The Auditor General (SAI Papua New Guinea) is established under the constitution by an act of the Parliament/ Legislative body. Head of State/ Government appoints the Head of the SAI. The Head of SAI should be a professionally qualified accountant. The Head of the SAI has no fixed term of six years with an age limit of 60 years. Head of SAI can be terminated
The various conditions of service of the Head of the SAI to secure independence are:
The SAI is independent of all the branches of the government. The SAI prepares the Budget for consideration by the Permanent Parliamentary Committee on Public accounts for recommendation to the Prime Minister. Section 27 of the audit act (1989) provides for proper maintenance of records by the SAI and section28 provides for the audit of the SAI.
The SAI's jurisdiction extends to following
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate as per section 4(1) and (3) of the Audit act (1989). The SAI has powers to enforce or initiate enforcement action to secure access to needed records which are not produced as per section 4 (3) of the Audit act (1989). The SAI has power to seal, search and seize documents and other related items considered necessary for audit and inspection as per section 4 of the Audit act (1989). Further, SAI has powers to seek testimonials of the persons concerned as per section 4 (1) (b) (i) and (ii) of the Audit act (1989). The SAI is empowered to seek co-operation of persons other than the agencies subject to audit and inspection as per the audit act 1989.
The SAI has powers to instruct government investigating agencies to perform activities considered necessary as per section 5 of the Audit act (1989). The SAI has powers to decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection on reference by government for corroboration. The SAI has authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters eg.
- Bougainville Provincial government during civil commotion
- Discretionary to Auditor - General
The SAI has powers to take punitive action and/or impose surcharges as per Audit act (1989) extract 3 - section 29 (1). The SAI has the powers to access the computer systems of the auditees and download and use electronic data either in site or off site. The SAI has the powers to review the development of computer systems by the auditees and suggest controls. The SAI has a role in the appointment or supervision of the other external auditors engaged by auditees for meeting the statutory requirements, but only for contracted audits under section 4 (1) of the audit act(1989).
The SAI prescribes Financial, Compliance, Performance and EDP Audits in its scope of Audit. The powers to perform these audits are mandated in the audit act (1989) extract I, section 3 (5), (h) & (i). The SAI conducts Concurrent Audit and Special Audit. The type of transactions and activities are Payments , Receipts, Frauds and Corrupt practices. Audit procedure for each main type of audit are planning (scooping etc.), Implementation and Reporting.
The SAI does not discharge judicial functions. The following up and enforcement of audit findings is done through management letters, recommendations and PAC enquiries. The SAI is required to follow generally accepted accounting principles, IAS in conducting audit and reporting. The SAI can not consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit.
The SAI can engage consultants and/or obtain professional services in conducting audit in a limited way. It reports on acts that infringe upon state economic interests like mass embezzlement of state assets etc. The SAI requires that any fraud or embezzlement be reported mandatorly by the auditees. The SAI enquires the auditees and examines the evidences and reporting about its findings/ recommendations. The SAI does not have a role on the disposal on audit findings.
The SAI has powers to share its audit reports with public or media after tabling the report to the Parliament. The SAI can not amend accounts in case of financial statement audits. The SAI has an advisory role but the government is not required to consult the SAI before taking any decision involving substantial consequences.
The SAI is constituted as an audit office with monocratic status ie. with an auditor general or equivalent as head. In performance of his functions under the constitution, the auditor general is not subject to control or direction of any person or authrity.
The SAI is subject to the Compliance audit. The SAI is required to submit a report on its activities to the Parliament.