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CONSTITUTION OF THE GENERAL AUDITING BUREAU
Royal Decree No. M/9 dated 11.2.1391 issued approved said constitution based on Council of Minister decision No. 159 dated 8.2.1392 H.
Published in Um A1 Qura newspaper in edition number 2367 dated 20.2.1391 H.
THIRD EDITION
In the Name of God the Merciful the Beneficent
Royal Decree
No. M/9
Date 11.2.1391
With the aid of God
We Faisal bin Abdulaziz
King of Saudi Arabia
After sight of Article 19 of the Council of Ministers Constitution
issued by Royal Decree No. 38 dated 22.10.1377 and
Council of Minister’s decision No. 1019 dated 15-26-8-1390H.
Declare the following:
(I) Approving the Constitution of the General Auditing Bureau (GAB) according to attached text.
(II) The Deputy Premier and the ministers shall implement this decree.
Faisal bin Abdulaziz
Decree No. 159 dated 8.2.1319
The Council of Ministers after sight of the attached file received from the Bureau of the council of Ministers Presidency under No. 17762 and dated 21.9.90 relevant to the comments of his Majesty the King on paragraph (4) of Article 9 of the GAB Constitution which reads as follows:
"Each authority or company to which the government pays part of its funds, or guarantees a minimum profit" and the possibility of exploiting the text of the paragraph by the GAB in matters that might impede the progress of work of such companies, and his majesty’s recommendation to determine the percentage of aid granted by the government of such companies so that not any subsidy mainly if it was partial shall result in full GAB control on companies, and after being acquainted with the remarks of His Majesty, and after sight of the recommendations of the ministerial committee entrusted with the task of studying case No. in 8.2.1391,
and after perusal of Decree No. 1019 dated 25-26.8.1390, Paragraph (4) of Article 9 becomes as follows:
4. All private establishments or firms in whose capital the state contributes or guarantees a minimum profit, providing that control on them shall be according to a special regulation prepared by the Council of Ministers. Said decision shall determine by range of this control to be compatible with the nature of its work and the extent of its financial rotation with the government to avoid impediment of its actions.
Second Deputy Premier
Fahad Bin Abdulaziz
The GAB is an independent body that reports directly to the Prime Minister.
The GAB composed of a President, Vice President, and a sufficient number of employees.
The President is to be appointed by virtue of a Royal Edict. He shall not be pensioned off or discharged except by a Royal Order. He will enjoy the merits of Ministers as to the monthly salary, pension salary and prosecution rules,
A Vice President to the GAB is appointed by virtue of a Royal Edict in grade fifteen.
The GAB President assumes the responsibility to supervising the organization of the GAB, conducting its actions and managing its personnel affairs. To discharge these responsibilities, he has the same authorities determined for a minister.
All rules established for all governmental employees are applicable to GAB employees, except otherwise stated in this Constitution.
The President of the GAB may delegate directly some of his authority to his deputy. The Vice President shall act for the President and assume all his authority upon the President’s absence.
The GAB is entrusted with the task of post-audit of the all state revenues and expenditures, all movable and immovable state assets, and the proper use and preservation of all state assets.
In implementation of the provisions of the preceding article, the GAB will prepare the executive regulations and get them approved by the Premier, also the GAB will create the systems required to guarantee the following:
1. Ascertain that all state revenues and entitlements such as movable and immovable assets and services have been recorded in accordance faith the regulations enforce and that all its expenditures have been made in accordance to the provisions of the annual budget and the administrative and financial regulations in force.
2. Ascertain that all state assets are used for the purposes for which they were intended by the concerned authority and that such authority has adopted procedures which guarantee the safety, and proper use of such assets, and prevent the misuse of these assets or their use for purposes other than those for which they were intended.
3. Ascertain that all the authorities subject to the GAB’s control under the provisions of Article 9, implement the financial and accounting rules and regulations in accordance with their own by-laws and that their financial actions are not in contradiction with such rules and regulations.
