The role of state audit in public debt management in vietnam

Within the subject scope, this study focus on the roles of State Audit in managing the public debt regarding the duties of State Audit in managing the public debt: + Roles of audit in ma

1

INTRODUCTION

1 Introduction on the research purpose

1.1 Research rationale

At the present, public debt tends to increase in many developing countries

and it is considered as vital financial resource for covering the budget deficit as

well as developing infrastructure and socioeconomic The public debt portfolio is

becoming bigger and more complicated, which are very risky for the management

and supervision of Public debt management agency As a result, for the public

debt management, there should be very closed control tools to avoid of the

possible detrimental consequences in future and to ensure for the sustainability of

the finance – budget

As the highest professional body that is specialized in financial inspection,

the SAV was established by the National Assembly, aiming to inspect all

organisations or authorities, which are using state budget, regarding the

management procedure, the use of state budget as well as money and government

‘s assets

As the highest professional body that is specialized in financial inspection,

the State Audit was established by the National Assembly, aiming to inspect all

organizations or authorities, which are using state budget, regarding the

management procedure, the use of state budget as well as money and government

‘s assets The activities of State Audit help to ensure the transparency in

management and in using the public debt and prevent from the arising risks, hence

State Audit proposes to the authorized authorities better methods to manage and

using public debt and to ensure the sustainability of State budget To identify the

role of State Audit in managing the Public debt is very essential, especially in the

context that there are many economic crises happening around the world due to

the sovereign debt default and the role of State Audit in managing public debt has

not been specified clear

Therefore, in order to clarify and provide some solutions to enhance the

effectiveness of the role of State Audit in managing public debt, researcher does

choose the doctoral dissertation with topic: “The role of State Audit in managing

public debt in Vietnam”

1.2 The research purpose

The research purpose bases on the scientific foundation of clarifying the

State Audit’s role in managing public debt and bases on practical research,

evaluation on the acting role of State Audit in managing public debt in Vietnam

2

By showing the strengths and weakness, the research shall propose main solutions

to enhance the role of State Audit in managing public debt in Vietnam

2 Research subject and research scope

Research subject:

This study aiming to research the role of State Audit in managing the public debt regarding the legal, functions and duties of State Audit in public debt management In which, the researcher focus on three main parts: organize audit

on public debt management; evaluate and propose solution for public debt management; and public the audit result on using and managing public debt

Research scope:

- Content: Roles of State Audit in managing public debt includes the identification of legal, functions and duties of State Audit in managing public debt Within the subject scope, this study focus on the roles of State Audit in managing the public debt regarding the duties of State Audit in managing the public debt:

+ Roles of audit in managing public debt + Roles of audit in evaluating, propose solution for managing public debt + Roles of the audit in publicizing the audit result on using and managing public debt

- Geography: This research concentrates on the experience of some countries that have huge public debt, in which, the sampling is Greece - the country that has not established the clear roles of State Audit in managing public debt; United States - the country that has established clear roles of State Audit in managing public debt; China - the country that has similar political system comparing to that of Vietnam and has already established the clear roles of State Audit in managing the public debt All of these samplings are aiming to help Vietnam to get lesson learned

- Time: This study aims to evaluate the practical roles of State Audit in managing the State Audit in Vietnam since 2006 until present; showing the view point, orientation, solution for establishing and enhancing the roles of State Audit

in managing Vietnamese public debt until 2020

3 Methodology

3.1 Research process

The research process approaches from theory to practice:

Step 1: Research on the theory of public debt, public debt management,

State Audit and its functions and duties Base on that, establish the theory

framework on the roles of State Audit in managing public debt

Step 2: Collect and process primary data as well as secondary data

Step 3: Analyze the research result on the roles of State Audit in managing

public debt in Vietnam, then summarize the strengths and weaknesses of the State

Audit’s role and the causes

Step 4: Base on the theoretical and practical finding, researcher proposes

the solution and recommendation to establish and enhance the roles of State Audit

in managing public debt in Vietnam

3.2 Research method

* The dialectical materialism method, historical materialism method of

Marxism-Leninism

* Secondary data collecting method

* Primary data collecting method

* Data processing techniques

Using conventional analytical techniques such as descriptive statistics in

order to draw the overall picture of Vietnam's public debt, statistics, aggregated

and analyzed to highlight the implementation process of public debt management

and implementing the roles of SAV in managing public debt during the period

2006 to 2013

4 The new contribution of the research

New contribution on the academic and theoretical aspects:

The thesis clarified the research rationale of the roles of SAV in public debt

management in Vietnam on 3 aspects: legal aspect, functional aspect and mission

aspects Therefore, the research focuses on analysis the mission of SAV In public

debt management, SAV has 3 main roles, that is conduct the audit on debt

management, assess, give recommendation and publish the audit finding the the

public debt’s using and managing

The lesson for Vietnam will be learned through the State Audit ‘s

experience in managing public debt of some countries around the world, for

instance the United States - a country that has advanced management level in

public debt; Greece - a country that has not good public debt management system,

which leads to the current sovereign debt default; China - the country that has

similar political system comparing to that of Vietnam

The new proposals drawing from research finding:

Based on the results of the State Audit roles in three audits on the management of public debt that the State Audit of Vietnam has done, it is analyzed according to three indicators: the results of handling errors in the management of public debt, wrong violations detected in the management of public debt and recommendation for strengthen public debt management; The research shows the existing advantages and disadvantages, identify the specific causes

Deriving from the shortcomings and inadequacies, the thesis has proposed a number of measures to enhance the role of the State Audit in managing public debt in Vietnam, namely: Improving the legal position of the State Audit of public debt management; Improving the quality and effectiveness of the State Audit; Improve organization, recruitment and training of human resources; Developing infrastructure, information and communication and information technology; and enhanced integration and international cooperation on the management of public debt and provide recommendations for state audit, the State, the public debt management agency and the unit using the public debt

5 Research Structure

Apart from the Introduction and Conclusion, all other parts of the research including the author’s commitment, appendix, references, research body are divided into 4 chapters:

Chapter I: Overview of the research Chapter II: Methodology regarding the State Audit ‘s roles in managing public debt

Chapter III: Situational Analysis of the roles of State Audit in managing public debt in Vietnam

Chapter IV: The author’s view, orientation and solution to enhance the roles of State Audit in managing public debt in Vietnam

CHAPTER I: OVERVIEW OF THE RESEARCH

1.1 Overview on existing researches that relating to the thesis

Look at the role of an organization including its position, function and duties in a field, progress, activities Thus, the correct approach in investigating the role of state audit in public debt management is on the legal position perspective, functions and duties of the Audit of Public Debt Management Recently, there has been no study on the role of state audit in public debt

5

management follows this direction Especially there are no study has given a full

role in the management of public debt Audit nor assess the role of the State Audit

page or factors affecting the role of state audit in public debt management

Therefore, the authors found that this is the space to study, through that

approach, contributes a perspective, giving an opinion in order to establish and

enhance the role of the State Audit of Public Debt Management, thereby,

contribute to raising the efficiency of public debt management, ensuring

sustainability of national financial security

CHAPTER II: METHODOLOGY ON THE ENHANCEMENT OF

STATE AUDIT IN PUBLIC DEBT MANAGEMENT

2.1 Public debt management

2.1.1 Public debt

2.1.1.1 Public debt concept

Public debt includes: government debt and debt from other entities

(enterprises, agencies, organizations, etc), in which the payment are guaranteed by

government, and debts from local authorities

2.1.1.2 Public debt classification

2.1.1.3 Roles of public debt

For covering the Government ‘s budget deficit: The most important role of

public debt is used to cover the Government’s budget overspending

For investment of the country development: For developing countries, in

order to develop the infrastructure and science & technology, the loan plays

important role, it helps to save time for achieving the development goals of

least-developed countries as well as developing countries who wish to become

developed countries

Stimulate economic growth, improve the investment environment: The debt

increases the attractiveness of the domestic investment environment, attracts and

expands the investment activities, create the trust of the country in the world

2.1.2 Public debt management

2.1.2.1 Definition of public debt management

The practical public debt management has been drawn from the experience

of many countries According to IMF, this is the "The process of establishing and

implementing a strategy of national debt in order to build up a capital as required,

