ASOSAI Regulation Handbook

Transcription

1 ASOSAI Regulation Handbook ASOSAI Regulation Handbook ASOSAI ASOSAI

2 Published by Asian Organization of Supreme Audit Institutions (ASOSAI) Secretariat The Board of Audit and Inspection of Korea 112, Bukchon-ro, Jongno-gu, Seoul, Korea Tel: (82-2) Fax: (82-2) URL:

3 1. Charter for the Asian Organization of Supreme Audit Institutions 1 2. Rules and Regulations of the Asian Organization of Supreme Audit Institutions Financial Rules for the ASOSAI Accounting Policies for the ASOSAI Rules of Procedure for the Assembly of the Asian Organization of Supreme Audit Institutions Rules of Procedure for the Governing Board of the Asian Organization of Supreme Audit Institutions Terms of Reference of the ASOSAI Capacity Development Committee Established Selection Procedures for ASOSAI Posts Articles of Incorporation of the ASOSAI Secretariat Statutes of the International Organization of Supreme Audit Institutions 129

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5 Charter for the Asian Organization of Supreme Audit Institutions

6 ASOSAI Regulation Handbook Charter for the Asian Organization of Supreme Audit Institutions Established in October 1978, in Berlin Amended in May 1985, in Tokyo Amended in October 1997, in Jakarta Amended in October 2009, in Islamabad Amended in February 2015, in Kuala Lumpur WHEREAS it is recognized that there is a need for a regional organization of Supreme Audit Institutions which would promote understanding and cooperation among Supreme Audit Institutions in the region; WHEREAS there is growing awareness of the need to fortify and strengthen the respective Supreme Audit Institutions within the Asian region through training and continuing education; WHEREAS the above aspirations can be effectively realized by the establishment of a regional organization of Supreme Audit Institutions, NOW THEREFORE, be it accepted that there shall be established a regional organization of Supreme Audit Institutions, hereinafter called the Asian Organization of Supreme Audit Institutions (ASOSAI). Article I - Objectives The objectives of the ASOSAI shall include the following: 1. To promote understanding and cooperation among member institutions through exchange of ideas and experiences in the field of public audit. 2

7 Charter for the Asian Organization of Supreme Audit Institutions 2. To provide facilities for training and continuing education for government auditors with a view to improving the quality of their performance. 3. To serve as a center of information and as a regional link with organizations and institutions in other parts of the world in the field of public audit. 4. To promote closer collaboration and brotherhood among auditors in the service of the government of the respective member institutions and among regional groups. Article II - Functions The functions of ASOSAI shall include the following: 1. To organize conferences and seminars for the exchange of ideas and experiences in the field of public audit. 2. To encourage and to promote research and to undertake publication of research papers and professional articles in auditing and related fields. Article III - Membership Section 1. The membership of the ASOSAI shall consist of Charter Members, Members and Associate Members. Section 2. Charter members are the signatories of this Charter. Section 3. Members shall be the Supreme Audit Institutions of the Asian and Oceanic countries of the Asian region which, after the creation of the ASOSAI, desire to affiliate with it and are members of INTOSAI. 3

8 ASOSAI Regulation Handbook Section 4. Associate members shall be the Supreme Audit Institutions of the Asian countries which, after the creation of the ASOSAI, desire to affiliate with it and are awaiting admission to the INTOSAI. Section 5. Membership shall cease upon withdrawal by a member institution which shall take effect at the end of six months from the date of notification of withdrawal served to the Governing Board. Article IV - Organization Section 1. The organizational structure shall be: a. The Assembly; b. The Governing Board; c. The Secretariat; and d. The Audit Committee Article V - The Assembly Section 1. The Assembly shall consist of all members who shall be represented by the Heads of the Supreme Audit Institutions or representatives duly authorized by them. Section 2. The Assembly shall have the following powers and duties; a. To formulate such policies as may be deemed necessary to attain the objectives of the organization; b. To elect from among themselves a Chairman; 4

9 Charter for the Asian Organization of Supreme Audit Institutions c. To elect from among themselves members of the Governing Board; d. To elect from among themselves two members who are not on the Governing Board to constitute an Audit Committee; e. To decide which country shall host the next Assembly; and f. To make rules and regulations and lay down procedures of business of the Assembly and other bodies of the organization. Section 3. At meetings of the Assembly, each member, other than the associate members, shall have one vote. Section 4. The Assembly shall meet in regular sessions at least once in three years and may also meet in special sessions at the unanimous request of the Governing Board or a majority of all the members. Section 5. A simple majority of the total membership shall constitute a quorum at any meeting of the Assembly and decisions of the Assembly shall be made by a simple majority of the members present and voting. Article VI - The Governing Board Section 1. The Governing Board shall be the executive arm of the organization and shall consist of eleven members to be determined as follows: a. The head of the Governing Board, who shall be the Chief Executive, shall be the representative of the Supreme Audit Institution where the last regular Assembly was held. b. There shall be two members, one, from the Supreme Audit Institution of the country where the next regular meeting of the Assembly will be held and the other, being the Secretary General selected in accordance 5