4. Follow up of the financial and accounting rules and regulations to ascertain their compatibility, efficiency and adequacy to the new developments in the public administration in the Kingdom, pointing out the deficiencies therein. The GAB shall submit proposals for adoption of better procedures or alterations in existing rules and regulations.
According to the provisions of this Constitution, the following authorities are subject to the GAB control:
(1) All ministries, governmental departments and their branches.
(2) Municipalities, managements of water springs and water departments.
(3) Public Corporations and other departments which have independent budgets to which the government contributes, either by way of subsidy or investment.
(4) All private establishment or companies in whose capital the government contributes or guarantees a minimum profit. Control of such establishments and companies shall be carried out according to a special system to be prepared by the GAB and issued by a decision from the Council of Ministers that would determine the scope of such control to be compatible with the nature of this work and the scope of its financial relation with the GAB to avoid impediment of its actions.
(5) Any authority that comes under the control of the GAB by an order from the Prime Minister or by a decision from the Council of Ministers.
All authorities subject to GAB audit must provide all accounting statements documents, and papers that allow the GAB to fulfill its responsibilities according to this Constitution. They should as well as, provide all facilities needed by GAB representatives, and inspectors in accordance with executive regulations issued in that regard.
The GAB informs the relevant authority of its findings and asks it to take corrective measures. The authority in turn informs the GAB of measures adopted within a maximum period of one mouth from notification date.
It is assumed to be the personal responsibility of the Director of Financial Affairs or his deputy in the following situations unless it was proved to be the responsibility of one specific person:
(1) any violation of the rules of article eleven.
(2) any delay in sending required statements and periodical reports to the GAB by the determined dates.
Should a dispute arise between the audited authority and the GAB, and in case such authority was not satisfied with the GAB’s final position, the mater should be directly referred to the Prime Minister for final decision.
The GAB is obliged to take measures deemed necessary to prevent leakage of secrets of controlled authorities through his officials.
It shall be considered a financial violation to:
(1) violate any provision of this constitution or any of its executive regulations issued to execute its rules.
(2) violate any provision of the States rules and regulations relevant to preserving its movable and stable funds, and organising its financial affairs such as the budget provisions, financial and accounting regulations and storehouse regulations.
(3) any negligence or failure that might result in losing one of the State’s financial right, or exposing one of the State’s financial interests to danger.
In case of disclosing a violation, the GAB might, according to the importance of such violation ask the employer to carry out needed investigation with the responsible employee and inflict administrative punishment on him, or the GAB may resort to lodging a case against the implicated employee to the competent disciplinary board.
Each of the authorities stipulated in paragraphs 1,2, and 3 of Article 9 must inform the GAB of any financial violation or any incident that might result in a financial loss to the State immediately upon discovering it without prejudice to any actions that should be taken by such authority.
No financial violation shall be overlooked except by a decision the council of ministers after prior consultation with the GAB in the regard.
Except for the provisions of the preceding article the President of the GAB has the authority to waive simple financial violations which do not exceed SR 500, providing the concerned employee returns the amount to the treasury and the President was convinced by given justification.
The President of the GAB shall submit an annual report for each fiscal year within a period which does not exceed the last day of the ninth month of the subsequent fiscal year. If the deadline happens to be a public holiday the report should be submitted on the following day. The report must include:
(1) A general evaluation of the State’s financial administration during the year.
(2) an evaluation of the financial administration of each authority audited by the GAB during the year.
(3) a statement of the final account for the year. If the final account was not submitted by the Ministry of Finance in ample time before the date set for the annual report, the report must enumerate the reasons which prevented the submission of the final account and the GAB’s comments in that regard, mainly the steps the GAB suggests to prevent recurrences.
(4) a brief statement of the work achieved by the GAB during that year.
The annual report referred to in the preceding article is to be submitted to His Majesty the King with one copy to be sent to the Council of Ministers and another one to the Ministry of Finance and National Economy.
The President of the GAB, without prejudice to the provisions of article Twenty might, submit other reports during the year, whether they were general or pertinent to particular subject or case.
