The Role of OAG Thailand and the Fight against Corruption & Money Laundering

1. The Role of OAG Thailandand the Fight against Corruption & Money Laundering Prepared by Sutthi Suntharanurak, Ph.D. (Economics) Government Auditor , Professional Level Office of the Auditor General of Thailand

2. Outline • Brief Introduction of OAG Thailand • Current situation of corruption in Thailand • The Anti-Corruption and Anti-Money laundering Agencies in Thailand • Investigative Audit ;The Role of OAG Thailand and Fight against corruption & money laundering

3. Brief Introduction of OAG Thailand • In 1875 under the absolute monarchy, the Royal Audit Office was established in order to control the public finance of Siam. (Siam is the previous name of Thailand.) • In 1915, the Inspection Department was set up in order that audited collecting revenue and inspected public expenditure.

4. In 1932 when the country changed to democracy rule, The inspection department was transferred to be a new and independent agency under the Office of the Prime Minister namely “ Office of the Auditor General of Thailand”  • Based on Audit Council Act B.E. 2476 (1933), Siam established the Audit Council as an institution accountable for financial government audit. • In 1979, Thailand revised the Law on Audit Council and enacted issued State Audit Act B.E. 2522 (1979). This law improved and expanded the audit authority to the performance audit.

5. However, in 1999 the State Audit Act was improved again as the Organic Act of State Audit B.E. 2542 (1999) under the constitution of Kingdom of Thailand which the State Audit shall be carried out by the State Audit Commission and the Auditor General who is independent and impartial. • Presently, OAG Thailand is one of constitutional organs under the Thai Constitution 2007 which composed the State Audit Commission, the Auditor General and the office of the Auditor General. OAG has reported directly to the parliament.

6. The State Audit Commission has authorities and duties as follows; • To determine standards relating to State audit; • To provide opinions, suggestions and recommendations for the correction of faults in State audit ; • To appoint the independent Fiscal and Financial Disciplinary Committee ; • To render decisions on actions relating to fiscal and financial discipline, finance and budget and the cases of dispute in relation to the decisions of the Fiscal and Financial Disciplinary Committee.

7. The Auditor-General shall have the powers and duties in relation to State Audit and shall be independent and impartial. • Under Article 39 (2) of the Organic Act of State Audit B.E. 2542 (1999),OAG Thailand has the authorities as follows - To audit the statement on receipt and payment; - To audit the currency reserve account; - To audit the receipt and payment, the custody and disbursement of money and uses of other properties belonging to the audited agencies; - To examine in the connection with the collecting revenue of audited agencies. • However, OAG will give the opinions whether audited agencies are in compliance with law, rules and regulation also value for money.

8. Our SAIs Development

9. Audit Types of OAG Thailand • Financial  Financial Audit , Accounting Audit and Voucher Audit • Compliance  Public Procurement Audit and Investigative Audit • Value for Money  Performance Audit • Other  Environmental Audit, Audit of Collecting Revenue and Special cases Audit

10. Current Situation of Corruption in Thailand • Recently, Thailand has slid to 88th place out of 176 in the 2012 Corruption Perceptions Index (CPI) compiled by Berlin-based Transparency International. • Thailand scored 3.7 from 10, sharing the same score and ranking with Malawi, Morocco, Suriname, Swaziland and Zambia.   • Actually, Thailand has the average CPI score not over 4.0 which reflects the severe problem of corruption in the Thai society.

11. CPI Thailand during 1999-2010

13. Memorial of corruption in Thailand

14. Memorial of Corruption in Thailand

16. The Anti-Corruption and Anti-Money Laundering Agencies • The National Anti-Corruption Commission (NACC) • The Public Sector Anti-Corruption Commission (PACC) • The Anti-Money Laundering Office (AMLO) • The Department Special Investigative (DSI) • Royal Thai Police (RTP) • Office of the Auditor General of Thailand (OAG)

17. The Anti-Corruption and Anti-Money Laundering Laws in Thailand • Thai Constitution B.E. 2550 (2007) issued about the inspection of the exercise of the state power in Chapter XII (Section 259-278) • The Penal Code of Thailand created a number general criminal offences relating to corruption of public official in section 143-157, 167,200,201,202

18. The Organic Act on Counter Corruption B.E. 2542 (1999) • Act on Offences Relating to the Submission of Bids to State Agencies B.E. 2542 (1999) • The Anti-Money Laundering Act B.E. 2542 (1999) • The Special Investigative Cases Act B.E. 2547 (2004) • Act on Administrative measure for prevention and suppression corruption B.E. 2551 (2008) • The Organic Act of State Audit B.E. 2542 (1999)

19. Source: The Nation – Sunday, July 29, 2012

20. Investigative Audit;The Role of OAG Thailand and Fight against corruption & money laundering • If the auditor found fraud and corruption behavior from the audit, we will submit the existed evidences to the investigative audit. • Investigative Audit is one of audit categories that aims to examine facts and collect evidence in the fraud suspected case or mistaken regulation. • The case considered to be in the process of investigative audit is normally considered from magnification of other audit categories such as financial audit, public procurement audit even performance audit including complaint, anonymous letter, and press news. 

21. The result of investigative audit of OAG in the fraud suspected case as prescribed in the Organic Act on State Audit B.E .2542(1999) was defined that the approved case by the State Audit Commission as fraud suspected circumstance or misuse of authority caused public damage on finance and property shall be •  notified the case to the investigative police for further action according to the laws. •  inform the audit result to NACC in case of mistake action as the Act on Offences Relating to Submission of Bids to State Agencies B.E.2542(1999) or Anti Collusion Law for further action according to the laws.

22.  inform the audit result to AMLO in case of mistake action as Anti-Money Laundering Act B.E. 2542 (1999) •  inform the audit result to the audited agencies or responsible Ministry or Supervisor or Controller of the audited entities for further action in criminal Law , Law on Liability for Wrongful Acts of Publics Officials , and Severe Anxiety Disorder Punishment. •  For the implementation of fraudulent case, the investigative police shall make use of OAG audit report to be the main inspection.

23. Our Statistical Cases about Fraud and Corruption

25. Cases which OAG considered to be fraud and corruption behavior • 1. Land purchasing of Local government • 2. Corruption in Public Procurement as manipulation of pre qualification, specification of overly sophisticated design, submission of false quotation, inflate price, bid rigging or price fixing, etc. • 3. Money lost from the account • 4. Bring false document to be disbursement evidence • 5. Intention of wrong doing on regulation • 6. The mistake action as the Act on Offences Relating to Submission of Bids to State Agencies B.E.2542(1999) or Anti Collusion Law • 7. Other cases such as excess payment of allowance or management beyond its mandate and causing damage

26. Sources • David Lyman (2012), “Anti-corruption Progress to Improve Thailand’s AEC and Global Standing” (Presentation slides in panel discussion of Tilleke & Gibbins) • Sirat Srisoontornpinit (2012), “Relationship between NACC and OAG Thailand” (Presentation slides in ASEANSAI meeting), www.aseansai.org • Sutthi Suntharanurak and Pan Ananabhibhut (2012), “Thai Budgetary Reform to Counter Corruption” (Research for NACC Thailand)