10 ASOSAI Regulation Handbook with Article VII. c. There shall be one member who shall be appointed by the Governing Board as the Capacity Development Administrator of ASOSAI. d. There shall be five other members who shall be selected by the Assembly. e. The immediate past Chairman and the immediate past Secretary General will be nominated to the Governing Board for one term. In the eventuality of the position(s) falling vacant it will be added to the number of seats open for election at the Assembly. Section 2. The Governing Board shall execute and implement the policies in accordance with the rules and regulations promulgated by the Assembly and may appoint committees for specific purposes and projects. Section 3. The Governing Board shall render a report of its activities at every meeting of the Assembly. Section 4. The Governing Board shall meet at least once a year. Article VII - The Secretariat Section 1. The Secretariat shall be headed by a Secretary General who shall be the Head of the Supreme Audit Institution of a member country to be selected by the Assembly. Section 2. The Secretariat shall perform administrative and financial functions that shall include: a. The keeping of all accounts, records, and files; 6

11 Charter for the Asian Organization of Supreme Audit Institutions b. The dissemination of necessary information by providing continuing contact among Supreme Audit Institutions of member countries; c. The preparation and submission of the financial statements of accounts for audit not later than three months after the close of each financial year; and d. The performance of other related duties that may be assigned to it. Article VIII - Finance Section 1. The financial year for ASOSAI shall be the calendar year. Section 2. The triennial budget of the ASOSAI shall be prepared by the Secretary General and shall be submitted by him to the Assembly after its having been approved by the Governing Board. Section 3. Each member shall pay to ASOSAI the following: a. An admission fee of US$500 upon its entry into the organization; and b. An annual financial contribution equal to the member's annual contribution to the INTOSAI, which amount shall in no case be less than US$500. Article IX - The Audit Committee Section 1. The Audit Committee shall audit the accounts of ASOSAI every three years and shall render a report to the Assembly not later than six months after the close of that period. Section 2. The Secretary General shall cause the annual accounts of ASOSAI 7

12 ASOSAI Regulation Handbook to be audited by an official of his Supreme Audit Institution. Article X - Amendments Section 1. This Charter may be amended by a vote of 2/3 of the total membership of ASOSAI at any regular meeting of the Assembly, or at a special meeting called for such purposes provided that notice of such meeting containing the proposed amendments shall be served to the members at least three months before the said meeting. 8

13 Charter for the Asian Organization of Supreme Audit Institutions Chronology of the amendment of the ASOSAI Charter The first amendment in May 1985 With the join of the SAIs of Australia and Papua New Guinea to ASOSAI, the membership of ASOSAI was expanded to the SAIs of Oceanic countries. (Section 3, Article III of the ASOSAI Charter) As the membership was increased from 8 SAIs in 1978 to 23 SAIs in 1984, the size of the Governing Board membership was also enlarged from 5 SAIs to 7. (Section 1, Article VI of the ASOSAI Charter) The second amendment in October 1997 The size of the Governing Board membership rose from 7 SAIs to 9 SAIs (Section 1, Article VI of the ASOSAI Charter) - It was decided to include one SAI that made a great deal of contribution to ASOSAI and to include one more SAI to be elected at the Assembly. The level of annual contribution was increased to the same level of INTOSAI from 50% of INTOSAI annual contribution. (Section 3, Article VIII of the ASOSAI Charter) The third amendment in October 2009 With the enlargement of ASOSAI membership from 30 SAIs in 1997 to 45 SAIs in 2009, the size of Governing Board membership increased from 9 SAIs to 11 SAIs. (Section 1, Article VI of the ASOSAI Charter) - The SAI that made contribution to ASOSAI came to be appointed by the Governing Board as a Training Administrator of ASOSAI. - Immediate past Chairman and immediate past Secretary General were added to the Governing Board membership as ex-officio members. 9

14 ASOSAI Regulation Handbook When any of these seats falls vacant, it is to be filled by election at the Assembly. The fourth amendment in February 2015 The name of Training Administrator was changed to Capacity Development Administrator. (Section 1, Article VI of the ASOSAI Charter) - The Strategic Plan for adopted at the 13 th Assembly prescribed the expansion of training mechanism into a broader concept of capacity development; hence the name change. 10

15 Rules and Regulations of the Asian Organization of Supreme Audit Institutions

16 ASOSAI Regulation Handbook Rules and Regulations of the Asian Organization of Supreme Audit Institutions Established in October 1978, in Berlin Amended in May 1985, in Tokyo Amended in October 1997, in Jakarta Amended in October 2009, in Islamabad Amended in February 2012, in Jaipur Amended in February 2015, in Kuala Lumpur CHAPTER I PRINCIPLES Rule 1. Name The Organization shall be called the Asian Organization of Supreme Audit Institutions. Rule 2. Objectives and Functions Section 1. The objectives of the Asian Organization of Supreme Audit Institutions hereinafter termed "the Organization" are: 1. To promote understanding and cooperation among member institutions through exchange of ideas and experiences in the field of Public Audit. 2. To provide facilities for research, training and continuing education for government auditors with a view to improving the quality of their performance. 3. To serve as a center of information and as a regional link with organizations and institutions in other parts of the world in the field of Public Audit 4. To promote closer collaboration and brotherhood among auditors in 12

