Tuesday, February 14, 2012

The Redefined State Financial and Administrative Audit Institution

In the first half of 2011, the government body formerly known as the “State Audit Institution” was renamed as the “State Financial and Administrative Audit Institution” pursuant to Royal Decree 27/2011. (We shall hereafter refer to the State Financial and Administrative Audit Institution as the “Institution”.) While the full significance of this amendment was not apparent at that time, the recent Law regulating the State Financial and Administrative Audit Institution, issued by Royal Decree 111/11 (the “Law”), has redefined the role of the Institution.

The Law has broadened the ambit of the Institution to encompass administrative audit (“toward more accountability, transparency and justice in the government performance”) and has increased the overall emphasis on ensuring transparent behavior by Omani government bodies.

Since its establishment by the State Audit Law (RD 55/2000), the Institution has been the financial watchdog of the government, endowed with broad powers to identify systemic financial weaknesses and to make remedial recommendations, rather than to limit its focus to specific transactional irregularities.

The newly issued Law, while repealing its predecessor, expands the Institution’s audit mandate to reach beyond the financial realm. The Institution’s predominant functions now include the following:

• to secure public funds, provide a framework for efficient management of such funds, and ensure their efficient and optimal utilization;
• to detect financial and administrative irregularities and identify inherent deficiencies in the relevant financial and administrative laws;
• to identify the causes of, and assign responsibility for, any deficient performances; and
• to ensure transparency in financial and administrative transactions, and make recommendations for the avoidance of conflict of interests and for the prevention of financial and/or administrative irregularities.