1 10 th asosai research project australian national audit office (anao) 12-14 november 2013 dr...

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10th ASOSAI Research Project

Australian National Audit Office (ANAO)

12-14 November 2013

Dr Thomas ClarkeExecutive Director

Performance Audit Services GroupAustralian National Audit Office

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Assessment of anti-corruptionPart 1: Legal status, structure and mandate of SAI

Q1. How would you describe the legal status and existence of your Supreme Audit Institution (SAI)?

( ) Established by virtue of the Constitution and enjoys a permanent legal status ( ) Established through a law and its existence depends on the pleasure of the Parliament or

Congress ( ) Established pursuant to a Presidential proclamation or executive order and SAI’s

existence depends on the pleasure of the President or Prime Minister ( ) Others (please specify) ……………………………………………………………………………… Q2. How would you describe the organizational structure of your SAI? ( ) Westminster model, also known as the Anglo-Saxon or Parliamentary model where the

Office of the Auditor General is an independent body that reports to the Parliament ( ) Judicial or Napoleonic model where the SAI functions like an audit court under the

judiciary which is independent of the executive and legislative departments ( ) Board or Collegiate model where the audit board is composed of an audit commission

which functions as the decision making body ( ) Others (please specify)

………………………………………………………………………………

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Q3. Do the members of the Audit Committee/Board or Head of your SAI enjoy a fixed term so as to isolate them from the influence politics?

( ) Yes, they have a fixed term under the Constitution or law ( ) No, their term of office depends on the pleasure of the Parliament or Congress which

appointed them ( ) No, their term of office depends on the pleasure of the President or Prime Minister but

they could only be removed for legal and valid reasons ( ) No, their term of office depend on the pleasure of the appointing authority and they can

be removed anytime with or without valid reasons ( ) Others (please explain)

…………………………………………………………………………………. Q4. How would you describe the independence or relationship of your SAI with the other

branches of the government? ( ) Independent of the executive, legislative and judicial departments of the state ( ) Under supervision or control of the executive department ( ) Under supervision or control of the legislature ( ) Under supervision or control of the judiciary ( ) Others (please specify) The Auditor-General is an Officer of the Parliament (legislature)

but cannot be directed (controlled) by the Parliament

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Q5. Does your SAI enjoy fiscal autonomy or financial independence in its operation? ( ) Yes, our SAI’s budget is subject to automatic release based on a fixed percentage of the

annual state budget which cannot be diminished or reduced by the Parliament or Congress

( ) No, our SAI’s yearly budget undergoes the scrutiny and review process of the Budget Department and the Parliament/Congress and the proposed budget could be reduced or increased by them

( ) Others (please specify) …………………………………………………………………………. Q6. Over what entities does your SAI have legal mandate and authority to audit? ( ) Central or national government agencies, bureaus, offices, instrumentalities and local

government units at all levels ( ) State-owned and controlled corporations, universities, colleges and enterprises ( ) Privately-owned public utilities company ( ) Private entities and non-governmental organizations receiving loans, subsidy or grants

from the state ( ) Social undertakings that enjoys financial support from the state ( ) Others (please specify) The Auditor-General’s mandate extends to all national

government agencies. The mandate also includes audits of Government Business Enterprises, and State ( regional) governments and private sector entities under certain circumstances.

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Q7. What types of audit services does your SAI render? Check all that applies. ( ) Fraud/Forensic Audit ( ) Real Time or a priori audit ( ) Performance Audit ( ) Compliance Audit/Regularity Audit ( ) Financial Audit ( ) Environmental Audit ( ) Value for Money Audit ( ) IT Audit ( ) Economic Accountability Audit ( ) Others (please specify) The ANAO audit approach integrates matters such as

Value for Money considerations, compliance requirements, IT audit activity etc into the two core business units: financial statement audit and performance audit.

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Assessment of anti-corruptionPart 2: Role of SAI in the prevention and detection of

corruption Q8. Does your Constitution, law or regulation creating and/or dealing with your SAI contain

specific articles about its roles and responsibilities on anti-corruption? ( ) If yes, please summarize them briefly

…………………………………………………. ( ) No Q9. Does your SAI have its own “anti-corruption strategy” implemented in accordance with the

national anti-corruption strategy? ( ) Yes (please summarize the goals and actions) ……………………………….. ( ) No Note: not applicable

Q10. Does the Strategic Plan of your SAI contain strategic goals and action concerning fight against corruption?

