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MINISTRY OF FINANCE MINISTRY OF EDUCATION AND TRAINING ACADEMY OF FINANCE  -By LAI PHUONG THAO COMPLETING THE PROCESS OF AUDITING NATIONAL TARGET PROGRAM FOR NEW RURAL DEVELOPMENT CONDUCTED BY THE STATE AUDIT OFFICE SUMMARY OF ECONOMICS PHILOSOPHY DOCTORAL THESIS HANOI - 2020 1 This thesis is made at the Academy of Finance Professional advisers: Assc.Prof, Dr Le Huy Trong Dr Nguy Thu Hien Critic 1: Critic 2: Critic 3: The thesis will be presented to the Thesis Committee at the Academy Council of the dissertation, meeting at the Academy of Finance at hour .day month the year 2020 The thesis can be found at the National Library and Library of Academy of Finance LIST OF RESEARCH PROJECTS HAVE BEEN PUBLISHED BY AUTHOR RELATED TO THE THESIS 1 Lai Phuong Thao, Do Quang Giam (2019) Japanese efficiency audit: Lessons learned for auditing national target programs for new rural development of Vietnam Journal of Audit Scientific Research, Volume 143- 9/2019, pages 83-90 Nguy Thu Hien, Lai Phuong Thao, Vu Thi Hai (2019) Applying the heat map to assess potential risks in the audit national target program for new rural development conducted by the State Audit Office Journal of Finance & Accounting Research, Volume 12 (197)/2019, pages 21-27 Lai Phuong Thao, Nguy Thu Hien, Vu Thi Hai, Bui Thi Mai Linh (2019) Applying the heat map: Inherent risk assessment potential in auditing Journal of Finance & Accounting research No 01 (5)-2019, pages 19-27 Le Huy Trong, Lai Phuong Thao (2017) Identify potential risks in mobilizing financial resources for the national target programs for new rural development Retrieved at: State Audit Office website: http://baokiemtoannhanuoc.vn/chuyende/nhan-dien-rui-ro-tiem-tang-trong-huy-dong-cac-nguon-luc-tai-chinh-chochuong-trinh-xay-dung-nong-tho-137552 INTRODUCTION The rationale of the research The audit process in general and the audit process conducted by the State Audit Office of Vietnam (SAV) in particular are always the top concern of many subjects Over the years, many researchers have tried to analyze and evaluate different aspects of the audit process with different auditing subjects However, so far, the process of auditing national target programs (NTPs) by the SAV has not been consistent and studies on this topic continue to be implemented This is because the NTP audit procedure implemented by the SAV is difficult to monitor and measure, depending on the management's willingness and judgment of each individual, so it is difficult to have a unified view NTPs are public investment programs that are important to the country's socioeconomic development The National Target Program for New Rural Development (NTPNRD) is one of two NTPs being implemented in Vietnam The program is performed in several phases, with the point of "starting point only but no ending point", the specific goals of the Program in each phase will serve the country's development target The program involves large amounts of capital investment from the state budget as well as people’s budget so it receives a large concern of the whole society and the political system Despite the fact that the NTP-NRD audit has initially provided useful information to the National Assembly, the Government, Ministries, and localities in organizing, managing, administering, implementing the Program, and auditing the NTP-NRD still faces many difficulties and challenges This situation requires more research on the auditing process for NTPs in general and for the NTP-NRD in particular in the direction of improving the quality of the information provided by the SAV With the theoretical gap in the conducted researches, based on practical requirements of the SAV, the author conducted the research: “Completing the process of auditing national target program for new rural development conducted by the state audit office" in order to clarify the issues being concerned of the audit procedure, and to propose solutions to effectively solve practical problems Review of domestic and foreign studies related to the dissertation topic 2.1 Overview of domestic studies 2.1.1 Studies on the NTP-NRD (1) Studies on management, organization, and implementation of NTP-NRD The NTP-NRD has being implemented in 63 provinces and cities across the country, so there have been studies on management, organization and implementation experience in some localities such as Pham Ha (2011) showed how to organize the implementation of the program in Quang Ninh province from selecting the implementation criteria to realizing the mobilization of internal strength from the community so that the province will soon reach the set target Vu Kiem (2011) pointed out the direction, management, and organization of the Steering Committee at all levels in implementing the program to help Thai Binh leverage the advantages and overcome limitations to achieve the goals of the Program in each phase Ba Thang (2011) pointed out the difficulties and challenges of Dak Lak province in the organization and implementation of the program, the root cause of the challenges that make the province’s NRD progress slow in comparison with the general plan Thanh Tan (2011) studied the case of Yen Bai and Vu Kiem (2011) studied in Thai Binh province All of these studies focus on analyzing and assessing the characteristics, organization, and management of each locality, from which to draw lessons or to propose solutions for the problems (2) Studies on the appropriateness of the criteria