regular audit services. No Special departments, offices or units within SAI. No

16. PART II: ROLE OF SAI IN THE DETECTION AND INVESTIGATION OF MONEY LAUNDERING Approach of SAI, if any, in the detection and investigation of money laundering. Not included in the mandate of our SAI The available courses of action – on discovery of red flag. Referred by the SAI to the anti-money laundering agency SAI have available facilities or mechanism to promote and intensify detection of money laundering.  Promulgation of relevant accounting and auditing rules and regulations  Governing Code of Ethics for Government Accountants and Auditors  Public Information Office with linkages to all sorts of media  Updated publication of audit reports through the SAI’s website

17. Part II – Contd… SAI have sufficient audit mandate, tools and techniques to detect money laundering -Placement, Layering and Integration. No SAI have a specific manual or guideline on anti-money laundering. No SAI have adequate number of audit personnel that have specific skills Very few SAI provide regular trainings to auditors about anti-money laundering. No  How SAI report any encountered and/or detected money laundering incidents.  Incorporated in the regular audit report.  SAI submit the audit report containing findings on money laundering to -  Entity Management and Legislative body.  Legal actions, if any, can your SAI initiate against the perpetrators of money laundering- SAI’s role is recommendatory in nature.

18. PART III: ASSESSMENT OF SAI’s PERFORMANCE AND INTEGRITY IN THE DETECTION AND INVESTIGATION OF MONEY LAUNDERING Field of the anti-money laundering efforts of your country does your SAI contributes best. Preventive Actions. Rate the performance of your SAI in combating money laundering Fair Method used to assess the above. In – house research and survey.

19. PART IV: AUDIT LIMITATIONS IN THE PREVENTION AND DETECTION OF CORRUPTION Do the relevant laws, rules and regulations authorize your SAI to have full access to bank records of government officials and private individuals who has/had transactions with the government? NO Factors which hampers your SAI’s role in the fight against money laundering. Corrupt people are not severely punished Necessary course of action to improve the role of SAI in the fight against money laundering. Need for professional training

20. PART V: COOPERATION AMONG SAIs AND ANTICORRUPTION AGENCIES Does your SAI have exchange of information and experience with other SAIs. NO Are there legal instruments in your country that provides for a joint undertaking among your SAI and anti-corruption agencies. NO SAI have any close cooperation with other enforcement agencies to acquire investigative skill, knowledge and experience in the fight against money laundering. NO

21. Thank You