6

to achieve the goal of cost and risk, meet other debt management criteria of the Government"

2.1.2.2 The purpose of public debt management

- To meet the financial needs of the Government and contribute to improve the effectiveness of management and macroeconomics policy making in each period

- To ensure the debt, maintain the reasonable debt portfolio in each period

- To detect the possible risks, thereby prevent and deal with frauds in order

to ensure the financial security and national currency

2.1.2.3 The guideline for public debt management

Firstly, clearly define the roles and responsibilities of organisations in managing public debt

Secondly, to ensure the publicity and transparency in public debt management

Thirdly, to ensure the public debt within limit Fourthly, to ensure the effectiveness of loans and loans using

2.1.2.4 The content of public debt management

- To set targets for public debt management and the coordination among the policies:

- To develop strategies for debt management and risk management framework:

- Develop transparency and responsibility in public debt management

2.2 State Audit in public debt management 2.2.1 Overview on the State Audit

2.2.2 The propose of State Audit in public debt management

- To detect the possible risks, thereby prevent and deal with frauds in order

to ensure the financial security and national currency

- To give recommendation for the Government to complete policies regarding public debt management and enhance the effectiveness of using public debt

- To ensure the transparency in public debt management

- Góp phần minh bạch hóa công tác quản lý nợ công

2.2.3 The legal position of State Audit in public debt management

State Audit is an authority outside the public debt management system,

SAV will be empowered independently in determining program audit plan and

apply measures to provide professional services in the process of making audit

decisions

2.2.4 State Audit function in public debt management

- First, verification function (confirmation);

- Second, expression function (recommendation)

Based on the basic functions of the audit, as the highest financial control

authority, State Audit shall examine, supervise the resources and public assets of

the country,

2.2.5 State Audit’s role in public debt management

2.2.5.1 To conduct the audit on public debt

With this role, the State Audit conducts audits of public debt of the State

Audit to check and supervise the whole process of the management, mobilization,

allocation and use of loans under specified standards There are 3 stages in

organizing the audit of public debt: prepare for the audit, conduct the audits and

prepare the report

Prepare for the audit

Conduct the audit

Prepare audit report

In Vietnam today, SAV has not built its own processes to audit the public

debt, but depend on each specific audit procedures to apply appropriate specialty

2.2.5.2 To assess, give recommendation for public debt management

Through the audit of public debt for debt management agencies, units and

institutions of debt, SAV gives opinion on the accuracy and honesty for public

debt management, to confirm for the integrity availability of information on

reported public debt and state audit also examined, monitoring the management

and use of public debt, pointing out the violation of the principles of legal

compliance, efficiency and savings in the management and use of public debt In

some cases, the separation of management activities compared with the provisions

of law shall also be required to repair, remedy, compensatory damages even be

punished as prescribed by law

Additionally, when conducting audit of public debt management, SAV will detect the flaw in the law adjustment mechanism, and it is also an important element in helping to improve the public debt management institutions

By this role, the State Audit reviews and gives comments to the National Assembly, the Government and the State management agencies to adjust and overcome the shortcomings in policies, laws, and forced the authorized agencies

to treat and to punish the violations of the laws and policies of the audited units 2.2.5.3 To publicize the audit results of the management and use of public debt