( ) Yes (please summarize the goals and actions)

………………………………………… ( ) No Note: not applicable

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corruption Q11. Does detecting corruption already embedded in the regular audit services that your SAI

has been performing? ( ) Yes, it is an audit focus of the audit services being rendered by our SAI ( ) Yes, but merely incidental to the audit services being rendered and not an

audit focus ( ) No, our SAI has a separate anti-corruption program or strategy ( ) No, not a direct focusconcern of our SAI but by the anti-corruption agencies ( ) Others (please specify)

……………………………………………………………….. Note: the ANAO does not seek to directly detect corruption via our audit services. Instead our focus

is on providing assurance that management controls within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti-corruption strategies and agencies are performing appropriately.

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corruption Q12. Are there special departments, offices or units within your SAI which have been assigned

specific functions and/or powers in the prevention, detection and investigation of corrupt activities and transactions in the government?

( ) If yes, please specify the name of the departments, offices or units ……………..

( ) No, all departments, offices or units conducting audit are mandated to

prevent, detect and investigate corrupt activities and transactions ( ) No, our SAI does not deal with preventing, detecting and investigating corrupt

activities and transactions ( ) No, our SAI’s duties are merely confined in the evaluation of internal control

system and providing recommendations for improvements As noted above: the ANAO does not seek to directly detect corruption via our audit services. Instead

our focus is on providing assurance that management controls within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti-corruption strategies and agencies are performing appropriately.

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corruption Q13. If there are special departments, offices or units within your SAI which are responsible for

combating corruption, for how long such departments, offices or units have been in place? ( ) more than 20 years ( ) 10-20 years ( ) 5-10 years ( ) less than 5 years ( ) None Note: not applicable Q14. Does your SAI have adequate number of audit personnel that have specific skills in the

detection of corrupt activities and transactions in the government? ( ) Yes (estimated number of personnel with special training/skills)

…………………. ( ) Very few personnel have adequate training in combating corruption ( ) Audit personnel have no skills of detecting corrupt activities and transactions As noted above: the ANAO does not seek to directly detect corruption via our audit services. Instead

our focus is on providing assurance that management controls within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti-corruption strategies and agencies are performing appropriately. Consequently, specific skills in directly detecting corrupt activities and transactions in the government are not a priority.

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corruption Q15. Does your SAI provide regular trainings to auditors about anti-corruption or anti-fraud in

accordance with an annual training program to ensure that auditors possess appropriate skills, knowledge, and abilities to identify and assess any potential irregularities?

( ) Yes (please enumerate the special trainings)

………………………………………… ( ) No As noted above: the ANAO does not seek to directly detect corruption via our audit services. Instead

our focus is on providing assurance that management controls within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti-corruption strategies and agencies are performing appropriately.

Q16. Does your SAI have a specific manual or guideline on anti-corruption or anti-fraud that

helps auditors prevent and/or detect corrupt activities and transactions in the government? ( ) If yes, please specify the title of the

manual……………………………………………. ( ) No Note: the ANAO has prepared guidance for auditors to follow if they encounter potential corruption or

fraud in their audit activities.

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corruption Q17. How would you describe the approaches of your SAI, if any, in detecting corrupt activities

and transactions in the government? ( ) Proactive through a risk based audit approach aimed at detecting red flags or

symptoms of corruption ( ) Reactive approach based only on complaints and referrals received ( ) Both proactive and reactive ( ) Limited only to detecting red flags or symptoms of corruption which will be

referred to the anti-corruption agency for the conduct of necessary investigation ( ) Neither proactive nor reactive as our SAI’s role is limited only to rendering

opinion on the fair presentation of financial statements of audited entities ( ) Others (please specify) the focus of the ANAO’s audit activity is on providing

assurance that management controls within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti- corruption strategies and agencies are performing appropriately.