used for NTP-NRD evaluation Recent domestic studies on the NTP-NRD have shown the importance and significance of the Program to the overall development of the country According to the authors, although the NTP-NRD has achieved significant results, there are still many issues which needed to considered, evaluated and adjusted so that Program outcomes can meet the expected goals of National Assembly, the Government and the expectation from people (Do Kim Chung and Kim Thi Dung, 2012, Budget Transparency Alliance, 2018) Although these studies not directly involve the audit procedure of NTP-NRD conducted by the SAV, they are great references when the SAV identifies potential risks in the procedure of auditing the Program 2.1.2 Studies on the audit process conducted by the SAV The domestic research results show that the research on the content, procedures, and methods of NTP audits has received increasing attention from researchers Aside from studies on the state budget auditing process by the SAV (Vuong Dinh Hue, 2004); procedure of auditing construction projects funded by the state budget conducted by the SAV (Tran Thi Ngoc Han, 2012) or developing scenarios for the audit procedure performed by the SAV in Le Anh Minh's research (2018), there are also studies on the procedure, content, and methods of auditing NTPs Le Hung Minh et al (2003), Nguyen Thi Kim Dung (2016) pointed out the necessity of auditing NTP-NRD, the program quality criteria, and factors affecting the quality of program auditing in which auditing procedure is one key factor But the authors have not clarified the specific limitation of each task in each step of the NTP-NRD auditing procedure Vu Thi Thanh Hai (2011) argued that auditing NTPs are operational audit which aimed to assess the Program's economics, efficiency, and effectiveness Nguyen Tuan Trung (2015) developed the research of Nguyen Van Ky et al (2003) and made the opinion that the auditing NTP is a combination of financial audits, performance audits, and compliance audits In previous studies, most of the studies focus on auditing NTPs in general, specific studies in auditing NTP-NRD are not numerous However, some of these research results provide a new direction for the follow-up suggestions for further steps in the implementation of the NTP-NRD audit procedure concerning the Program's specificity 2.2 Review of foreign research 2.2.1 Studies on NTP-NRD Some countries around the world also have movements to build new rural areas, such as the movement to build "new villages" (Saemaul Undong) in Korea in the 1960s (Tuan Anh, 2012); China, with many agricultural and rural development programs, such as the "fire show", aims to equip millions of farmers with advanced scientific ideas, fostering talents and improving their quality, the "Bumper Crop Program" helps the majority of farmers apply advanced science and modern management methods to develop agriculture and rural areas, the "Poor-aid program", etc (Cu Ngoc Huong, 2006); in addition, US, Japan, Thailand, and some other countries also have programs geared towards agriculture, rural areas and farmers Most of the studies on NTP-NRD are focusing on the Program's implications for the country's development 2.2.2 Studies on the audit process conducted by the State Audit Office In the early 1960s, under the pressure of that program auditing need to help improve the performance in subsequent stages of the program, the State Audit Office of Japan conducted effective audits when auditing programs and projects to assess the implementation, utilization and direct results of programs and projects through benefit-cost analysis, and impact assessment on beneficiaries, correctness, and appropriateness of the program and project for socio-economic change, thereby proposing solutions for improvement (Kazuki H & Shigeru Y., 2006) In the same study, the authors pointed out the steps to perform the audit, the audit process of project programs conducted by the State Audit Office of Japan which is an effective audit, so the criteria used to evaluate are criteria related to outputs and results of programs and projects Recently, global State Audit Offices face more and more challenges related to the quality of the information provided by the State Audit Offices In addition to completing the system of international state audit standards, the audit process has also been focused on developing IDI (2009) IDI (2012) in the manual for the implementation of the International Audit Standard for audit activities has cited the audits of social security programs and projects that applied operational audits with four steps in the auditing process to assess the economics, efficiency, and effectiveness of programs and projects It emphasized, from the findings made through the audit, the State Audit Office must assess the impact of those findings, and propose solutions to improve the following phases of the program and projects This document also initially addresses the problem of determining audit risk in the operational audit, as a basis for applying risk maps to assess risks of audits Research on the audit process of national programs, projects, centers of health and human services of the US has conducted research and built an audit process of six steps: (1) Preliminary planning set for audits; (2) Preparing the investigation of the audit object; (3) Designing data collection surveys; (4) Collecting and analyzing information; (5) Preparing audit report; (6) Evaluating the results after