The Board of Audit
SAI is established under the Constitution. The Commissioners are appointed by the Cabinet. Procedure for terminating the appointment of the Commissioners is as follows:
Article 6. A commissioner shall retire from office with the decision of both Houses of the Diet, when, in the collegiate judgement of the other Commissioners, the Commissioner is unable to perform his duties due to mental or physical impediment or he is in violation of duties in office.
Article 7. A Commissioner shall forfeit his office, when he is condemned to a penalty more than a confinement by a criminal court.
Article 8. Except in cases referred to in the latter part of Article 4 paragraph 3 and Articles 6 and 7, a Commissioner shall not, against his will, forfeit his office.
There are no prescribed qualifications for the appointment of the Commissioners, but it has a fixed tenure of seven (7) years and an age limit, i.e., 65 years
To secure independence, of the Board of Audit, various measures are taken as follows:
Special procedure for appointment of Commissioners.
Special procedure for removal of Commissioners.
Control over resources/budget of the Board of Audit.
Immunity/protection from actions by others in its performance of duties of Commissioners
When the Board of Audit receives a request, from either House, any of the Committees of either House or any of the Research Committees of the House of Councilors, under the provision of the Article 105 of the Diet Law (Law No.79 of 1947) (including the case where this is applied by Article 54-4 paragraph 1 of the same Law), it may conduct the audit upon specific matters requested and report the result. (The Board of Audit Law, Article 30-2) on its own discretion.
The SAI is financially independent. There are special provisions giving the Board of Audit a power greater than usual about its budget request. Public Finance Law describes as follows;
Article 17. The Speakers of the House of Representatives and the House of Councilors, the Chief Justice of the Supreme Court and the President of the Board of Audit shall submit budget estimates to the Cabinet every fiscal year. The Prime Minister (the Head of the Prime Minister's Office) and each Minister shall submit budget estimates to the Finance Minister every fiscal year.
Article 18. The Finance Minister shall examine and adjust budget estimates submitted by each Minister, the Speakers of the House of Representatives and the House of Councilors, the Chief Justice of the Supreme Court and the President of the Board of Audit, and forward them to the Cabinet for its approval. The Cabinet, when it approves the above described budget estimates, shall seek advance consultation of the Speakers of the House of Representatives and the House of Councilors, the Chief Justice of the Supreme Court and the President of the Board of Audit on their respective expenditure estimates.
Article 19. The Cabinet, when it reduces expenditure budget estimates of the House of Representatives, the House of Councilors, the Courts, or the Board of Audit, shall state in the budget it approved the detailed expenditure budget estimates submitted by these organizations, and shall state the resource fund for Diet restoration of such reductions.
SAI has jurisdiction over following:
22. The following matters shall
be subject to the audit by the Board of Audit.
Monthly accounts of revenues and expenditures of the State
Acceptance and distribution of cash and goods owned by the State, and State
Charge and collection of government claims and increase or decrease of
Government bonds and other obligation of the State
Acceptance and distribution of cash, precious metals and securities by the Bank
of Japan on behalf of the State
The accounts of juridical persons more than half of whose capital is invested by
The account to be subject to audit by the Board of Audit in accordance with a
provision of the law.
The Board of Audit may audit, if it considers necessary, or at the request of
the Cabinet, the following matters.
Securities which are owned or taken custody of by the State, and cash and goods
taken custody of by the State
Acceptance and distribution of cash, goods and securities by entities other than
the State, on behalf of the State
The accounts of such bodies as are given subsidies, incentive grants, bounties
or other financial assistance such as loan or indemnity of loss directly or
indirectly by the State
The accounts of bodies a part of whose capital is invested by the State
The accounts of business enterprises operating under the Commerce Law whose
shares are wholly or partly owned by the Government Corporations subject to
audit by the Board in accordance with the provisions in Article 22 item (5) or
item (4) of this Article.
The accounts of bodies for which the State guarantees payment of the principal
of or the interest of debt
The accounts of contractors of construction with, or suppliers of goods to, the
State (in regard to the contracts concerned).
When the Board of Audit decides to audit any of the accounts mentioned in
paragraph 1, it shall inform the parties concerned thereof.
