translation of the draft audit bureau law

October 2004 This document was produced for review by the United States Agency for International Development. It was prepared by Chemonics International Inc.

Translation of the Draft Audit Bureau Law

AMIR II Achievement of Market-Friendly Initiatives and Results

JORDAN AMIR II Achievement of Market-Friendly Initiatives and Results Contract No. 278-C-00-02-00210-00 The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

Contract No.: 278-C-00-02-00210-00 Contractor Name: Chemonics International, Inc. USAID Cognizant Technical Office: Office of Economic Opportunities USAID Jordan Date of Report: October 2004 Document Title: Translation of the Draft Audit Bureau Law FINAL Author’s Name: IBLAW Activity Title and Number: Achievement of Market-Friendly Initiatives

and Results Program (AMIR Program)

PSPI Component Task No. 591.03.01 Translate the Draft Audit Law

Translation of the Draft Audit Bureau Law Final Report October 2004 The opinions expressed herein are those of the author(s) and do not necessarily reflect the opinions of the United States Agency for International Development or the United States Government or Chemonics International or any firms in the AMIR Program consortium or the management of the AMIR Program.


Data Page Name of Component: Private Sector Policy Initiative Author: IBLAW Practice Area: Trade and Investment Service Offering: N/A List of Key Words Contained in Report: Audit Bureau Law, Official Gazzette, legislations, regulations, oversight, entities, violations, autditing

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Abstract This report is a translation of the Draft Audit Bureau Law into English.

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Table of Contents Data Page ............................................................................................................................ ii

Abstract .............................................................................................................................. iii

Table of Contents............................................................................................................... iv

Executive Summary ............................................................................................................ 1

DRAFT AUDIT BUREAU LAW ...................................................................................... 2


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Executive Summary This report is a translation of the Draft Audit Bureau Law into English.

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DRAFT AUDIT BUREAU LAW Article (1): This Law shall be known as the Audit Bureau Law for the

year 2004 and shall come into effect one month after its publication in the Official Gazette.

Article (2): The Audit Bureau shall be considered an independent

department for financial and administrative audit, that is a separate legal entity with financial and administrative autonomy, which reports to His Majesty the King. The Bureau shall, in its capacity, undertake any legal action, and shall be represented in its legal proceedings by the Civil Public Attorney and/or any other person designated by him for this purpose.

Article (3): The Audit Bureau shall have the following objectives:

1. To exercise oversight over public moneys and ensure

their proper use within the purposes stipulated in the legislation in force.

2. To enhance the efficiency, effectiveness, credibility and economy of the entities within its purview .

3. To represent principles of rule of law, integrity, transparency and accountability.

4. To represent standards of conduct the for sound and honourable performance of public posts within government and other entities subject to the Bureau’s oversight.

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Article (4): Notwithstanding what is stated in any other legislation, the

Audit Bureau shall have oversight over the following entities :

1. Ministries and government departments.

2. Official public institutions and public corporations.

3. Municipal and rural councils and joint services councils.

4. Any entity whose charter stipulates that its moneys constitute public property.

5. Any other entity whose accounts are subject to review and audit upon request of the Council of Ministers.

Article (5): A. The Audit Bureau shall have its own independent

budget which shall be prepared and approved by the Director of the Bureau and included in the general state budget as submitted.

B. The fiscal year of the Bureau shall begin on the first of January and shall end on the thirty-first of December of the same year.

Article (6): 1. The Audit Bureau shall be managed by a Director who

shall be appointed by a Royal Decree upon the recommendation of the Council of Ministers, and whereby the appointment shall be notified to the Lower House of Parliament at its first ordinary session.

2. Before assuming his post, the Director shall take the following oath before His Majesty The King “I swear by God Almighty to be loyal to The King, observe the Constitution, serve the nation and faithfully perform the duties entrusted to me”.

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3. Subject to the King’s approval, the Director of the Audit Bureau shall be tried before the Supreme Council for any job related crimes imputed to him .

Article (7): The Director of the Audit Bureau shall not be dismissed

from his post, nor shall his services be terminated except for any of the following reasons:

1. The issuance of a Royal Decree relieving him from his post or accepting his resignation.

2. Attainment of retirement age.

3. Established health related job disability.

4. His acceptance of another assigned post.

Article (8): 1. The Audit Bureau Director shall have the rank, salary

allowances and entitlements of a minister ex-officio and shall exercise his authorities according to the regulations issued pursuant to this Law.

2. The Bureau’s affairs and administration, the disbursement of its allocations, and the appointment, promotion, transfer, leaves, financial rights, and any other matter related to its employees shall be governed pursuant to regulations issued for this purpose.

3. The Audit Bureau Director may seek expert assistance in matters which require technical expertise, and shall stipulate remuneration for such services from the Bureau’s budget assigned for this purpose.