An original copy of procurement, construction, and service contracts - in general any contract or agreement - concluded with any of the authorities mentioned in paragraphs 1,2 and 3 or Article 9 and commit the State to certain obligations, or entitles it to certain rights of value exceeding SR 50,000.00 should be submitted to the GAB upon signature. Said copy should be accompanied by all pertaining documents and statements.
The President of GAB shall determine procedures required for the GAB to commence its jurisdictions relevant to corporations and authorities included in paragraphs 3 and 4 of Article 9, in such a manner as to be compatible with its special financial systems, the nature of its work, and its independence.
1. The President of the GAB shall determine the percentage of the audit work to be executed by the GAB, and establish the procedures for selecting samples on technical basis and according to statistical methods and in the light of need and experience with respect to each category of documents and operations to be audited by the Bureau and the authorities subject to its audit.
2. Such percentages shall be determined by the President in confidential Orders issued for that purpose. Measures should be taken to maintain their secrecy.
The President of the GAB might upon, his suggestion and the Prime Minister’s approval authorize the payment of honorariums to GAB employees whose efforts and efficiency lead to saving significant funds for the public treasury or to rescuing similar funds from certain loss. Such honorariums should be paid from the amounts budgeted for that purpose in the GAB budget provided that incentives paid to one auditor in any one year should not exceed three months salary.
The President should prepare the draft budget of the GAB in accordance with the rules followed by governmental entities.
1. The President, his Deputy, or any other employee of the GAB shall not during the term of their office practice any other government employment against salary or gratuity from the states treasury or to accept membership of any company or financial body whether against a return or not, or to practice any commercial or professional work.
2. In addition to the provisions of the preceding paragraph, the President and the Vice President of the GAB, during the term of their office, are not allowed to purchase any of the state assets, or to lease or sell any of their property to the State or to conclude barter deals with the State relevant to such
A devotion allowance shall be paid to entitled GAB technical employees by virtue of a decision issued by the Council of Ministers and suggested by the President of the GAB.
The GAB shall prepare the executive regulations required for the implementation of this Constitution and obtain approval by the Prime Minister.
The Council of Ministers in the competent authority for interpreting the provisions of this Constitution.
Provisions of the General Personnel Regulations shall be applicable whenever no special provision is included.
This Constitution shall be promulgated in the official gazette and shall become in force from the date of such promulgation it also cancels any contravening provisions.
EXECUTIVE REGULATIONS OF THE GENERAL AUDITING BUREAU CONSTITUTION
Approved by Royal Order No. 18835/3/S, dated 19.1.1392H
The General Auditing Bureau shall be composed of technical and administrative departments and sections according to the requirements of work. The President of the Bureau shall issue the necessary decisions and instructions for the organization of these departments and sections and determine their jurisdictions and authority.
Each department shall be headed by a director to be selected by the President from among the Bureau's efficient staff to manage and supervise the department's work and direct its personnel in the lights of rules and regulations. Each department shall have an assistant director to be selected by the President or his representative.
The directors of departments shall issue the necessary directives and guidance for the organization and proper progress of the work within the limits of the regulations. Each director shall submit a quarterly report to the Vice President on progress of work in his department, showing the achievements by his staff during the period, their reasons for delay, (if any), actions taken, the methods of remedy, the activities of his staff, efficiency and experiences they gained. He shall propose the methods for the development of the work and highlight the growth requirements of his department.
The director of each department or section shall refer matters of particular importance to his immediate superior, unless otherwise instructed by the President of the Bureau.
Departments entrusted with the audit and inspection and other technical offices shall prepare the annual reports on the accounts and other functions entrusted to them and submit the same to the concerned department at a time which allow it to study these reports and incorporate them into the Bureau’s annual report.
The duties of the personnel of the departments, sections, offices and branches and the methods of their performance of the work shall be established by internal regulations to be issued under a decision by the President of the Bureau. Coordination between these units and the establishment of proper work relationship between each other and relations with the authorities which are subject to the GAB’s control shall be carried out in accordance with the decisions to be issued by the President of the Bureau.
