Summary Doctoral thesis in Economics: Auditing organization operating on state budget expenditure performed by the State Audit Office

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CHAPTER 1 INTRODUCTION ABOUT THE RESEARCH

1.1. The urgency of the thesis

To overcome these limitations, it is necessary to have a comprehensive study, a system of theory and practice on auditing organization of state budget expenditure activities in order to clarify the causes of the limitations as well as propose a scientific basis for improving the quality of operational audit in the next time. With that desire, the postgraduate chooses the topic "Auditing organization operating on state budget expenditure performed by the State Audit Office" as the research subject in his doctoral thesis. 1.2. Overview of the research situation

1.2.1. Operational auditing studies in the public sector According to the postgraduate's synthesis, there are 6 studies, in which they are ministerial level topics, dissertations and articles, but these studies mainly refer to the role of operational audit, benefit, value or factors affecting the development of operational audit ... without studying specific contents in organizing operational audit associated with state budget expenditure activities. Stemming from the great role of the state budget in ensuring the operation of the state apparatus and as a macro-regulating tool, it is required that the management and use of the state budget must be for the right purposes, according to the right regime, thrift and result. To consider and evaluate the effectiveness of public resources, in the world, most countries have set up a supreme auditing agency. In Vietnam, the State Audit Office, established by the National Assembly, is seen as an efficient, important and effective tool in assessing, confirming, concluding and recommending for management. use of finance and public property. However, that achievement has mainly been done through the type of financial statement audit and compliance audit. 1.2.2. Studies on operational auditing criteria

There are 5 research groups on auditing criteria, including abroad and domestic studies mainly in the form of presentations at the seminar. The studies go into the roles and benefits of the criteria, but have not yet studied the approach and built specific auditing criteria associated with operations in general and state budget expenditure in particular. 1.2.3. Studies on operating audit organizations

The scale of annual national budget expenditure tends to increase, on average, the growth rate of state budget expenditure in the period from 2011 to 2018 is about 11.25% per year. Public debt is always at a high level and state budget deficit in the period from 2016 to 2020 with average of 3.9% of GDP... Even so, state budget spending is still in the wrong regime, not according to the norm, ineffective, so always put pressure on and affect the sustainability of the state budget. Before the request to provide timely information to the National Assembly to monitor and decide on the State budget, the role of the State Audit Office should be enhanced and auditing of State budget expenditure activities of the State Audit Office should be promoted. There are 3 researches related to the audit organization operating in parallel with the narrow scope (the health field or the national target program) or different (the business field) with the research scope of the thesis. 1.2.4. Studies on operational auditing processes

Over the past years, theories about operational audit in general and state budget performance audit have been concerned by many researchers, but there are not many scientific research works, especially there are other perspectives which must be continuously studied and clarified.

There are 5 related studies, but these studies focus on subjects that are non- business units, commercial banks or point out the benefits of a step in the operational auditing process without any overall research on both a 4-step process associated with state budget spending. 1.3. Gaps need further study

Recently, operational audit has been highly praised and considered as an independent audit in the State Audit Office's activities. However, due to the late birth and development after the type of financial audit, compliance audit, the approach to in-depth research and application of auditing organizations is still difficult, the auditing criteria and auditing process are still is of general nature, lack of detailed instructions, especially practice instructions. The domestic researches mainly focus on theoretical and academic such as the nature and role of the operational audit organization or the operating audit organization associated with a specific entity such as an enterprise or public service in the medical field. Foreign researches often study on concepts, criteria and the role

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1.6. Research Methodology

The thesis approaches the research object according to the qualitative method, inheriting and developing previous research views on the operational organization of the State Audit Office with the type of financial audit and compliance audit in the state budget sector.

or benefits of operational audit in the public sector. Although, there have been many researches on operational audit, but the audit organization of state budget spending has been carried out by the State Audit Office, up to now, there has been no methodical, comprehensive and systematic research. Therefore, there are many issues, views and perceptions about auditing organizations on state budget spending activities that are left open or have not been studied and explained in a specific, profound and comprehensive manner. The theisi also uses statistical methods, qualitative analysis, synthesis and interview; method of processing data from primary and secondary data sources to achieve research objectives. 1.4. Research objectives 1.7. Structure of the thesis The general research objective of the thesis is to propose solutions to perfect the The thesis is structured into 4 chapters, including: operational audit of state budget expenditure activities. Chapter 1: Introduction of the study The specific objectives of the thesis are: Chapter 2: Theoretical basis for the auditing organization operating on State - Building a theoretical basis for the organization of the operational audit of state budget expenditure performed by the State Audit Office budget expenditure activities. Chapter 3: Current status of the auditing organization operating on State budget expenditure performed by the State Audit Office Chapter 4: Complete solutions for the auditing organization operating on State - Studying the experience of the supreme auditing agencies in the world and drawing lessons about the operational audit organization of State budget expenditure activities. budget expenditure performed by the State Audit Office

- Analyzing and evaluating the actual state of operational audit organization of State budget expenditure activities performed by the State Audit Office, clearly indicating the results achieved, the limitations and the causes of the limitations.