Article (9): The Director of the Audit Bureau shall not: 1. be a member of either House of the Parliament.

2. exercise any political or party activity.

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3. buy or lease any State movable or immovable property, including by public auction, nor be awarded any government contract or privilege other than his prescribed financial rights, and with the exception of residential loans and real estate .

4. participate in the establishment of any company, corporation or commercial or financial entity entitled to a privilege or subsidy from government, or in which government is a shareholder , or which is subject to the Bureau’s oversight.

5. be a member of the board of directors of any company or entity practicing business for profit.

6. receive a salary from any company or perform or participate in any commercial or financial activity.

7. serve during a period of one year from the date of the termination of his service as Director of the Audit Bureau a member of the board of directors of any corporation, entity or company practicing business for profit and subject to the Bureau’s oversight, unless otherwise stipulated by legislation.

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Article (10): A Secretary General shall be appointed for the Bureau by a

decision of the Council of the Ministers and upon the recommendation of the Bureau’s Director . The Secretary General shall exercise his authorities pursuant to the provisions of this Law and the regulations issued pursuant thereto.

Article (11): The Secretary General shall assume the authorities of the

Bureau’s Director in his absence or during vacancy of the post pending the appointment of a new Director .

Article (12): The Audit Bureau shall assume the following tasks: 1. Oversee and audit revenues and expenditures and

deposit, advances, loans, grants, settlements and inventory accounts within and outside the Kingdom as provided for in this Law.

2. Provide advise in financial and accounting matters to the entities subject to the Bureau’s oversight.

3. Ensure that the administrative decisions and procedures in the entities within the Bureau’s oversight comply with the legislations in force.

4. Oversee the performance and assess the return on expenditures of the entities subject to its oversight to ensure the effective, efficient and optimal use of public moneys.

Article (13): In respect of revenues, the Audit Bureau shall be

responsible for: 1. Auditing the accrued taxes, fees and returns to ensure

that their assessment and accrual are consistent with the laws and regulations in force.

2. Auditing gifts, donations and loans by local and foreign entities.

3. Auditing transactions of sale, commissioning, lease

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and disposal of government lands and real estates.

4. Auditing collection of revenues to ensure that that such occur on due date as stipulated in the relevant laws and regulations, that the Law for Collection of Public Moneys is applied to defaulting taxpayers, and that the collected funds have been supplied to the general account of the treasury and entered in the sections and items assigned thereto in the general budget.

5. Auditing revenue write-offs and exemptions to ensure their conformity with the laws and regulations in force.

Article (14): As regards expenditures, the Audit Bureau shall be

responsible for: 1. Auditing expenditures to ensure that such

disbursements comply with the designated purposes and are pursuant to the laws and regulations in force.

2. Auditing supporting disbursal documents for validity and consistency of their amounts with recorded entries.

3. Ensuring that disbursal requests are executed duly and by the competent entities .

4. Ensuring that the expenditures are entered in the assigned sections and in the general budget.

5. Ensuring that budget allocations are exceeded only subject to the prior approval of the competent authorities and pursuant to the laws and regulations in force.

6. Verifying the grounds for non-disbursement, in part or in whole, of allocations appropriated for the new activities.

7. Ensuring the implementation of the General Budget Law and its annexes and the validity of the financial orders and transfers issued pursuant thereto.

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Article (15): The Audit Bureau shall be responsible for auditing all

deposit, advance, loan, gifts, donations and settlement accounts, to ensure the validity of their pertinent transactions, their conformity with the amounts stated in the records, their due documentation and due recovery of the advances and loans and the interests incidental thereto .

Article (16): The Director of the Audit Bureau, or any officer authorized

thereby may at any time audit the accounts of any entity subject to the Bureau’s oversight, and may take inventory of the funds, stamps, financial documents, and supplies thereof. The employees of such entities shall cooperate therewith to facilitate his task and shall furnish such with any required information and data . The Director may also notify them of any concerns and seek clarifications about grounds therefor and about any apparent delays in concluding transactions.

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Article (17): The Audit Bureau Director, or any officer authorized

thereby, may audit the inventory accounts records, books, registers and relevant documents of entities subject to his oversight, verify the validity of their annual inventory operations, and investigate causes for any stockpiling or damage to stored materials, and may propose methods for the proper safe-keeping and maintenance of stored material, and principles for setting proper storage plans.


thereby, may audit any electronic document, records, data or systems, or any documents not mentioned in the preceding articles if he so deems necessary, and shall have access to the accounting and financial transactions of any entity subject to his oversight, at any stage of such transactions, and whether in respect of revenues or expenditures. The Director may also contact directly the employees responsible for such accounts, and correspond therewith and obtain copies of said documents therefrom.


thereby may audit administrative decisions which have a financial impact or relate to institutional performance, as well as decisions affecting personnel at the entities subject to his oversight to ensure their conformity with the legislations in force.