17 Rules and Regulations of the Asian Organization of Supreme Audit Institutions the service of the governments of the respective member institutions and among regional groups. Section 2. The functions of the Organization are: 1. To organize conferences and seminars for the exchange of ideas and experiences in the field of public audit. 2. To encourage and to promote research and to undertake publication of research papers and professional articles in auditing and related fields. 3. To perform such other functions as may be necessary in keeping with its objectives. Rule 3. Supreme Audit Institution By "Supreme Audit Institution" is meant any such public body of a State which, howsoever it may be designated, constituted or organized, exercises the highest public auditing function of that State. CHAPTER II COMPOSITION Rule 4. Members The membership of the organization shall consist of Charter Members, Members and Associate Members. Charter Members are the signatories of the Charter of the Organization. Members are those Supreme Audit Institutions of the Asian countries which, after the creation of the Organization of Supreme Audit Institutions, desire to affiliate with it and are members of International Organization of Supreme Audit Institutions. Associate Members are those Supreme Audit Institutions of the Asian countries which, after the creation of the Organization, desire to affiliate with it and are awaiting admission to the International Organization of Supreme Audit Institutions. 13

18 ASOSAI Regulation Handbook Rule 5. Withdrawal of Membership A member Supreme Audit Institution may withdraw from the organization by notification of withdrawal served to the Governing Board through the Secretary General, the cessation of membership being effective on the expiry of six months from the date of such notice. CHAPTER III ORGANS Rule 6. The organs of the Organization are: (a) The Assembly, (b) The Governing Board, (c) The Secretariat, and (d) The Audit Committee. CHAPTER IV THE ASSEMBLY Rule 7. Composition The Assembly shall consist of all members of the Organization who shall be represented by the Heads of Supreme Audit Institutions or representatives duly authorized by them. Rule 8. Observers Section 1. The members may also accredit representatives at the Assembly as observers. Section 2. Representatives of the Asian Supreme Audit Institutions who are not members of the Organization and those from international organization with goals linked to those of the Organization and of scientific institutions and institutions of learning can be admitted by the Governing Board in the 14

19 Rules and Regulations of the Asian Organization of Supreme Audit Institutions Assembly as observers. Rule 9. Meetings The Assembly shall meet in regular sessions once every three years and may also meet in special sessions at the unanimous request of the Governing Board or a majority of all the members of the Organization, provided that a special session called for the amendment of the Charter will require notice of such session containing the proposed amendments served to the members at least three months before the said session. Rule 10. Duties The duties of the Assembly are: (a) To formulate such policies as may be deemed necessary to attain the objectives of the Organization; (b) To assign specific tasks to the Governing Board and the Secretariat; (c) To make rules and regulations of the Organization and lay down rules of procedure for the Assembly and other bodies of the Organization; (d) To decide which country shall host the next Assembly; (e) To determine the annual financial contribution of the member institutions; (f) To approve the triennial budget submitted by the Governing Board; (g) To deal with all other matters submitted to the Assembly by the Governing Board; (h) To consider and adopt the report of the Audit Committee on the accounts of the Organization; (i) To decide as the highest authority on matters concerning regional cooperation among Asian Supreme Audit Institutions; (j) To elect from among themselves the Chairman and the Secretary General; 15

20 ASOSAI Regulation Handbook (k) To elect from among themselves members of the Governing Board; and (l) To elect from among themselves two members who are not on the Governing Board to constitute the Audit committee. Rule 11. Chairman The Chairman of the Assembly shall preside over all its meetings and shall hold office until his successor is duly elected in the next regular Assembly. Rule 12. Voting Section 1. Regardless of the number of delegates representing it, each member Institution (other than an Associate Member) has the right to one vote. Section 2. A simple majority of the total membership of the Assembly shall constitute a quorum at any meeting and decisions of the Assembly shall be made by a simple majority of the members present and voting. In the event of an equality of votes, the Chairman shall have the casting vote. Rule 13. Rules of Procedure The procedure at the Assembly shall be governed by rules of procedure approved by the Assembly. CHAPTER V THE GOVERNING BOARD Rule 14. Composition The Governing Board which shall be the executive arm of the Organization, will be composed of the following members: (a) Head of the Supreme Audit Institution where the last regular Assembly was held; (b) Head of the Supreme Audit Institution where the next regular 16

21 Rules and Regulations of the Asian Organization of Supreme Audit Institutions Assembly will be held; (c) The Secretary General; (d) The Head of a Supreme Audit Institution appointed by the Governing Board as the Capacity Development Administrator of ASOSAI; (e) Five other Heads of member supreme Audit Institutions, other than Associate Members, elected by the Assembly for a period of one term with an option for a further one term re-election; and (f) The immediate past Chairman and the immediate past Secretary General will be nominated to the Governing Board for one term. In the eventuality of the position(s) falling vacant it will be added to the number of seats open for election at the Assembly. Rule 15. Meetings Section 1. The Governing Board shall meet at least once a year at the time and place agreed upon by a majority of the members of the Board. Section 2. Extraordinary meetings of the Board shall be held on a request made to the Chairman by the Secretary General or by at least four members of the Board, at the time and place determined by him. Section 3. A quorum is formed when at least six members are present. Section 4. Decision on all matters requires agreement of at least six members. Rule 16. The Chairman The Chairman of the Governing Board who will also be the Chief Executive, shall be the Head of the Supreme Audit Institution where the last regular Assembly was held and shall hold office until such time as the new Chairman assumes office. 17

