The SAI Mongolia is established by an act of Parliament/Legislative Assembly. Head of the SAI is appointed by Parliament. The Head of the SAI can be terminated by Parliament due to
The Auditor General of Mongolia shall be appointed by the State Great Hural upon the proposal of the Chairman of the State Great Hural for the term of 6 years and may be re-appointed once. The person appointed as an Auditor General of Mongolia needs to be a citizen of Mongolia; over 40 years old; not to have reached the ceiling of civil service age; must not have been convicted of any crime; should have an educational degree related to the fields of economics, finance, accounting, law, public administration or other relevant fields; have worked in civil service for more than 10 years; not to hold any positions and hold jobs in conflict with the powers of the Auditor General of Mongolia, and not to have a financial interest in business entities of all types of ownership and professional and non-governmental organizations;
The Auditor General of Mongolia is appointed by the State Great Hural upon the proposal of the Chairman of the State Great Hural for the term of 6 years and may be re-appointed once.
In the event of a failure to fulfill in proper way his/her duties or inability to perform duties due to health reasons the State Great Hural may release the Auditor General of Mongolia and Deputy Auditor General from his/her duties. If the Auditor General of Mongolia or Deputy Auditor General is suspected of convicting a crime, he/she shall be suspended from his/her post by the State Great Hural until a court decision is made and removed from the post upon proof of committing a crime and upon court decision becoming valid.
The various conditions of service of the Head of the SAI to secure independence are:
The audit jurisdiction of the National Audit Office shall include:
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate. The SAI has 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, search and seize documents and other related items considered necessary for audit and inspection. Further, it does not have powers to seek testimonials of the persons concerned in the matter of audit and inspection. It can not seek co-operation of persons other than agencies subject to audit and inspection.
The SAI does not have powers to instruct government investigating agencies to perform activities considered necessary. The SAIC may request the investigating agencies for further investigation if it finds a fact which seems illegal or facing to crime. 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. The 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. According to law on state audit and inspection, the main functions of the SAIC are to audit the collection of the state central budget revenue, allocation and utilization of the budget assets, to audit the exercise of control over the utilization, disposal, maintenance and protection of the state property assets.
The SAI has powers to take punitive action and/or impose surcharges in the fallowing circumstances
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 but cannot review the development of computer systems by the auditees and suggest controls. The SAI has no role in the appointment and supervision of the other external auditors engaged by auditees for meeting the statutory requirements. It can not regulate their work, if appointed. (Law regarding these mandates is pending before Parliament.)
The National Audit Office develops long term and annual audit plans. In developing long term and annual plans, the National Audit Office gives due consideration to suggestions made by the State Great Hural and its Standing Committees; proposals by other domestic and foreign organizations; audits conducted and planned to be conducted by internal audit organizations; audits conducted and planned to be conducted by international organizations; and unforeseen emergencies that may arise in the course of events.
The Government and other organizations submits end of year financial statements to the National Audit Office in accordance with accounting standards within the time established by the Public Sector Management and Financing Law. The National Audit Office conducts a financial statement audit and assessment within the time established by the Public Sector Management and Financing Law and sends a report to the Portfolio Minister and a copy of the report to the central government administrative organization in charge of finance and budget. It may rely on and make assessment based on the audits performed by internal and independent audit organizations, if the National Audit Office deems that the audits and reports of those organizations are accurate, reliable and meet the international and national auditing standards.
The Auditor General of Mongolia may decide not to perform annually a financial statement audit of an organization, several audits of which proved that it has good accounts and records and internal control. The Auditor General of Mongolia shall advise thereof the State Great Hural and other relevant organizations.
The National Audit Office may contract other audit organizations to exercise its function of performing financial statement audits and shall be responsible for the quality of audit performed in this manner before the State Great Hural. The procedure of performing audit on a contract basis shall be approved by the Auditor General of Mongolia.
The National Audit Office may charge the audited organization a fee to cover direct and indirect costs for financial statement audits it performs. The amount and rate of audit service fees shall be established each year by the central government organization in charge of finance and budget upon the proposal of the National Audit Office and shall be reflected in the budget of organizations. The revenue from fees charged for audit by the National Audit Office shall be transferred to the state budget and payment of fee for an audit performed on a contract basis shall be made to the relevant audit organization.
The National Audit Office may conduct a performance audit of any entity and program under its audit jurisdiction. Before starting the audit, the National Audit Office shall advise the entity to be audited of the audit objectives and scope. Upon completion of the audit and preparation of the report, the National Audit Office submits it to the audited entity the draft report and to request to comment within 10 working days; include and give consideration to comments received from audited entity in the final report, if they are deemed to have ground, or to undertake measures to verify the conclusion by additional evidences, if the comments are found to have no ground. Finally it sends the final report to the State Great Hural, audited entity and other relevant organizations and officials.
The National Audit Office shall consist of the Auditor General of Mongolia, Deputy Auditor General, and a staff. The Deputy Auditor General and a staff shall have a duty to assist the Auditor General of Mongolia in exercising the powers vested by this Law. The Auditor General of Mongolia, Deputy Auditor General and a staff of the National Audit Office shall be government special service officers.
The National Audit Office shall be the supreme audit institution of Mongolia and shall comply with the laws of Mongolia and other decisions of the State Great Hural. The organizations and officials, except the State Great Hural and the Chairman of the National Security Council, shall be prohibited to exercise supervision over the National Audit Office and performance of the Auditor General of Mongolia and to give assignments.
The National Audit Office shall establish auditing and reporting standards that will be followed by auditors of the State Audit Organization, internal auditors and any other professional auditors performing audits on behalf of the National Audit Office. The standards shall meet generally accepted auditing standards and principles, including those established by the International Organization of Supreme Audit Institutions and the International Federation of Accountants.
The budget of the National Audit Office is discussed and approved by the State Great Hural based on the proposal of the National Audit Office. The budget ensures the requirement of independent activity of the National Audit Office. The budget of audit offices of aimags and the capital city is discussed and approved by the Hural of Citizens’ Representatives of respective aimag and the capital city based on the proposal of the audit offices of aimags and the capital city. The budget shall ensure the requirement of independent performance of audit offices of aimags and the capital city.