- Proposing solutions to perfect the operational audit organization of State budget expenditure activities performed by the State Audit Office and the conditions for implementing those solutions. 1.5. Object and scope of the study - The research object of the thesis is the operational audit organization of State budget expenditure activities

- Scope of the study: With integrated and multi-level budget of Vietnam, so, the scope of the study with a longitudinal (field) approach to state budget expenditure is linked to the budget of ministries, central agencies and localities, namely recurrent expenditure and development investment expenditure (accounting for about 87% - 90% / total annual state budget expenditure).

The time to survey the current state of the operational audit organization of State budget expenditure activities performed by the State Audit Office is limited in the period from 2015 to 2019.

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CHAPTER 2 subjects in order to evaluate the economy, efficiency and effectiveness in the management and use of state budget expenditures.

THEORETICAL BASIS OF THE AUDITING ORGANIZATION OPERATING ON STATE BUDGET EXPENDITURES PERFORMED BY STATE AUDIT OFFICE

2.1. Overview of state budget expenditure and operational audit 2.1.1. Overview of state budget expenditure 2.1.1.1. Concept of state budget expenditure

State budget expenditure is understood as the distribution and use of state budget funds to ensure the implementation of the State's functions according to certain principles or in other words, state budget spending is the redistribution of financial resources that has been focused on the State budget and bring them to the intended use.

2.1.1.3. Content of State budget expenditure (1) . Regarding to the development investment spending Development investment expenditures are State budget expenditure tasks, including capital on construction investment expenditures and a number of other investment spending tasks in accordance with law. (2) . Regarding to regular spending Regular expenditures are those used by the State budget fund to meet the spending needs associated with the regular functions and tasks of the State in socio- economic management. These are expenses, although not immediately creating physical products, but for consumption and will be reproduced and served for economic development in the future. 2.1.2. Overview of operational audit Based on the purpose and content, State budget expenditures include: cumulative expenditures (spending on development investment) and consumption (recurrent expenditures). 2.1.2.1. Concept of operational audit

There are many concepts given about operational audit depending on the approach and views of different subjects, but basically the core content of the concepts are towards the term economy, efficiency and effectiveness.

The process of state budget expenditure includes: The process of distributing and allocating funds from the state budget to form all kinds of funds before being put into use; and the process of using is to directly use the allocated money from the state budget to the purpose or beneficiary without going through the formation of funds before being put into use.

From the above analysis issues, it can be understood that state budget expenditure is all expenses estimated and decided by competent agencies to ensure the implementation of the State's functions and tasks in a certain period of time. . In the view of the postgraduate, operational auditing of the state budget expenditure is understood as examining and evaluating the economy, efficiency and effectiveness in the management and use of state budget expenditures. Auditing activities must be based on the establishment of audit criteria associated with appropriate audit procedures in order to achieve the stated audit objectives. 2.1.1.2. Characteristics of State budget expenditure affect operational audit organization 2.1.2.2. Objectives of operational audit

State budget expenditures are associated with state power and are not directly refundable; at the same time, state budget expenditures are considered and evaluated for effectiveness on a macro scale.

According to the audit standards of the State Audit Office, the objectives of the operational audit include: Examining, evaluating the economy, the efficiency, the effectiveness of programs, activities, units; Providing recommendations to improve the situation and publishing the results in accordance with the audit findings. Depending on the circumstances and the specifics of the audit stage, the audit objectives might be:

State budget expenditures are uniformly managed, used efficiently, economically and publicly and transparently and only are implemented when there are estimates, in accordance with regulations, standards and norms; following the cycle of the state budget.

(i) Audit objective describes the current situation: Describing the current situation to provide more information for the audience using the operational audit report to fully understand the situation, development, process of the program and activities; (ii) Standard audit objectives: Examining and evaluating whether the programs and activities are performed according to the proposed standards of economy, efficiency and effectiveness. With some characteristics of the State budget expenditure analyzed above, it is necessary to organize the operational audit in association with the process of forming and ending a state budget cycle as well as approaching the scope, nature and purpose of the State budget expenditure tasks in each period and specific

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Fourthly, ensuring the quality of the audit stage. 2.3. Operational audit criteria of state budget expenditures performed by the (iii) Analytical audit objectives: Analyzing, finding out the causes and evaluating the effects of the operation not according to the standards of economy, efficiency and effectiveness as set forth for the programs and activities of the unit. State Audit Office 2.1.2.3. The role of operational audit of state budget expenditure performed by the 2.3.1. Concept of operational audit criteria State Audit Office (i) Firstly, providing the National Assembly with information about the quality of management and efficiency in the use of state budget funds. According to the operational audit’s training documents of State Audit Office, "Auditing criteria are feasible and appropriate standards that are used as metrics to evaluate audit content:" [24, p.88] .

(ii) Secondly, providing information to the society, taxpayers as well as improving accountability, transparency on the achievement of set socio-economic goals and economic use results of the State budget fees.