22 ASOSAI Regulation Handbook Rule 17. Rules of Procedure The procedure at the Board meetings will be governed by rules of procedure laid down by the Assembly. Rule 18. Functions of the Governing Board The Governing Board shall have the following functions: 1. To execute and implement the policies of the Organization in accordance with the rules and regulations approved by the Assembly. 2. To appoint committees for specific purposes and projects, and lay down the rules of procedure for each such committee. 3. To approve the annual financial plan and the budget of the Organization and its execution; to approve the triennial budget for submission to the Assembly. 4. To consider reports on the accounts of the Organization. 5. To ratify the acts and decisions made by the Chairman during the recess of the Governing Board. 6. To render a report of its activities at every meeting of the Assembly. 7. To seek and nominate the next host/secretary General. The nominated candidates will require the approval of the Assembly. 8. To nominate ASOSAI representatives on the INTOSAI Governing Board. Rule 19. Functions of the Chairman The Chairman shall have the following function: 1. To execute the decisions of the Governing Board. 2. To direct and coordinate the activities of the Organization during the recess of the Governing Board, and to make a report to the Board. 3. To represent the Organization in its dealings with national and 18

23 Rules and Regulations of the Asian Organization of Supreme Audit Institutions international organizations. 4. To do his best that the provisions of the Charter and these rules and regulations are complied with, and that the integrity and permanence of the Organization are maintained in accordance with its principles and purposes. 5. To coordinate with international, regional, or national organizations which carry out audit activities or are interested in government audit. 6. To submit a report to the Assembly of the general operations of the Organization at every meeting of the Assembly. 7. To perform any other functions consistent with his position, the ASOSAI Charter and these rules and regulations. CHAPTER VI THE SECRETARIAT Rule 20. Head and Seat The Secretariat shall be headed by the Secretary General who shall be the head of a member Supreme Audit Institution elected by the Assembly. The Secretariat will be seated in the country of that Supreme Audit Institution. Rule 21. Functions of the Secretary General The Secretary General shall have the following functions: 1. To assist the Governing Board in the fulfillment of its tasks. 2. To prepare the plans and programs of activities for submission to the Chairman. 3. To prepare the annual and triennial financial plans and budgets for submission to the Governing Board; the triennial budget shall be submitted to the Assembly after it has been approved by the Board. 4. To plan, organize, direct, coordinate, and control the activities of 19

24 ASOSAI Regulation Handbook ASOSAI according to the policy laid down by the Governing Board or the Chairman. 5. (i) To organize seminars and other activities conformable to objectives and policies of the Organization. (ii) To organize seminars and other activities jointly with outside parties such as INTOSAI Development Initiative (IDI) and the Government Auditing Foundation (GAF) of Japan, and in doing so, to sign a contract, agreement or memorandum of understanding with those parties according to the policy laid down by the Governing Board or the Chairman. 6. To keep the Chairman informed on important matters which should be brought to his attention. 7. To obtain all reports and other documents from member institutions; to study them and propose to the Chairman, measures to be taken in accordance with recommendations made. 8. To disseminate necessary information by providing continuing contact among member Supreme Audit Institutions. 9. To sign, jointly with the Chairman, certifications awarded by ASOSAI. 10. To serve as Secretary of the Governing Board, and to maintain the official minutes of its meetings. 11. To keep all accounts, records and files. 12. To prepare, and submit for audit the financial statements not later than three months after the closing of each financial year. 13. To perform any other functions assigned to him by the Governing Board. 20

25 Rules and Regulations of the Asian Organization of Supreme Audit Institutions CHAPTER VII FINANCIAL REGULATIONS Rule 22. Financial Year The financial year of the Organization shall be the calendar year. Rule 23. Funding of Expenses Section 1. The expenses of the Organization shall be funded as follows: 1. By admission fee of US 500 dollars from the member institutions. 2. By annual financial contribution equal to the member Institution's annual contribution to the International Organization of Supreme Audit Institutions which in no case shall be less than US 500 dollars. 3. By voluntary contributions in addition to those approved and called for by the Assembly, by any member Institution; such contributions may be designated for specific activities of the Organization or be unrestricted as to use. 4. By assistance, grants, donations or contributions from international organizations with goals linked to those of the Organization. 5. By income from publications of the Organization. Section 2. The annual financial contribution shall be remitted to the Secretariat by the member Institutions at the start of each financial year. Rule 24. The Supreme Audit Institution of the seat country of the Secretariat shall provide administrative personnel and site for its operation. Expenditure relating to the office of the Secretary General shall be borne by the member Institution of which he is the Head. Rule 25. All administrative costs incurred in any regular or special session of the Assembly or meeting of the Governing Board shall be borne by the 21