SAI has the power to requisition all records of the auditee departments/organizations to discharge its mandate. The Board of Audit, if necessary for its audit, may demand submission of books, documents or reports from those bodies whose accounts are subject to audit by the Board, or may ask questions or demand appearance before it to the persons concerned. (The Board of Audit Law Article 26) SAI does not have the power to enforce or initiate enforcement action to secure access to needed records, which are not produced. SAI does not have the power to seal, search and seize documents and other related items where it is considered necessary for its audit and inspection. SAI does not have the power to seek testimonials of the persons concerned. SAI can seek co-operation of persons other than the agencies subject to audit and inspection for presenting materials. It can also ask government agencies, public bodies and the similar entities to submit reference material and evaluation report. (The Board of Audit Law Article 28)
has the power to instruct government investigating agencies to perform
activities considered necessary. In case the Board of Audit deems that an
official in charge has committed a crime while discharging his duties, it shall
notify the Public Prosecutors Office of the matter. (The Board of Audit Law
Article 33) When the Board discovers that the original adjudication was improper
due to any error or omission in the statement of accounts and vouchers and
supporting documents, it can re-adjudicate the liability of the cash handling
official or the goods handling official within five (5) years after the
adjudication on non-indemnity. (The Board of Audit Law, Article 32,clause 5)
SAI has the powers to decide on claims of interested persons in connection with official actions, duties and behaviors of persons subject to audit and inspection. SAI does not have the power to take punitive action and/or impose surcharges. In case the Board of Audit deems, as a result of audit, that an official in charge has caused a grave loss to the State intentionally or through gross negligence, it may demand a disciplinary action against the official from the head of the department he/she belongs to or from other persons responsible for supervising. This provision shall apply to the case where an official in charge of fiscal transaction of the State does not observe the regulations for the verification of accounts, for instance by neglecting to submit statements of accounts and vouchers and supporting documents, or does not comply with the demand made upon him (The Board of Audit Law Article 31).
SAI has the power to access
the computer systems of the auditees and the power to download and use
electronic data either in site or off site and the power to review the
development of computer systems by auditees and suggest/enforce any controls.
SAI does not have any role in the appointment of other external auditors engaged
by the auditees for meeting any statutory requirements.
Audit Procedures And Functions
SAI prescribes Financial audit, Compliance audit and Performance audit as its scope of audit. The Board of Audit shall audit the final accounts of revenues and expenditures of the State under the provision of Article 90 of the Constitution of Japan and also such accounts as are provided for by laws. It shall constantly audit and monitor the public accounts to secure their adequacy and to rectify their defects. It shall also conduct its audit from the viewpoints of accuracy, regularity, economy, efficiency and effectiveness, and from other necessary viewpoint of auditing. (The Board of Audit Law Article 20) SAIâ€™s audit procedures followed are
Documentary audit in the Headquarters of the Board
of Audit: Auditee
agencies have to submit statements of accounts, with vouchers and other
supporting documents, to the Board regularly. Auditors examine these statements
The Board sends its auditors to sites where accounts are kept or projects
are implemented. At the audit sites, auditors examine all accounting books and
documents, interview persons in charge, observe properties and inspect completed
SAI discharges judicial
functions for liability of Cash Handling officials and Budget-Executing
officials. The nature of audit examination inherent in the function are as per
the Board of Audit Law Article 32.
The Board follows up its audit
findings it reported in its past Audit Reports. The Board specifically reports,
in its annual Audit Report, information of actions auditee agencies took based
on the " Opinion Presentations" and "Action Demands" the
Board reported in its past Audit Reports.
Final accounts of the
expenditures and revenues of the State shall be audited annually by the Board of
Audit and submitted by the Cabinet to the Diet, together with the statement of
audit, during the fiscal year immediately following the period covered. The
organization and competency of the Board of Audit shall be determined by law.
(The Constitution of Japan, Article 90) It can also make explanations at the
Diet with regard to the Audit Report provided for in Article 29, make a
Commissioner attend the Diet or make explanations by presenting documents. (The
Board of Audit Law, Article 30)
The Board of Audit
comprises the Audit Commission, a decision-making organ, and the General
Executive Bureau, an executive organ. The
Audit Commission comprising three commissioners, acts as the collegiate
decision-making body of the Board of Audit on all important matters.
Article 3: The President of the Board of Audit shall be appointed by the
Cabinet, according to the result of mutual election among the Commissioners.
Article 4. (I):
Commissioners shall be appointed by the Cabinet, with the consent of both
Houses of the Diet.
In case the term of office of a Commissioner expires or a vacancy in the
membership of the Commission occurs and the consent of both Houses of the Diet
cannot be obtained owing to its prorogation or the dissolution of the House of
Representatives, the Cabinet may, regardless of the provisions of paragraph 1,
appoint a commissioner without the consent of both Houses.
In the case referred to in paragraph 2, the consent of both Houses shall
be required at the first session of the Diet to be convoked after the
appointment. Without the consent of both Houses, the Commissioner shall
naturally retire from office.
The Emperor shall attest appointment and dismissal of Commissioners.
The remuneration for Commissioners shall be fixed by another law.
Article 5: (1)
The term of office of Commissioners shall be seven years, and a
Commissioner may be reappointed for one additional term.
In case an office of a Commissioner loses the incumbent during his
tenure, the successive Commissioner shall hold office for the remaining term of
A Commissioner shall retire from office upon attainment to the age of
Audit Commission has to decide
the following matters:
1. Enactment, amendment or
repeal of the Board of Audit Regulations.
2. The Audit Report.
3. Decision of such accounts
as are subject to the audit by the Board.
4. Adjudication and
re-adjudication of the liabilities of cash handling officials.
The General Executive Bureau
shall, under direction and supervision by the Audit Commission, be engaged in
administration work, audit and claims settlement.