The President of the Bureau shall decide the place for the operations of checking, auditing, and inspection of the accounts of the authorities subject to the Bureau’s control which could be either at the premises of the Bureau or at the premises of the auditee according to the capabilities of the Bureau and demands of the public interest.
The Bureau shall provide its officials whose duties require working at the authorities subject to control with inspection and audit cards which enable the holder to obtain the necessary facilities from the authorities at which he is required to carry out his duties. Such officials shall have the right to carry out their tasks without the need to obtain permission from the head of the authority in cases where the element of surprise is essential to realize the audit objectives, such as the audit of cash and so on.
Ministries and government departments shall submit to the Bureau their monthly accounts provided for in the financial regulations, within fifteen days from the end of the month to which the said accounts refer. The accounts of the last month of the fiscal year shall be submitted to the Board at a date to be fixed in the closing of accounts to be issued by the Ministry of Finance and National Economy at the end of each fiscal year, in agreement with the Bureau.
Treasurers of ministries, departments, government circles and branches thereof shall submit to the Bureau their cash count sheets at the end of each month, duly endorsed by the accountants of the said units and the directors of their finance departments or heads of branches, within the five days following the end of the month to which such inventory refers.
The Bureau may establish branches in the main areas of the Kingdom to exercise and execute its duties according to the work requirements. The establishment of such branches, their organization and the determination of their jurisdictions and authorities shall be effected by decisions to be taken by the President of the Bureau within the funds allocated in the budget.
This regulation shall enter into force with effect from the date of its publication.
Kingdom of Saudi Arabia
Bureau of the Presidency of the Council of Ministers
No. 19851
Date: 4-7-1395
To HE the Vice President of the GAB
Greetings,
The Council of Ministers in its Decision No. 733 dated 9.6.1395 decided the following:
After sight of the attached document sent to us by H.E. the Minister of Finance and National Economy along with H.E.’s letter No. 2264/94 dated 23.4.1395 which refers to the Council of Minister’s Decision No. 1460 on 30.11.1393 on the assignment of H.E. IDB’s President and H.E. GAB President to work out a decision on the deadline by which the GAB may have expressed its remarks on disbursement vouchers sent by ministries and government so as the latter would be able to take corrective measures promptly, and ultimately refer whatever actions taken to H.M.’s Bureau for consideration and take appropriate decisions- the matter had been discussed and summarised in the attached minutes which include recommendations relevant with regard to redressing the situation resulting from the delay in forwarding GAB remarks and related responses of the entities with the result that it has become ultimately difficult to correct the errors incurred as a result of financial discrepancies.
In view of the above; H.E. had decreed that these recommendations be endorsed and distributed to all ministries, entities, government departments, general corporations and municipalities.
Also after sight of the report prepared jointly by their Excellencies the Finance Minister, the CSB President, the IDB President and the GAB Vice President; the Council of Ministers hereby decides to adopt the following recommendations:
First: The GAB shall make the necessary arrangements to set up a cadre that would entirely be devoted to reviewing expenditures of the following year (95/96), starting from year’s beginning and ending with year end. Other GAB auditors shall be assigned to complete the review of previous years accounts. To achieve maximum reviewing efficiency, the newly created machinery should not be engaged in other duties aside from reviewing financial accounts of the following year.
Second: The GAB shall review the accounts of a certain month during the following months or two months or receiving such documents together with relevant account sheets, and the GAB shall promptly send back its findings. Documents of bids should be studied immediately after being received by the GAB.
Third: All ministries, government departments, general corporations and municipalities should send their responses to the GAB notices within 15 days from the date of receiving them in accordance with Article 16 of the GAB Constitution. Director of the respective financial department/section or the department in charge shall be accountable for any delay. The delay in working out the responses shall be deemed as negligence entailing the penalties stipulated in the Employees Disciplinary Code. The GAB is entitled to ask the Investigation and Disciplinary Board to call to account the employee responsible for the delay following a notification of the delay to be sent to him.