26 ASOSAI Regulation Handbook member institution which is hosting such meeting. Rule 26. Prior to the beginning of each financial year, the Secretary General shall submit to the Governing Board for approval a draft budget covering the cost of activities envisaged for the year. The Secretary General shall exercise full financial powers within the budget approved by the Board. Rule 27. Travel and all other expenses of the Chairman and members of the Governing Board, Secretary General and members of the Audit Committee will be met by their respective Supreme Audit Institutions. Rule 28. After the end of each financial year, the Secretariat shall submit to the Governing Board a financial statement duly audited by an Auditor selected by the Secretary General from the officials of Supreme Audit Institution. Rule 29. Audit Committee Section 1. The Committee shall comprise of two member Institutions who are not on the Governing Board as elected by the Assembly. The Heads of the elected member institutions may nominate their representatives, if they are unable to attend personally. Section 2. The Committee shall have the following functions. 1. To audit the accounts of the Organization every three years. 2. To render an audit report to the Assembly not later than six months after the close of the three year period. The Secretary General shall supply to the Audit Committee any information required for the performance of its duties and shall assist it in its task. Section 3. The committee will commence functioning on receipt of notice of 22

27 Rules and Regulations of the Asian Organization of Supreme Audit Institutions readiness of accounts for the period of three years to be audited, such notice shall be served by the Secretary General not later than three months after the close of the period. Section 4. The Committee will determine its own procedures of business. Rule 30. Amendments These Rules and Regulations may be amended by a simple majority of the members present and voting in an Assembly. 23

28 ASOSAI Regulation Handbook Chronology of the amendment of the ASOSAI Rules and Regulations The first amendment in May 1985 With the enlargement of ASOSAI membership from 8 SAIs in 1978 to 23 SAIs in 1984, the size of the Governing Board membership was expanded from 5 SAIs to 7. (Rule 14 of the ASOSAI Rules and Regulations) The quorum for holding a meeting and for making decisions was revised from 3 SAIs to 4. (Sections 3 and 4, Rule 15 of the ASOSAI Rules and Regulations) The second amendment in October 1997 The size of the Governing Board membership was increased from 7 SAIs to 9. (Rules 14 of the ASOSAI Rules and Regulations) - It was decided to include one SAI that made a great deal of contribution to ASOSAI and to include one more SAI to be elected at the Assembly. The quorum for holding a meeting and for making decisions was revised from 4 SAIs to 5. (Sections 3 and 4, Rule 15 of the ASOSAI Rules and Regulations) The Secretary General was bestowed new responsibility to sign a contract, agreement or memorandum of understanding with other parties on behalf of ASOSAI. (ii, Section 5, Rule 21 of the ASOSAI Rules and Regulations) The third amendment in October 2009 With the enlargement of ASOSAI membership from 30 SAIs in

29 Rules and Regulations of the Asian Organization of Supreme Audit Institutions to 45 SAIs in 2009, the size of Governing Board membership was expanded also from 9 SAIs to 11. (Rule 14 of the ASOSAI Rules and Regulations) - The SAI that made contribution to ASOSAI came to be appointed by the Governing Board as a Training Administrator of ASOSAI. - Immediate past Chairman and immediate past Secretary General were added to the Governing Board membership as ex-officio members. When any of these seats falls vacant, it is to be filled by election at the Assembly. The quorum for holding a meeting and for making decisions was revised from 5 SAIs to 6. (Sections 3 and 4, Rule 15 of the ASOSAI Rules and Regulations) The Governing Board was entrusted with new responsibilities for nominating the next Chairman, next Secretary General and the ASOSAI representatives on the INTOSAI Governing Board. (7-8, Rule 18 of the ASOSAI Rules and Regulations) The fourth amendment in February 2015 The name of Training Administrator was changed to Capacity Development Administrator. (d, Rule 14 of the ASOSAI Rules and Regulations) - The Strategic Plan for adopted at the 13th Assembly prescribed the expansion of training mechanism into a broader concept of capacity development; hence the name change. 25

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31 Financial Rules for the ASOSAI

32 ASOSAI Regulation Handbook Financial Rules for the ASOSAI Established in February 2014 CHAPTER I. ASOSAI Financial Management System Objectives Rule 1. The primary objective of the financial management system of the ASOSAI is to ensure that, to the maximum practical extent, resources acquired are used efficiently and effectively; are properly accounted for; and, are used for the purpose intended. Rule 2. The system shall ensure the production of reliable and useful financial information to assist the organs of the ASOSAI in their decision taking. Rule 3. The Financial Rules for the ASOSAI presents the policies and procedures to be used by the ASOSAI in implementing the financial management policies established in the Charter for the ASOSAI. Components Rule 4. The components of the financial management system of the ASOSAI shall generally correspond to the four phases of the management process, as shown in the following exhibit: (a) Planning and Programming 28

33 Financial Rules for the ASOSAI (b) Budgeting (c) Budget Execution and Accounting (d) Audit Planning and Programming Rule 5. The Secretariat is primarily responsible for drafting a program plan to implement the goals and objectives established by the Governing Board and by the Assembly. Budgeting Rule 6. The Secretariat shall determine the level of resources needed to reach those objectives through the budget. Rule 7. The budget shall be presented to the Governing Board and to the Assembly for approval. Budget Execution and Accounting Rule 8. The Secretariat shall allocate funds to implement the plans and programs in accordance with the approved budget. The Secretariat shall maintain the related accounting records and prepare the financial report. 29

