Hoàn thiện quy trình kiểm toán chương trình mục tiêu quốc gia về xây dựng nông thôn mới do kiểm toán nhà nước thực hiện tt tiếng anh

MINISTRY OF

FINANCE

MINISTRY OF
EDUCATION AND TRAINING

ACADEMY OF FINANCE
-------------------By

LAI PHUONG THAO

COMPLETING THE PROCESS OF AUDITING
NATIONAL TARGET PROGRAM FOR NEW RURAL
DEVELOPMENT CONDUCTED BY THE STATE AUDIT OFFICE

SUMMARY OF ECONOMICS PHILOSOPHY
DOCTORAL THESIS

HANOI - 2020
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This thesis is made at the Academy of Finance

Professional advisers:

1. Assc.Prof, Dr. Le Huy Trong
2. Dr. Nguy Thu Hien

Critic 1: .....................................
Critic 2: .....................................
Critic 3:......................................

The thesis will be presented to the Thesis Committee at the Academy Council of
the dissertation, meeting at the Academy of Finance
at......... hour.........day..........month.......... the year 2020

The thesis can be found at the National Library
and Library of Academy of Finance

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LIST OF RESEARCH PROJECTS HAVE BEEN PUBLISHED BY AUTHOR
RELATED TO THE THESIS

1

1.

Lai Phuong Thao, Do Quang Giam (2019). Japanese efficiency audit: Lessons
learned for auditing national target programs for new rural development of
Vietnam. Journal of Audit Scientific Research, Volume 143- 9/2019, pages 83-90.

2.

Nguy Thu Hien, Lai Phuong Thao, Vu Thi Hai (2019). Applying the heat map
to assess potential risks in the audit national target program for new rural
development conducted by the State Audit Office. Journal of Finance &
Accounting Research, Volume 12 (197)/2019, pages 21-27.

3.

Lai Phuong Thao, Nguy Thu Hien, Vu Thi Hai, Bui Thi Mai Linh (2019).
Applying the heat map: Inherent risk assessment potential in auditing. Journal
of Finance & Accounting research. No. 01 (5)-2019, pages 19-27.

4.

Le Huy Trong, Lai Phuong Thao (2017). Identify potential risks in mobilizing
financial resources for the national target programs for new rural development.
Retrieved at: State Audit Office website: />
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INTRODUCTION
1. The rationale of the research
The audit process in general and the audit process conducted by the State Audit
Office of Vietnam (SAV) in particular are always the top concern of many subjects. Over
the years, many researchers have tried to analyze and evaluate different aspects of the
audit process with different auditing subjects. However, so far, the process of auditing
national target programs (NTPs) by the SAV has not been consistent and studies on this
topic continue to be implemented. This is because the NTP audit procedure implemented
by the SAV is difficult to monitor and measure, depending on the management's
willingness and judgment of each individual, so it is difficult to have a unified view.
NTPs are public investment programs that are important to the country's socioeconomic development. The National Target Program for New Rural Development (NTPNRD) is one of two NTPs being implemented in Vietnam. The program is performed in

several phases, with the point of "starting point only but no ending point", the specific
goals of the Program in each phase will serve the country's development target. The
program involves large amounts of capital investment from the state budget as well as
people’s budget so it receives a large concern of the whole society and the political
system. Despite the fact that the NTP-NRD audit has initially provided useful information
to the National Assembly, the Government, Ministries, and localities in organizing,
managing, administering, implementing the Program, and auditing the NTP-NRD still
faces many difficulties and challenges. This situation requires more research on the
auditing process for NTPs in general and for the NTP-NRD in particular in the
direction of improving the quality of the information provided by the SAV.
With the theoretical gap in the conducted researches, based on practical
requirements of the SAV, the author conducted the research: “Completing the process
of auditing national target program for new rural development conducted by the
state audit office" in order to clarify the issues being concerned of the audit
procedure, and to propose solutions to effectively solve practical problems.
2. Review of domestic and foreign studies related to the dissertation topic
2.1. Overview of domestic studies
2.1.1. Studies on the NTP-NRD
(1) Studies on management, organization, and implementation of NTP-NRD
The NTP-NRD has being implemented in 63 provinces and cities across the
country, so there have been studies on management, organization and implementation
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experience in some localities such as Pham Ha (2011) showed how to organize the
implementation of the program in Quang Ninh province from selecting the
implementation criteria to realizing the mobilization of internal strength from the
community so that the province will soon reach the set target. Vu Kiem (2011)
pointed out the direction, management, and organization of the Steering Committee at
all levels in implementing the program to help Thai Binh leverage the advantages and