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corruption Q18. Upon discovery of red flags or symptoms of corruption during a regular audit, what are

the available courses of action for your SAI? Check all that applies. ( ) The office or department which discovered the red flags will conduct a full

blown investigation ( ) The red flags will be referred to the special department, office or unit of the

SAI for the conduct of a full blown investigation ( ) The red flags will be referred by the SAI to the anti-corruption agency for the

conduct of a full blown investigation ( ) The red flags will not be pursued but reported to management as internal

control weaknesses with recommendations for improvement ( ) Others (please specify)

…………………………………………………………………..

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corruption Q19. Does your SAI have available facilities or mechanism to promote and intensify prevention

and detection of corrupt activities and transactions in the government? Check all that applies. ( ) Hotline devoted solely to corruption complaints ( ) Corruption alert section in the SAI website ( ) Citizens help desk that caters corruption complaints in whatever form ( ) Legal and financial assistance for auditors, witnesses and whistle blowers ( ) Anti-corruption researches ( ) Anti-corruption educational/training programs ( ) Citizens Participatory Audit Program ( ) Promulgation of accounting and auditing rules and regulations ( ) Declaration of assets and liabilities of public officials ( ) Governing Code of Ethics for Government Accountants and Auditors ( ) Public Information Office with linkages to all sorts of media ( ) Updated publication of audit reports through the SAI’s website ( ) Others (please specify) All auditors must declare their independence prior to

commencing work on a performance audit

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corruption Q20. Does your SAI have sufficient audit mandate, tools and techniques to detect relevant

cases of the following types of corruption? Check all that applies. ( ) Abuse of position/power ( ) Conflict of Interest ( ) Fraud ( ) Bribery ( ) Criminal breach of trust ( ) Illegal gratuities ( ) Extortion ( ) Asset misappropriation ( ) Embezzlement ( ) Forgery ( ) Influence peddling ( ) Kickback ( ) Nepotism ( ) All types of Illegal activities in public procurement procedures ( ) Illegal activities related to financing of political parties or candidates in the

national and local elections ( ) Online frauds or frauds using the computers Note: the focus of the ANAO’s work is on financial management and administrative

performance. The ANAO does not have a role in detecting or investigating criminal activities.

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corruption Q21. In relation to question no. 7, which of the audit services are most instrumental in the

detection and prevention of corruption in your country based on SAI’s experience? Please list them down according rank.

( 1 ) ........................................................................... ( 2 ) ……………………………………………………………………… ( 3 ) ……………………………………………………………………… ( 4 ) ……………………………………………………………………… ( 5 ) ……………………………………………………………………… Note: each of the audit services is instrumental in providing assurance that management controls

within audited arrangements provide appropriate assurance that the risk of corruption is well managed, and that anti-corruption strategies and agencies are performing appropriately.

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corruption Q22. What audit tools and techniques, if any, does your SAI perform to detect corrupt activities

and transactions in the government? Please list them down according to the order of effectiveness (examples: data mining, network analysis, risk analysis etc.)

( 1 ) ........................................................................... ( 2 ) ……………………………………………………………………… ( 3 ) ……………………………………………………………………… ( 4 ) ……………………………………………………………………… ( 5 ) ……………………………………………………………………… As noted above: the ANAO does not seek to directly detect corruption via our audit services.

Q23. Based on your SAI’s experience, please discuss briefly the most high profile corruption case that it uncovered; and what are the best audit practices that led to its detection?

No response

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corruption Q24. How does your SAI report any encountered and/or detected corrupt activities and

transactions in the government? ( ) Our SAI issues a special audit report specifying the audited corrupt activities

and transactions, the pecuniary loss suffered by the government, the persons responsible/liable and the laws and rules violated.

( ) Our SAI does not issue a special audit report but the corrupt activities and transactions encountered and/or detected will be incorporated in

the regular audit report. ( ) Other (please elaborate) the focus of the ANAO’s work is on financial

management and administrative performance. Potential cases of corruption are referred to the appropriate law enforcement agency for investigation.

Q25. To which parties does your SAI submit the audit report containing findings on corrupt

activities and transactions? (Please check all that applies) ( ) Entity’s management ( ) Legislative body ( ) Executive body ( ) Law Enforcement Agency ( ) Others (please specify)

…………………………………………………………………… Note: not applicable. As noted above potential cases of corruption are referred to the

appropriate law enforcement agency for investigation.

