Chapter I: General Provisions
The audit of the financial affairs of the governments shall be conducted in accordance with the provisions of this Act.
Duties and functions of audit are enumerated as follows:
1.To supervise the implementation of budget;
2.To certify receipt and payment orders;
3.To examine financial activities; to certify annual financial reports;
4.To inspect irregularities and dereliction of duties concerning of the financial activities;
5.To evaluate the performance of financial activities;
6.To judge financial responsibilities;
7.To perform other audit works stipulated by other laws.
Audit duties and functions shall be conducted by the audit agencies.
Central government agencies and their subordinate institutes' financial activities shall be audited by National Audit Office. For those agencies based in provincial or local areas, may be audited by the designated audit bureaus (offices) nearby.
Provincial (municipal) governments and their subordinate agencies shall be audited by in charged provincial (municipal) audit bureaus. Audit offices may be set up in counties and cities to audit the financial affairs of these local governments and their subordinate agencies.
Special public service agencies, government enterprises and institutions shall be audited by the audit bureaus (offices) having jurisdiction.
Whenever there is no related audit bureau (office) on place, government agencies' financial activities should be audited by the audit agency governing them, or by an audit bureau (office) in the vicinity so delegated.
In order to facilitate auditing work, an auditing agency may delegate another auditing agency to carry out certain audit and the latter shall inform the former concerning the decisions and opinions about the audit.
When an audit involves special technique, or requires surveillance or testing, other organizations or specialists may be consulted or requested by audit agencies to perform certain assignments. However, the final decision rests with the auditing agency in question.
Auditors shall carry out their audit functions in accordance with the law without interference.
The important audit cases in the National Audit Office should be referred to the Council of Auditors for decision; similar cases in an audit bureau (office) shall be referred to the Auditors’ Meeting for decision.
The bylaws of the Meetings shall be prescribed by National Audit Office.
The auditing agencies shall regularly or irregularly dispatch personnel to various agencies to conduct on-the-spot audit; whereas this type of audit has not been conducted, the agencies concerned shall be asked to submit their financial reports for audit. In the latter case, personnel may be dispatched to carry out spot audit.
Audit agencies may inspect, at any time, the receipts, disbursements and properties of the various government agencies.
In performing the auditing function, the auditors may inspect the books, vouchers, other documents, cash balance, and properties of various agencies under audit. The officers in charge of those agencies under audit shall not conceal, or refuse to produce what is to be audited. Upon questioning or requesting for information by the auditor, the officers in charge shall give detailed and accurate answers or furnish the needed information.
In case the responsible officers do not comply with the foregoing provision, the auditors shall report the fact to the competent auditing agencies so that they request the directors of the said government agencies to effect punishment thereupon, or to appeal to the Control Yuan for action.
In performing the auditing function, the auditing agencies may dispatch officers armed with Inspection Certificates issued by the National Audit Office to make inquiries at any public or private organizations and individuals, or to inspect the books, vouchers, and other documents of these organizations. The various responsible persons concerned shall not conceal the above or refuse cooperation. Upon questioning, they shall furnish detailed and truthful answers.
When it is deemed necessary in connection with the performance of the auditing function, judicial or military police authorities may be asked to render appropriate assistance.
The auditing agency or auditor, in performing the auditing function as mentioned in the above two articles, may take notes about the inquiries and ask the persons questioned to sign or stamp their personal chops on the notes. When it is deemed necessary, the auditing agency or auditor may seal off the various relevant books, vouchers, and other documents for the time being, and may take into custody the whole or a part thereof.
When an auditor discovers evidence of irregularities or dereliction of duty committed by individuals of an organization, he shall have the case reported to the auditing agency concerned. The latter shall notify the organization in question to take necessary action, and shall report to the Control Yuan to take action according to the law. Cases involving criminal offenses shall be referred to the court for action and shall also be reported to the Control Yuan.
When auditor considers that urgent action should be taken with respect to his discovery of irregularities or mal-practices, as mentioned in above articles, he shall promptly report the case to the auditing agency concerned. The latter shall notify the officer in charge of the agency in question to take immediate action.