overcome limitations to achieve the goals of the Program in each phase. Ba Thang
(2011) pointed out the difficulties and challenges of Dak Lak province in the
organization and implementation of the program, the root cause of the challenges that
make the province’s NRD progress slow in comparison with the general plan. Thanh
Tan (2011) studied the case of Yen Bai and Vu Kiem (2011) studied in Thai Binh
province. All of these studies focus on analyzing and assessing the characteristics,
organization, and management of each locality, from which to draw lessons or to
propose solutions for the problems.
(2) Studies on the appropriateness of the criteria used for NTP-NRD
evaluation
Recent domestic studies on the NTP-NRD have shown the importance and
significance of the Program to the overall development of the country. According to
the authors, although the NTP-NRD has achieved significant results, there are still
many issues which needed to considered, evaluated and adjusted so that Program
outcomes can meet the expected goals of National Assembly, the Government and the
expectation from people (Do Kim Chung and Kim Thi Dung, 2012, Budget
Transparency Alliance, 2018). Although these studies do not directly involve the
audit procedure of NTP-NRD conducted by the SAV, they are great references when
the SAV identifies potential risks in the procedure of auditing the Program.
2.1.2. Studies on the audit process conducted by the SAV
The domestic research results show that the research on the content, procedures,
and methods of NTP audits has received increasing attention from researchers. Aside
from studies on the state budget auditing process by the SAV (Vuong Dinh Hue,
2004); procedure of auditing construction projects funded by the state budget
conducted by the SAV (Tran Thi Ngoc Han, 2012) or developing scenarios for the
audit procedure performed by the SAV in Le Anh Minh's research (2018), there are
also studies on the procedure, content, and methods of auditing NTPs. Le Hung Minh
et al. (2003), Nguyen Thi Kim Dung (2016) pointed out the necessity of auditing
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NTP-NRD, the program quality criteria, and factors affecting the quality of program
auditing in which auditing procedure is one key factor. But the authors have not
clarified the specific limitation of each task in each step of the NTP-NRD auditing
procedure. Vu Thi Thanh Hai (2011) argued that auditing NTPs are operational audit
which aimed to assess the Program's economics, efficiency, and effectiveness.
Nguyen Tuan Trung (2015) developed the research of Nguyen Van Ky et al. (2003)
and made the opinion that the auditing NTP is a combination of financial audits,
performance audits, and compliance audits. In previous studies, most of the studies
focus on auditing NTPs in general, specific studies in auditing NTP-NRD are not
numerous. However, some of these research results provide a new direction for the
follow-up suggestions for further steps in the implementation of the NTP-NRD audit
procedure concerning the Program's specificity.
2.2. Review of foreign research
2.2.1 Studies on NTP-NRD
Some countries around the world also have movements to build new rural areas,
such as the movement to build "new villages" (Saemaul Undong) in Korea in the
1960s (Tuan Anh, 2012); China, with many agricultural and rural development
programs, such as the "fire show", aims to equip millions of farmers with advanced
scientific ideas, fostering talents and improving their quality, the "Bumper Crop
Program" helps the majority of farmers apply advanced science and modern
management methods to develop agriculture and rural areas, the "Poor-aid program",
etc (Cu Ngoc Huong, 2006); in addition, US, Japan, Thailand, and some other
countries also have programs geared towards agriculture, rural areas and farmers.
Most of the studies on NTP-NRD are focusing on the Program's implications for the
country's development.
2.2.2 Studies on the audit process conducted by the State Audit Office
In the early 1960s, under the pressure of that program auditing need to help
improve the performance in subsequent stages of the program, the State Audit Office
of Japan conducted effective audits when auditing programs and projects to assess the

implementation, utilization and direct results of programs and projects through
benefit-cost analysis, and impact assessment on beneficiaries, correctness, and
appropriateness of the program and project for socio-economic change, thereby
proposing solutions for improvement (Kazuki H. & Shigeru Y., 2006). In the same
study, the authors pointed out the steps to perform the audit, the audit process of
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project programs conducted by the State Audit Office of Japan which is an effective
audit, so the criteria used to evaluate are criteria related to outputs and results of
programs and projects.
Recently, global State Audit Offices face more and more challenges related to
the quality of the information provided by the State Audit Offices. In addition to
completing the system of international state audit standards, the audit process has also
been focused on developing IDI (2009).
IDI (2012) in the manual for the implementation of the International Audit
Standard for audit activities has cited the audits of social security programs and
projects that applied operational audits with four steps in the auditing process to
assess the economics, efficiency, and effectiveness of programs and projects. It
emphasized, from the findings made through the audit, the State Audit Office must
assess the impact of those findings, and propose solutions to improve the following
phases of the program and projects. This document also initially addresses the
problem of determining audit risk in the operational audit, as a basis for applying risk
maps to assess risks of audits.
Research on the audit process of national programs, projects, centers of health
and human services of the US has conducted research and built an audit process of
six steps: (1) Preliminary planning set for audits; (2) Preparing the investigation of
the audit object; (3) Designing data collection surveys; (4) Collecting and analyzing
information; (5) Preparing audit report; (6) Evaluating the results after the audit.
Research has also shown that the above six audit steps are not only closely

intertwined, but also help to create useful audit evidence for drawing conclusions
when auditing national programs and projects with audit content including financial
and operational audits. However, the audit process has not yet indicated the suitability
of the process with the characteristics of the object being audited. (Department of
Health & Human Services, 1994).
Steve G. Sutton and James C. Lampe (2012) gave an overview of the audit
process quality assessment framework. The study has reviewed previous studies on
the audit process, the quality evaluation framework of the audit process. But the
research only involves the audits of financial statements, not to audits of programs
and projects.
Le Anh Minh (2014) outlined the audit standards for the Australian public sector
audit process, the direction of technology affecting the audit process, and the
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performance evaluation activities of the audit process performed by the Australian
Government, which made strategic suggestions to change the audit process of the
State Audit Office of Vietnam. However, the research results are based on the
opinions of the State Auditors without the feedback on the audit process results from
the audited subjects.
In general, in recent years, researchers have made great efforts in approaching
the audit process, the audit of programs and projects implemented by the State Audit
Offices to provide solutions to complete the process, the audit activities of programs
and projects under a different point of view and has achieved certain results. Thereby,
it not only contributes to clarifying the role and responsibility of the State Audit
Offices to the performance of programs and projects in practice but also is a valuable
source of theoretical material, as a premise for further studies.
2.3. General conclusions from published studies and new points in the
research of the thesis
2.3.1. Conclusions drawn from published studies

