The Auditor General and a National Audit Office (NAO) was established under Section 97(1) of the Part VII, 2011 TCI Constitution as an institution protecting good governance.
Section 98 (1) - Auditor General and National Audit Office states that the office of Auditor General shall be a public office, and appointments to that office shall be made in accordance with section 91.
(2) - The National Audit Office shall be headed by the Auditor General, shall support and assist the Auditor General in the exercise of his or her functions, and shall have such other functions as may be prescribed by law.
(3) - In addition to the other functions conferred on the Auditor General by sections 122 and 126, the Auditor General shall have the following functions—
(a) to promote accountability in the public administration of the Islands;
(b) to undertake any function conferred on the Auditor General by or under any Ordinance; and
(c) to do anything incidental or conducive to any of the Auditor General’s functions.
Section 122 (5) - The Public Accounts Committee shall examine and report to the House of Assembly on—
(a) the reports submitted to the Committee by the Auditor General under section 126(4); and
(b) such management letters and reports of the Auditor General as have been submitted to the Committee or as have been laid before the House or as the Auditor General has brought to the attention of the House;
Section 122 (9)
The Auditor General shall be adviser to the Public Accounts Committee, and the Committee shall not meet without the presence of the Auditor General or his or her nominee.
Section 126 Audit
(1) The Auditor General shall audit and report on the public accounts of the Islands, including the House of Assembly, the courts, the central and local government administrations, the institutions protecting good governance, and any public corporations or other bodies or organisations established by or under any Ordinance.
(2) For the purposes of subsection (1)— (a) accounts shall be provided by the authorities referred to in that subsection to the Auditor General within four months of the end of each financial year; and (b) the Permanent Secretary, Finance shall, as soon as practicable after the end of each financial year, cause to be prepared for submission to the Auditor General a statement of accounts reflecting the financial operations of the Consolidated Fund and any other public fund or account for that financial year.
(3) The Auditor General and any person authorised by him or her shall have a right of access at all reasonable times to all such documents as appear to him or her to be necessary for the purposes of conducting an audit under subsection (1), and shall be entitled to require from any person holding or accountable for any such documents such information and explanation as he or she thinks necessary for those purposes.
(4) Each year the Auditor General shall, as soon as practicable and in any case within four months of receiving the accounts under subsection (2)(a), submit to the Public Accounts Committee of the House of Assembly a report of the accounts audited by him or her under subsection (1) for the immediately preceding financial year, and shall send a copy of each report to the Governor, who shall publish the audited accounts and report as soon as practicable.
The Auditor General’s powers and operational mandate are established under the 2012 NAO Ordinance.
There is a general public expectation that an opinion is provided, taking into consideration the financial performance, risks, internal controls, compliance, regularity, propriety and value for money (Sections 18 – Audit of Public Accounts and 19 – Audit of Statutory Bodies).
The NAO is required under the laws to examine, audit and certify where appropriate whether or not the accounts and statements represent fairly the financial position of Government, Statutory and Other Public Bodies and that it has been conducted with regularity and propriety. Further the NAO must ensure that reasonable precautions have been taken to safeguard the proper collection and payment of monies and to ensure that all expenditure to which such examination and audit relate has been lawfully incurred. The NAO is also required to assure the internal control system and internal audit services is adequate and that satisfactory management measures have been taken to ensure that public or other resources are procured economically and utilized efficiently and effectively.