34 ASOSAI Regulation Handbook Audit Rule 9. The audit shall be conducted to confirm the accuracy and reliability of financial information and to provide management information about the efficiency and effectiveness of operations. Reliable and timely financial information is the key ingredient to this process. Internal Controls Rule 10. The financial management system shall also include efficient and effective internal controls as an integral part of each component. The Secretariat's internal control system shall consist of a plan of organization and the methods and procedures adopted to ensure that resources are used in a manner consistent with the goals and objectives of the ASOSAI and with the Charter for the ASOSAI. CHAPTER II. Member Contributions Basis for Contributions Rule 11. The expenses of the ASOSAI shall be financed through annual membership contributions paid to the ASOSAI by its members in accordance with Section 3-b, Article 8 of the Charter for the ASOSAI. The annual membership contribution shall be equal to the member SAIs' annual contribution to the INTOSAI which in no case shall be less than USD 500. Rule 12. The currency of the ASOSAI contributions is the US Dollar. In order to determine the ASOSAI annual contribution in accordance with Rule 11, the 30

35 Financial Rules for the ASOSAI INTOSAI membership contributions shall be converted into US Dollars by the 'Representative Exchange Rate for Selected Currencies' posted by the IMF, because the currency of the INTOSAI is the EURO. Rule 13. In accordance with Rule 12, the ASOSAI annual contribution is determined in the year of the INTOSAI Congress by applying the 'Representative Exchange Rate for Selected Currencies' reported by the IMF on December 31 of that year. The rate shall be maintained for three years until the year of the next INTOSAI Congress when the INTOSAI annual contribution is reestimated. Unless the annual contribution of the INTOSAI is changed, the ASOSAI annual contribution remains unchanged. Rule 14. In addition to contributions approved and called for by the Assembly, any member SAI may make voluntary contributions designated for specific activities of the Organization or designated as unrestricted as to use. Billing Procedures Rule 15. Using a letter invoice in January of each year, the Secretariat shall notify member SAIs of their obligation to send the annual membership contribution payment. The Secretariat shall also request member SAIs to submit their three-year voluntary contribution pledge as a basis for budget estimation. Rule 16. For those members in arrears, the Secretariat shall note the amount overdue in the same letter and shall add the amount overdue to the current year's contribution. 31

36 ASOSAI Regulation Handbook Payment and Receipt of Annual Contributions Rule 17. The annual membership contributions shall be remitted to the Secretariat by the member SAIs at the start of each financial year. Rule 18. The member SAI may choose the form of payment (cheque, cash, or postal remittance/bank transfer) with consideration of the most economical and efficient terms of payment. All payments shall be made in US Dollars. Bank charges must be paid by the member SAIs which are paying the contributions. Rule 19. The Secretariat shall deposit intact all payments received in bank accounts established for this purpose within the next banking day. Rule 20. The Secretariat shall acknowledge the receipt of payment of the contribution. Late Contributions or Non-payment of Contributions Rule 21. The Secretariat shall send follow-up letters to members who have not paid their annual membership contributions by June 30. Payment and Receipt of Voluntary Contributions Rule 22. Rules 17 to 20 shall be applied mutatis mutandis to receipt and payment of voluntary contributions. 32

37 Financial Rules for the ASOSAI CHAPTER III. Budgeting Budget Rule 23. The expenses of the ASOSAI shall be funded from: (a) the admission fee of US 500 dollars from the member institution; (b) the annual membership contributions and voluntary contributions; (c) assistance, grants, donations or contributions from international organizations who share the goals of external government audit with the ASOSAI; (d) the income from the publications of the ASOSAI. (e) any other incomes other than the aforementioned, including interest income. Rule 24. The budget shall present an estimate of revenues and expenses and shall determine the level of resources needed to reach the operational objectives of the ASOSAI. Rule 25. Three-year budgets shall be prepared to coincide with the triennial Assemblies of the ASOSAI, with annual adjustments to be made as needed with the approval by the Governing Board. Rule 26. For budgeting purposes, the financial period shall cover the three years beginning on January 1 of the year following an Assembly and ending on December 31 of the year of the next Assembly. 33

38 ASOSAI Regulation Handbook Budget Process Rule 27. The Secretariat shall prepare and submit a three-year rolling budget plan to the Governing Board annually no later than one month before the Governing Board meeting. Rule 28. The triennial budget adopted by the Governing Board shall be approved by the Assembly. Rule 29. In between Assemblies, the Secretariat shall submit annually to the Governing Board for approval an updated three-year rolling budget plan with respect to important activities which the Secretariat had not foreseen at the time the initial budget proposals were prepared. Rule 30. The Secretary General shall exercise full financial powers within the budget approved by the Governing Board and the Assembly. Contents of the Budget Document Rule 31. The proposed budget shall contain program narratives in conformity with the purpose of the ASOSAI as stated in the Charter and decisions by the Assembly or the Governing Board. Rule 32. The budget document shall include a brief statement on the main changes compared with the previous financial period and shall include such further annexes or statements as the Secretary General may deem necessary and useful. 34