The officer in charge of the agency in question shall be held jointly responsible if he does not take immediate action upon notice of the above.
Where the person suspected of committing an act referred to in the second paragraph of Article 14, Article 17, 18 and 78 is the officer in charge of an agency, the auditing agency shall notify his higher agency to take necessary action.
Where the agency has deferred or taken improper action toward the case which was referred to it for action by an auditing agency, the auditing agency shall inquire the agency in question and the latter shall respond with responsible answer.
Where the auditing agency does not get responsible answer from the agency in question, or considers the answer unsatisfactory, the National Audit Office may refer the case to the Control Yuan for action.
An auditing agency or auditor shall, in pre-audit, refuse to sign any disbursements that violate budgetary or other law or statute; and shall, in post-audit, disallow and require a refund of such disbursements.
Audit agency shall issue the notice of approval of audit, or the notice of audit, to the respective agencies audited concerning the result of the audit.
Upon receipt of the notice of the result of audit, the agency concerned shall submit a statement of explanation, within thirty days, for the decision of the auditing agency, except for cases concerning the audit of annual reports where the Law of Final Report shall apply. The auditing agency may make the decision without consulting the agency in question after the above-mentioned time limit.
Whenever the agency disagrees with audit agency's decision up by the preceded article, the agency under audit may ask for reconsideration within thirty days after receipt of the decision notice, except for cases concerning the audit of annual reports which shall be governed by the Law of Final Report. The auditing agency will not reconsider the case after the expiration of the prescribed period.
Request for reconsideration may be filed once only.
Where an agency, due to special reasons, is not able to ask for reconsideration on the audit agency's decisions or to reply to the auditing notice within a prescribed time, the agency may submit a request for extension within above time limit, by offering a statement of the reasons.
The auditing agency may grant an extension but once only.
In reviewing important audit cases, the audit agency, when necessary, may notify the respective agency to dispatch staff members to explain and answer inquiries.
In the event of subsequent discovery of error, omission or repetition relative to a closed case, the auditing agency may re-examine this case provided that it is within two years from the date of decision. In the event of subsequent discovery of false evidence, re-examination may be conducted provided that it is within ten years from the date of decision.
Where an auditing agency changes its decision as a result of re-examination, the previously issued notice of approval and verification becomes null and void, and shall be cancelled within a prescribed period.
Where an auditing agency couldn't settle a case due to missing of the personnel in charge, the audit agency may ask its supervise agency to trace, publish the gist of the case and inform the personnel agency to suspend the employment of the person in question until case resolved.
An auditing agency, while dispatching a staff member to participate in the financial council of a government agency, shall not be bound by the resolutions thereof, in case the participant designated by the auditing agency has expressed disagreement to the resolutions in question.
Government agencies' accounting systems and regulations concerning internal audit shall be promulgated and enforced only after due consultation with the respective competent auditing agencies; the same procedure governs changes in the above-mentioned matters. Where there are regulations governing the operational inspection or performance evaluation, the auditing agency shall be informed of the same.
Where in examining and certifying disbursements, the officers in charge, or their proxies and their chief accountants have any doubts or disputes about the relevant auditing law and regulations, they may request in writing the competent auditing agencies for advice, and the latter shall oblige with due interpretation.
The above-mentioned interpretation may be publicly announced.
Where the government issues bonds or borrows, the competent agency shall submit the statutory provisions for bond issuance or the loan agreement to the competent auditing agency for record. The auditing agency shall be kept informed of any subsequent modifications therein.
Follow the close of a fiscal year, the government shall prepare an annual report and submit it to the auditing agency for audit. Upon the submission of the Central Government annual report by the Executive Yuan, the National Audit Office shall, within three months, complete its audit and have its audit report submitted to the Legislative Yuan.
Where there are questions raised or information requested in connection with the deliberation of the above-mentioned audit report by the Legislative Yuan and the Control Yuan or by their various committees, the Auditor General shall make reply or furnish pertinent information.
Foregoing provisions be applied mutatis mutandis to the submitting and auditing of local governments’ annual financial statements.