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Sullivan, Peter "Opening Remarks at the Seminar on the Dissemination of the Audit Law" [2003] ADBLPRes 4 (12 June 2003)

Opening Remarks at the Seminar on the Dissemination of the Audit Law

by
Vice-President Peter H. Sullivan

25 October 1999

Your Excellency Uth Chhorn, the Auditor General
Excellencies, ladies and gentlemen

It is a great pleasure and honor for me to have the opportunity to participate in this very important Seminar on the Dissemination of the Audit Law—the first of its kind in the recent history of Cambodia. This Law is often regarded by many as a strong and independent law that provides a very solid platform from which an effective government auditing practice can be embarked upon. As you are all aware, the Audit Law also paved the way for the establishment of the existing National Audit Authority (NAA) and internal audit functions in Government agencies.

The Asian Development Bank (ADB) is very proud to associate itself with this very important initiative. ADB provided technical assistance to the Royal Government of Cambodia in 1996 to assist with capacity building in the audit and inspection functions, and more significantly in the preparation of the auditing standards and draft Audit Law, which was subsequently passed by the National Assembly in March 2000. Our main objective was to assist the Royal Government in improving transparency and accountability in its public financial management. In this regard, we are also pleased to be able to continue our support with the second phase of technical assistance to NAA, the National Assembly, Ministry of Economy and Finance and the line ministries. We sincerely hope and urge that they all take full advantage of the expertise of the Principal Audit Adviser, based at NAA.

We believe that public sector auditing is a vital element for effectively promoting good governance. In a constitutional system of democracy like Cambodia, the National Assembly is the public's representative forum, elected by the public and it derives its ultimate legitimacy from the public on whose behalf it acts. It is the National Assembly that is responsible for promoting the goals of transparency, accountability and integrity. In this context, NAA provides a crucial link between the public sector on the one hand, and the National Assembly and the public at large on the other. NAA, in collaboration with its counterpart internal audit units, is the supreme institution that regularly evaluates the practical conduct of the Government’s financial operations and performance.

The cost to the country's economy of weak financial management in the public sector can be huge, whilst the benefits of sound financial management and reporting can be immense. Good financial reporting underpins good financial management and it makes it easier to effectively manage government expenditure, to set fiscal performance targets, and to measure and improve the efficiency of producing public goods and services. As such, ADB attaches great significance to auditing as a function of service quality, transparency, accountability and development effectiveness. Our vision and commitment go far beyond supporting just the current efforts, which focuses mainly on financial auditing, and we would like to possibly extend this commitment to establishing performance auditing depending on progress made by NAA. We encourage all stakeholders and NAA in particular to work towards this longer-term objective.

It is important to note that as the external auditor of the Royal Government NAA relies heavily on the effectiveness of the internal audit units of the various Government agencies. It is therefore critical that such units be established and strengthened as soon as possible to enable NAA to function as a really effective institution. We would urge NAA and the Royal Government to expedite the adoption of the pending internal audit sub decree in order that a clear legal framework is created for establishing internal audit operations. In this context, we would like to take this opportunity to congratulate the Ministry of Education, Youth and Sport for taking a very bold step in establishing the internal audit unit under the Department of General Inspectorate.

It is very gratifying to have the opportunity to directly support the NAA in the organization of this Seminar. We trust that everyone here today will gain a lot of information and knowledge from the presentations, discussions and Q & A. We hope that this Seminar will be a rewarding experience for all of you.

Last but not least, we wish to take note that Samdech Prime Minister Hun Sen has agreed to attend the final session and present Closing Remarks at this Seminar. This, we believe, is reflective of the Royal Government's commitment to the promotion of good governance and transparency in Cambodia.

Thank you for your kind attention.