The legal basis of SAI is an Act of Parliament/Legislative body. The Parliament appoints the Head of the SAI. The procedures for terminating the appointment of the Head of the SAI are:
There are prescribed qualifications for appointment of the head of the SAI.
University degree.
To have acquired a licence for an authorised state auditor.
The head of SAI is appointed for a fixed tenure. The period of tenure is 10 (ten) years.
The various conditions of service of the Head of the SAI to secure independence are:
The SAI conducts Independent audit of the financial statements under the SAL provisions. The SAI does not have financial independence but it is in the process of gaining. Government and Parliament have the right to decide on the allocation of budgetary resources for the SAI .
The SAI's jurisdiction extends to following and there are no limitations imposed on this jurisdiction.
SAI has jurisdiction over the public utility/Agencies providing public services even if they are privately funded and managed (State owned only) and also the regulatory bodies (e.g. Privatization, Environment, Pollution Control, telecom etc.
The SAI does not have powers of requisitioning all records of the auditee departments/organisations to discharge its mandate.
The SAI does not have powers to enforce or initiate enforcement action to secure access to needed records which are not produced. The SAI does not have power to seal but can search and seize documents and other related items considered necessary for audit and inspection.
The SAI has powers to seek testimonials of the persons concerned, but it can not seek co-operation of persons other than agencies subject to audit and inspection - Article 24 from the SAL .... ....the state auditor is given the right to ask the representatives of the audited entity for explanations that are significant for the audit performance. The SAI does not have powers of instructing government investigating agencies to perform activities considered necessary. But SAI accomplish such requirements as per Article 24 from the SAL.
The SAI does not have powers to decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection. It can be done only by court procedure. SAI does not have the authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters. The SAI has no 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. Article 20 from SAL: The auditor is given the right to check the books, forms and other records. It has power to review the development of computer systems by auditees and suggest controls. The SAI has no role in the appointment or supervision of the other external auditors engaged by auditees for meeting the statutory requirements.
The SAI prescribes Financial, Compliance, Performance (not conducted yet) and EDP Audit (not prescribed by SAL but exercised within the audit procedures in compliance with the INTOSAI standards). The powers to perform these audits are mandated by the law governing the SAI, Article 2 from the SAL for the financial and compliance audit and Article 3 from the SAL for performance audit. The SAI conducts Pre-audit and Special audit. The audit methodology / procedures followed are
SAI does not discharge judicial functions. The audit findings are presented to the auditees and their competent authorities. Review of the enforcement of the audit findings is conducted within the next scheduled audit. SAI has to follow specific standards, practices and guidelines in conducting audit and reporting. SAI can consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit e.g-: INTOSAI. SAI can consultants and/or obtain professional services in conducting audits under article 19 of SAL.
The SAI reports on acts that infringe upon state economic interests like mass embezzlements of state assets etc. SAI requires that all fraud embezzlement must be reported mandatorly by the auditees. But it does not have powers to oversee the ultimate disposal of such cases. The reporting procedure being followed by the SAI on its findings through Art 23 of the SAL. Upon completion of the audit, the authorized state auditor drafts a preliminary report, which is distributed to the legal advocate of the audited entity and to competent authorities of the audited entity. Taking in to consideration the written comments of the audited entity, the authorised state auditor completes and signs the final report. It has a role in the disposal or the action taken on audit findings. The SAI have powers to share its audit reports with the public and media, after approval of the annual report of the SAO by the Parliament. In the case of Financial Statement audits, SAI has the powers to amend accounts. SAI has an advisory role to the government. The government is not required to consult the SAI before taking decisions involving substantial consequences.
SAI is constituted as an audit office with monocratic status i.e. with an Auditor General or equivalent as head. The SAI have the powers to engage external auditors/agencies/consultants as required.
The SAI can not expend resources budgeted independently. The SAI has full independence in forming its workplan. For now SAI has no power in the recruitment of audit and other staff due to the imposed Government restriction on new employment in the public sector. The SAI is subjected to an independent audit - according to Art. 15 of the SAL. The SAI is required to submit a report on its activities to the Parliament.