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corruption Q26. What legal actions, if any, can your SAI initiate against the perpetrators of corrupt

activities and transactions? ( ) Criminal prosecution ( ) Civil forfeiture and seizure of the proceeds of corruption ( ) Civil suits for recovery of the government funds and properties ( ) Administrative sanctions ( ) Our SAI’s role is recommendatory in nature ( ) Others (please specify)

……………………………………………………………………

Q27. What mechanism, if any, does your SAI adopt to ensure that the audit findings and recommendations contained in your audit reports are properly acted upon by the concerned body enumerated under question no. 21? Please elaborate your answer.

For financial statements audits, more serious findings are published bi-annually (see Interim Phase of the Audits of the Financial Statements of Major General Government Sector Agencies for the year ending 30 June 20XX; and Audits of the Financial Statements of Australian Government Entities for the Period Ended 30 June 20XX). Progress against all findings is monitored through each audited agency’s audit committee (the ANAO is represented on each audit committee).

For performance audits, progress against all recommendations is monitored through each audited agency’s audit committee. Follow-up performance audits are conducted by the ANAO for selected reports and recommendations (see for example: ANAO Report No 53 2012-13 Agencies' Implementation of Performance Audit Recommendations).

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Assessment of anti-corruptionPart 3: Assessment of SAI’s performance and integrity in

the prevention and detection of corruption Q28. In what field of the anti-corruption efforts of your country does your SAI contribute best?

Please rank them accordingly. ( ) Preventive actions by providing recommendations to improve entity’s

anti-corruption and internal control system and sharing best practices and benchmarking information to assist decision-makers

( ) Detective actions through the conduct of fraud/forensic audits and timely reporting of the audit results to the Prosecution Department

( ) Punitive measures by implementing criminal, civil and administrative/disciplinary sanctions

( ) None of the above Q29. How would you rate the performance of your SAI in combating corruption? Please explain the

methodology used to gauge your performance and reasons for the rating. ( ) Very

poor…………………………………………………………………………………… ( ) Poor

……………………………………………………………………………………….. ( )

Fair…………………………………………………………………………………………… ( ) Good Within the scope of the ANAO mandate and role, our performance has

been good. Evidence to support this assertion includes the ongoing low levels of known (and estimated) corruption in Australian Government entities. The value placed on the Auditor-General’s role is also evidenced by his inclusion in the management arrangements for the proposed Australian Government’s National Anti-Corruption Strategy.

( ) Very good……………………………………………………………………………………

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Assessment of anti-corruptionPart 3: Assessment of SAI’s performance and integrity in

the prevention and detection of corruption Q30. What methods, if any, do your SAI use to obtain objective information about the

effectiveness of its anti-corruption policy and performance? ( ) Third-party satisfaction surveys ( ) In-house research and studies ( ) Others (please specify)

……………………………………………………………………. ( ) None Q31. Has your SAI implemented a self-integrity assessment such as the “IntoSAINT

Methodology” mentioned in the exposure draft of ISSAI 5700? ( ) Yes (please elaborate)

……………………………………………………………………. ( ) No

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Assessment of anti-corruptionPart 4: Audit limitations in the prevention and detection

of corruption Q32. Which types of controls do not have a sufficient level of maturity to ensure the integrity

and competence of your SAI in the field of anti-corruption? ( ) Integrity legislation and regulations ( ) Management attitude ( ) Organizational culture ( ) Professional SAI standards ( ) Response to integrity violations ( ) Recruitment and selection ( ) Administrative organization and internal control ( ) Integrity awareness ( ) SAI legal framework ( ) Vulnerability / risk analysis ( ) Audit and monitoring ( ) Accountability ( ) None

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of corruption Q33. Do you think that there must be changes in the legal framework and organizational

structure of your SAI to better address growing demand for anti-corruption activities? ( ) Yes, (please elaborate)

………………………………………………………………….. ( ) No Q34. Which of the following factors do you think hampers your SAI’s role in the fight against

corruption? Please check all that applies. ( ) Corrupt people are not severely punished ( ) Collusion between law enforcers and corrupt people ( ) Authorized officials lack commitment ( ) Some superiors cover up for their subordinates ( ) Fear of retaliation and victimization ( ) People’s and media’s participation not mobilized well ( ) Lack of competent and experienced staff to handle corruption cases ( ) Lack of capacity and financial resources of SAI ( ) Other (Please specify)

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of corruption Q34 continued

Note: none. The greatest risk lies in complacency in audited agencies and the ANAO. In a financial statements context, auditors are responsible for obtaining reasonable assurance that

the financial report taken as a whole is free from material misstatement whether caused by fraud or error. Auditors are required to maintain professional skepticism throughout the audit, considering the potential for agency management to override controls (Auditing Standard ASA 240).