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Article (20): The Audit Bureau Director may perform his audits in a

manner to ensure that current accounts are handled duly and that preventive measures against [their] distortion and manipulation are adequate and effective. The Director may also comment upon any shortcomings in financial or administrative legislation pertaining to financial matters, and may seek to ensure that the laws, regulations and instructions related to financial and administrative matters and accounts are strictly observed. He may also comment upon any failure or fault in the application of the said legislation and upon the adequacy of regulations and instructions in realizing the purposes of financial legislation. .


thereby may participate in committees formed by the entities subject to the Bureau’s oversight, provided the kind of committees and their value [sic] and all matters related thereto shall be specified according to the instructions set by the Director.


thereby may seek to verify the existence of the internal control unit at any entity subject to the Bureau’s oversight, and assess the effectiveness and weaknesses of such. The Director may also have access to all reports and information received from such units relating to financial and administrative matters, and to the reports of investigations in violations related to financial and administrative matters. The Director may also request any further information and explanations pertaining to the Bureau’s work from any entity subject to its oversight.

Article (23): A. In respect of performance monitoring and evaluation of

return on expenditure, the Audit Bureau may: 1. Audit the investments of entities subject to the

Bureau’s oversight and ensure their soundness and the appropriateness of returns thereon in light of the risks

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incurred.

2. Monitor the implementation of the projects set forth for in the plans of entities subject to the Bureau’s oversight to ensure proper use of the financial allocations prescribed in their budgets, completion of the projects within the prescribed budget and time, and realization of stated project goals, with clarification regarding any shortcomings or diversions therefrom.

3. Ensure that resources are procured in appropriate, quantities, qualities and prices and utilized appropriately and cost effectively.

B. Entities subject to the Bureau’s oversight shall provide the Bureau with a copy of the economic feasibility study of proposed investment projects one month prior to start of implementation, and shall notify the Bureau of any amendments to the study after implementations and of the grounds therefore

Article (24): The Audit Bureau may audit accounts at its premises, the

premises of the relevant entities, or in the field , as decided by the Bureau’s Director. Entities subject to the Bureau’s oversight shall, upon request, furnish the Bureau’s employees with a suitable place at their premises and shall avail to them the facilities and services as of their own employees.

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Article (25): The ouputs of the Audit Bureau’s oversight activities which

include the Bureau’s remarks, inquiries and results of audits of entities subject to the Bureau’s oversight shall be specified in instructions issued by the Bureau’s Director .

Article (26): A. The Bureau’s Director may ask the entities subject to

its oversight to undertake the following measures:

1. Refrain from the financial and administrative errors and violations and provide the grounds for committing such;

2. Cease any financial transaction or measure found to be contrary to the provisions of the legislations in force.

B. Entities subject to the Bureau’s oversight shall respond to the remarks and inquires in the Bureau’s audit outputs as follows:

1. Within a period not exceeding thirty days, if the headquarter of that the entity is within the Kingdom.

2. Within a period not exceeding sixty days, if the headquarter of that the entity is outside the Kingdom.

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Article (27): If a person fails to allow the Audit Bureau employee to

conduct any audit or investigation provided for by this Law, the Director, or the said employee, shall be entitled to wax-seal the boxes, closets or other places wherein the items and accounts to be examined and audited are found and to affix the official seal thereon If the objection persists, the Director or the said employee may summon the judicial police and seek their assistance to complete the sealing operation and guard the sealed premises until removal of the seals upon approval of the said employee .

Article (28): Any person who removes the seal affixed in accordance

with the preceding Article shall be subject to a fine of not less than 500 Jordanian Dinars.

Article (29): Any person who fails to allow employees of the Audit

Bureau to perform their duties as stipulated in this Law , or who commits any of the violations stated therein, shall be considered to be obstructing such employees from performing their official duties, and shall be subject to a fine of not less than 250 Jordanian Dinars for every month or part of a month during which the obstruction or violation continues, and without prejudice to other disciplinary actions stipulated in the applicable personnel regulations.

Article (30): The procès-verbal made by the Audit Bureau Director, or

any officer authorized thereby shall be accepted prima facie.

Article (31): 1. The entities subject to the Bureau’s oversight shall

notify the Bureau of incidents of misappropriation, theft, forgery or gross negligence in respect of public moneys promptly upon discovery, and of the measures taken in their respect, and shall also inform it with the investigation reports, and decisions taken against the

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offenders. The Audit Bureau Director may investigate such incidents by special committees formed by him for this purpose.