State Audit Agency plays a key role in ensuring that the public debt can be understand logically, honest and trustworthy by all stakeholders This is the role

to publicize the results of the audit on the management and use of public debt

In addition, the State Audit’s role of publicize the audit findings on public debt management and using is very useful to investors as well as international organizations like the IMF, World Bank and other creditors in giving out their investment decisions SAV plays an important role in creating a better reporting system for public debt Performing this role helps publicizing information about public debt and public administration, improving transparency in the operations and improve the accountability of the Government

2.2.7 Criteria to assess the role of State Audit in managing public debt

The result after handling frauds in the management of public debt can be

understood as the result of handling the financial audit of public debt, including all revenues increases, expense decreases, amounts paid out for recovering state budget while conducting the audit of public debt

Frauds detected in the management of public debt can be understood as the

result of or the audit findings of the case of violation, the acts of corruption, waste discovered during the audit

Recommendation for reorganizing the public debt management can be

understood as a result of the amendment proposals, supplement and improve the public debt policy, the administration documents, uncompleted and inappropriated public debt management, in which SAV discovered through auditing activities

9

2.2.7 Elements affecting the roles of State AUdit in public debt

management

2.2.7.1 Intrinsic elements from State Audit

- The quality of audit activities;

- Human Resources;

- Infrastructure

2.2.7.2 Extrinsic elements

- Legal environment;

- Economic environment;

- Social environment

2.3 International experience of the role of the State Audit of Public

Debt Management

2.3.1 Experience from Greece

2.3.2 Experience from United States

2.3.3 Experience from China

2.3.4 Lesson learned

Firstly, each country should clearly define the role of the state audit agency

in public debt management by regulating the role of the State Audit in the

Constitution, the law and the system of regulatory documents

Secondly, State Audit must have a organized structure and build a team of

experienced and qualified auditors

Thirdly, public debt management activities are high international demand

area, in which State Audit should strengthen international integration through

publicizing information on operational audit of public debt, exchange positive

experience and methods of implementation

CHAPTER 3:

ANALYSIS ON THE CURRENT ROLES OF STATE AUDIT IN

PUBLIC DEBT MANAGEMENT IN VIETNAM

3.1 Public debt management in Vietnam

3.1.1 Vietnamese public debt during recent years

10

Public debt 404.556 558.155 657.940 877.753 1.124.638 1.392.020 1.641.296 1.942.098

1 Government

4 Public

- Government

- Nợ CPBL/GDP

- Nợ CQĐP/GDP

The picture above shows that public debt in Vietnam is increasing Causes may include: (1) The budget deficit, (2) The public investments are large and flattened, (3) Low efficiency of pubic debt using

3.1.2 Public Debt Management in Vietnam from 2009 until present

3.1.2.1 Legal framework Since 2009, there is a huge number of guideline document on the Law of Public debt and the document system on public debt management is quite completed However, the legal framework for public debt management still exist some shortcomings, namely:

- The roles, functions and duties of State Audit in managing public debt are not clearly defined in the Constitution, the Law of Public debt management, State budget Law, Law on State Audit and the guidelines for public debt management

cause difficulties in performing the audit of public debt management in order to

confirm and give transparent information on public debt, as well as improve the

efficiency of public debt management

- The concept of debt as well as debt management are still confusing and

inconsistent with international standards, thus it is difficult to classify and

aggregate debt

- The improvement degree of the legal framework between domestic and

international debt managements also has big gaps, which leads to the difficulties

in management debt portfolio

3.1.2.2 Organizing the public debt management

The management of the public debt of the government has come close to

the international best practices as defined goals, principles of management, in

addition to the user to achieve the objectives of capital mobilization and

management efficiency stop But during this period, public debt management has

exposed some issues follows:

- In fact, the assignment and personnel allocation in public debt

management are overlapping and unfocused

- The organizational structure, functions and duties of the Debt

Management and external financial Agency need further improvement to formed

a professional debt management system

- There is not any independent and objective agency to supervise the

management and using public debt One of the other requirements of transparency

and accountability in managing public debt that have not been organized in

Vietnam is that debt management activities should be audited annually by State

Audit

3.2 Legal position of State Audit in public debt management

So far, the legislation document did mention the position of the State Audit,

that is specialized bodies operate independently but the legal position of the SAV

in public debt management has yet to be clearly defined especially the Law on

State Budget , the State Audit Law and the Law on public Debt Management Can

understand indirectly, in the management of public debt position of Audit is an

independent professional body, not on the public debt management system The

text was not specified audit activities of the debt management agency is assigned

responsibility as the world practice suggests that only specified audit programs

and projects using loans (assigned to the audit or independent auditor)

3.3 Roles of State Audit in public debt management

Since the establishment of the Law on State Audit in 2006, the state audit function has been defined relatively completed and comprehensive "The roles of State Audit is conducting audit on financial statements, compliance audit, performance audit for all agencies and organizations that managing and using budget funds and state property” Apart from the financial audits roles, the State Audit of many countries in the world also conduct audits to examine and assess the observance of laws and implementation of audit activity to assess the economic and effectiveness in the operation of the units and organizations that use state budget and public property including public debt management Thus, with the new regulations, SAV absolutely has completed audit functions of auditing the manage and use of public debt This is the inherent function of the SAV and also the difference among SAV, independent audit and internal audit; in the practice of Vietnam, there is not any government agencies that performs this function before the establishment of State Audit

3.4 The implementation result in performing state audit role in public debt management in Vietnam recently.

So far, the SAV completely has legal basis to conduct an audit of public debt as well as activities related to public debt However, the role of state audit in public debt management has not been the specified clearly in any legislation The legislation was not specified clearly the audit activities of the debt management agency is assigned responsibility as the world practice suggests that only specified audit programs and projects using loans (assigned to the audit or independent auditor) Besides, the document also does not prescribe the specific responsibility for the SAV for public debt This is one of the biggest drawbacks of the role of the State Audit audited the deployment of public debt

However, since the establishment, state audit has paid attention to the role

of state audit in public debt management when settling audit departments of programs and projects related to public debt and paid attention to assess the public debt management to conduct an audit of the total annual budget settlement

So far, the SAV has not conducted a comprehensive audit of public debt management about that new content to conduct audits related to public debt management audits in total annual budget and final settlement program and projects using loans by performing audit of investment projects, the national target programs with content related to public debt Summary of findings of audits related to the public debt include: auditing total 2013 state budget finalization and audit the management and use of government bonds and the audit period

2006-13

2012 Reduction Program Light and adaptation to climate change in 2013 that use

of foreign loans Thereby partially visible implementation results of the State

Audit role in public debt management through criteria: Result processing

irregularities in public debt management, irregularities detected in the

management of public debt and recommendations reorganizing public debt

management

3.4.1 Results on handling frauds in the field of public debt management

3.4.2 Frauds detecting from public debt management

3.4.3 Recommendation on reorganizing public debt management.

3.5 Evaluate the practical roles of State Audit in public debt

management

3.5.1 Achievement

In recent years, the State Audit perform its role in the management of

public debt, as a prerequisite to the establishment of the State Audit role in

managing public debt through legislation .We can see the results achieved in the

following several aspects:

Firstly, State Audit has paid attention to the audit of public debt since its

establishment

Secondly, State Audit has paid attention to the assessment of public debt

management through audit and finalize State Budget,

Thirdly, through the the content audit of public debt, the State Audit did

give some cautionary comments for debt situation of local budgets from which

attract the attention of the National Assembly, the Government, the authorities

and the public

Fourthly, in recent years, the status of State Audit has been enhancing

3.5.2 The limitation and weakness

Despite the results achieved in the implementation of state audit role in

public debt management, there is some limitation that State Audit should pay

attention to in order to establish and enhance its roles in public debt management

following current practices There are some weakness and limitations in

performing the role of State Audit in public debt management that should be

found, for example:

First, until now, after nearly 20 years of operation, the roles of State Audit

has not been defined clearly in any legislation or public debt management policy

14

Second, the audit process, despite the integration of assessment of public debt but the level is still limited, the quality of the audit and audit progress also has distance not less than required and can not be considered that is the role of the State Audit performed in public debt management

Third, the assessment of the SAV is not deep and not much help the public debt management agency

Fourthly, the SAV has not given macro recommendations to help governmental agencies to complete management of debt

Fifth, there is no effective audit, many findings have not been proposed for handling resolutely

Finally, addressing the relationship between scaling, audit quality and maintain ethical requirements, quality officers and auditors is always a big challenge

3.6 The causes for limitation

These shortcomings and limitations mentioned above is due to many reasons, both objective and subjective But can list some basic causes of the following:

First, the legal framework and the provisions on public debt are not clearly defined the roles and responsibilities of the state audit agency in public debt management, as well as regulations of the agencies that are responsible for debt management in providing information related to debt management, shall report periodically to the Audit irregularly on issues of public debt management

Second, it is starting from the intrinsic weaknesses of the SAV So far, the organizational structure of state audit is still in process of completion and it is unfinished

Third, the awareness of the levels, sectors, public and society in general about the legal status, functions, tasks and role of state audit in public debt management has not fully and comprehensively, even sometimes, in some places even misleading

Fourth, many problems have has cause the effective and efficient operation

of SAV is in the process of finishing as the legal system of economic and financial management, legal system of debt management drain;

Fifth, functions, responsibilities and coordination mechanisms between the public debt management agency and inspection agencies, is inefficient, sometimes overlapping,

CHAPTER 4:

AUTHOR’S VIEW POINT, ORIENTATION AND RECOMMENDATION TO ENHANCE THE ROLES OF STATE AUDIT

IN PUBLIC DEBT MANAGEMENT IN VIETNAM

4.1 Author’s view point and orientation to enhance the roles of state

audit in public debt management.

4.1.1 View point.

4.1.1.1 Enhancing the role of SAV in public debt management is

enhancing the role of supervision in public debt management activities

4.1.1.2 Enhancing the role of SAVin public debt management is

conformity with the guidelines and policies of the Party, Law of State Audit and

other laws in public debtmanagement

4.1.1.3 Enhancing the role of SAV in public debt management is

conformity with international practices of establishing legal position and

ensuring the principle of independence ofSAV activity

4.1.1.4 Enhancing the role of the SAV in public debt management on the

basis of raising relationship between audit objects and audit objectiveof SAV

4.1.2 Orientations

4.1.2.1 SAV development orientations

Increasing role of SAV in public debt management must be done according

to specific orientationsin order to ensure the activities of SAV develop in the right

way, achieving the objectives and confirmed SAV's role in the system of

inspection, supervision the economy This orientations must be based on specific

principles,matching with the current activities of SAV sand the development

trend of SAV in the future

4.1.2.2 Orientation to enhancing the position, the role of SAVinpublic debt

management

With the goal of identifying core values for developing Vietnam State

Audit is "Transparency-Quality-Efficiency and constantly add value", enhancing

the position and role SAV in public debt management, in period of now to 2020,

SAVhas to determine for themselves the following orientations:

One is the role of SAV in public debt management must be overall

determinative in the relationship of the public finances

Secondly, the role of SAV in public debt management must be overall determinative in the relationship of the state budget finance auditing

Third, the audit report of public debt must be overall determinative in the relationship of the national resources management

Fourth, building staffs and public debt audit process

4.2 Solutions to enhance the role of SAV in Public Debt Management

4.2.1 Solutions to enhance the legal position SAV in Public Debt Management

4.2.1.1 Enhancing social comprehension about the position and role of SAV inpublic debt management

First, SAV should develop and implement coordination regulations between law enforcement agencies, legislature and inspection agencies; finish building the legal documents, which adjust this relationships in public debt auditing activities;