In a performance audit context, our auditors are expected, as part of planning and conducting an

audit, to make an assessment of whether fraud or related wrongdoing many have a significant impact on the program or activity. If the risk of fraud or related wrongdoing is high, the audit should include procedures designed to assess the adequacy of the audited agency’s management of this risk.

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of corruption Q35. Do the relevant laws, rules and regulations guarantee those conducting fraud/forensic

audits the rights to the following? (Check all that applies) ( ) Immunity from harassment cases ( ) Insulation from political pressures ( ) Legal and financial assistance to auditors acting as witnesses in a corruption

case ( ) Power to issue compulsory processes to command submission of required

documents ( ) Access to government offices’ accounting records, financial statements,

contracts and other legal instruments ( ) Investigatory and inquisitorial powers such as power to punish for contempt ( ) Exemptions from the Secrecy of Bank Deposits law ( ) Others (please specify)

…………………………………………………………………. Note: not applicable. However, the auditor general and his staff,are independent and

audit reports attract Parliamentary Privilege (thereby conferring immunity from prosecution). Auditors have free access to all relevant records and Australian Government premises.

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Assessment of anti-corruptionPart 5: Cooperation among SAIS and anti-coorupion

agencies Q36. Good governance is the best antidote to fraud and corruption. Please elaborate the role

of your SAI towards creating awareness and promoting good governance among government ministries or departments and agencies in your country.

Through our financial audits and program of performance audits, and our Better Practice Guides, the ANAO takes the lead role in promoting good governance among Australian Government agencies. Our audits and Better Practice Guides are published on the ANAO website, and attract strong parliamentary and media interest. The ANAO works closely

with audited agencies to promote the outcome of our audit activity, particularly through liaison with senior agency management and through our role on the internal audit committees for each agency.

Q37. Has your SAI ever cooperated with foreign counterparts in fighting corruption? If yes,

please specify the projects, activities or subject matter. ( ) Yes

…………………………………………………………………………………………. ( ) No ( ) Other (Please elaborate)

………………………………………………………………… Q38. Are there legal instruments in your country that provides for a joint undertaking among

your SAI and anti-corruption agencies relative to the prevention, detection, reporting and prosecution of corrupt activities and transactions in the government?

( ) Yes (please specify)……………………………………………………………………………….

( ) No

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Assessment of anti-money launderingPart 1: Organisational structure and legal mandate of SAI Q1. Does your Constitution, law or regulation creating and/or dealing with your SAI contain

specific articles about its roles and responsibilities on the prevention and detection of money laundering?

( ) If yes, please summarize them briefly ………………………………………………..

( ) No Q2. Does your SAI have its own “anti-money laundering strategy” implemented in accordance

with the national anti-corruption strategy? ( ) Yes (please summarize the goals and actions)

……………………………………….. ( ) No – not applicable

Q3. Does detecting money laundering already embedded in the regular audit services that your SAI has been performing?

( ) Yes, it is an audit focus of the audit services being rendered by our SAI ( ) Yes, but merely incidental to the audit services being rendered and not an

audit focus ( ) No, our SAI has a separate anti-money laundering program or strategy ( ) No, not a concern of our SAI but by the anti-money laundering agencies ( ) Others (please specify)

……………………………………………………………………

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Assessment of anti-money launderingPart 1: Organisational structure and legal mandate of SAI Q4. Are there special departments, offices or units within your SAI which have been assigned

specific functions and/or powers in the prevention, detection and investigation of money laundering? ( ) If yes, please specify the name of the departments, offices or units