Firstly, there is no consensus on the content of the work in the process of
auditing the NTPs in general, the process of auditing the NTP-NRD in particular. The
content of work performed in each work step of the audit process is also subjective,
dependant on different perspectives.
Secondly, up to now, there have been no domestic and foreign studies on the
appropriateness of the contents of the work in the process of auditing the NTPs in
general, the NTP-NRD in particular based on assessing the satisfaction of objects
using the information provided by auditors.
In summary, in the past years, many authors have focused on the NTPs in
general, the NTP-NRD in particular and the audit process conducted by the SAV to
show the achieved results and the shortcomings in the organizing, managing and
implementing the Program as well as the advantages and limitations of the audit
process and they have achieved certain results. However, there is a lack of research
studies on the auditing process on NTP-NRD conducted by SAV in specific
conditions of Vietnam.
2.3.2. Research gaps and new points in the research of the dissertation
- Studying the specific characteristics of the NTP-NRD and SAV, which clearly
indicates the effects of these characteristics to the process of NTP-NRD audit
conducted by the SAV;
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- Studying the appropriateness of the auditing process of NTP-NRD through the
feedback of the auditors participating in the audit, auditors of the advisory units for
the General State Auditor for each step of the work in the audit process. Thereby, the
dissertation focuses on studying the causes of inappropriate points in the process,
creating a basis for proposing complete solutions;
- Studying the satisfaction of the beneficiaries for the process and results of an
audit of NTP-NRD conducted by SAV, thereby proposing the completion of the
process, improving the usefulness of the audit results by the SAV.

3. The research objectives of the dissertation
- To systematize, interpret, and clarify the theoretical basis of the procedure of
auditing NTP- NRD conducted by the SAV.
- To analyze and assess the status of the procedure of auditing NTP- NRD
conducted by the SAV.
- To propose orientation and solutions to complete the procedure of auditing
NTP- NRD conducted by the SAVcontributing to improve the audit quality.
4. Research subject and scope of the dissertation
 Research subjects
The objects of the dissertation are the theoretical and practical issues related to
the procedure of auditing NTP-NRD conducted by the SAV. To carry out this study,
the subjects surveyed to collect information for the topic consist of auditors and
representatives of the SAV advisory agencies; experts and representatives of audited
entities from ministries, central functional agencies as well as provincial, district, and
communal authorities in Vietnam.
 Scope of the research:
The study was carried out for auditing NTP-NRD conducted by the SAV
recently in Vietnam. The study focuses on analyzing and evaluating the procedure of
auditing NTP-NRD conducted by the SAV in localities, the study does not go into
depth analyzing the procedure of auditing NTP-NRD at the ministerial and functional
agencies level.
 Research limits
The dissertation only focuses on researching, analyzing, and evaluating detailed
audit procedures implemented at localities without researching the comparative audit
procedure in ministries and functional agencies conducted by the SAV for NTP-NRD
in Vietnam.
5. Research method
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Approach method: Participatory approach; Process approach; Approach
according to the implementation level.
Research site selection method: identified suitable research sites and
subjects.
Information collection method: Used to collect secondary data and primary
data of each content related to the procedure of auditing NTP-NRD. Based on the
collected data, the Ph.D. candidate selected the necessary and suitable data for
deep analysis.
Information summarizing and analyzing method: Secondary and primary
information collected for research is classified, processed, and synthesized
according to the system of research indicators serving the evaluation of the
procedure of auditing NTP-NRD conducted by SAV. After obtaining information
on the current status of the procedure of auditing NTP-NRD conducted by SAV,
the author applied data analysis methods such as descriptive statistical method,
comparison method, scoring method, and priority ranking method.
6. The scientific and practical significance of the thesis
The completion of the dissertation has scientific and practical significance as
follows:
Theoretically: The dissertation is a scientific research document for theoretical
issues on NTPs, management mechanisms, auditing activities for NTPs of state audit
agencies. This theory can be the premise and basis for forming the theory for the
types of thematic audits performed by the SAV.
Practically: The dissertation studies the current situation of the NTP-NRD
auditing procedure conducted by the SAV, thereby proposing several solutions and
recommendations to contribute to the completion of the auditing NTP-NRD
conducted by the SAV. The findings of the dissertation are the manual to the SAVs in
the implementation of the NTP audit procedure in general and the NTP-NRD in
particular, as well as revise some steps of the audit procedure.
7. Dissertation structure
In addition to the introduction, conclusion, list of tables, diagrams, references,