Secondly, SAV should finish building the legal basis for the organization and operation of information propagation and dissemination of the State Audit Law, the role of state audit in public debt management and other activities of the State Audit

Thirdly, the state audit should actively enhance the quality of information and communication, including the renovation and improve the quality of the content and form of the existing products, and established more Times Review Accounting and division responsible for information and communication;

Fourth, the state audit should regularly talk with the audited units Through this seminar in order to propagate and popularize these management practices, good governance; make recommendations on shortcomings and limitations that unit might encounter Thereby, contribute to enhancing the role of the State Audit

in public debt management

4.2.1.2 Improving thelegal status, powers, responsibilities and roles ofthe State Audit in public debt management

To propose to add to the Law of State Audit some certain provisions on legal position, duties and powers of the state audit agency regarding the public debt management

4.2.2 Groupof solutionsimproving the qualityand effectiveness of theState Audit.

4.2.2.1 Improving Audit capability

17

To improve the audit capability of State Audit in order to ensure the

inspection and supervision of the Government in public debt management, to

contribute to the thrift, to avoid the corruption, loss and waste, to detect and

prevent the law violations, to improve the effectiveness in managing and using

public debt To combine the financial audit, compliance audit and operational

audit, in which to prioritize the financial audit and compliance audit in order to

enhance the public debt audit for checking and evaluating the economic,

effectiveness and efficiency in state budget management, money and state assets,

especially in managing and using public debt

4.2.2.2 To improve audit effectiveness

Step by step improving the legal validity and value of audit report, to

enhance the thematic audit regarding the public debt management, the pressing

issues that take much attention of the society, even the important issues of the

country, in order to provide enough information to the citizen, press as well as

public regarding the public debt management by publishing audit result and result

on the conclusion, recommendation of state audit

4.2.2.3 Enhancing the audit result

Constantly improve audit quality, reduced audit time, economically and

effectively using resources in the organization and operation of the State Audit;

innovating audit organizations, especially organizational grouped audit, the audit

groups; improve the quality of audit survey inplanning and analysis, synthesis the

results of the audit

4.2.3 Group of solutions to improve organizational system , recruitment

and personnel training

4.2.3.1 Group of solution to improve the organizational system

SAV should continue to develop and perfect the organizational system of

the State Audit following unifiedcentralized management model Striveto 2020, it

is expected that the organizational structure of the State Audit will be basically

completed

4.2.3.2 Group of solutions to improve the quality of recruitment and

personnel training

Continually build up the personnel that have consistent political bravery,

moral and healthy lifestyle without corruption and wasting when doing the audit;

those personnel must have innovative and creative thinking, having good

knowledge and experience that fit to their position, they should also be good at

18

solidarity, cooperation, high discipline, working dedicatedly, scenically and respect the common organization

4.2.4 Group of solution to develop infrastructure, communication and information technology

4.2.4.1 Solution for the infrastructure development and the compensation and benefit for State Audit’s officials, employees and auditors

Audit should develop preferential policies to create strong steps to mobilize resources to ensure the facility-specific system-wide SAV The construction of the facilities and treatment regime for officials and civil servants

4.2.4.2 Solution for the communication State Audit Office shall, in coordination with units under construction SAV content, plan and carry out regular propaganda and popularization of laws, resolutions and directives of the Party and State on public debt management, the role of state audit in public debt management as well as experience auditing public debt

Centre for Science and Audit Training should cooperate with the International Cooperation Department and the State Audit Office, to organizes seminars, talks about the role of state audit of public debt management, public debt auditing experience and information on the public debt There by, open and create the transparency for assessment, report on public debt management and reports on public debt audit In addition, to enhance the preciseness of citizens, owners, management organization regarding the management and using of public debt as well as the role of State Audit in public debt management

The audit reports and website of State Audit should open a section that broadcasting about the public debt management and role of State Audit, sharing about the experience in public debt management, strategies and action program of State Audit in public debt management, as well as finding on the public debt management