2. If the Bureau Director finds that the violation is of criminal nature , he may refer the matter to the attorney general or the disciplinary authorities, as the case may require.

3. If the Bureau’s Director finds that the financial violation is such that it requires civil action, , he may request the minister of finance to file a lawsuit pursuant to the Government Actions Law and the other laws in force, whereby the minister of finance shall take the necessary legal actions within one month from the date of the Bureau’s request .

Article (32): Auditor’s of the ministry of finance at the entities subject

to the Bureau’s oversight and financial officials shall notify the Bureau of all cases of disbursement involving financial violations within one month from their occurence.

Article (33): 1. The Audit Bureau Director shall present an annual

report with his comments about the Government closing accounts and shall submit such to the Lower House of Parliament and shall send copies thereof to the Prime Minister and Minister of Finance. The report shall include the Director’s remarks about the entities subject to the Bureau’s oversight which have been audited by him pursuant to paragraphs (1) and (3) of Article (4) of this Law, indicating therein the committed violations and the liabilities arising therefrom. This shall be done at the beginning of every ordinary session or upon request of the Lower House .

2. The Bureau Director shall prepare an annual report about the closing accounts of the official public institutions and public corporations, and shall present such to the Lower House of Parliament and send copies thereof to each of the Prime Minister and

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Ministry of Finance. The report shall include the Director’s remarks about conclusions of his audits, indicating the committed violations and the liabilities arising therefrom. This shall be done at the beginning of every ordinary session or upon request of the lower House of Representatives.

3. The Bureau’s Director shall present a report to the Council of Ministers about the results of his audits of those entities pursuant to the provisions of paragraph (5) of Article (4) of this Law, and shall present copies of such to the Lower House of Parliament and the administrative entity relevant to the audited entity.

4. The Bureau’s Director shall include in the reports mentioned in the preceding paragraphs a performance evaluation of each entity subject to his oversight pursuant to the provisions of this Law.

5. The Bureau’s Director may, at any time, present to the Lower House of Parliament special reports to draw attention to matters he deems of the seriousness and significance calling for expedited consideration.

6. The Ministry of Finance shall submit the closing account to the Audit Bureau within a maximum of six months from the end of the fiscal year.

7. The entities subject to the Audit Bureau’s oversight shall provide the Bureau with their budgets, closing accounts, and any settlements and additional amendments thereto, and with their financial statements, the results of their annual warehouse inventory, and there performance reports.

8. The Council of Ministers shall not approve the closing accounts of official public institutions and public corporations before consulting the Bureau thereabout.

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Article (34): Any person employed or hired by any entity subject to the

Bureau’s oversight shall be deemed to have committed a violation necessitating disciplinary or penal measures, and without prejudice to what is provided for in other legislation in force, in any of the following cases:

1. Failure to respond to the outputs of the Bureau’s audits , delayed responses, or failure to address such outputs during the set period without valid cause shown. In this respect, replies which are evidently intended for protraction and procrastination are deemed non-responsive.

2. Concealing documents and financial statements or failing to submit such upon request or intentionally delaying their submission.

3. Delays by competent entities without good cause in notifying the Bureau of measures taken against financial violations occurring therein or failure to take necessary measures without good cause.

4. Failing to facilitate the task of the Bureau’s employees or to cooperate with the committees formed by the Bureau pursuant to this Law.

Article (35): The Bureau’s Director may disregard de minimus financial

or administrative violations which do not cause damage to the public treasury, or whose value does not exceed (100) Jordanian Dinars, upon return of the amount to the treasury by the responsible employee and good cause shown to the Director.

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Article (36): Divergent opinion between the Bureau and any entity

subject to its oversight shall be submitted to the Council of Ministers for a decision thereupon. The Director shall include in his reports to the Lower House all matters of divergence.

Article (37): The Council of Ministers shall, upon the Director’s

recommendation issue the regulations necessary for the implementation of the provisions of this Law, including those governing the Bureau employees.

Article (38): The Audit Bureau Director shall have the authority to issue

instructions governing the Bureau’s affairs and required manuals therefor.

Article (39): The Audit Bureau shall post audit expenditures , however

the Bureau’s Director may, in special cases, conduct pre-disbursement audits for any entity subject to the Bureau’s oversight.

Article (40): Except in cases of flagrant delicto, employees of the Bureau

shall be not be arrested or investigated, nor shall any penal or civil action be brought against them for any act related to the performance of their duties without permission from the Director of the Bureau.

Article (41): The Audit Bureau Law No. (28) for the year 1952, as

amended, shall be repealed, provided the regulations in force shall remain valid pending the issuance of new regulations pursuant to the provisions of this Law.

Article (42): The Prime Minister and the Ministers are required to

implement the provisions of this Law.

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translation of the draft audit bureau law

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