and appendices, the thesis consists of 3 chapters:
Chapter 1: Basic theories of process of auditing the national target program
conducted by the State Audit office.
Chapter 2: Current status of process of auditing the national target program for
new rural development conducted by the State Audit Office of Vietnam.
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Chapter 3: Solutions to complete the process of auditing the national target
program for new rural development implemented by the State Audit Office of
Vietnam.
CHAPTER I
BASIC THEORIES OF PROCEDURE OF AUDITING THE NATIONAL
TARGET PROGRAM CONDUCTED BY STATE AUDIT OFFICE
1.1. GENERAL THEORY OF STATE AUDIT OFFICE
1.1.1. The concept of State audit office
1.1.2. State audit concept
The State audit office is a professional organization of the state administrative
apparatus. State audit activity is the process of collecting audit evidence objectively,
independently, systematically to determine compliance with the law in management
and use of finance and public properties. Thereby implementing accountability to the
legislature, law enforcement, people about the economics, efficiency, and
effectiveness of programs and projects funded by the State budget.
1.1.2. The role of a state audit
Firstly, it contributes to improving the economics, effectiveness of the
management, and usage of financial resources of the State.
Secondly, it contributes to improving the observance and improvement of laws
on the economic and financial management of the State.
Thirdly, contribute to creating transparency of economic-financial relations.
Fourthly, contribute to improving the effectiveness in management and usage of

State finance.
1.1.3. The function of State audit
 General function: Function of verifying and expressing opinions
 Specific functions: Function of assessing, confirming, concluding and
recommending of the management and usage of a nation's public finance and assets
1.1.4. Organizational model of the State audit office
(1) The organizational model of the completely independent SA office: the State
Audit Office of the Federal Republic of Germany, the Court of Appeals of the
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Republic of France, the SAV of Spain, Greece, Switzerland, Portugal, Indonesia, and
a few other countries.
(2) The organizational model of the SA office under the executive
(Government): China, Japan, Thailand, Sweden, Laos, and some other countries.
(3) The organizational model of the SA office under the legislature (parliament):
USA, Russia, UK, Denmark, Australia, Netherlands, and many other countries.
(4) The organizational model of the SA office belongs to the head of State
(President): South Korea, India, Bangladesh, Paraguay, and some other countries
apply.
1.2. BASIC THEORY OF NATIONAL TARGET PROGRAM
1.2.1. The concept of the target program and national target program
Target program: It is understood that a public investment program includes
projects aimed at realizing one or several government objectives in a certain
industry or sector that are facing urgent issues to be addressed.
National target program: A public investment program aimed at realizing the
socio-economic objectives of specific periods nationwide.
1.2.2. Characteristics of target program, national target program
Characteristics of Target program: The target program usually has a narrow
scope in a certain industry or territory, the influence of the program is therefore also

limited in a certain scope, in-depth content according to the problem needs to be
solved in each region or field, the program implementation time can be many years.
Characteristics of National target program:
- Regarding the content: The NTP includes sustainable development programs
associated with the country's comprehensive development strategy in a specific
period, deeply affecting people's lives.
- Regarding the structure of capital sources: The capital for implementation of
NTPs is usually from many sources such as Central budget sources; Local budget
sources; Legally mobilized resources from organizations, businesses, and the
community; Credit funds; and integrated resources from other programs and projects,
so the management will be very complex, requiring scientific management and
administration.
- Regarding the regulations on management and administration: The
management and administration of NTPs from the central to local levels with specific
powers and obligations of each unit.
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1.3. PROCESS OF AUDITING NATIONAL TARGET PROGRAMS
CONDUCTED BY STATE AUDIT OFFICE
Firstly, preparing for the audit
(1) Prepare, approve and send the survey outline; (2) Collect information of
NTPs; Review of collected information and internal control system of the audited
entity; Identify audit risks and critical contents of the audit; (5) Plan the audit.
Secondly, implementing the audit
Auditors deploy the contents established in the general audit plan in general and
the detailed audit plan in particular, through audit methods and techniques to collect
audit evidence in a sufficient way, and reliable basis for making conclusions.
Thirdly, preparing and approving the audit reports
The auditors must collect all audit evidence in order to make comments and

assessments on the contents of the audited NTP, from which to prepare audit records
and audit reports.
Fourth, monitoring and inspecting the implementation of audit conclusions,
recommendations
Monitoring and inspecting the implementation of audit conclusions and
recommendations is a separate step of the State audit. This activity demonstrates the
competence and responsibility of the State audit in evaluating the implementation of
the audit conclusions and recommendations made by the State audit office to the
audited entity and the settlement of issues raised in the audit reports.
1.4. EXPERIENCE OF SOME COUNTRIES IN THE WORLD ON THE
NATIONAL TARGET PROGRAM AND LESSONS LEARNED FOR
VIETNAM
1.4.1. Experience of some countries in the world when auditing NTPs
1.4.1.1. Japanese experience
1.4.1.2. Australian experience
1.4.1.3. Chinese experience
1.4.2. Lessons learned in conducting audit of NTPs in general and NTP-NRD in
particular
Firstly, determine the scope and content of the audit in accordance with the
ability to perform, focusing on major issues that are decisive to the effectiveness of
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the program, avoiding spreading, dispersing resources, reducing quality. amount and
efficiency of auditing;
Secondly, it is necessary to arrange a reasonable time and personnel so that the
auditor can deeply assess the implementation situation, evaluate the use of program
and project outputs, evaluate results, and evaluate them. the adaptability of the
program in the socio-economic development;
Thirdly, the State audit office needs to apply expert methods, with consulting of