the audit Research has also shown that the above six audit steps are not only closely intertwined, but also help to create useful audit evidence for drawing conclusions when auditing national programs and projects with audit content including financial and operational audits However, the audit process has not yet indicated the suitability of the process with the characteristics of the object being audited (Department of Health & Human Services, 1994) Steve G Sutton and James C Lampe (2012) gave an overview of the audit process quality assessment framework The study has reviewed previous studies on the audit process, the quality evaluation framework of the audit process But the research only involves the audits of financial statements, not to audits of programs and projects Le Anh Minh (2014) outlined the audit standards for the Australian public sector audit process, the direction of technology affecting the audit process, and the performance evaluation activities of the audit process performed by the Australian Government, which made strategic suggestions to change the audit process of the State Audit Office of Vietnam However, the research results are based on the opinions of the State Auditors without the feedback on the audit process results from the audited subjects In general, in recent years, researchers have made great efforts in approaching the audit process, the audit of programs and projects implemented by the State Audit Offices to provide solutions to complete the process, the audit activities of programs and projects under a different point of view and has achieved certain results Thereby, it not only contributes to clarifying the role and responsibility of the State Audit Offices to the performance of programs and projects in practice but also is a valuable source of theoretical material, as a premise for further studies 2.3 General conclusions from published studies and new points in the research of the thesis 2.3.1 Conclusions drawn from published studies Firstly, there is no consensus on the content of the work in the process of auditing the NTPs in general, the process of auditing the NTP-NRD in particular The content of work performed in each work step of the audit process is also subjective, dependant on different perspectives Secondly, up to now, there have been no domestic and foreign studies on the appropriateness of the contents of the work in the process of auditing the NTPs in general, the NTP-NRD in particular based on assessing the satisfaction of objects using the information provided by auditors In summary, in the past years, many authors have focused on the NTPs in general, the NTP-NRD in particular and the audit process conducted by the SAV to show the achieved results and the shortcomings in the organizing, managing and implementing the Program as well as the advantages and limitations of the audit process and they have achieved certain results However, there is a lack of research studies on the auditing process on NTP-NRD conducted by SAV in specific conditions of Vietnam 2.3.2 Research gaps and new points in the research of the dissertation - Studying the specific characteristics of the NTP-NRD and SAV, which clearly indicates the effects of these characteristics to the process of NTP-NRD audit conducted by the SAV; - Studying the appropriateness of the auditing process of NTP-NRD through the feedback of the auditors participating in the audit, auditors of the advisory units for the General State Auditor for each step of the work in the audit process Thereby, the dissertation focuses on studying the causes of inappropriate points in the process, creating a basis for proposing complete solutions; - Studying the satisfaction of the beneficiaries for the process and results of an audit of NTP-NRD conducted by SAV, thereby proposing the completion of the process, improving the usefulness of the audit results by the SAV The research objectives of the dissertation - To systematize, interpret, and clarify the theoretical basis of the procedure of auditing NTP- NRD conducted by the SAV - To analyze and assess the status of the procedure of auditing NTP- NRD conducted by the SAV - To propose orientation and solutions to complete the procedure of auditing NTP- NRD conducted by the SAVcontributing to improve the audit quality Research subject and scope of the dissertation  Research subjects The objects of the dissertation are the theoretical and practical issues related to the procedure of auditing NTP-NRD conducted by the SAV To carry out this study, the subjects surveyed to collect information for the topic consist of auditors and representatives of the SAV advisory agencies; experts and representatives of audited entities from ministries, central functional agencies as well as provincial, district, and communal authorities in Vietnam  Scope of the research: The study was carried out for auditing NTP-NRD conducted by the SAV recently in Vietnam The study focuses on analyzing and evaluating the procedure of auditing NTP-NRD conducted by the SAV in localities, the study does not go into depth analyzing the procedure of auditing NTP-NRD at the ministerial and functional agencies level  Research limits The dissertation only focuses on researching, analyzing, and evaluating detailed audit procedures implemented at localities without researching the comparative audit procedure in ministries and functional agencies conducted by the SAV for NTP-NRD in Vietnam Research method Approach method: Participatory