Revised Procedure for Verification of Record by Audit – AG 22.06.2023
On June 22, 2023, the Auditor General of Pakistan issued a critical update to the procedure for record verification in audits. This new directive, encapsulated in Director Audit Office letter No. RDDA-MLN/F-164/2019/Reports/CD-1215 and AGP letter No. 581/129; PAC/C/2019 dated December 29, 2022, introduces essential changes aimed at improving the efficiency and effectiveness of the audit process. In this article, we will delve into the details of the revised procedure, its implications for auditee organizations, and best practices for implementing these changes.
Overview of the Revised Procedure for Record Verification
The revised procedure introduces several important updates to the record verification process. These changes are designed to streamline operations, enhance accountability, and ensure that audit processes are carried out more effectively. Here’s a breakdown of the key updates:
1. Submission of Complete Records via Registered Mail
Auditee organizations are now required to send their records through registered mail. This new requirement ensures that all documents are formally recorded, tracked, and verified upon receipt by the audit office.
This step is crucial as it establishes a formal record of the document’s submission, providing evidence of delivery and ensuring that all records are accounted for.
2. Provision of Annotated Replies Supported by Documentary Evidence
Under the new procedure, organizations must provide detailed annotated replies, also known as working papers, along with the necessary documentary evidence to address pending audit paras. This requirement ensures that responses to audit queries are comprehensive, well-documented, and verifiable.
The inclusion of detailed working papers and evidence supports a more thorough review process, enabling auditors to verify the information provided and assess the validity of the responses.
3. Submission Deadline for Records
The directive specifies that records must be submitted at least ten days before the commencement of Departmental Accounts Committee (DAC) meetings. This advance submission allows the audit team adequate time to review the documents and prepare for the discussions in the DAC meetings.
Meeting this deadline is essential for ensuring that the audit process proceeds smoothly and that all issues are addressed in a timely manner.
4. Designated Address for Submission
Records and annotated replies should be sent to the Regional Director Audit, Local Government Multan Region, at the specified address: House No. 07, Gulshan-E-Mehar Colony, Chungi No. 06, Multan. This address must be used for all submissions related to the new verification procedure.
Ensuring that records are sent to the correct address is vital for the proper handling of documents and for avoiding any issues related to misplaced or misdirected submissions.
Importance of the Revised Procedure for Record Verification
The updates to the record verification procedure offer several benefits that enhance the overall audit process:
1. Enhanced Accountability and Transparency
By requiring records to be sent via registered mail, the revised procedure improves accountability and transparency. This approach provides a clear and formal record of the submission, which helps ensure that all documents are received and processed correctly.
2. Increased Efficiency in Audit Processes
The requirement for annotated replies and supporting evidence streamlines the audit process. It provides auditors with all necessary information upfront, which helps in conducting a more efficient and thorough review of audit paras.
3. Better Preparation for DAC Meetings
The advance submission of records ensures that auditors have sufficient time to review and prepare for DAC meetings. This preparation leads to more informed and productive discussions during the meetings.
4. Stronger Documentation and Tracking
Using registered mail for submissions strengthens the documentation and tracking of records. This formal process helps prevent issues related to the loss or misplacement of documents, ensuring that all records are properly managed.
Best Practices for Complying with the Revised Procedure
To effectively adhere to the revised procedure for record verification, auditee organizations should follow these best practices:
1. Prepare Complete and Accurate Records
Ensure that all records are comprehensive, accurate, and up-to-date before submission. This involves preparing detailed working papers and gathering all relevant documentary evidence.
Best Practice Tip: Conduct a thorough internal review of all records and supporting documents to verify their accuracy and completeness before sending them to the audit office.
2. Use Registered Mail for Submission
Submit all records and annotated replies through registered mail to ensure a formal and trackable submission process. This method provides proof of delivery and receipt.
Best Practice Tip: Keep copies of registered mail receipts and track the delivery status to confirm that records have been received by the audit office.
3. Adhere to Submission Deadlines
Ensure that records are submitted at least ten days before the start of DAC meetings to comply with the new deadline requirements. Timely submission allows auditors to review the documents and prepare for the meetings.
Best Practice Tip: Establish a submission schedule to ensure that records are prepared and sent on time, avoiding any last-minute delays.
4. Provide Detailed Annotated Replies
Prepare annotated replies that address each audit para in detail, providing all necessary evidence and explanations. This comprehensive approach supports the verification process and helps address audit queries effectively.
Best Practice Tip: Address each audit query systematically and include clear explanations and evidence to support your responses.
5. Ensure Proper Addressing of Submissions
Send records to the correct address for the Regional Director Audit, Local Government Multan Region. Double-check the address details to ensure that submissions are properly directed.
Best Practice Tip: Verify the address before sending records and consider using a delivery confirmation service to ensure that submissions are received.
Common Challenges and Solutions
Organizations may encounter various challenges when implementing the revised procedure. Here are some common issues and solutions:
1. Challenge: Ensuring Accuracy in Records
Solution: Implement regular internal reviews and audits to ensure the accuracy of records and supporting documents.
2. Challenge: Meeting Submission Deadlines
Solution: Develop a detailed submission timeline and assign tasks to ensure that deadlines are met without delays.
3. Challenge: Managing Document Tracking
Solution: Utilize a document management system to track the submission and receipt of records effectively.
Conclusion
The revised procedure for the verification of records by audit, introduced by the Auditor General of Pakistan on June 22, 2023, brings several important changes aimed at improving the efficiency and effectiveness of the audit process. The new requirements for registered mail submissions, annotated replies, and adherence to submission deadlines are designed to enhance accountability, transparency, and overall audit effectiveness.
By following best practices such as preparing accurate records, using registered mail for submissions, meeting deadlines, and providing detailed replies, auditee organizations can successfully navigate the revised procedure and support a smooth and effective audit process. These changes represent a significant step toward strengthening public sector financial management and ensuring the proper use of public funds.