……………… ( ) No, all departments, offices or units conducting audit are mandated to

prevent, detect and investigate money laundering ( ) No, our SAI does not deal with preventing, detecting and investigating money

laundering ( ) No, our SAI’s duties are merely confined in the evaluation of internal control

system and providing recommendations for improvements Q5. If there are special departments, offices or units within your SAI which are responsible for

combating money laundering, for how long such departments, offices or units have been in place? ( ) more than 20 years ( ) 10-20 years ( ) 5-10 years ( ) less than 5 years ( ) None Note: not applicable

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Assessment of anti-money launderingPart 2: Role of SAI in the detection and investigation of

money laundering Q6. How would you describe the approaches of your SAI, if any, in the detection and

investigation of money laundering? ( ) Proactive through a risk based audit approach aimed at detecting red flags or

symptoms of money laundering ( ) Reactive approach based only on complaints and referrals received ( ) Both proactive and reactive ( ) Limited only to detecting red flags or symptoms of money laundering which

will be referred to the anti-money laundering agency for the conduct of necessary investigation

( ) Neither proactive nor reactive as our SAI’s role is limited only to rendering opinion on the fair presentation of financial statements of audited entities

( ) Detecting or investigating money laundering activities is not included in the mandate of our SAI

( ) Others (please specify) ……………………………………………………………………

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money laundering Q7. Upon discovery of red flags or symptoms of money laundering during a regular audit,

what are the available courses of action for your SAI? Check all that applies. ( ) The office or department which discovered the red flags will conduct a full

blown investigation ( ) The red flags will be referred to the special department, office or unit of the

SAI for the conduct of a full blown investigation ( ) The red flags will be referred by the SAI to the anti-money laundering agency

for the conduct of a full blown investigation ( ) The red flags will not be pursued but will be reported to management as

internal control weaknesses with recommendations for improvement ( ) Others (please specify)

……………………………………………………………………

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money laundering Q8. Does your SAI have available facilities or mechanism to promote and intensify detection

of money laundering? Check all that applies. ( ) Hotline devoted solely to money laundering complaints ( ) Money laundering alert section in the SAI website ( ) Citizens help desk that caters money laundering complaints in whatever form ( ) Legal and financial assistance for auditors, witnesses and whistle blowers ( ) Anti-money laundering researches ( ) Anti-money laundering educational/training programs ( ) Citizens Participatory Audit Program ( ) Promulgation of relevant accounting and auditing rules and regulations ( ) Declaration of assets and liabilities of public officials ( ) Governing Code of Ethics for Government Accountants and Auditors ( ) Public Information Office with linkages to all sorts of media ( ) Updated publication of audit reports through the SAI’s website ( ) Others (please specify)

…………………………………………………………………...

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money laundering Q9. Does your SAI have sufficient audit mandate, tools and techniques to detect money

laundering which consists of three basic steps: Placement, Layering and Integration. With the current mandate, which of the three is most accessible to audit?

( ) Placement ( ) Layering ( ) Integrating ( ) None of the above ( ) Other (Please specify) It is not the role of the ANAO to directly detect money

laundering. This is the function of the specialist FIU – the Australian Transactions and Analysis Centre (AUSTRAC). The ANAO provides assurance as to the effectiveness of AUSTRAC’s administration through the conduct of financial statements audits of the entity and performance audits of its operations (including Audit Report No 47 2012-13 AUSTRAC’s Administration of its Financial Intelligence Function).

Q10. Does your SAI have a specific manual or guideline on anti-money laundering that helps

auditors prevent and/or detect and investigate money laundering incidents? ( ) If yes, please specify the title of the manual

…………………………………………. ( ) No

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money laundering Q11. Does your SAI have adequate number of audit personnel that have specific skills in the

detection and investigation of money laundering? ( ) Yes (estimated number of personnel with special training/skills)

…………………. ( ) Very few personnel have adequate training in the detection and investigation

of money laundering ( ) Audit personnel have no skills of detecting money laundering Note: the role of the ANAO does not extend to directly detecting money laundering.

Consequently, specific skills in directly detecting money laundering are not a priority. Q12. Does your SAI provide regular trainings to auditors about anti-money laundering in

accordance with an annual training program to be sure that auditors possess appropriate skills, knowledge, and abilities to identify and assess any potential irregularities?

( ) Yes ( ) No Note : see response to Q11.