approach; Process approach; Approach according to the implementation level Research site selection method: identified suitable research sites and subjects Information collection method: Used to collect secondary data and primary data of each content related to the procedure of auditing NTP-NRD Based on the collected data, the Ph.D candidate selected the necessary and suitable data for deep analysis Information summarizing and analyzing method: Secondary and primary information collected for research is classified, processed, and synthesized according to the system of research indicators serving the evaluation of the procedure of auditing NTP-NRD conducted by SAV After obtaining information on the current status of the procedure of auditing NTP-NRD conducted by SAV, the author applied data analysis methods such as descriptive statistical method, comparison method, scoring method, and priority ranking method The scientific and practical significance of the thesis The completion of the dissertation has scientific and practical significance as follows: Theoretically: The dissertation is a scientific research document for theoretical issues on NTPs, management mechanisms, auditing activities for NTPs of state audit agencies This theory can be the premise and basis for forming the theory for the types of thematic audits performed by the SAV Practically: The dissertation studies the current situation of the NTP-NRD auditing procedure conducted by the SAV, thereby proposing several solutions and recommendations to contribute to the completion of the auditing NTP-NRD conducted by the SAV The findings of the dissertation are the manual to the SAVs in the implementation of the NTP audit procedure in general and the NTP-NRD in particular, as well as revise some steps of the audit procedure Dissertation structure In addition to the introduction, conclusion, list of tables, diagrams, references, and appendices, the thesis consists of chapters: Chapter 1: Basic theories of process of auditing the national target program conducted by the State Audit office Chapter 2: Current status of process of auditing the national target program for new rural development conducted by the State Audit Office of Vietnam 10 existences are unavoidable problems and required to be gradually removed in local areas to ensure the construction of new rural areas in their localities in a sustainable manner c/ Impacts on the auditing process conducted by SAV The NTP-NRD is a set of synchronous goals, tasks, and solutions in terms of economy, politics, society, environment, health, education, etc to achieve some goals of agriculture, rural areas and farmers which are associated with the overall socioeconomic development strategy of the country in the period 2010-2020 and subsequent periods In order to achieve the set of goals, the NTP-NRD has implemented many programs and projects with large investment capital funded by the state budget, credit, and mobilization from enterprises, people, organizations, and other sources As the program's subjects are the State and the rural people then the audit objects must include financial audits, compliance audits and operational audits to ensure that the audit results will contribute to the completion of the law on managing and operating the program, to create transparent economic relations when deploying, as well as to improve the economic efficiency and effectiveness in managing and using the Program's capital sources and the objectives of the Program which are set out in each phase However, The NTP-NRD is a program that has capital sources integrated with many other project programs The capital amount is large and has a long implementation time, some Program’s issues had been audited by other audit phases Hence, with given limited resources, the SAV should consider with care the potential risks of the Program to determine the Program audit objectives on the basis of auditing grounds including relevant legal documents, the handbook guiding on the organization, management and implementation of the Program 2.1.1 Introduction to the auditing the NTP-NRD conducted by SAV With its important nature and great influence, the NTP-NRD is one of the subjects that the SAV devotes a lot of resources to assess Due to the complex nature of the Program, the SAV assigned the Specialized State Audit equity I to chair and conduct the first trial audits in Hanoi and Bac Ninh City in 2013 (SAV, 2013) These are premise audits as a basis for building a large-scale audit process to evaluate the management, implementation, program implementation in ministries, branches, and localities in the following years in 2015 and 2016 16 2.1.2.1 Audit objectives With its role, function, and position, the SAV wishes to provide the National Assembly and the Government with comprehensive and systematic information on the status of management, administration, organization, and implementation of the NTPNRD, State Auditor General has approved Decisions to audit the Program with eleven specific goals 2.1.3.2 Audit content The NTP-NRD includes many major projects related to many fields such as economy, politics, society, environment, education, construction, and health; involving several ministries and branches from the central to local levels; is implemented in all provinces and cities in Vietnam so that the audit contents are specifically assigned to each audit units by the SAV However, whether auditing at central or local levels, at ministries, branches, or at