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Law on the Bureau of Auditing - 1962

LAW OF THE BUREAU OF AUDITING

28 SOMBULA 1341

CHAPTER ONE

ARTICLE 1: Matters of audit accounts and assets (cash and kind) are subject to the provisions of this law.

ARTICLE 2: The accounts of all assets of the state, specially after registration, is audited by the General Auditing Department.

ARTICLE 3: Auditing accounts means organized examination and probe into documents of accounts, transactions and operations related to the preparation of documents, estimation and determination of sources of allocations, revenues, expenditures and payments from and to the treasury.

ARTICLE 4: The General Auditing Department considers the main objective of auditing to be the determination of the degree of success and failure to financial operations of those government offices, tassidy’s and institutions which expend public funds.

COMMENT: Tassidy’s are those institutions which have legal entity (personality and whose capital is one hundred percent owned by the State. The institutions which receive public funds and have legal entity are those to which a known amount of funds are allocated or transferred in a specific financial year from the State budget as a grant.

ARTICLE 5: Auditing of accounts of offices, tassidy’s and institutions which expand public funds are done as follows:

1. To study and examine the application of budgetary, financial and accounting practices and procedures.
   
2. To review and probe the rules and regulations pertaining to the preparation and submission of revenues, expenditures and payments reports. Also to determine whether other financial reports are prepared in accordance with accounting rules and regulations at a specific point of time.
   
3. To determine whether given orders of the Government Department are valid from legal point of view and whether tassidy’s function economically and legally for public benefit.
   
4. To scrutinize expenditures whether they are spent in accordance with the set programs and objectives.
   
5. To find out whether sufficient and necessary accounting practices and procedures have been observed before implementing orders.
   

Whenever, in addition to the above subjects, something else is also considered to be audited, it shall be audited provided the President of the Audit Department or the Prime Minister orders it in writing.

CHAPTER TWO: TYPES AND PRINCIPLES OF AUDITING

ARTICLE 6: In accordance with the provisions of this law, the accounts and financial operations of the government offices, tassidy’s and institutions which expend public funds allocated to them by the State shall be audited by the General Auditing Department. The auditing shall take place in three types as follows:

1. Simple auditing.
2. Complete auditing
3. Special auditing
   

ARTICLE 7: Simple auditing is resorted to in financial and accounting mattes at places where such transactions have taken place. After completion of transaction, such simple auditing shall take place at least once every year.

ARTICLE 8: The objective of recording to simple XXXX of the government offices, tassidy’s and institutions expending public funds is as follows:

1. To remove XXXX and correct errors in accounting and financial transactions.
   
2. To prevent non-compliance with the accounting and budgetary systems and non-observance of accounting and financial rules and regulations.
   
3. To certify and compare transactions with rules and regulations.
   
4. To prepare reform proposals within the provisions of the law and regulations for the benefit of the administrative and financial heads of departments.
   
5. To discover fraud and [financial] manipulations.
   

ARTICLE 9: Complete auditing covers all financial and account transactions during a fixed financial year of a government office or tassidy Complete auditing is resorted to under the following conditions with written orders of the Prime Ministry or whenever considered necessary by the General Auditing Department:

1. Where simple auditing proves that public funds of a government office or tassidy are expanded contrary to the laws and regulations of the country.
   
2. Where fraud and manipulations are discovered in the financial and account transactions of a government office or enterprise.
   

ARTICLE 10: Special auditing entails a specific case of financial or account transaction performed XXXX XXXX XXXX XXXX Auditing Department shall undertake special auditing under written orders of the Prime Ministry or at the written request of the highest ranked officer, particularly under the following conditions:

1. Whenever theft or loss and concealment of inventories, equipment or salaries occur or discrepancies in quality and quantity of assets come to light.
   
2. Whenever commission of bribery is identified in financial and account transactions.
   
3. Whenever fraud and manipulations are discovered in the statements of persons or balances of profit institutions in order to conceal facts and thus evade taxes.
   
4. Where manipulations are resorted to in the preparations of documents and estimates of taxes and customs duties.
5. Where fraud or non-compliance with rules and regulations is committed in the preparation and performance of construction contracts, delivery and completion of goods.
   
6. Where discrepancies in the first and second estimates of construction is revealed.
   

CHAPTER THREE: RESPONSIBILITIES OF AUDITORS
AND ACCOUNT OFFICIALS

ARTICLE 11: Auditors, in the performance of their duties, are considered guilty under the following conditions and shall be reprimanded or proceeded against in accordance with set rules and regulations.

1. concealment of facts and transactions committed contrary to rules and regulations.
   
2. Failure to mention the existence of errors, written corrections in documents and in account offices; loss of documents and account books connected with financial and account transactions.
   
3. Not completing in the shortest possible time the audit work for which he has been made responsible.
   
4. Hiding or destroying evidentiary documents in order to conceal a crime regarding fraud or to take personal advantage from it.
   

ARTICLE 12: In each case of auditing the auditors are bound to study and investigate the particulars of financial account and administrative transactions of an office, tassidy or institution and scrutinize the documents and registers of account transaction and performance of accountants so as to acquire sufficient information thereon. Based on this documentary evidence, an audit report shall be prepared during the process of auditing wherein the auditors shall write their observations, proposals and judgments in connection with the financial and account activities of accountants and other concerned officials in a lucid, clean-out and reasoned form. The complete auditing report shall contain the following items:

1. The name and location of the office, its first administrative unit and the second provincial administrative unit or departments audited shall be mentioned.
   
