The SAI is established by an act of Parliament/Legislative. SAIs head is appointed by Parliament. The Procedure for removal of Head of SAI is as follows
The Head of SAI is appointment for a fixed 7 years single tenure. The various conditions of service of the Head of SAI to secure independence are:
The relationship with other branches of Government are as described below
Executive
The state comptroller is completely independent of the Government. He has full autonomy and authority to draw audit plans. Comptroller does not take active part in decision making of these bodies and the executive is not involved in shaping or approving the budget of SAI
Legislature
The state comptroller is responsible and submits its reports to the Knesset. The Knesset deals and approves the budget of the SAI.
Judiciary
The state comptroller audits the administrative activity of the judiciary system and does not audit or review decisions taken by the court.
Investigating Agencies
The state comptroller only audits these bodies and if something arouses suspicion of a criminal act, he shall bring it to the Knowledge of Attorney General.
The budget of the comptroller is determined by the Finance Committee of the Knesset upon the proposal on the Comptroller. After expiration of financial year the comptroller submits the financial report to the state audit affairs committee.
The SAI's jurisdiction extend to the followings:
The SAI does not audit the government policy. The comptroller may audit-in all levels-the decision making process carried out, prior to the decision of the government to implement a certain policy.
SAI also has Jurisdiction over
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate. SAI has powers to enforce or initiate enforcement action to secure access to needed records. SAI does not have powers to search and seize document and other related items where it is considered necessary for its audit and inspection. SAI has powers to seek testimonials (appearances and answers) of the persons concerned as referred in the Commission Enquiry Law. SAI has powers to seek co-operation of persons other than the agencies subject to audit and inspection for presenting materials or provide testimonials necessary for its audit and inspection.
It does not have powers of instructing government investigating agencies to perform activities considered necessary. On suspicion of criminal act, he shall bring the matter to the knowledge of the Attorney General. SAI cannot decide on claims of interested persons in connection with official actions, duties and behaviors of person subject to audit and inspection. The state comptroller does so in his capacity as Ombudsman. SAI has no the authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters.
SAI does not have powers to take punitive action and/or impose surcharges. SAI has powers to access the computer systems of the auditees and the power to download and use electronic data either in site or off site. SAI also has powers to review the development of computer system by auditees and suggest/enforce any controls. It has no role in the appointment of other external auditors engaged by the auditees for meeting any statutory requirements. SAI has no powers to supervise and regulate their work, if engaged.
The SAI prescribes Financial audit, Compliance audit Performance audit and EDP audit in its scope of audit. The powers of the comptroller are mandated by law, which states that the comptroller shall examine the legality, moral integrity, orderly management, efficiency and economy of the audited bodies and any other matter he deems necessary.
SAI conduct Pre-audit, Concurrent audit and special audit. The SAI discharges judicial functions in specific cases
1. Fines for violating political finance laws
2. Discharge of whistle blowers ( In his capacity as Ombudsman) by audited bodies
The follow up procedure on audit findings is as follows
- The head of the audited body (minister, head of local government or board of directors) are obliged to appoint a staff to rectify defects, to be headed by the director general in that body
- The staff shall discuss the ways to rectify the defects and report on their decisions to the head of the audited body
- The head of the audited body shall report to the comptroller regarding the decision made; Ministers shall also report to the prime Minister
- The prime Minister shall also inform the comptroller, with in eight months from the time a report is presented to him of the results of the handling of the said effects
- The comptroller may at any time demand reporting in addition to those enumerated in this section.
- The comptroller's reports are dealt by state audit affairs committee; This committee deals solely with these reports. (and some other matters dealing with state audit.
- Following these discussions, the Committee submits recommendation for the approval of the Knesset; this committee is the only one whose all recommendations are approved by the Knesset.
SAI is not required to follow any specific standards, practices and guidelines in conducting audit and reporting. The SAI has set itself the standards and guidelines. SAI can consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit. SAI can engage consultants or obtain professional services in conducting audit.
SAI can report on acts that infringe upon State economic interests like mass embezzlement of State assets, serious losses and wastes. SAI does not require that any fraud or embezzlement be reported mandatorly by auditees. The government corporations are obliged by law to report to the state comptroller on such cases. The SAI recommendations are submitted to the Knesset along with immediate publication in media, including the website. The SAI has a role in disposal of the action taken on the audit findings.
SAI does not present an interim report before rendering an annual report on the examination of the closing of accounts of Federal, Provincial and Local governments. SAI has powers to share its audit reports with the public and media simultaneously along with formal reporting. In the case of Financial Statement audits SAI has no the powers to amend accounts. SAI has no advisory role.
The SAI is constituted as an audit office with monocratic status ie. with an auditor general or equivalent as head. there is no separate provincial Audit office.
SAI can expend resources budgeted independently . SAI has full independence in forming its workplan. The SAI is completely independent of the recruitment of audit and other staff and in determining conditions of the service of the staff. SAI is not subject to an independent audit. SAI is required to submit a report on its activities to the State Audit Affairs Committee of the Knesset.