provinces, districts, communes, the program’s audit contents all consist of financial audits, compliance audits, and operational audits (SAV, 2016e ) 2.1.3.3 Audit technique In order to carry out the contents of the auditing NTP-NRD, the SAV applied the general basic technical tools of the audit such as Reconciliation, analysis, comparison, sampling In addition, due to the peculiarity of the NTP-NRD of which the rural people are the main subjects, the SAV conducted the interview number of rural citizens by designed questionnaire The SAV also applied other techniques such as field observation, recalculating the volume from the completed drawing, design to compare with final settlement A-B, winning bid price according to the process of auditing investment projects for projects basic construction investment as an effective tool when auditing 2.2 CURRENT PROCESS OF AUDITING THE NTP-NRD CONDUCTED BY STATE AUDIT OFFICE OF VIETNAM 2.2.1 Preparing for the audit First, survey and gather information of the NTP-NRD - Information on the internal control system of the NTP-NRD such as organizational structure, functions, and duties of the Program management apparatus (responsibilities of ministries, central branches, responsibilities of local departments, ); legal documents on Program management and administration; internal management regulations of the unit on supervision, implementation, 17 acceptance and final settlement; financial and accounting management work such as the applicable accounting policies, the organization of the accounting apparatus, the organization of accounting; - Other relevant information such as changes in an organizational structure at agencies and units funded by the provincial budget; Errors and frauds detected from previous audits, related inspection, and examination agencies; Economic disputes, lawsuits related to the audited units; Information on the mass media on pressing issues in society, complaints and letters related to individuals and organizations in the management and use of Program funds Second, assess the information gathered and the internal control system of the audited entity - Evaluating of information and internal control system: auditors assess the assignment, decentralization of functions and tasks of the Program’s management and implementing units: whether they are doing with a clear, reasonable, and convenient guarantee for the implementation process or not At the same time, assessing the factors affecting the management and administration activities of the unit such as economic fluctuations, policies, regulations of the unit, changes in personnel, the complexity of Programme - Overall assessment of the implementation of the Program: it needs to analyze and evaluate the Program's characteristics from the beginning of implementation to the time of the audit; funding for implementation and mechanisms for management, allocation, and integration of Program funds; preliminary assessment of economics and social efficiency of the Program Third, identify critical audit contents and auditing risks Identify critical audit contents: From the results of the analysis and general assessment of the implementation of the Program as well as the internal control system of the audited units, auditors identify key issues when auditing the NTP-NRD including (1) Organization, the direction of the Program implementation; (2) The observance of regimes and policies in managing construction investment projects and financial and accounting regimes (3) Compliance with other Program provisions such as assessing inadequacies in the implementation of 19 criteria in the national set of criteria compared to actual conditions in local areas Identify audit risks - Potential risks: Potential risks are highly appreciated, but auditors have not yet 18 pointed out specific potential risks that are hidden in each feature of the program, as a basis for making a fit audit plan Although the potential risks are appreciated, the audit was conducted by auditors from 13 Local state audit entities under the general management of specialized state auditor II, so it is difficult to control the quality of auditors in the audit delegations - Control risks: The control risks identified by the auditing team is high based on the evaluation of the surveyed information on the internal control system of the audited entity However, the potential risk is specifically based on the characteristics of the program, so the control risk has only been assessed quite generally by the auditors, not yet indicated the control regulations which are needed to prevent or detect potential risks, thereby making assessments on the quality of the internal control system at the audited units as well as determining the level of control risks in each audited entity - Detection risk: From the assessment results, the potential risk and control risk of NTP-NRD are identified at high levels, so the detected risk is determined at a very low level to ensure the overall risk of the audit at an acceptable level Thus, by not being able to assess the specific level of risk in each audited content, only determining the level of detected risk to be achieved is at a very low level, making the audit plan spread out, and difficult ineffective staffing Four, plan the audit Based on analyzing the crucial contents and risks of the audit, the auditing team prepares the audit plan and submits it to the SAV leader for approval, the audit plan includes the following contents: Audit objectives; Audit contents: auditing of capital funding and settlement of funding; auditing the compliance with State policies, regimes, and laws; audit the management, direct the implementation of the program, audit the implementation situation of the Program's contents, objectives, economic audit, evaluate the social efficiency and effectiveness of the Program The audit plan also determines the audit scope; audit limits; criteria for evaluating the Program's economics, efficiency and effectiveness; audit methods; staffing plan 2.2.2 Implementing the audit Financial auditing: The content of financial auditing the NTP-NRD has been done fairly methodically, adhering to the contents instructed in the outline of the audit such as auditing funding sources; auditing the use and settlement of funding 19 Compliance auditing: Compliance auditing the NTP-NRD has been a focus on auditing the cost estimation and allocation; auditing the compliance with estimation, and auditing the budget settlement Activities auditing: In order to implement the content of activities auditing the NTP-NRD, auditors have audited the performance of the program contents and objectives; auditing the economics, efficiency, and effectiveness of the program Although the audit plan has established evaluation criteria in performance auditing, during the audit implementation period, the use of such criteria in the assessment is still very modest and limited 2.2.3 Preparing and approving the audit reports The auditing of NTP-NRD has been carried out by many audit delegation, and audit teams, so at the end of the audits, the heads of the auditing teams shall prepare a draft audit report on the basis of summarizing the audit results according to the minutes of the audits with agreement among team members on the content of evaluation, audit conclusions The draft audit report will be reviewed and resolved by the head of the audit team before any audit team report is prepared The head of the assigned units for the audit task will then organize the appraisal and review of the unit audit report before sending it to the General Department, Department of Legal Affairs, Department of Auditing Regime & Quality Control for controlling and evaluating according to current regulations; at the same time, send that report to the Specialized State Auditor II to join with 03 Departments to appraisal and submit to the SAV leader for direction before organizing the announcement of audit results and issuing audit reports 2.2.4 Monitoring the implementation of audit conclusions and recommendations Monitoring the implementation of audit recommendations has a great influence on the effectiveness and efficiency of the audit conducted by the SAV in general and the audit of NTP-NRD in particular Specialized state audit entity II is the trusted unit that has been pointed to be chair of the auditing NTP-NRD That entity is always paying attention, focusing on and considering the management, monitoring, and inspection of petition implementation as one of the important tasks, since then they have proposed may directions, and timely solutions to improve the audit quality in this period Specialized state audit entity II after has been checking the implementation of the recommendations of the audit, often urging the continued implementation For cases of low petition implementation results, the entity has issued a dispatch, set a working schedule, sent a leader of the entity together with the staff of the General 20 Division and auditor to directly discuss, to understand and to analyze more clearly the reasons why the audited unit has not implemented, as a basis for reporting to the SAV leader, and for finding solutions to solve the shortcomings together 2.3 ASSESSMENT OF THE AUDIT PROCESS ON NTP-NRD CONDUCTED BY STATE AUDIT OFFICE OF VIETNAM 2.3.1 Achievements At the step of preparing for the audit: Preparing the audit is an extremely important step in the audit process In preparation for the audit of NTP-NRD, the SAV piloted in two provinces, Bac Ninh and Hanoi in 2013, as a basis for the development and issuance of a comprehensive audit organization plan in 2015 and 2016 was conducted by the specialized state audit and regional audit Well implemented in the medium-term plan, the auditing of the NTP-NRD is highly consistent throughout the industry which does not only help to minimize the impacts of Program’s Audit activities on the performance of common tasks of each unit but also help to improve the effectiveness of the audit process when performing integrated audits Specifically, due to the fact that staffs in charged of NTP-NRD in the localities have limited capacity in terms of both professional qualifications and experience in implementing the Program, based on collected information and systematic investigation techniques, SAV has assessed the control risk at a high level without wasting time for audit procedures such as checking the details of the control or observing the continuity of the internal control system This will help the SAV to plan an audit consistently with the characteristics of the audit object At the step of implementing the audit: The steps of the auditing process are clearly designed, the audit quality control system of the SAV is established and maintained throughout the implementation phase of the auditing NTP-NRD that helped the auditing adhered and stuck to the objectives set out in the audit outlines even though the auditing is organized by many delegations, jointly implemented by both the specialized