Fourth: All ministries, government departments, general corporations and municipalities should promptly send transactions of their expenditures, receipts and bids to the GAB provided that the account sheets do not arrive later than the end of the following month. Expenditure transactions of the same month should be attached to the account sheets. As for the documents of services and supplies contracts, they should be sent within two weeks from the date of signing the contracts. Director of the financial department (or other relevant administration/division) shall be accountable for any delay and shall be subject to penalty according to the procedures stipulated in the aforementioned Article 3.
Fifth: The GAB is urged to take necessary steps to improve the quality and quantity of its cadre. The GAB, CSB and IPA are likewise urged to agree on a plan that would meet this end.
Sixth: Consistent with article 18 of the GAB Constitution issued by the Royal Edict. No. m/9 on 11.2.1391 entailing that no financial discrepancy would be overlooked except with a Council of Ministers decree after consulting the GAB-The General Secretariat of the Council of Ministers may refer to the GAB all transactions sent to it by government entities requesting the dismissal of any financial discrepancy in order to have the GAB’s opinion on the matter before submitting it to be Council of Ministers.
Seventh: These recommendations are to be distributed to all ministries, government departments, general corporations and municipalities.
The above being approved by His Majesty, should be implemented.
With my best regards,
President of the Council of Ministers Bureau
Saleh Al -abbaad
In the Name of God the Merciful the Beneficent
Kingdom of Saudi Arabia
Council of Ministers Bureau
No. 3/17953
Date 28.7.1396
Subject : Approval of modify the third paragraph of Council of Ministers Decision No. 733 dated 9.6.1395
His Excellency the President of the General Auditing Bureau
After sight of the following attached documents sent to us
1. A letter No. 4296 dated 29.7.1395H which refers to the decision No. 733 on 9.6.1395H by the Council of Ministers whereby article 3 stipulates that all ministries, government departments, general corporations and municipalities to send their responses to the GAB notices within 15 days from the date of receiving them, and the request of his Royal Highness to extend this period in paragraphs Second and Third to three months for the Ministry of Defence and its branches.
2. A letter No. 1370/39.8.1395H from the Ministry of Foreign Affairs which made reference to the decision No. 733 on 9.6.1395H by the Council of Ministers whereby the third paragraph stipulates that all ministries, government departments, general corporations and municipalities to send their responses to the GAB notices within 15 days from the date of receiving them and their request not to apply this period to the Ministry of Foreign Affairs due to the fact that most of their branches are outside of Kingdom, and after considering the recommendation of the committee No. 60 on 26.1.1296H.
The Council of Ministers in its decision No. 1199 dated 9.7.1396 approved modification of the third paragraph of Council of Ministers decision No. 733 dated 9.6.95 to become one month instead of fifteen days. As my lord His Majesty the King has approved the contents of said decision, please take actions needed for its implementation.
Best regards.
President of the Bureau of Council
of Ministers Presidency
Mohammed Al Abdullah Al Nwaisir
Kingdom of Saudi Arabia
Bureau of the Presidency of the Council of Ministers
Department of Regulations and Employee
No. 7-D 10102
Date 27.4.1398
Subject: Approval of the Draft Regulations Regarding the Audit of the Private Establishments and Companies in whose Capital the State Contributes or Guarantees a Minimum Profit.
His Excellency the President of the GAB
Regards,
The Council of Ministers in its decision No. 390 dated 18.4.1394 decided the following:
On the basis of the two letters (No. 11850/4 dated 20.5.1392 and No. 7069/4 dated 18.4.1397) of His Excellency the President of the General Auditing Bureau regarding his request for the approval of the draft Regulations of the GAB for the audit of private establishments and companies in whose capital the State contributes or guarantees a minimum profit,
The Council of Ministers approved the mentioned Regulations in the attached form. Since his Majesty the King approved the decision we wish you to act accordingly.