In the view of the Postgraduate, the operational audit criteria associated with state budget expenditure can be understood as follows: “Operational audit criteria are appropriate, acceptable qualitative and quantitative measures that are based on the measure to evaluate the economy, efficiency and effectiveness of state budget expenditure activities of organizations, agencies and units ”. (iii) Thirdly, promoting the improvement of management quality and efficiency in the use of state budget funds by developing and applying recommendations after conducting operational audits. 2.3.2. Operational audit criteria of state budget expenditures 2.2. Overview of the operational audit of state budget expenditure performed by the State Audit Office

(1). Economic operational audit criteria: Economy is often referred to as the minimum principle and otherwise known as thrifty. Economy mainly focuses on considering the reduction in input resources.

The total cost of the unit used = x 100% (1) Level of spending’s saving from State Budget Toal budget assigned due to project

(2). Operational audit criteria for efficiency: Efficiency refers to the maximum output with defined resource usage. 2.2.1. The concept of operational audit organization The concept of "Operational audit organization" is composed of the terms "Organization" and "Operational audit". According to the Encyclopedia, the term "Organization" [19] is generally understood as the activity to define the structure of the system, and arrange the implementation of work; and the term "Operational Audit" as described in Section 2.1.2 above, is essentially the use of audit criteria to evaluate the economy, efficiency and effectiveness of activities, ystem or program or project.

2.2.2. Requirement of operational audit of State Budget expenditure (i) Operational Audit organizations of state budget expenditures must ensure (i) As for regular expenditure: The effectiveness of the use of state budget expenditure can be measured by generating a larger output or results while still using a specified amount of defined input funding. efficiency and professionalism. (ii) Auditors performing audit activities must have skills and qualifications. Efficiency of state budget expenditure = Funds assigned to perform the tasks / actual funding for the tasks * 100% (2) 2.2.3. Principles of organizing operational audit of state budget expenditures Or Efficiency of state budget expenditure = Results of implementing tasks / tasks Firstly, the organization of operational audit of state budget expenditure must be consistent with the legal status, implementation capacity of the State Audit Office and the current legal system. implemented according to assigned plans * 100% (3) (ii) For development investment expenditures: To determine the effectiveness of state budget spending for a project, there are often many quantifiable methods, for example: + Net present value (NPV):

Secondly, complying with the audit standards, procedures, and relevant guidelines that apply to operational audits and focus on the auditor's ability to judge the expertise associated with the characteristics of each operational audit when setting up audit criteria to evaluate the economy, efficiency and effectiveness in the management and use of state budget expenditure. (4) Thirdly, choosing audit topics in accordance with the functions, tasks and expected audit objectives.

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2.4. Personnel organization of operational audit for state budget expenditures + Internal rate of return (IRR):

(5)

Operational auditing organization of state budget expenditure activities is also done through an audit incorporating all three types (financial audit, compliance audit and performance audit), in which mainly financial audits are performed and compliance audit, while operational audit only implemented in some contents. According to the postgraduate, the organization of human resources for the operational audit of state budget expenditure is carried out with two models as follows: Accordingly, any project with a larger NPV or IRR will be appreciated.

The first model of the online audit team The organizational model of online audit teams is suitable for audits operating (6) independently of state budget spending. + ICOR coefficient: ICOR = [Kt-K(t-1)]/[Yt-Y(t-1)] In which: K is capital; Y is the output; t is the reporting period; t-1 is the previous period

The second model of the division of audit teams The hierarchical audit team model is suitable for auditing state budget expenditure activities integrated with financial audit and compliance audit in an audit stage when the audit scale and scope are large and also suitable for Vietnam's state budget characteristic, that is typically intergovernmental integration. In addition to evaluating and determining efficiency through a number of quantitative indicators, for development investment spending, auditors need to combine the assessment with some other qualitative indicators such as effectiveness for Socioeconomic. 2.5. Organizing the operational auditing process for state budget expenditures (3). Validity of operational audit criteria: Validity is understood as the results, achieved goals of the entity.

It can be understood that the operational audit process is the provisions on the order and procedures to carry out the operations of the operational audit. Like other auditing processes, operational audit processes are performed in the following four steps: The validity of state budget expenditure activities is understood as the performance results or the level of achievement of objectives and tasks when the state budget funds have been allocated and used. 2.3.3. Source of building audit criteria of state budget expenditure activities

Audit implementation

Audit preparation Diagram 2.4 Operational audit process Audit reports’ preparation and submission Monitoring, checking the implementation of audit conclusions and recommendations In general, there are many approaches to build auditing criteria. However, depending on the characteristics of each operational audit, the auditor may collect different sources of documentation to appropriately establish the auditing criteria. It usually relies on the following sources: Source: Operational audit process of State Audit Office(2018) Firstly, the source is legal. Secondly, other sources.

For the auditing stage of state budget expenditure activities: Sources of documents that the auditor considers and analyzes to establish the auditing criteria can be: the State Budget Law; public investment law, system of standards and norms; medium and long term plans on the state budget; plan on socio-economic development in the period; medium-term public investment plans; resolutions of the National Assembly, reports of the Government on state budget estimates ...