39 Financial Rules for the ASOSAI Budgeting for Revenues Rule 33. The revenue of the ASOSAI from annual membership contributions shall be estimated based on the total number of ASOSAI members and based on the amount of each member's annual contribution. Rule 34. Voluntary contributions shall be included in the budget estimate on the basis of the pledges and the past records of the actual payments of member SAIs. Rule 35. Interest revenue shall be estimated considering the expected average balance of deposits and the interest rates of bank accounts during the budget period. Budgeting for Expenses Rule 36. The estimated expenses shall include, among others, the following chapters: Training activities Publications Postage and banking fees Rule 37. The Training Administrator, the publisher of the ASOSAI Journal, or other SAIs which carry out ASOSAI-sponsored activities shall submit their threeyear project plans along with the associated budget estimates to the Secretariat no later than three months before the Governing Board meeting is held. Rule 38. In accordance with Rule 24 of the Rules and Regulations of the ASOSAI, the 35

40 ASOSAI Regulation Handbook Supreme Audit Institution of the seat country of the Secretariat shall provide administrative personnel and the site for the operation of the Secretariat. Expenses relating to the operation of the Secretariat shall be borne by the member Institution of which the Secretary General of ASOSAI is the head. These expenses shall not be included in the budget. Rule 39. The costs incurred for organizing the regular or special session of the Assembly or meeting of the Governing Board shall be borne by the member institution hosting the meeting. These costs shall not be included in the budget. Rule 40. Travel and all other expenses of the Chairman, members of the Governing Board, the Secretary General, and members of the Audit Committee shall be met by their respective Supreme Audit Institutions. These expenses shall not be included in the budget. Rule 41. The budget proposed by the Secretariat shall present a detailed statement of the estimated expenses of all individual budget lines in each chapter. Rule 42. The actual revenues and expenses of each year shall be compared with the budget figures to determine variances and to evaluate if the budgeting process can be improved upon the following year. Any major deviations from the budget shall be noted and justified or used to amend operations where warranted. Rule 43. The level of cash held in the demand deposit account shall be sufficient for the Secretariat to fund the operations of the organization for one quarter. Funds that are not immediately needed shall be invested following prudent investment practices. 36

41 Financial Rules for the ASOSAI CHAPTER IV. Accounting Accounting System Rule 44. The Secretariat shall maintain appropriate accounting records and related supporting documents in accordance with consistently maintained sound accounting practices. The Secretariat shall prepare annual financial statements in accordance with the Accounting Policies for the ASOSAI which are based on the International Financial Reporting Standards (IFRS) and the International Public Sector Accounting Standards (IPSAS), the Charter for the ASOSAI, and the decisions of the Assembly and the Governing Board. Rule 45. Further details on the principles, methods and other necessary matters for accounting that are not stipulated in the Accounting Policies shall be based on the International Financial Reporting Standards (IFRS) and the International Public Sector Accounting Standards (IPSAS). Internal Controls Rule 46. The Secretariat should implement and maintain an adequate system of internal controls to safeguard assets, to ensure the accuracy and reliability of accounting data and financial reporting, to promote operational efficiency, and to comply with the Charter for the ASOSAI. Rule 47. All of the accounting transactions of the ASOSAI shall be recorded in the accounting system of the ASOSAI. This accounting system shall maintain the following accounting records: Cash Receipts and Payments; 37

42 ASOSAI Regulation Handbook General Journal; General Ledger; Trial Balance; and Subsidiary Ledgers, including Receivables/Payables Rule 48. The internal control system is based on the following six principles: (a) All accounting transactions and entries must be checked by the supervisor of the person preparing the entry and must be approved by the supervisor of the person checking the entry. (b) The accounting manager shall regularly, at least monthly, perform review of accounting records to compare with actual transactions. (c) The receipts and payments of funds must be made under appropriate authorization. (d) All checkings and approvals must be clearly evidenced. All supporting records and documents shall be filed in chronological order. These records and documents, as well as the books of accounts, shall be retained and preserved for nine years. (e) A clear segregation of duties must exist so that no one can perform initiation, recording and approval of transactions. When some of these transactions cannot be separated, a detailed supervisory review of related activities should be required as a compensating control activity. (f) Only authorized persons can access the accounting system and the documents. Financial Statements Rule 49. The ASOSAI financial statements shall primarily provide information about the financial position of the ASOSAI, its cash flow, and the results of its 38

43 Financial Rules for the ASOSAI operations. All revenues and expenses, whatever the sources of funds, shall be reported. Financial statements shall include a comparison of budgeted and actual revenues and expenses. Rule 50. Further details on the basis, content, and method for the preparation of financial statements shall be provided in the Accounting Policies for ASOSAI to be adopted by the Governing Board. Internal Audit Rule 51. Not later than three months after the closing of each financial year, the Secretariat shall prepare and submit financial statements to an internal auditor selected by the Secretary General from the officials of the Supreme Audit Institution serving as the Secretariat. Audit Committee Rule 52. The Audit Committee shall audit the accounts of the ASOSAI every three years. The Audit Committee examines the financial statements of ASOSAI in accordance with the internationally accepted audit standards in order to obtain reasonable assurance about whether the financial statements are free of material misstatement and to report the result to the Assembly. Rule 53. As stipulated in Section 2-d, Article 5 of the Charter for the ASOSAI, the Assembly shall elect two member SAIs to serve on the Audit Committee for a term of three years among those members who are not on the Governing 39

