The Auditor-General’s mandate to audit statutory boards
26 In 2004, the Public Accounts Committee in its Report (Parl. 2 of 2004)
recommended that “statutory boards that have been audited over a considerable
period of time by commercial auditors be rotated back for audit by the Auditor-
General’s Office. This would enable the boards to receive detailed scrutiny by the
Auditor-General’s Office.”
27 The Auditor-General (AG) in his Report for the Financial Year 2006/07
stated that he fully agreed with the Committee’s recommendation and would give
priority to obtain the manpower and other resources needed to implement it and that
he aimed to audit each of the larger statutory boards at least once every five years.
The Committee supports the AG’s responses to its recommendation.
28 The Auditor-General’s Office (AGO) kept the Committee informed of the
efforts being made to obtain more resources and the nature and extent of the audits
that AGO would carry out on statutory boards going forward. The Committee noted
that AGO would audit 18 statutory boards in FY 2007/08, up from 13 in the previous
FY. As increasing its audit capacity would take some time, AGO would be farming
out some of its financial statements audits to commercial auditors. AGO has sought
from the Ministry of Finance the additional budget it needs to implement the
Committee's recommendation.
29 AGO informed the Committee of a limitation it faced in implementing the
Committee's recommendation fully. Under the current legal framework, the power of
the AG to audit all statutory boards is not provided for in the Audit Act. The Audit
Act, being an old piece of legislation, pre-dates the formation of most statutory
boards which are separate legal entities from ministries and has not been reviewed
and updated since it was passed in 1966. Under the law as it now stands, AG is
empowered to audit a statutory board only if the Act creating the statutory board
gives him the power to do so. Currently a number of statutory boards do not have
such a provision in their Acts.
30 The Committee recommends that AGO carry out a review to determine how
it could widen and deepen its audit of statutory boards to make its audit more
effective. As part of the review, the Committee further recommends that AGO study
the best practices of other national audit institutions.