2.5.1. Audit preparation The content of this step is that: the auditor surveyed, collected information and documents related to the operation, management and use of the state budget of the unit; internal control system; management and operation processes; organizational structure; internal regulations ... On that basis, the auditor assesses the risks, determines materiality and notes other issues affecting the control of state budget expenditure of the unit. The purpose of this step is to help the auditor establish the auditing criteria in developing and completing the general auditing plan, detailed auditing plan, and setting auditing program for the auditing stage.

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2.5.2. Audit implementation criteria, there is a need to coordinate with experts; The agreed criteria used in the audit stage must have the consent of the audited entity. This is the stage when the auditor uses auditing techniques and procedures to collect auditing evidences.

Criteria for evaluating the economy, efficiency and effectiveness: Both supreme auditing agencies choose one to two out of three criteria (economic, efficient, and effective) to perform the audit stage, often do not select all three criteria in an audit stage because of the difficult feasibility. Operational audit is the process of making open judgments, and therefore, the auditor should be careful in analyzing auditing evidences as well as the quality (value) of them. 2.6.2. Experience of some countries on audit organization and 2.5.3. Preparing and submitting auditing reports implementation of operational audit process (1) Canadian State Audit Office (2) Malaysia State Audit Office The auditing report is the final product of the auditing. On the basis of audit findings on the management and use of the state budget, the operational audit report will evaluate, conclude and recommend on audit objectives and contents of the state budget expenditure audit that were identified in the auditing plan. (3) Australia National Audit Office (ANAO) 2.5.4. Monitoring and checking the implementation of audit conclusions and (4) US Government Accountability Office (GAO) recommendations (5) New Zealand State Audit Office 2.6.3. Lessons learned for the State Audit Office of Vietnam Researching experiences from the above 5 auditing agencies about the audit process and audit organization methods; on that basis, lessons learned are: This is the last step of the auditing process; an activity requires the implementation of audit conclusions and recommendations of the audited entity, but also is the activity of examining the entity's corrective actions related to the indicated audit recommendations. 2.6. Experience in operational audit of a number of countries in the world and lessons for the State Audit Offices in Vietnam 2.6.1. Experience in building operational audit criteria (1) The view of the supreme audit agency in the world

(1). The lesson of building operational audit criteria: it must attach the importance and pay attention to the construction of audit criteria and risk assessment which is suitable for each audit stage; auditing criteria must be based on reality and set in the specific context and conditions of the entity and should be exchanged and discussed with management of the entity; operational audit criteria should be designed from general criteria to detailed criteria; it needs to increase the use and consultation of external experts when setting audit criteria.

According to the general guidelines on building operational audit criteria of INTOSAI as well as some other supreme auditing agencies, it is not possible to build an available sample operational audit criteria system to apply to all operational audits for which the operational audit criteria will be established and developed by the auditors themselves, and should be considered in many respects accordingly. (2) Experiences of Indonesia and Tartastan auditing agencies in terms of (2). Lessons about the organization of human resource of operational audit Firstly, the size of the audit organization is about 5 to 7 auditors doing from the planning stage to the end to prepare the audit report, at the same time attaching importance to the structure, capacity and expertise. operational audit criteria Secondly, it is necessary to often organize the operational audit independently with the long lasting audit, even up to 12 months.

(3). Lessons on performing operational audit processes Firstly, the supreme auditing bodies all develop auditing standards and The operational audit criteria of the Tartastan and Indonesia auditing agencies are specifically developed for each auditing stage and the audit criteria are based on auditing standards and auditing practice experience, good practices are drawn from the same operations. auditing guidelines that operate under INTOSAI.

Second, the supreme audit agencies attach great importance to the medium and long-term planning work to determine selected areas and topics for operational audit. Requirements when building audit criteria: Focusing on selecting auditors with general knowledge of the auditing field and experience from similar activities to participate in the criteria development. On the other hand, when setting up the

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Thirdly, choosing the audit topic, which concerns the period (usually between 3 years and 5 years) and focuses on the most risky areas .... experience from thematic audits as well as the necessary foundation preparation required for implementing this type of operational audit. 3.1.3. The results of operational audit of State budget expenditure

Fourthly, usually spending a lot of time on planning the audit (eg: Malaysia State Audit Office spends up to 70% of the time of the audit stage on the audit planning stage). Fifthly, a number of supreme auditing agencies attach great importance to the (1). Expenditure for development investment: Audit results revealed many limitations and shortcomings in capital allocation; approval of investment guidelines, projects; acceptance and payment work; progress and capital use .... inspection of the implementation of audit conclusions and recommendations. (2). Regular expenditures: Restrictions on spending that are not in accordance with regimes, standards, norms, or with improper sources ...; spending is still large ... CHAPTER 3 3.2. Actual status of operational audit organization of state budget spending performed by the State Audit Office CURRENT SITUATION OF OPERATIONAL AUDIT ORGANIZATION OF STATE BUDGETS EXPENDITURE PERFORMED BY STATE AUDIT OFFICE 3.2.1. The state of building operational audit criteria of state budget spending performed by the State Audit Office

Auditing criteria is the most differentiated and distinctive point to distinguish the types of audit (operational audit with financial audit and compliance audit). Auditing criteria are often developed in the audit planning stage based on the determination of the expected audit objectives and contents.