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money laundering

Q13. How does your SAI report any encountered and/or detected money laundering incidents? ( ) Our SAI issues a special audit report specifying the detected money

laundering incidents, the pecuniary loss suffered by the government, the persons responsible/liable and the laws and rules violated.

( ) Our SAI does not issue a special audit report but the money laundering incidents encountered and/or detected will be incorporated in the regular audit report.

( ) Other (Please specify) Any concerns about potential money laundering would be referred to the appropriate law enforcement agency or to AUSTRAC.

Q14. To which parties does your SAI submit the audit report containing findings on money

laundering? (Please check all that applies) ( ) Entity’s management ( ) Legislative body ( ) Executive body ( ) Law Enforcement Agency ( ) Others (please specify)

………………………………………………………………. Note: not applicable. While audit response are provided to entity management and to the

Parliament (legislature), the role of the ANAO does not extend to directly detecting money laundering.

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money laundering Q15. What legal actions, if any, can your SAI initiate against the perpetrators of money

laundering? ( ) Criminal prosecution ( ) Civil forfeiture and seizure of the proceeds of money laundering ( ) Civil suits for recovery of the government funds and properties ( ) Administrative sanctions ( ) Our SAI’s role is recommendatory in nature ( ) Others (please specify)

………………………………………………………………….

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Assessment of anti-money launderingPart 3: Assessment of SAI’s performance and integrity in

the detection and investigation of money laundering

Q16. In what field of the anti-money laundering efforts of your country does your SAI contributes best? Please rank them accordingly.

( ) Preventive actions by providing recommendations to improve anti-money laundering entity’s internal control system and sharing best

practices and benchmarking information to assist decision-makers ( ) Detective actions through the conduct of investigations and timely reporting of

the audit results to the Prosecution Department ( ) Punitive measures by implementing criminal, civil and

administrative/disciplinary sanctions ( ) None of the above Note: the role of the ANAO in respect of money laundering is to provide assurance that

the national anti-money laundering strategy and agency are being appropriately managed. The ANAO does not have a role in directly detecting or combating money laundering.

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Assessment of anti-money launderingPart 3: Assessment of SAI’s performance and integrity in

the detection and investigation of money laundering

Q17. How would you rate the performance of your SAI in combating money laundering? Please explain the methodology used to gauge your performance and the reasons for the rating?

( ) Very poor …………………………………………………………………………………..

( )Poor…………………………………………………………………………………………

( ) Fair…………………………………………………………………………………………..

( ) Good. ( ) Very

good…………………………………………………………………………………… ( ) Money laundering is not included in the legal mandate of our SAI Q18. What methods, if any, do your SAI use to obtain objective information about the

effectiveness of its anti-money laundering policy and performance? ( ) Third-party satisfaction surveys ( ) In-house research and studies ( ) Others (please specify)

…………………………………………………………………… ( ) None – not applicable

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Assessment of anti-money launderingPart 4: Audit limitations in the detection and

investigation of money laundering Q19. Do the relevant laws, rules and regulations authorize your SAI to have full access to bank

records of government officials and private individuals who has/had transactions with the government?

( ) Yes ( ) No Note: the Auditor-General Act would enable the ANAO to access this information, but it is

not used for this purpose because the ANAO does not have a role in directly detecting or combating money laundering.

Q20. Which of the following factors do you think hampers your SAI’s role in the fight against

money laundering? Please check all that applies. ( ) Corrupt people are not severely punished ( ) Collusion between law enforcers and corrupt people ( ) Authorized officials lack commitment ( ) Some superiors cover up for their subordinates ( ) Fear of retaliation and victimization ( ) People’s and media’s participation not mobilized well ( ) Lack of competent and experienced staff to handle money laundering cases ( ) Lack of capacity and financial resources of SAI ( ) Other (Please specify)

……………………………………………………………………. Note: not applicable. The ANAO does not have a role in directly detecting or combating

money laundering.

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Assessment of anti-money launderingPart 4: Audit limitations in the detection and

investigation of money laundering Q21. What is necessary course of action to improve the role of your SAI in the fight against money

laundering? ( ) A change in the laws and regulations to ensure that tour SAI has the sufficient

mandate ( ) Reorganization of the SAI to devote necessary resources (auditor and budget)

to the fight against money laundering ( ) Need for professional training to improve the skills and expertise of auditors to

the fight against money laundering ( ) Need for professional training to awareness of auditors for anti-money

laundering ( ) No action is needed since our SAI is a very active institution in the fight

against money laundering ( ) Other (Please specify). No action is needed as the ANAO does not have a

role in directly detecting or combating money laundering, nor does it see the need to have such a role.

