The Auditor General (SAI Tonga) is established by an act of the Parliament/ Legislative body. Government appoints the Head of the SAI. The Head of SAI should be a qualified chartered or certified accountant. The Head of the SAI appointment has no fixed term or an age limit. Head of SAI can be terminated by cabinet on recommendations of the Prime Minister.
The various conditions of service of the Head of the SAI to secure independence are:
All the branches of the government are subject to audit and review by the SAI. The Head of SAI reports to the prime Minister. The SAI is not financially independent. Treasury determines the budget of SAI. SAI does not have much control over the budget.
The SAI's jurisdiction extends to following with a limitation that in case of semi government bodies SAI audits only if it is appointed as an external auditor
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate as per Public audit act, chap 66 section 10. The SAI has powers to enforce or initiate enforcement action to secure access to needed records which are not produced as per Public audit act, chap 66. The SAI has power to seal, search and seize documents and other related items considered necessary for audit and inspection. Further, SAI has powers to seek testimonials of the persons concerned or involved in the matter of audit and inspection as per Public audit act, chap 66. The SAI is empowered to seek co-operation of persons other than the agencies subject to audit and inspection as per Public audit act, chap 66 section 10 & 11.
The SAI does not have powers to instruct government investigating agencies to perform activities considered necessary but sometimes recommendations can be made to refer the matter to police for further investigations. The SAI does not have authority to re-examine its own jurisdiction. The SAI has no powers to decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection. This matter is to be referred to the cabinet. The SAI has no 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. The SAI does not have the powers to access the computer systems of the auditees and download and use electronic data either in site or off site or to review the development of computer systems by the auditees and suggest controls but it can do so if allowed by the auditees. 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 and Compliance Audits in its scope of Audit. The powers to perform these audits are mandated in public audit act (chap 66), Public revenue act ( chap60) and public Finance administration act (chap 65). The SAI conducts Pre Audit of pensions and retirement benefits, Concurrent Audit of receipts and payments and Special Audit for special investigations and special studies on some areas of audit interests.
Audit procedure for each main type of audit is
- Substantive and compliance tests
- System based audits
The SAI does not discharge judicial functions. The SAI is required to follow specific standards, practices and guidelines in conducting audit and reporting. The SAI can 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. 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 with regards to public funds be reported mandatorly by the auditees. The SAI reports its findings to the head of the department and to the cabinet. The SAI plays no role on the disposal on audit findings.
The SAI has powers to share its audit reports with public or media after formal reporting process, when it is passed from the Parliament. The SAI can amend accounts in case of financial statement audits if a major adjustment is considered significant and necessary to be made. The SAI does not have advisory role but the government can 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. The SAI is not empowered to engage external auditors/agencies/consultants.
The SAI can not expend resources independently. It should be with in the allocated fund for each set of activity. To expend it has to apply for the same. SAI can appoint senior officers but it must follow recruitment process of government and approval of Parliament is required. For junior officers establishment division of the government does the recruitment. The SAI is subject to an independent audit regarding receipts and payments of the SAI and the report is submitted to the Prime Minister and the cabinet.. The SAI is required to submit a report on its activities to the Prime Minister on annual basis.