AUDITING OF STATUTORY BOARDS BY AUDITOR-GENERAL

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AUDITING OF STATUTORY BOARDS BY AUDITOR-GENERAL: 7.

Mr Gautam Banerjee:

Mr Gautam Banerjee asked the Minister for Finance in view of the increased focus on corporate governance and transparency (a) whether it is sufficient for large statutory boards to be audited by the Auditor-General only once in every five years; and (b) how does this practice compare with other countries such as the UK, Australia, Canada and New Zealand.

Mr Gautam Banerjee asked the Minister for Finance which statutory boards is the Auditor-General unable to audit under the current legal framework and whether this framework will be amended to allow the Auditor-General to audit all statutory boards.

The Senior Minister of State for Finance (Mrs Lim Hwee Hua) (for the Minister for Finance): Mr Speaker, Sir, may I have your permission to take Question Nos. 7 and 8 together?

Mr Speaker: Yes.

Mrs Lim Hwee Hua: Sir, let me inform the House that statutory boards are audited annually, whether by the Auditor-General or a public accounting firm. Since last year, the Auditor-General's plan has been to audit the larger statutory boards at least once in five years. This does not mean that the larger statutory boards cannot be audited by the AG more frequently. For example, the AG audits IRAS every year. Likewise, the Monetary Authority of Singapore is audited by the AG every year as the MAS Act requires it. My Ministry has supported a higher manpower budget to enable his office to increase the frequency of his audit of statutory boards.

Mr Banerjee asked about the practice in other countries such as Australia, New Zealand, Canada and UK with regard to

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the audit of statutory boards. In these four countries, the accounts of the bodies equivalent to our statutory boards are by law required to be audited by their national audit institutions annually.

The current system of the Auditor-General coming in periodically to audit a statutory board, in between audits by a public accounting firm appointed in consultation with the AG, has served us well. As I mentioned, the AG will subject a statutory board to more frequent audits where necessary. This is a more focused and practical approach as it allows him to direct resources towards areas which are of greater significance.

As regards Mr Banerjee's other question, under the current legal framework, the Auditor-General is empowered to initiate and carry out an audit of a statutory board only if the Act creating that statutory board so provides. This framework, Sir, was introduced at a time when there were very few statutory boards. Out of the 53 statutory boards listed in the Accounting Standards Act, all but seven have provisions in their Acts which accord such power to the Auditor-General.

Nevertheless, we recognise that the current legal framework governing the audits of statutory boards is unwittingly incomplete and should be updated to reflect the larger number of statutory boards that we have today. Except where there are national security reasons, the Auditor-General should be able to initiate audits in statutory boards.

In his Annual Report tabled in Parliament in July, the Auditor-General stated that he had embarked on a review of the Audit Act, which has not been substantively updated since it was passed in 1966. His review, which takes into account the legislation and practices of other countries, will include the audit of statutory boards. My Ministry will

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consider the AG's review report and recommendations when they are ready.