experts from specialties related to projects in the NTPs into expert contracts for hightech work sections such as formulating evaluation criteria;
Fourthly, to make the audit process more transparent, and at the same time help
the auditors have more reference information, the SAV should apply information
technology in updating electronic diaries, in reporting progress of audit inspection
teams, in requesting audit inspection teams to review the work of the team, to assign
responsibilities to each auditor when the audit content is missed;
Fifthly, it is necessary to attaching importance to organizing the evaluation and
drawing experience after each audit phase to review and to carefully evaluate the
limitations in order to draw experience before conducting the audit for the next batch.
Sixthly, it is essential to surveying to collect feedback on the satisfaction of the
subjects using information from the NTP audit results to evaluate the effectiveness of
the audits.
CHAPTER II
CURRENT PROCESS OF AUDITING THE NATIONAL TARGET
PROGRAM FOR NEW RURAL DEVELOPMENT CONDUCTED BY THE
STATE AUDIT OFFICE OF VIETNAM
2.1. BRIEF INTRODUCTION OF AUDITING THE NATIONAL TARGET
PROGRAM FOR NEW RURAL DEVELOPMENT IN VIETNAM
2.1.1. Brief introduction of the NTP-NRD in Vietnam
2.1.1.1. The national target program for new rural development in Vietnam
The NTP-NRD in Vietnam is a program which consists of a set of related
government funding projects to target the goal of constructing Vietnam rural areas
with modern socio-economic infrastructure; rational economic structure and forms of
production organization, combining agriculture with the rapid development of
industry, services and urban following the planning; stable rural society, rich in
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national cultural identities; improving the intellectual standard, ecological protecting
the ecological environment; strengthening the rural political system under the

leadership of the Communist Party.
2.1.1.2. Characteristics of the NTP-NRD and those impacts on the auditing
process conducted by SAV
a/ Characteristics of the NTP-NRD
First, subjects: The NTP-NRD is taken commune as a basic unit when
implementing, in the process of organization, management, and implementation. The
rural people must be the subject.
Second, contents: The NTP-NRD was concretized through 11 contents
(Government, 2010): (1) Planning of new rural development; (2) Developing socioeconomic infrastructure; (3) Restructuring, developing the economy, raising incomes;
(4) Reducing poverty and improving the social security; (5) Innovating and
developing effective forms of production organization in rural areas; (6) Developing
of education - training in rural areas; (7) Developing a medical system to better
provide healthcare for rural residents; (8) Building a cultural life, information system,
and rural communication; (9) Supplying clean water and rural environmental
sanitation; (10) Improving the quality of Party organizations, authorities, and sociopolitical organizations in the area; (11) Maintaining security and rural social order.
Third, capital sources: The Program was implemented with a large amount of
capital funded by local budgets, central budgets, credit funds, capital from citizens,
and other sources. In addition, the Program also used capital integrated from other
programs and projects, so the management will be extremely complicated, requiring
scientific and strict management and administration.
Four, management and administration: The NTP-NRD was managed and
adminised by many levels from central to local.
b/ Outcomes of the NTP-NRD in Vietnam
After nearly 10 years of implementing the program, the life of rural people has made
positive changes. Most of the 19 criteria of the NTP on new rurual construction has been met
the standard according to the aggregated data of the Central new rural development
Coordination Office.
Besides the achievements, the process of implementing the new rural
development still has had some existences in localities such as rural environmental
pollution, social evils, poor infrastructure, program sustainability, etc.. These

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existences are unavoidable problems and required to be gradually removed in local
areas to ensure the construction of new rural areas in their localities in a sustainable
manner.
c/ Impacts on the auditing process conducted by SAV
The NTP-NRD is a set of synchronous goals, tasks, and solutions in terms of
economy, politics, society, environment, health, education, etc. to achieve some goals
of agriculture, rural areas and farmers which are associated with the overall socioeconomic development strategy of the country in the period 2010-2020 and
subsequent periods. In order to achieve the set of goals, the NTP-NRD has
implemented many programs and projects with large investment capital funded by the
state budget, credit, and mobilization from enterprises, people, organizations, and
other sources.
As the program's subjects are the State and the rural people then the audit
objects must include financial audits, compliance audits and operational audits to
ensure that the audit results will contribute to the completion of the law on managing
and operating the program, to create transparent economic relations when deploying,
as well as to improve the economic efficiency and effectiveness in managing and
using the Program's capital sources and the objectives of the Program which are set
out in each phase.
However, The NTP-NRD is a program that has capital sources integrated with
many other project programs. The capital amount is large and has a long
implementation time, some Program’s issues had been audited by other audit phases.
Hence, with given limited resources, the SAV should consider with care the potential
risks of the Program to determine the Program audit objectives on the basis of
auditing grounds including relevant legal documents, the handbook guiding on the
organization, management and implementation of the Program.
2.1.1. Introduction to the auditing the NTP-NRD conducted by SAV
With its important nature and great influence, the NTP-NRD is one of the subjects