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Assessment of anti-money launderingPart 5: Cooperation among SAIs and anti money

laundering agencies Q22. Does your SAI have exchange of information and experience with other SAIs towards

enhancing the capabilities and methodology of audit in detecting money laundering? ( ) Yes. If yes, please elaborate: ……………………………………….. ( ) No ( ) Other (Please specify)

…………………………………………………………………… Q23. Are there legal instruments in your country that provides for a joint undertaking among

your SAI and anti-corruption agencies relative to the prevention, detection, reporting and prosecution of money laundering?

( ) Yes (please specify) …………………………………………………………………….

( ) No Q24. Does your SAI have any close cooperation and attachment of officers with other

enforcement agencies to acquire investigative skill, knowledge and experience in the fight against money laundering?

( ) Yes. Please elaborate: ………………………………………………………………..

( ) No ( ) Other (Please specify)

…………………………………………………………………………..

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ANAO role in anti-corruption and anti-money laundering:

summary assessment

ANAO mandate and role falls within the Westiminster/Parliamentary model of SAI– Reports are public, recommendations are advisory– No mandate to conduct criminal investigations or impose penalties etc

ANAO does not seek to directly detect corruption or money laundering via our audit services. – Instead our focus is on providing assurance that management controls within audited

arrangements provide appropriate assurance that the risk of corruption and money laundering is well managed, and that anti-corruption and anti-money laundering strategies and agencies are performing appropriately.

– If concerns about corruption or money laundering are identified during audit activities, there is an established protocol to refer these to the specialist anti-corruption and anti-money laundering agencies.

Overall, ANAO is comfortable with current arrangements and does not see a pressing need to change the legislative mandate or develop specialist in-house detection and investigation capabilities.

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summary assessment Why are we comfortable?– The system as it is currently structured, is working reasonably well: rates of known and

estimated official corruption and money laundering are very low in Australia, by global standards, and the available trend information is flat/downwards, suggesting that the problems are stable or even improving.

– Without a sense of ‘crisis’ there is unlikely to be parliamentary support for changes to ANAO legislation/mandate or financial support for increased audit activity.

– The key issue for the ANAO is to monitor changes within Australia, and if worrying trends emerge, to take action (drawing on the work of this research project).

An interesting observation about cause/effect– The ANAO has a relatively weak and indirect approach to combating corruption and money

laundering. However, rates of corruption and money laundering in Australia are low This suggests that, the absence of strong/direct SAI arrangements does not automatically mean that rates

of corruption/money laundering will be high. Proposition: strong/direct SAI arrangements are primarily a reaction to the failure (or perceived failure) of

other government mechanisms to control corruption and money laundering

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considerations for our project 3 things to consider in developing our report and any better practice

guidance:

1. Context is vital Report needs to recognise the impact of the operating context for each SAI, including rates

and nature of corruption /money laundering and their respective mandates/models Guidance needs to be able to be tailored to each SAI’s needs and contexts

– perhaps a matrix of options to choose from?

2. Proportionality is important if the problem is small you don’t need a big response! If the problem is small and the trend information is neutral or positive, then there will be

little support for change (‘the system is working’) If either of these preconditions are not met, then conditions will be more positive for

introducing stronger audit arrangements.

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considerations for our project 3 things to consider in developing our report and any better practice

guidance (continued):

3. Realism is important Systemic issues such as endemic corruption are beyond the capability of an SAI to resolve

on its own. SAIs are one part of a political, social and economic system and our audit activity should be viewed in this light

If stronger audit arrangements are considered necessary , careful consideration needs to be given to defining a realistic desired outcome, and how the SAI can assure itself that its actions (and not the actions of others) are achieving the desired effect

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Further information

Web: www.anao.gov.auAddress: GPO Box 707, Canberra ACT

2601 Australia

Email: [email protected]: 61 (0)2 6203 7436

http://www.anao.gov.au/

mailto:[email protected]

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