Hard to Cure Audit-fearing Syndrome

The State Audit of Vietnam has performed thousands of audits in State-funded entities in most fields. The auditor has discovered and proposed the rise in tax collections and the reduction in spending in many units, thus saving trillions of Vietnamese dong for the State. The State Audit has also found out loopholes, irrationalities in current budgetary management policies and proposed for changes to the Government, the National Assembly and competent bodies. Therefore, the State Audit plays a very important role in public financial management in general and State-funded development investment expenditure in particular. However, according to Dr Do Trong Khanh, the coordination between State Audit with related agencies in the process of estimating investment spending is lax and ineffective.

 

He said the shortcoming was attributed to the absence of a clear coordination mechanism for the State Audit and central and local relevant agencies in the process of estimating State Budget as well as a clear definition for the involvement of the State Audit in the process of estimating costs for development investment. For that reason, the State Audit of Vietnam is yet to perform the role as a budget estimating consultant for central and local State units. The State Audit has not really been considered a powerful tool for budgetary management at central and local levels. In principle, central and local agencies shall proactively use audit tools to serve budget management and proactively request the State Audit to examine and assess financial and budgetary activities. However, they are not willing to be audited. Besides, the current mechanism is insufficient for the State Audit to perform its full professions.

 

In addition, the State Audit currently only focuses on auditing correctness and legality of budgetary statements while its roles in estimating budgets is meagre. Reports and statements related to State budget spending submitted to the lawmaking National Assembly by the Government and to the People’s Council by the People’s Committee lack opinions of State Audit for their feasibility and economy. Even, the Law on State Budget provides that the State Audit only determines the correctness and legality of settlement statements, not other documents with connection with budget estimations.

 

To create a complete legal corridor for State Audit, Mr Khanh proposes amendments to the Law on Organisation of the National Assembly, Law on Organisation of the Government and Law on State Audit to ensure the consistency. Accordingly, the State Audit will be given more power in estimating budgets, examining estimations, and supervising budget management at both central and local levels. Laws also need to create mechanisms for coordination and cooperation between the State Audit and relevant bodies.