3.1. Overview of the operational audit organization of the State Audit Office 3.1.1. Overview of State Audit Office State Audit Office was established under Decree No. 70 / CP dated 11/7/1994 of the Government. The birth of State Audit Office is indispensable in accordance with required and international practice. State Audit Office has the main function and task of assessing, confirming, making conclusions and recommendations for the management and use of public finance, public assets ... The organizational structure of the State Audit Office consists of 32 units divided into 04 blocks. 3.1.2. The development of operational audit of the State Audit Office The period before 2010: Operational audit was not respected, auditing activities of the State Audit Office mainly performed financial audit and compliance audit. The period from 2010 to 2013: The State Audit Office has not conducted independent audits but the number of large thematic audits has increased.

Through the practical survey and the results (90%) of the questionnaires, it shows that the State Audit Office has not built the criteria as well as guidance on operational audit criteria on state budget spending to apply and refer to when evaluating the management and use of state budget expenditures by audited units. In fact, the audit criteria of some audits were fuzzy and not yet established, the structure was clear and mainly expressed through some audit contents or statistical indicators in the final report. State budget calculation of units. A few assessments of the economy, efficiency and effectiveness are auditors mainly based on the norm of state budget allocation, the actual implementation and results of the implementation of the state budget estimates of the units. audited, but in practice, the financial mechanism and the norms of state budget allocation are not synchronous, limited and inconsistent with the actual operation of the state budget using units. 3.2.2. Current situation of human resources organization of operational audit of state budget expenditures

From 2014 up to now, especially the implementation of the 2015 Law on State Audit, the State Audit Office has paid more attention and focused on the development of operational audit. Accordingly, the State Audit Office strengthens the organizational structure of the State Audit Office; developed the audit standards system of the State Audit Office, and at the same time oriented the pilot organization of a number of operational audits in the annual audit plan of the State Audit Office. According to the aggregated data, in the period from 2015 to 2019, the proportion of operating audits in the annual audit plan is about 4%. The human resources organization of operational audit of state budget expenditures is designed in two forms, that is auditing the state budget balance of ministries, central agencies and localities (integrating audit objectives and contents) and auditing independently operational audits according to selected topics: (1). Human resources organization of operational audit of state budget It can be seen that the development of operational audit of State Audit Office is only really clear from 2015 until now, after having accumulated some expenditure according to an integrated model

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(2). Audit implementation stage Organizational model of audit team according to classification (Model of audit team with audit teams), specifically:

Inheriting the results from the study of auditing plans due to the audit preparation models (above), the thesis has synthesized audit findings through illustrative boxes associated with the independent and integrated audit model. - The organization of audit personnel in auditing plans at ministries and central agencies is usually about 3-4 audit teams or 7-9 audit teams when the state budget is larger and each audit team has 3 or 4 auditors .. (3). Making and submitting audit reports stage

The thesis has synthesized and analyzed the current state of the process of making audit reports at the State Audit Office, especially the procedures for preparing and submitting audit reports. (4). Examination stage of the implementation of audit conclusions and - Human resources organization of auditing budget statements in localities for all three areas (state budget revenue, regular expenditure and capital construction investment). Except for localities with large scale state budget (Hanoi and Ho Chi Minh City), the personnel organization structure for audit teams is usually arranged from 5-8 audit teams, each audit team has from 3 to 5 auditors. recommendations

the high rate of financial settlement, but

The thesis has analyzed the 3-step implementation process, which clearly implementation results of audit conclusions and shows recommendations on basic recommendations on reorganization of management, supplementation, the revision of mechanisms and policies is still slow and the rate is low. (2). Human resources organization of operational audit of state budget spending according to an independent model: Due to the audit objectives by subject and audit scope is not large in principle of organization size of auditing personnel under the online but practical model is still organized according to the linear model, popularizing the organizational structure of auditing personnel including from 2 to 4 audit teams with about 8 to 16 auditors. 3.3. A general assessment of operational audit organization of state budget expenditure performed by the State Audit Office 3.3.1. Results in setting criteria and organizing operational audit of state budget expenditures 3.3.1.1. Results in building audit criteria (i) Forming a foundation for developing operational audit.