that the SAV devotes a lot of resources to assess. Due to the complex nature of the
Program, the SAV assigned the Specialized State Audit equity I to chair and conduct the
first 2 trial audits in Hanoi and Bac Ninh City in 2013 (SAV, 2013). These are premise
audits as a basis for building a large-scale audit process to evaluate the management,
implementation, program implementation in ministries, branches, and localities in the
following years in 2015 and 2016.
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2.1.2.1. Audit objectives
With its role, function, and position, the SAV wishes to provide the National
Assembly and the Government with comprehensive and systematic information on the
status of management, administration, organization, and implementation of the NTPNRD, State Auditor General has approved Decisions to audit the Program with eleven
specific goals.
2.1.3.2. Audit content
The NTP-NRD includes many major projects related to many fields such as
economy, politics, society, environment, education, construction, and health; involving
several ministries and branches from the central to local levels; is implemented in all
provinces and cities in Vietnam so that the audit contents are specifically assigned to
each audit units by the SAV. However, whether auditing at central or local levels, at
ministries, branches, or at provinces, districts, communes, the program’s audit contents
all consist of financial audits, compliance audits, and operational audits (SAV, 2016e ).
2.1.3.3. Audit technique
In order to carry out the contents of the auditing NTP-NRD, the SAV applied the
general basic technical tools of the audit such as Reconciliation, analysis,
comparison, sampling ...
In addition, due to the peculiarity of the NTP-NRD of which the rural people are
the main subjects, the SAV conducted the interview number of rural citizens by
designed questionnaire. The SAV also applied other techniques such as field
observation, recalculating the volume from the completed drawing, design to

compare with final settlement A-B, winning bid price according to the process of
auditing investment projects for projects. basic construction investment as an
effective tool when auditing.
2.2. CURRENT PROCESS OF AUDITING THE NTP-NRD CONDUCTED
BY STATE AUDIT OFFICE OF VIETNAM
2.2.1. Preparing for the audit
First, survey and gather information of the NTP-NRD
- Information on the internal control system of the NTP-NRD such as
organizational structure, functions, and duties of the Program management apparatus
(responsibilities of ministries, central branches, responsibilities of local
departments,...); legal documents on Program management and administration;
internal management regulations of the unit on supervision, implementation,
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acceptance and final settlement; financial and accounting management work such as
the applicable accounting policies, the organization of the accounting apparatus, the
organization of accounting;
- Other relevant information such as changes in an organizational structure at
agencies and units funded by the provincial budget; Errors and frauds detected from
previous audits, related inspection, and examination agencies; Economic disputes,
lawsuits related to the audited units; Information on the mass media on pressing
issues in society, complaints and letters related to individuals and organizations in the
management and use of Program funds.
Second, assess the information gathered and the internal control system of the
audited entity
- Evaluating of information and internal control system: auditors assess the
assignment, decentralization of functions and tasks of the Program’s management and
implementing units: whether they are doing with a clear, reasonable, and convenient
guarantee for the implementation process or not. At the same time, assessing the

factors affecting the management and administration activities of the unit such as
economic fluctuations, policies, regulations of the unit, changes in personnel, the
complexity of Programme.
- Overall assessment of the implementation of the Program: it needs to analyze
and evaluate the Program's characteristics from the beginning of implementation to
the time of the audit; funding for implementation and mechanisms for management,
allocation, and integration of Program funds; preliminary assessment of economics
and social efficiency of the Program.
Third, identify critical audit contents and auditing risks
Identify critical audit contents: From the results of the analysis and general
assessment of the implementation of the Program as well as the internal control
system of the audited units, auditors identify key issues when auditing the NTP-NRD
including (1) Organization, the direction of the Program implementation; (2) The
observance of regimes and policies in managing construction investment projects and
financial and accounting regimes. (3) Compliance with other Program provisions
such as assessing inadequacies in the implementation of 19 criteria in the national set
of criteria compared to actual conditions in local areas.
Identify audit risks
- Potential risks: Potential risks are highly appreciated, but auditors have not yet
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pointed out specific potential risks that are hidden in each feature of the program, as a
basis for making a fit audit plan. Although the potential risks are appreciated, the
audit was conducted by auditors from 13 Local state audit entities under the general
management of specialized state auditor II, so it is difficult to control the quality of
auditors in the audit delegations.
- Control risks: The control risks identified by the auditing team is high based on
the evaluation of the surveyed information on the internal control system of the
audited entity. However, the potential risk is specifically based on the characteristics

of the program, so the control risk has only been assessed quite generally by the
auditors, not yet indicated the control regulations which are needed to prevent or
detect potential risks, thereby making assessments on the quality of the internal
control system at the audited units as well as determining the level of control risks in
each audited entity.
- Detection risk: From the assessment results, the potential risk and control risk of
NTP-NRD are identified at high levels, so the detected risk is determined at a very low
level to ensure the overall risk of the audit at an acceptable level. Thus, by not being
able to assess the specific level of risk in each audited content, only determining the
level of detected risk to be achieved is at a very low level, making the audit plan spread
out, and difficult ineffective staffing.
Four, plan the audit
Based on analyzing the crucial contents and risks of the audit, the auditing team
prepares the audit plan and submits it to the SAV leader for approval, the audit plan
includes the following contents: Audit objectives; Audit contents: auditing of capital
funding and settlement of funding; auditing the compliance with State policies,
regimes, and laws; audit the management, direct the implementation of the program,
audit the implementation situation of the Program's contents, objectives, economic
audit, evaluate the social efficiency and effectiveness of the Program.
The audit plan also determines the audit scope; audit limits; criteria for
evaluating the Program's economics, efficiency and effectiveness; audit methods;
staffing plan.
2.2.2. Implementing the audit
Financial auditing: The content of financial auditing the NTP-NRD has been
done fairly methodically, adhering to the contents instructed in the outline of the audit
such as auditing funding sources; auditing the use and settlement of funding.
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Compliance auditing: Compliance auditing the NTP-NRD has been a focus on