2. The beginning and end dates of auditing.
   
3. The terms of auditing and the mention of the fact whether the audit was post-audit, simple audit, complete audit or special audit. Mention shall also be made of what kind of documents, registers and papers have been audited.
   
4. Explanation of the short-comings that existed.
   
5. The names and ranks of chiefs and accountants whose performance has been audited shall also be noted.
   
6. Each opinion of the finance and account audit committee shall cover all of the points mentioned below:
   

(1) Capability and efficiency of accountants based on the results of the XXXX.

(2) Existence of sufficient number of officials.

(3) Whether the functions and activities of the accountants are in accordance with agreements, laws, regulations and by-laws.

(4) Reform proposals in regard to what should be done and how.

ARTICLE 13: In response to the questions asked by the auditors from accountants, chiefs and other officials whose account and financial transactions are under audit, care should be taken that they reply to each question in the shortest possible time in plain and clear-out language. The accountants or other officials who are questioned shall not appoint a representative to answer for them and shall not postpone or delay their answers without reasonable reasons of illness and so forth.

ARTICLE 14: The auditors shall sign all registers, documents and papers to be audited and shall also put their seals and red notice marks thereon.

ARTICLE 15: The auditors are required to reflect reasons and evidence with impartiality irrespective of whether such evidence is in favor or against public funds.

ARTICLE 16: In all account and financial audits, the collected documents, registers, papers, evidence and XXXX whether proving or disproving crimes shall be considered valid and acceptable.

ARTICLE 17: Whenever during the XXXX of documents, registers and papers it comes to notice that a crime has been committed and the detachment of account documents and papers from the original dossier of the department concerned is either impossible or contrary to the usual procedures of the said office, the audit committee shall make photo copies or copies of the required documents and papers. These documents and papers shall be signed by the concerned officials and certified by their chief and then attached to the audit documents.

ARTICLE 18: Whenever during account auditing it comes to notice that a crime has been committed, the audit committee is empowered to question the accused, the informed and the witnesses individually so as to prevent the alteration of the real nature and substance of the crime. The audit committee shall be the sole judge to decide the procedures of the questioning by advancing and retarding the turns, subpoenaing and dismissing the persons concerned.

ARTICLE 19: All chiefs of central and provincial office along with chiefs of tassidy’s and institutions are required to submit at demand all necessary documents, information and papers to the audit committee appointed for the purpose by the General Audit Department. Registers, documents, papers and the conclusions arrived at previously by the internal audit group of the departments, provincial offices and tassidy’s shall be put at the disposal of the audit committees whenever required.

ARTICLE 20: All audit reports shall be submitted to the General Audit Department by the appointed audit committee.

CHAPTER FOUR: QUESTIONING PROVISIONS

ARTICLE 21: The authority for auditing reports, papers and documents regarding financial and account audits of departments and tassidy’s located at the center in general, and those of province whereas the volume of audit reaches a figure of more than five hundred thousand Afghanis related to government revenues and expenditures of the treasury, or government investments whose audits have been requested by the highest ranked officers or governors and sub-governors – rests with the General Audit Department.

ARTICLE 22: The Board of Directors of all enterprises and institutions in which government has participation shares shall send to the General Audit Department a copy of its annual reports submitted to the General Meetings indicating revenues and expenditures. Losses and profits, and balance sheets.

COMMENT: Institutions in which government participation shares amount to less than ninety percent shall not be usually subjected to auditing unless there is a written Prime Ministry order to do so. Only the reports of stipulated institutions shall be examined and XXXX for safeguarding the public financial interests.

ARTICLE 23: All financial and account reports received or submitted by an audit committee shall be entrusted to the investigation committee of the General Audit Department no later then ten days after receipt.

ARTICLE 24: The investigation committee shall be composed of one (or more) officials each from the Ministries of Finance, Justice and the General Audit Department in accordance with the volume of work.

COMMENT: The chief of the committee shall be an official of the Ministry of Finance.

ARTICLE 26: The investigation committee shall be required to hold regular sessions in which the submitted audit reports shall be examined in the shortest possible time and final decisions given thereupon.

ARTICLE 26: The investigation committee shall scrutinize in detail the audit report. Based on documentary evidence and audit papers and in accordance with the rules and regulations of the country, the said committee shall register he verdict regarding officials, accountants and other legal or real persons involved in the case about the kind of punishment to be XXXX out to them, whether administrative or judicial punishment proceedings and the verdict thus determined shall be submitted to the General Audit Department.

ARTICLE 27: Whereas the verdict of the investigation committee envisages administrative punishment for the involved persons of the case, the General Audit Department shall send such verdicts to the office or enterprises concerned for implementation.

Whereas the verdict of the investigation committee envisages court proceedings, he case shall be presented to the court by the Attorney-General’s Office and the office or enterprise concerned shall also be informed of the decision so as to take steps in accordance with the provisions of the law applicable to the civil servants and other administrative employee of the State.

COMMENT: The papers and reports of the General Audit Committee and the verdict of the investigation committee with regard to the items recommending administrative and court proceedings against the persons involved shall be submitted to the concerned courts.

CHAPTER FIVE: DEFINITIONS

ARTICLE 28: The definitions given to the terms of government asset accounting, budget, 8revenues, expenditures, treasury, accountant, pre-audit, the granting authority, financial year, the term of office and the completed account – in the Law of Budget and Accounting of 1338 (sic) shall also be valid here.

ARTICLE 29: Any provisions of the laws or decrees or regulations issued prior to the coming into force of this law which are contrary to the letter and spirit of this law shall be considered nullified.

ARTICLE 30: The provisions of this law shall be implemented by the General Audit Department and shall be considered applicable to all offices, enterprises and institutions.