Through the study of the above two audit organization models, it shows that there is a difference in the size of the audit team as well as the selection and arrangement of audit staff in the audit team. Specifically, the organization human resources of the integrated audit organization model requires more number of auditors due to the broader audit scope and objectives, but often does not impose high requirements on auditing personnel; while the size of the organization and personnel of the independent audit organization model is often less but requires high quality. 3.2.3. The situation of the organization of the operational audit process for state budget expenditures

(ii) Auditing criteria of state budget expenditure, although not independently, detailed and fully developed for the audits, it has been integrated in terms of economy, efficiency and effectiveness embedded in the content of the audit, accounting of the thematic audits, the state budget settlement of the ministries, central agencies and localities. 3.3.1.2. Results in operational audit organization of state budget expenditures (i) Results of the personnel organization of the operational audit of state budget expenditures. (ii) Results of the implementation of the process of operational audit of State (1). Audit preparation period - The thesis has researched the status of an auditing plan from the preparation and approval of the survey outline to the general audit planning stage. Along with that, the auditing plan is illustrated in an integrated model and an independent model associated with two areas of expenditure (regular expenditure and development investment expenditure). budget expenditures. 3.3.2. Limitations and the causes of the restriction 3.3.2.1. Limitations in building audit criteria

- For the operational audits of state budget expenditure are integrated: Auditing criteria of state budget expenditure have not been focused on methodically, On the basis of the research results, the thesis clearly shows the difficulties, limitations and identifies that most of the auditing plans are made for different subjects, but are the same in the way and content of risk assessment. ; Since then, the determination of audit objectives, contents, methods and audit criteria are still universal, estimated and has not come into reality to refer to the audit implementation process.

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fully and clearly developed, but mainly designed in the form of General auditing content or some aspects ... not organized monitoring, updating and summarizing the implementation of audit conclusions and recommendations into a complete database system. 3.3.2.4. Causes of limitations

There are many reasons leading to the limitations of the operational audit results of state budget expenditures of the State Audit Office in recent years, but the main reasons are: (1) Professional qualification and audit skills (2) Lack of timely and inadequate implementation instructions (3) There is no consensus in awareness about operational audit

CHAPTER 4 - For operational audits of state budget expenditure conducted under an independent model: Operational audit criteria have been concerned, but only to a certain extent, that is the design of general audit criteria, has not yet developed these general audit criteria into detailed audit criteria associated with the specific conditions and context of State budget expenditure activities at the audited entity; has not had the consultation of experts or exchanged opinions with the audited unit; ambitious to comprehensively evaluate the economy, efficiency and effectiveness of the management and use of resources of a budget level with the scope of a budget year, so audit criteria are still heavy qualitative, spread and difficult to implement. 3.3.2.2. Limitations in the organization of auditing personnel organization The arrangement of auditing personnel in audit teams still had many COMPLETING SOLUTIONS FOR THE OPERATIONAL AUDIT ORGANIZATION OF STATE BUDGETS EXPENDITURE PERFORMED BY STATE AUDIT OFFICE limitations and was not consistent with the nature and characteristics of each audit. 3.3.2.3. Limitations in the audit process of state budget expenditure activities 4.1. Orientation of developing operational audit of state budget expenditures First, the audit preparation stage

Firstly, the State Audit development strategy to 2030 and a vision to 2035, the State Audit Office needs to clearly define a roadmap associated with quantitative targets and specific objectives for developing the type of operational audit ... Secondly, the State Audit Office develops and completes guidelines for The organization, access to information collection, research and analysis and selection of audit topics on state budget expenditure activities are not appropriate, lack of methodical and passive causes difficulties for the implementation process, both about the auditing process as well as the organization and personnel of the audit team. operational audit in particular sectors ... Seconly, the audit implementation phase Thirdly, applying experience from practice and international to standardize the Auditing methods focus on the audit of compliance rather than economics, system of records, forms to apply for operational audit. efficiency and effectiveness. Fourthly, consolidating personnel, especially training and retraining for The independent operational audits still lack the specific auditing methods of qualified auditors, qualifications and skills in analysis and synthesis ... operational audit such as consultation and use of experts; quality accreditation or Fifthly, it is necessary to pay attention to investment in information technology Thirdly, the stage of preparing and submitting audit reports infrastructure associated with modern audit software applications. Audit reports of the integrated operational audits were not structured and To speed up and improve quality, the completion of operational audit of state synthesized according to each audit content and criteria. budget expenditure should focus on a number of key requirements such as:

For audits operating independently: The audit report has synthesized audit findings according to audit content and criteria, but there is no standardization and consensus on audit criteria. Operational audit reports have not yet reflected the effects as well as the need for remedial solutions. Firstly, to meet the requirement of providing timely, complete and useful information to the National Assembly and the Government in macroeconomic management, especially in the inspection and supervision activities of the National Assembly on using state budget funds Fourthly, monitoring and inspecting the implementation of audit conclusions Secondly, the practical requirements and in line with the to meet characteristics of state budget expenditure and recommendations. Thirdly, to meet requirements according to standards, operational audit There is no difference in the nature of the jobs in this step between types of audit, especially the impact of operational audit recommendations has not been assessed, has processes and in line with international practices

