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Audits

Integrated Financial and Procurement Audits for Bank Financed Projects - The China Experience

Jingrong He's picture
Supreme Audit Institutions (SAI) for Bank financed projects have carried out financial and procurement audits. In Poland, this initially started more than a decade ago and there have been several other examples over the past years in other countries.

By the end of FY16, China National Audit Office (CNAO), the SAI in China, had successfully completed its third year of integrated financial and procurement audits for 27 Bank financed projects and accounting for 28% of the total active portfolio of China. This is a big leap from only 3 projects in the first year of FY14.

Rome was not built in a day. CNAO has been the external auditor of all Bank-financed projects in China since 1984. It conducts project audits in accordance with the Government Auditing Standards of the P.R. China and the International Standards on Auditing. The Foreign Funds Application Audit Department and the Audit Service Center of CNAO, and the Provincial Audit Institutions conduct audits on Bank financed projects and issue the audit reports in their names. There are about 120-130 financial audit reports submitted to the Bank every year. CNAO's audit reports not only include the auditor's opinion on project financial statements, they also include opinions on procurement compliance as this is an important aspect of the review of the eligibility of expenditures. This procedure is in full compliance with the Audit Law of P. R. China, which requires auditing of authenticity, legality and beneficial results of the budgetary revenues and expenditures or financial revenues and expenditures of public funds. It was under this context that in FY 14, we started piloting the use of CNAO for integrated financial and procurement audits in some Bank-financed projects.

Weekly Wire: The Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.


Different Take on Africa
Good Governance vs. collective action

"It’s time for donors to get out of their addiction to Good Governance! No country has ever implemented the current donor-promoted Good Governance agenda before embarking on social and economic development. This was true for rich countries before they became rich, and it is true for the rapidly ‘catching up’ countries of Asia today. Countries in sub-Saharan Africa are no exception. They are therefore not helped to get out of poverty by donor insistence on prior achievement of Good Governance, meaning adoption of the institutional ‘best practices’ that emerged in much richer countries only at a later stage in their development. This is a main message of the Joint Statement of five research programmes, which has just been published. You may also like to see the PowerPoint presentation of the Joint Statement." READ MORE