auditing the cost estimation and allocation; auditing the compliance with estimation,
and auditing the budget settlement.
Activities auditing: In order to implement the content of activities auditing the
NTP-NRD, auditors have audited the performance of the program contents and
objectives; auditing the economics, efficiency, and effectiveness of the program.
Although the audit plan has established evaluation criteria in performance auditing,
during the audit implementation period, the use of such criteria in the assessment is
still very modest and limited.
2.2.3. Preparing and approving the audit reports
The auditing of NTP-NRD has been carried out by many audit delegation, and
audit teams, so at the end of the audits, the heads of the auditing teams shall prepare a
draft audit report on the basis of summarizing the audit results according to the
minutes of the audits with agreement among team members on the content of
evaluation, audit conclusions. The draft audit report will be reviewed and resolved by
the head of the audit team before any audit team report is prepared. The head of the
assigned units for the audit task will then organize the appraisal and review of the
unit audit report before sending it to the General Department, Department of Legal
Affairs, Department of Auditing Regime & Quality Control for controlling and
evaluating according to current regulations; at the same time, send that report to the
Specialized State Auditor II to join with 03 Departments to appraisal and submit to
the SAV leader for direction before organizing the announcement of audit results and
issuing audit reports.
2.2.4. Monitoring the implementation of audit conclusions and recommendations
Monitoring the implementation of audit recommendations has a great influence
on the effectiveness and efficiency of the audit conducted by the SAV in general and
the audit of NTP-NRD in particular. Specialized state audit entity II is the trusted unit
that has been pointed to be chair of the auditing NTP-NRD. That entity is always
paying attention, focusing on and considering the management, monitoring, and
inspection of petition implementation as one of the important tasks, since then they
have proposed may directions, and timely solutions to improve the audit quality in this

period. Specialized state audit entity II after has been checking the implementation of
the recommendations of the audit, often urging the continued implementation. For
cases of low petition implementation results, the entity has issued a dispatch, set a
working schedule, sent a leader of the entity together with the staff of the General
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Division and auditor to directly discuss, to understand and to analyze more clearly the
reasons why the audited unit has not implemented, as a basis for reporting to the SAV
leader, and for finding solutions to solve the shortcomings together.
2.3. ASSESSMENT OF THE AUDIT PROCESS ON NTP-NRD
CONDUCTED BY STATE AUDIT OFFICE OF VIETNAM
2.3.1. Achievements
At the step of preparing for the audit:
Preparing the audit is an extremely important step in the audit process. In
preparation for the audit of NTP-NRD, the SAV piloted in two provinces, Bac Ninh
and Hanoi in 2013, as a basis for the development and issuance of a comprehensive
audit organization plan in 2015 and 2016 was conducted by the specialized state audit
and regional audit. Well implemented in the medium-term plan, the auditing of the
NTP-NRD is highly consistent throughout the industry which does not only help to
minimize the impacts of Program’s Audit activities on the performance of common
tasks of each unit but also help to improve the effectiveness of the audit process when
performing integrated audits.
Specifically, due to the fact that staffs in charged of NTP-NRD in the localities
have limited capacity in terms of both professional qualifications and experience in
implementing the Program, based on collected information and systematic
investigation techniques, SAV has assessed the control risk at a high level without
wasting time for audit procedures such as checking the details of the control or
observing the continuity of the internal control system. This will help the SAV to plan
an audit consistently with the characteristics of the audit object.

At the step of implementing the audit:
The steps of the auditing process are clearly designed, the audit quality control
system of the SAV is established and maintained throughout the implementation
phase of the auditing NTP-NRD that helped the auditing adhered and stuck to the
objectives set out in the audit outlines even though the auditing is organized by many
delegations, jointly implemented by both the specialized state audit entities and the
regional state audit entities. SAV always maintains periodic reporting on the progress
and results of the audit to ensure that the Head of the audit team and the Head of the
audit delegation are always updated to the process of the audit activities, in order to
promptly handle, solve in critical situations arising during the audit process, to avoid
affecting the schedule and quality of work. At the same time, the SAV also promotes
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the application of information technology in audit activities such as using electronic
audit diaries to control the progress and quality of the audit.
At the steps of preparing and approving the audit reports:
Steps to prepare and review the audit reports: The steps of preparing and
approving the audit reports of NTP-NRD are clearly formulated by the SAV to ensure
the rights and responsibilities of the related parties. The SAV has worked closely with
ministries, functional agencies, the National Steering Committee of NTP-NRD, the
Local Steering Committee of the NTP-NRD and the local authorities in preparing and
reviewing the audit report to ensure the audit results are in accordance with the reality
of the organization, management, direction and implementation of the Program
through collected audit evidence. As a result, the audit results of NTP-NRD in the
period of 2010 - 2015 was conducted by SAV clearly indicated some shortcomings
and limitations in the process of organizing, managing and implementing the Program
through the collected data, as well as recommendations to complete the legal
documents system in the organization, implementation of the Program, along with the
recommendations and amendments to the criteria and content system in the NTPNRD which are not suitable to reality, or warning information about the situation of

