Purpose, Legal Basis and Principles
The State Audit Office is the supreme audit institution. The main objectives of the State Audit Office are to promote legal, efficient and effective spending of public funds and other assets of material value, as well as to contribute to the protection of the national wealth and the property of the autonomous republics and local self-government units, and to the improvement of public financial management.
The main functions of the office are:
- Public audit
- Control of budget execution and spending
- Monitoring the financial activities of political unions of citizens
The audit authority of the State Audit Office, within the scope of its powers, extends to the legislative, executive and judiciary branches of government, legal entities under public law, local self-government bodies, the National Bank of Georgia, enterprises in which 50 per cent or more shares are owned by the State, by the autonomous republics and/or by local self-government units, also to other legal or natural persons, organizations and institutions.
The State Audit Office carries out its activities on the basis of the Constitution of Georgia, international treaties and agreements, Organic Law of Georgia on State Audit Office, other legislative and subordinate normative acts.
The State Audit Office is guided by the main principles laid down by the International Organization of Supreme Audit Institutions.
The principles of the State Audit Office's activities are objectivity, independence, publicity and professionalism.
The State Audit Office is independent in its activity and bound only by the law.
The State Audit Office is accountable only to the Parliament of Georgia and until June 1 of each year, prepares, and submits an annual report on its activities to the legislative body.
Public Audit and Audit Reports
The purpose of public audit is to provide an independent and objective assessment of public resources management, as well as to determine how effectively the stated goal is being achieved.
The State Audit Office carries out three types of public audits: financial audit, compliance audit, performance audit.
Within the financial audit, the State Audit Office examines and evaluates reports and financial statements of public institutions, as well as the functioning of internal control and internal audit. In addition, the State Audit Office checks whether an auditee is managed properly and in good faith. Other than that, the State Audit Office is authorized to examine, evaluate and report any issue that are of critical importance for improving public finance management.
Compliance audit involves checking, evaluating and reporting on the lawfulness and reasonability of the activities of public agencies. Specifically, it determines the extent to which the organization's activities comply with legislation, regulatory norms, contractual requirements, grant requirements, organizational policies and procedures.
Within the performance audit, the State Audit Office assesses the economy, productivity, and effectiveness of the use and management of public resources.
A report is prepared based on the audit findings, which contains information about revealed deficiencies within the audit and recommendations issued for resolving those shortcomings.
Audit reports are presented to the auditee. It may also be sent to its superior body. The State Audit Office, through electronic system, monitors implementation of recommendations issued within the audit.
Based on the recommendations of the State Audit Office, the Parliament and the executive branch make important decisions in the social, health, education, science, economics and other fields. Because of the audits, with the recommendations issued by the State Audit Office, tens of millions of Georgian Lari (GEL) are saved in the state budget annually.
Within the audit, in case of detecting signs of a crime, the State Audit Office addresses law enforcement agencies and provide them with relevant materials.
Reports and Opinions on the state budget
Existing budgetary legislation provides for the preparation of reports / opinions by the State Audit Office and submission to the Parliament of Georgia at both the planning and implementation stages of the state budget.
At the planning stage of the state budget, the State Audit Office prepares an opinion for the Parliament of Georgia on the reasonableness and lawfulness of revenues and expenditures provided by the Government's next year's draft state budget (the Government of Georgia submits draft state budget to the Parliament of Georgia no later than October 1).
As for the reports of the State Audit Office on the state budget execution, the State Audit Office prepares reports on the implementation of the state budget for both the current and last year.
- The Office prepares a report on the current state budget execution (8 months execution) of the Government’s State Budget Execution Report, which will be submitted to the Parliament of Georgia together with the opinion on next year's state budget.
- The Office prepares a report on the annual Government’s State Budget Execution Report. The Government submits the above-mentioned report to the State Audit Office within three months after the end of the year. Then, within 50 days, the State Audit Office prepares its report and submits it to the Parliament.
Autonomous Republic Budget
The State Audit Office annually submits information on the results of the audit related to the expenditure and execution of the budgets of the Autonomous Republics of Abkhazia and Adjara to the Supreme Council of the respective Autonomous Republic.
In addition, the State Audit Office prepares and submits a report / opinion to the Supreme Council of the Autonomous Republic on the draft budget of the Autonomous Republic and the report of the Government of the Autonomous Republic on budget execution.
The State Audit Office submits a report to the Parliament of Georgia on the expenditure and execution of municipal budgets once every two years.
Monitoring of Political Finances
The State Audit Office monitors the financial activities of political unions of citizens within the competence of the Organic Laws of Georgia on Election Code and Political Associations of Citizens.
LEPL Public Audit Institute
The Public Audit Institute is a legal entity under public law operating on the basis of the State Audit Office with an educational profile.
The Public Audit Institute operates in several areas: provides professional development of the State Audit Office staff, provides certification of public sector audit services with exclusive rights, municipal development and civil servants professional development programs, conducts individual and corporate trainings, provides research / analytical, expert and consulting services, creates professional literature and study guides.
The Institute was established on the basis of the Organic Law of Georgia on State Audit Office in 2012 and operated in two main areas beforehand- Public Sector Auditing Services and Public Sector Auditors Certification. Since 2019, the Institute has ceased conducting public audit and has chosen an educational profile as its core.