44 ASOSAI Regulation Handbook Board. The Heads of the elected member institutions may nominate their representatives, if they are unable to do their business personally. Rule 54. When electing SAIs as the Audit Committee members, the Assembly shall consider the capacity of the SAIs to undertake the audits in compliance with these Financial Rules, and with the Charter for the ASOSAI. Rule 55. The Audit Committee members may nominate officials of their respective SAIs to conduct the audits on their behalf. When nominating such officials, the Audit Committee members shall take into account the following criteria: IT audit and statistical sampling capability; knowledge of international accounting standards; language capability; ability to complete the work according to time lines determined in the Charter and the Financial Rules for the ASOSAI Rule 56. The Audit Committee will commence functioning on receipt of the notice of readiness of the accounts for the period of three years to be audited, such notice shall be served by the Secretary General not later than three months after the close of the period. Rule 57. The Audit Committee shall carry out an on-site audit of the accounting documentation and related records maintained by the Secretariat. Rule 58. The Audit Committee shall render to the Assembly an audit report for each of the years of the triennium, not later than six months after the close of the 40

45 Financial Rules for the ASOSAI three-year period. In addition to an audit opinion, the audit report may include any other matter resulting from the audit of the financial statements which the Audit Committee consider material. Rule 59. The Secretariat shall make the necessary arrangements to enable the Audit Committee to carry out their duties and responsibilities. Rule 60. In no case shall the Audit Committee include criticism in their report without first affording the Secretary General an adequate opportunity of explaining the matter. Rule 61. The Audit Committee members shall pay for the travel costs for their audit activities. They shall not receive any fees for their audit activities. Rule 62. The Audit Committee will determine its own procedures of business. CHAPTER VI. Financial Report Rule 63. No later than one month before the Governing Board meeting, the Secretariat shall prepare and submit to the Governing Board an annual financial report containing the financial statements audited by an internal auditor, an audit opinion, and management discussion and analysis. The financial statements for the preceding two years shall be included in the annual financial report for comparison. Rule 64. In the year when the Assembly is to be held, no later than one month before 41

46 ASOSAI Regulation Handbook the Governing Board meeting, the Secretariat shall submit an annual financial report to the Governing Board and to the Assembly containing the financial statements audited by the Audit Committee, an audit opinion, and management discussion and analysis. The financial statements for the preceding two years shall be included in the annual financial report for comparison. CHAPTER VII. Amendments Rule 65. Amendments to these Financial Rules shall be made only upon approval by the Assembly. ADDENDUM Rule 1. These Rules shall enter into force on January 1,

47 Accounting Policies for the ASOSAI

48 ASOSAI Regulation Handbook Accounting Policies for the ASOSAI February Objective 1.1 The objective of the accounting policies for the ASOSAI, which is a not-for-profit organization, is to ensure the production of reliable and useful financial information by providing consistent accounting framework applicable to the Secretariat of ASOSAI. 2. Financial Accounting Principles 2.1 The accounting principles used by the Secretariat comply with these policies. The International Financial Reporting Standards (IFRS) and the International Public Sector Accounting Standards (IPSAS) shall be applied when there are no stipulations in these polices. 2.2 The accounting policies for the ASOSAI are based on four major assumptions related to the environment in which transactions take place. They provide the underlying basis for the accounting system, and they are as follows: 2.21 Economic Entity There exists only one economic entity within the ASOSAI. Accordingly, all transactions including training activities, shall be recognized, accounted for, and reported by the Secretariat Going Concern It is assumed that the entity will continue to operate in the foreseeable future. It means that the ASOSAI has neither the intention nor the necessity of liquidation or of curtailing materially the scale of its operations in the foreseeable future Monetary Unit 44

49 Accounting Policies for the ASOSAI It is assumed that money is an appropriate basis by which to measure economic activities The monetary unit of accounting for ASOSAI activities is the US dollar (USD) Periodicity It is assumed that the activities and, therefore, the financial flows of an entity can be divided into meaningful time periods For the financial statement purposes of the ASOSAI, the fiscal year begins on January 1 and ends on December The basic principles for recording financial transactions are the following: 2.31 Measurement Principle Generally, transactions will be recorded at historical cost, i.e., the exchange price on the date of the transaction When IFRS requires or permits fair value measurements or disclosures about fair value measurements for specific transactions, they will be recorded at fair value Despite item above, transactions that have insignificant difference between fair value and historical cost could be recorded at historical cost. For example, a term deposit whose maturity is within a year and whose interest rate is at ordinary level may be measured and recorded at historical cost Revenue Recognition Principle Revenue shall be recognized when it is earned and when it is realized or realizable Matching Principle Expenses are necessarily incurred to generate revenue. In 45