outstanding debts in infrastructure investment in NTP-NRD, which has contributed to
luring the attention of the National Assembly, the Government, the functional
agencies, the public opinion on the effectively implementing the NTP-NRD.
At the step of monitoring the implementation of audit conclusion and
recommendation
The step of monitoring the implementation of audit conclusions and
recommendations: The NTP-NRD is a major policy of the Party and the State, and is
widely concerned by the people. It has been implemented through various periods
and the audited period is one of very first. Therefore, the monitoring and examining
the implementation of conclusions and recommendations by the SAV to relevant units
and individuals are strictly conducted by the SAV to ensure compliance with the
provisions of law. Understanding the expectations of the Party, National Assembly,
government, ministries, functional agencies, local authorities, and people for
information provided by the SAV on NTP-NRDs, SAV publicizes the audit
conclusions, results of the implementation of SAV conclusions and recommendations
annually, oriented towards issues of social concern.
2.3.2. Limitations
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2.3.2.1. At the step of preparing for the audit
As a basis for assessing the limitations and shortcomings in the audit preparation
step, the study conducted consultation of auditors participating in the audits and from
the SAV's advisory units about the relevance on different aspects of the audit
planning stage.
Firstly, the audit preparation step has not been given adequate attention;
Secondly, determining the main audit contents and auditing risks are not
reasonable;
Thirdly, determining the purpose of the audit is not suitable for resource
conditions, so the feasibility is not high.

2.3.2.2. At the step of implementing the audit
Using audit techniques to collect audit evidence, develop audit findings to draw
audit conclusions that are the main content of the audit implementation step. In order
to further clarify the limitations and shortcomings during the audit period, the study
consulted the SAV auditors about the appropriateness of the audit procedure at this
stage. The results of the audit show that the financial audit and compliance audit
basically fit with the objectives, content, and conclusions of the audit. Therefore, the
average score for financial audit is 4.1 points (suitable) and a compliance audit is 4.0
points (suitable). However, in operational audits through evaluating the economics,
efficiency, and effectiveness in the NTP-NRD implementation, the score is still low
(the average score is 3.4. , less suitable).
2.3.2.3. At the step of preparing and approving the audit report
- In a number of audit phases, the audit reports have not fully reflected the
content of audit evidence, so the quality of the audit report is not high.
- Some audit findings are still lacking convincing evidence or the content of the
audit and the figures reflect the lack of consistency and logic, leading to the fact that
some delegations have to change the audit results and recommendations.
- A number of audit quality control teams have not fully performed their roles
and responsibilities in appraising draft audit reports, so some audit reports still
contain errors such as the wrong name of selected samples audit district, audit
conclusions are still general with unclear legal grounds, ...
- A number of audit teams have not seriously implemented the revision and
explanation of conclusions of the functional departments and leaders of SAV before
sending program audit results to the audited units.
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2.3.2.4. At the steps of monitoring, inspecting the implementation of audit
conclusions and recommendations
Most of the inspection teams only focus on examining the implementation of

financial handling proposals but do not closely monitor the reorganization of the
management, organization, implementation of the Program, as well as revoke the
decision of recognizing met the new rural standards for communes that still "lack”
of criteria. The inspection teams have not conducted the assessment and analysis
of the reasons why the audited units have not implemented the audit
recommendations (due to the unit’s intensionally not implement or the SAV's
recommendations are not satisfactory). Since then, there have been suggestions to
improve the quality of auditing in general and the quality of implementation of audit
recommendations in particular.

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2.3.3. The cause of the shortcomings and limitations in the procedure of
auditing NTP-NRD conducted by SAV
Firstly, the overlap, delay, and ambiguity of several documents guiding the
management, organization, and implementation of NTP-NRD.
Secondly, due to the old thinking, some auditors believed that the data of NTPNRD are national secret data so that it should not be disclosed and SAV should only
consider contents related to public assets.
Third, the audit procedure in general, the approach, the method of auditing risk
analysis in particular for complex programs such as the NTP-NRD has not followed
the reality.
Fourthly, SAV still has a part of cadres affected by the old management
mechanism, who are not ready to convert to modern management mechanism, to
apply new methods and techniques in auditing such as using information technology
in managing and implementing the audit.
CHAPTER III
SOLUTIONS TO COMPLETE THE PROCESS OF AUDITING NTP-NRD
CONDUCTED BY SAV
3.1. DEVELOPMENT ORIENTATIONS OF SAV IN THE COMING TIME

AND REQUIREMENTS, PRINCIPLES FOR COMPLETING THE
PROCEDURE OF AUDITING NTP-NRD CONDUCTED BY SAV
3.1.1. Development orientation of SAV in the coming time
SAV defines the basic content of the Development Strategy for the period of 20202030 and vision to 2035 including:
1. Ensuring a complete and comprehensive institutionalization of the Party's
strategy, policies and guidelines on SAV development; complying with law provisions
and going along with with the country's socio-economic development orientations;
2. Developing SAV must meet the requirements of international economic
integration, in accordance with the international principles, practices and practical
conditions of Vietnam, being a responsible member for promoting the development of
public audit in the region and the world;
3. Ensuring high independence for SAV activities; commensurates with the position
and role of the SAV as the highest inspection agency in inspecting financial and public
asset established by the National Assembly, operates independently and always obeys
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