4.2.4.3 Solution for the development of science - information technology Regarding the science activities, State Audit should improve the science activities and develop the information technology in order to enhance the management skills applying information technology To combine the research activities with staffs training and to apply the research finding to practical audit

To research the model, management framework and method for audit activities

4.2.5 Solution for the international integration and cooperation

regarding public debt

To improve the existing bilateral and multilateral relationship among the

members of the Organizational of Supreme Audit Institutions Asia (ASOSAI) and

the International Organizationfor Control of Suprememath (INTOSAI) in order to

maintain and strengthen the existing relationship, develop the cooperation and

sharing regarding public debt management and increase the advantage of State

Audit of each country in public debt management

4.3 Recommendation to enhance the position and roles of State

Auditing in managing public debt

4.3.1 Recommendation for the Government

First,to adjustand improve the legal status of the State Auditagency It is

important to ensure the independence, integrity and professionalism of the Audit

aims to improve the quality, efficiency and effectiveness of audit activities as a

tool to control the management and use of public resources So far, the

Constitution of the Republic of Vietnam Socialist no regulations on audit-related

activities or SAV Therefore, the Government should have the A mendment in the

Constitution of our country on the legal status and the functions and tasks of the

State Audit agency

Second, should improve the legal system, first of all need to check, recheck

the existing text to cancel the law is outdated, contradictoryandoverlappingwith

each other At the same time promote the development and promulgation of a

uniform law on the basis of research and application of international law to

conform to the conditions of Vietnam

Third, to strengthen the authority for such additional functions SAV survey,

the audit authority for the management and use of public debt to promptly stop

and limit to the minimum the consumption phenomen on pole, and timely

resolution of these errors related to public debt managemen activities

Fourth, the right to direct the Government, ministries, relevant units in

close coordination with the Audit and congressional offices in the management of

public debt as well as the implementation strategy of Vietnam's public debt

Fifth, to meet the operational expenditure of Audit to ensure the

independence, integrity and professionalism of the agency In addition, the State

should have policies for development investment in information technology and

media equipment and other techniques to ensure that the organization and

operation of the Audit and meet the needs of international integration

4.3.2 Recommendation for State Audit

In order to enhance the quality, validity and effectiveness of audit activities

to improve the role of State Audit in public debt management, State Audit should:

- Completing thelegal basis proportionate, adequate and comprehensive for Audit;

-Developing and perfecting the organizational structure of the State Audit apparatuson the basis of centralized management modelas the current uniform, including the advisory unit, the specialized state audit central and local areas in the state audit methods;

- Improving the quality and development of staff, public servants and employees in sufficient quantity, structure and professional structure reasonable value at each stage;

- Modernizationofthe State Auditactivity;

- Enhanced auditing of annual reports on public debt while enhancing the quantity and quality audits of public debt topics, such as external borrowing by the government, national debt, Government debt guarantees, borrowing costs etc

On the other hand, strengthen auditing and evaluating the use and efficiency of the use of loans, which are guaranteed by the Government in the investment project, enterprises, commercial banks thereby alarming risks may occur that threaten the sustainability of public debt and budget

- Strengthen and improve the efficiency of cooperation between State Audit and agencies of the National Assembly, the public debt management agencies and the units those use the public debt;

- Strengthen the publicity and transparency of the audit results and the implementation of the conclusions and recommendations of the audit;

- Expand international cooperation in order to learn and exchange experiences with the State Audit agencies in the region and the world to improve the experience in the management of public debt as well as the audit of public debt;

- The development of infrastructure system, ensuring funding and working conditions; ensure the material life and spirit, creating the working conditions and motivation to staff, officers and employees of the State Audit to work securely, developing the capabilities and forte, keeping in virtue duty performance

4.3.3 Recommendation for the public debt management Agencies

The public debt management agencies needs to develop a strategic plan for the loan on the basis and in accordance with the economic - social development