President of the Bureau of
The Presidency of the Council
of Ministers
Mohammed Abdullah Al-Nwaisir
THE GAB EXECUTIVE REGULATIONS FOR THE AUDIT OF PRIVATE CORPORATIONS AND COMPANIES IN WHOSE CAPITAL THE STATE CONTRIBUTES OR GUARANTEES A MINIMUM PROFIT
The GAB shall examine and audit the accounts of private firms and companies in whose capital the state contributes or guarantees a minimum profit. GAB audit of such firms and companies shall be in accordance with commercial principles and within the scope of rules that organises the work of such firms and companies according to the provisions of this regulation.
GAB audit of private firms and companies, in whose capital the state or bodies or public corporations contribute by at least 25% aims at ascertaining that such firms comply with systems and financial and accounting regulations established for them, and that their financial activities do not violate such rules and regulations.
The Bureau in its effort to achieve such aims has the right to:
(1) Examine final accounts and the balance sheet, and ascertain that it includes all important data that should be highlighted, and it correctly reflects the net profit or loss or the surplus or deficit for each fiscal year, as well as the real financial position of the firm or company.
(2) Examine the external auditors' reports on the final accounts and the balance sheet, discuss their reservations on them and verify given justifications, and follow-up recommended corrective actions.
(3) Examine ledgers and financial records, and to audit documents to the limit deemed necessary by the GAB
(4) Examine the administration’s efficiency and ascertain its proper use of funds and disposition thereof for designated purposes. Also to ascertain that the firm or company adopts modern systems that are adequate for the purposes of internal financial control. The administrative board shall present to the ordinary general assembly of shareholders any remarks raised by the GAB. The GAB shall present any annual report on the results of its audit and its evaluation of performance to all parties mentioned in this article, to the Prime Minister, the Minister of Finance and National Economy, and the relevant minister.
All firms and companies referred to in the preceding articles shall provide the GAB with all documents, data, and clarifications deemed necessary for the GAB to execute its functions in the best possible manner, they should also provide the GAB with copies of the following:
(1) Their main by-laws, systems, financial and accounting regulations, powers of board of directors and executives and any modifications or alterations they might be subject to.
(2) Final accounts referred to in their constitutions, the board of directors reports or the executives reports about their actions, financial position for the prior year before the date established for the convening of the general assembly by 25 days at least.
The GAB has the right to sent one representative or more to discuss the GAB’s remarks at the ordinary general assemblies of the shareholders. Firms and companies referred to in the preceding article must notify the GAB of the Assemblies convening dates by at least 15 days before the meeting date.
With regard to private firms and companies in whose capital the state, bodies, and corporations contribute by less than 25%, control on their accounts shall be according to the stipulation of their by-laws and to the provisions of companies regulations and any other regulations that might be issued in that regard. Such companies and firms must provide the GAB with a complete copy of their final accounts, and the board of directors or general directors reports about their actions and the final position for the prior fiscal year before the ordinary meeting of the general assembly of the share-holders by at least 30 days to make it possible for the GAB to provide the states representatives to such meetings with its remarks on the referred to accounts and reports.
Control on private companies and firms to which the state guarantee minimum profit is carried out to ascertain that they deserve the subsidy paid to them. The GAB in its efforts to attain that is authorized to ask the subsidised body to furnish needed data and clarifications as well as all documents and reports on whose basis the subsidy was determined and paid. To achieve such aims the GAB is entitled within the requirements of its auditing to view needed records, ledgers, and documents at the private company’s or firms headquarters (location).
The President of the GAB has the authority to ask competent authorities to carry out investigations and to inflict suitable punishment on any person who, on purpose has hidden certain information in an effort to impede the GAB from executing its functions stipulated in this regulation; or committed a financial violation that might result in changing the financial position of audited body.
Firms, companies, associations, and bodies in whose capital the state contributes with other States, or other bodies or international bodies are excluded from the provisions of this regulation, they should be controlled according to the provisions of their respective constitutions. Ministers, authorities, and public corporations that represent the state in such bodies shall provide the GAB with the final accounts, balance sheets, and financial reports received from its delegates to such bodies. The GAB shall study them and send its comments thereof to relevant ministers or heads of organizations and public corporations.
Rules of this Regulation shall become valid after one month of being published in the official gazette.