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4.2. The solutions to perfect organization of operational audit of state budget In addition, for a more detailed illustration of the audit criteria outlined above, the expenditure implemented by the State Audit Office postgraduate designed the appendix and the accompanying table for reference. 4.2.1. The solutions to operational audit criteria for state budget spending (iii) The validity criterion includes 2 general audit criteria. Thirdly, the budget settlement stage has 2 criteria that are synthesized and developed into 5 detailed criteria. 4.2.2. Solution to perfect the organization of human resources of operational audit of State budget expenditures Auditing criteria are always considered difficult and new to auditors. Practices in the operational audit of the supreme auditing agencies in the world can not build an available and complete set of criteria to apply to every operational audit stage, but it is very necessary to have guidelines or good practice on audit criteria for reference. To overcome this, the postgraduate proposes two core contents, including: (1). Organization of human resources of operational audit of state budget (1). Approaches to set audit criteria expenditures according to the model of a distributed audit team (i) To carefully study the sources of documents from legal documents related This mainstreaming model is also understood in terms of integrating both audit to the audit topic to select suitable audit criteria. objectives, contents and organizational personnel structure of the audit team.

(ii) The remaining audit criteria will be established through the audit team in coordination with experts as well as consensus with the entity by posing relevant audit questions. . (2). Proposing to build some audit criteria for state budget expenditure

to facilitate

The state budget cycle consists of 3 phases (estimation, budget execution and budget settlement), the auditor's evaluation, conclusions and recommendations for each stage in the state budget cycle, the postgraduate proposes to develop a practice guide on the following State budget expenditure audit criteria: Firstly, the state budget estimation stage has 9 control criteria Deploying this model is often suitable for thematic audits with large topics, the number (size) of audited subjects and the audit scope spanning geographically, diverse sources of capital. The advantage is the concentration of resources as well as the wisdom of the majority; a more comprehensive assessment of the audit topic; saving on state budget costs for conducting audits of the State Audit Office, but the size and structure of personnel participating in the audit is larger and requires mainly auditors with experience in financial and compliance audit, at the same time requires a high level of planning. On the other hand, this model is suitable up to a certain time (2025) when the State Audit Office focuses on financial and compliance audit. (i) Economic criteria (3 criteria) (2). Organizing operational auditing personnel for state budget expenditures (ii) Efficiency criteria (3 criteria) according to the online auditing team model (iii) Effectiveness criterion (3 criteria). Secondly, the budget execution stage (i) Economic criteria The online model applies to an independent audit and is performed throughout by an audit team at the same time on the objective, the content of the audit only focuses on the operational audit to evaluate and recommend in terms of 3E (economy, effectiveness and efficiency) or can only be rated on 1E or 2E.

- General operational audit criteria of state budget expenditures are considered through: The amount of state budget savings = Actual expenditure - the amount of expenditure assigned

- In the total state budget expenditure allocated by areas of expenditure, the auditor can detail the general audit criteria into detailed criteria (autonomous funding sources and non-autonomous funds) to evaluate the difference between the results of the previous year, the actual expenses of the reported year and the estimated expenditures assigned. (ii) Efficiency criterion consists of 6 general criteria, of which some general criteria are developed with many detailed criteria. Applying this model in accordance with international practices, ensuring the independence and thoroughness of audit objectives as well as audit content. Organizing the structure of audit personnel under this model is not complicated, the number of participating auditors is less, more professional, and the mechanism of working mainly in groups to perform work continuously from the survey stage, collecting information, data to design objectives, audit criteria, apply operational audit procedures and prepare, issue audit reports. On the other hand, the roadmap should be accelerated after 2025 when the State Audit Office changes from financial audit, compliance audit to operational audit.

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4.2.3. Solution for completing the organization of operational audit process of Fourthly, design 2 more appendices (audit methods and audit criteria). state budget expenditures 4.2.3.4. Solution for completing the stage of monitoring, checking the implementation of audit conclusions and recommendations 4.2.3.1. Solutions to complete the audit preparation stage (1). Proposing a medium-term operational audit planning process

Firstly, it is necessary to legislate regulations for audited entities on transparency, accountability for audit results as well as the responsibility to fully and promptly report on audit recommendations to the State Audit Office. Secondly, attaching responsibilities and requiring audited agencies and units to formulate the unit's Action Plan with a specific implementation timeline. 4.3. Conditions for implementing the solutions 4.3.1. Regarding to the State The postgraduate proposes a 3-step process such as: The first step: Synthesize, analyze and evaluate potential audit topics into a medium-term plan (3 years); The second step: Design the assessment contents (internal, external and other issues evaluation) associated with potential topics for the audit selection in the first step; The third step: Quantify potential audit topics through weighting the design content in the second step. To illustrate the above steps, the postgraduate presents a detailed attached appendix (Appendix 03). (2). Propose an operational audit planning process Building, amending, supplementing and perfecting a system of policies, standards and norms consistent with reality to create legal corridors and support for subjects participating in the economy. 4.3.2. Regarding to the State Audit Office The postgraduate proposes to develop an audit planning process from analyzing and evaluating according to 9 criteria to decide to choose the audit topic (usually if any audit topic has 3/9 criteria rated at a high level can be selected). (1). Completing the system of audit documents and guidelines ... (2). Modeling activities of state budget expenditure objects (2) Ensuring human resources meet requirements (3). Determine materiality and evaluate audit risks (3) Increasing the application of information technology The postgraduate proposes a risk assessment matrix associated with levels. (4) Expanding international cooperation (4). Define audit objectives and content 4.3.3. Regarding to audited entities (5). Use an expert and consult advice (6). Build audit programs

