icab capa keynote paper

ICAB-CAPA
INTERNATIONAL CONFERENCE

on
STRENGTHENING BANGLADESH PUBLIC SECTOR ACCOUNTING
AND AUDITING - GLOBAL REFORMS AND THE WAY FORWARD

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Keynote Paper on
“STRENGTHENING PUBLIC SECTOR ACCOUNTING AND
AUDITING IN BANGLADESH”

ANWARUDDIN CHOWDHURY
Council member & Past President ICAB
Director CAPA Board

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ACCOUNTABILITY ISSUES

Agencies In Democratic System:


Legislative Branch



Executive Branch



Judiciary

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LEGISLATIVE BODIES


Parliament



Public Accounts Committee



Public Undertakings Committee



Parliamentary Standing Committees

 Comptroller and Auditor General


All the Law Courts

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EXECUTIVES

 Prime Minister

 Ministers
 Secretaries of The Ministries
 Executives of The Government Agencies
 Accounts Offices

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ACCOUNTABLE FOR WHAT?



Accountability for Stewardship of Financial Resources

 Accountability For Efficiency and Economy of Operations
 Accountable for Faithful Compliance Adherence to Legal
Requirements & Administrative Policies
 Accountability for Results of Government Activities
Reflected in Accomplishments and Effectiveness

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ACCOUNTABILITY FRAMEWORK
Parliament
President
SAI (CAG)

PA Committee
Audit Reports

Pertinent issues on Accountability:


Audit objections so far disposed off by the PA Committee



What actions so far taken on PA Committee's



Have there been improvements ?

recommendations?

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LEGAL JURISDICTION OF PUBLIC SECTOR AUDIT
Government / Public Sector
Organisations
Government Ministries
Departments/Divisions/Directorates

Applicable Laws
Constitution
Constitution

Audit

authority/by
C AG
CAG

Autonomous /Semi Autonomous Bodies CAG Addl. Functions Act.

CAG CA firms

Local Authorities

Relevant laws

CAG, CA Firms

State Owned Banks and DFIs

CAG Addl. Functions Act.

CAG, CA firms

Government Owned Entities

CAG Addl. Func /CA ‘94 CAG, CA Firms

Nationalised Industries

Nationalisation
Order,1972
Foreign Aided Projects
CAG Addl Func Act-74

Donor
Govt. Educational institutions/ Hospitals Constitution
etc.

CAG, CA Firms
CAG, CA firms
CAG

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LEGAL FRAMEWORK FOR PUBLIC SECTOR AUDIT
 Bangladesh Constitution (1972)
 C & AG’s (Additional Functions) Act (1974)
 MOF Executive Order -CAG Estd. (1985)
 Nationalization Orders (1972)
 Denationalization Orders (1982)
 Relevant Enactments/Presidential Orders
 Companies Act (1994)
 Bank Companies Act (1991)

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OCAG ORGANOGRAM
CAG
CAG Office

DCAG (Senior) Gr. II

Bangladesh Railway Finance
Department

Defence Finance
Department

ADG (Finance) Bangladesh Railway
(BR) Gr. II

CGDF Gr. II

JDG (Finance), (BR)
Gr. III

SFC (Army)
Gr. III

FA & CAO (East), BR Gr. III

SFC (Navy)
Gr. III

DCAG (A&R) Gr. III

DCAG (Procedure)
Gr. III

FA & CAO (West), BR Gr. III
FA & CAO (Project), BR Gr.
III

Addl. FA & CAO BR-3
Gr. IV

A&R

=

Accounts and Reports

ADG

=

Additional Director General

BR

=

Bangladesh Railway

CGDF

=

Controller General Defence Finance

DCAG

=

Deputy Comptroller and Auditor General

DG

=

Director General

FA & CAO =

Financial Adviser & Chief Accounts Officer

FC

=

Finance Controller

JDG

=

Joint Director General

SFC

=

Senior Finance Controller

SFC (Air Force)
Gr. III
SFC (Defence Works)
Gr. III
SFC (Defence Purchase)
Gr. III

Audit Directorates

Training Academy

DG
DG

DG Financial Management
Academy, Gr. II

Commercial Audit Directorate, Gr. III
DG
DG

Local and Revenue Audit Directorate,
Gr. III
DG
Post, Telegraph & Telephone Audit
Directorate, Gr. III
DG
Works Audit Directorate
Gr. III

DG
Railway Audit Directorate
Gr. III
DG
Civil Audit Directorate
Gr. III
DG
Foreign Aided Projects Audit
Directorate, Gr. III
DG
Defence Audit Directorate,
Gr. III
DG
Mission Audit Directorate,
Gr. III
DG
Performance Audit Directorate,
Gr. III

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GOVT / PUBLIC SECTOR FINANCIAL ACCOUNANTABILITY

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FINANCIAL ACCOUNANTABILITY OF
LOCAL GOVERNMENT AUTHORITIES

Stakeholder
s

Municipal Bodies
Ordinances

C&AG Auditor
MLGRDC
Ownership

Management

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PUBLIC SECTOR PURVIEW
IPSASB Framework
“Public sector refers to Governments, Regional Government, Local
Governments & Related Government entities including Agencies,
Boards, Commissions & Enterprises”

Bangladesh Public Sector Coverage
Public Sector Covers all Arena of Public Services Provided by the
Following Agencies:
 Government Ministries











Divisions /Directorates / Departments
Government Sub-Ordinate Offices
Local Government Authorities
Autonomous/Semi-Autonomous Bodies
Public Sector Corporations
Foreign Aided Projects (SCOPE/SPEMP B)
State Owned Enterprises (SOEs)
State Owned Bank (SOB)
Hospitals/Educational Institutions etc.

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IMPORTANCE OF FINANCIAL REPORTING SYSTEM FOR
GOVERNMENTS / PUBLIC SECTOR


Essential for Increased Accountability and Transparency in
Use of Public Funds



Developing Public Sector Awareness of Govt. Spending



Credibility of Financial Information for Public Trust

Timeliness of Financial Information for Good
Governance and Decisions




Increased Credibility for Attracting FDI



Assurance to Development Partners



Improved Sovereign Rating Awards

Efficient Financial Reporting System for Economic
Development and Public Welfare.


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PUBLIC SECTOR AUDITOR’S ROLE:



Determining Oversight



Facilitating Foresight



Increasing Insight



Conducting Objective Independent Financial Audit



Conducting Performance/VMA Environment and IT Audit

 Enhancing Economy, Efficiency and Effectiveness of
Resources Utilization of Audit Entities


Meet Expectations or Development Partners/Fund Provider’s



Ensuring Transparency of Financial Information



Assuring Accountability of Management Decisions



Combating Corruption, Misuse & Wastage

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PUBLIC SECTOR AUDIT FOCUS
 Emphasis on Expenditure
 Availability of Budget
 Authorisation By Competent Authority
 Payment Acknowledged By Right Person
 Government Rules And Procedures Complied
 Expenditures Properly Classified
 Justification Of Expenditures
 Emphasis on Cash Expenditures And Cash Income Not on Accruals (Cash Basis IPSAS)

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FINANCIAL STATEMENTS UNDER CASH/ACCRUAL
REPORTING SYSTEMS
Cash Basis of Accounting



Cash Flow Statement
Statement of Accounting Policies and Explanatory Notes

Accrual-basis Accounting






Statement of Financial Position
Statement of Financial Performance
Cash Flow Statement
Statement of Changes in Net Assets/ Equity
Accounting Policies and Explanatory Notes to FS

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