implementing The audit program is carried out in two steps (Designing a preliminary audit program and developing a detailed audit program) and postgraduate designed a preliminary and detailed audit program for a project ( Appendix 04). Full awareness of the significance of the operational audit report (aiming to help the unit manage and use the state budget economically, be more efficient and increase the effectiveness in implementing the plan) and coordinate compliance in the auditing process and the conclusions and seriously recommendations in the operational audit report of the State Audit Office. 4.2.3.2. Solution to complete the audit implementation stage

The thesis proposes a number of auditing methods associated with the designed table to create favorable conditions, but also creates pressure for auditors to perform (the description of the applicable audit method; sample observation table ; interview; analysis of collected evidence). 4.2.3.3. Solution to complete the stage of making and submitting audit reports Firstly, synthesize audit results and prepare audit reports, it is necessary to classify audit findings. Secondly, specific guidance on operational audit reports such as reporting techniques, usage styles, increasing use of charts, images. Thirdly, design more summary reports

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CONCLUSION

budget) according to two models of organization of auditing personnel. On that basis, evaluating the results achieved, the limitations and especially the cause of the limitations to serve as a basis for proposing solutions to perfect the operational audit organization of state budget expenditures. (3) The thesis has given three (03) groups of solutions to improve the operational audit organization of state budget expenditures:

(i) Propose an approach to audit criteria and specifically develop twenty-three (23) general audit criteria and thirty one (31) detailed audit criteria associated with the state budget cycle.

(ii) Propose the organizational model of audit team associated with the audit method in the roadmap for the implementation of the Strategy for the development of operational audit of the State Audit Office until 2025 and after 2025.

in particular. Accordingly, the study of the

(iii) Propose to complete a number of contents in the operational audit process of state budget expenditures. In which, specify three (03) steps for medium-term planning; nine (09) criteria for selecting objects to operational audit of State budget expenditures; three (03) levels associated with the score in the risk assessment and two (02) steps in developing the audit program. These contents are fundamental and important for the operational audits in general and the operational audit of state budget expenditure in particular. In the world context, the development trend of operational audit of the supreme auditing agencies is very fast and becomes indispensable in operational audit. Looking at the domestic situation and context in recent years, along with the process of renovation and reform for economic development in general, in the management and use of state budget of agencies and units in particular, there have been many changes, especially compliance with state budget disciplines as well as gradually improving the efficiency of using state budget funds in a clear way. However, public resources, especially the state budget cannot be limitless, along with the increasing demands of the people for transparency, accountability of competent agencies as well as requirements for effectiveness in the management and use of the state budget is an objective practice. Therefore, the State Audit Office needs to focus on and increase the conduct of operational audits in general and operational audit of thesis state budget spending "Operational audit organization of state budget expenditure performed by the State Audit Office" with the aim of contributing to the suggestion and orientation for the State Audit Office to continue researching and applying in operating audit which is practical and significance; the dissertation's research results have clarified the following contents: (1) The thesis has briefly studied the theoretical basis of operational audit organization of the state budget expenditure, which emphasized: (i) Organize the approach, identify the source of audit criteria and use appropriate operational audit criteria. (ii) Organize the audit personnel model through the establishment of an audit team associated with two (02) models (online model and linear model). (iii) Organize the implementation of operational auditing tasks of state budget expenditure associated with the operational audit process.

(iv) Study experience in criteria building and operational audit organization (organization of personnel and implementation of operational audit process) from five (05) models of the supreme audit agency in the world. On that basis, draw three (03) groups of lessons for the State Audit Office in Vietnam. However, the field of operational audit in general and operational audit of state budget expenditure in particular is a difficult and new field for auditors as well as the postgraduate, so it is inevitable to avoid certain limitations. The postgraduate hopes that the above research results will partly meet and solve a number of difficulties and limitations in organizing operational audit of state budget spending in the coming time, especially building targets. appropriate audit criteria to serve as a basis for evaluation and to make it clearer and easier to implement some important contents that are often difficult for auditors to perform and omit in the steps of the audit process; it is a useful reference in training activities; the foundation for the development, more complete when building practice guidance on audit criteria for the fields; and is also a premise for future studies to approach more deeply on operational audit in general and operational audit of state budget expenditure in particular of the State Audit Office./. The postgraduate would like to thank for the enthusiastic instructors and comments of scientists and people interested in the thesis research!

(2) The dissertation has studied and analyzed the current state of the operational audit organization of the State budget expenditure of the State Audit Office in recent years, in which the results have been summarized and generalized from audits by the field of state budget expenditure (development investment and regular expenditure) associated with the budget level (central budget and local