state audit entities and the regional state audit entities SAV always maintains periodic reporting on the progress and results of the audit to ensure that the Head of the audit team and the Head of the audit delegation are always updated to the process of the audit activities, in order to promptly handle, solve in critical situations arising during the audit process, to avoid affecting the schedule and quality of work At the same time, the SAV also promotes 21 the application of information technology in audit activities such as using electronic audit diaries to control the progress and quality of the audit At the steps of preparing and approving the audit reports: Steps to prepare and review the audit reports: The steps of preparing and approving the audit reports of NTP-NRD are clearly formulated by the SAV to ensure the rights and responsibilities of the related parties The SAV has worked closely with ministries, functional agencies, the National Steering Committee of NTP-NRD, the Local Steering Committee of the NTP-NRD and the local authorities in preparing and reviewing the audit report to ensure the audit results are in accordance with the reality of the organization, management, direction and implementation of the Program through collected audit evidence As a result, the audit results of NTP-NRD in the period of 2010 - 2015 was conducted by SAV clearly indicated some shortcomings and limitations in the process of organizing, managing and implementing the Program through the collected data, as well as recommendations to complete the legal documents system in the organization, implementation of the Program, along with the recommendations and amendments to the criteria and content system in the NTPNRD which are not suitable to reality, or warning information about the situation of outstanding debts in infrastructure investment in NTP-NRD, which has contributed to luring the attention of the National Assembly, the Government, the functional agencies, the public opinion on the effectively implementing the NTP-NRD At the step of monitoring the implementation of audit conclusion and recommendation The step of monitoring the implementation of audit conclusions and recommendations: The NTP-NRD is a major policy of the Party and the State, and is widely concerned by the people It has been implemented through various periods and the audited period is one of very first Therefore, the monitoring and examining the implementation of conclusions and recommendations by the SAV to relevant units and individuals are strictly conducted by the SAV to ensure compliance with the provisions of law Understanding the expectations of the Party, National Assembly, government, ministries, functional agencies, local authorities, and people for information provided by the SAV on NTP-NRDs, SAV publicizes the audit conclusions, results of the implementation of SAV conclusions and recommendations annually, oriented towards issues of social concern 2.3.2 Limitations 22 2.3.2.1 At the step of preparing for the audit As a basis for assessing the limitations and shortcomings in the audit preparation step, the study conducted consultation of auditors participating in the audits and from the SAV's advisory units about the relevance on different aspects of the audit planning stage Firstly, the audit preparation step has not been given adequate attention; Secondly, determining the main audit contents and auditing risks are not reasonable; Thirdly, determining the purpose of the audit is not suitable for resource conditions, so the feasibility is not high 2.3.2.2 At the step of implementing the audit Using audit techniques to collect audit evidence, develop audit findings to draw audit conclusions that are the main content of the audit implementation step In order to further clarify the limitations and shortcomings during the audit period, the study consulted the SAV auditors about the appropriateness of the audit procedure at this stage The results of the audit show that the financial audit and compliance audit basically fit with the objectives, content, and conclusions of the audit Therefore, the average score for financial audit is 4.1 points (suitable) and a compliance audit is 4.0 points (suitable) However, in operational audits through evaluating the economics, efficiency, and effectiveness in the NTP-NRD implementation, the score is still low (the average score is 3.4 , less suitable) 2.3.2.3 At the step of preparing and approving the audit report - In a number of audit phases, the audit reports have not fully reflected the content of audit evidence, so the quality of the audit report is not high - Some audit findings are still lacking convincing evidence or the content of the audit and the figures reflect the lack of consistency and logic, leading to the fact that some delegations have to change the audit results and recommendations - A number of audit quality control teams have not fully performed their roles and responsibilities in appraising draft audit reports, so some audit reports still contain errors such as the wrong name of selected samples audit district, audit conclusions are still general with unclear legal grounds, - A number of audit teams have not seriously implemented the revision and explanation of conclusions of the functional departments and leaders of SAV before sending program audit results to the audited units 23 2.3.2.4 At the steps of monitoring, inspecting the implementation of audit conclusions and recommendations Most of the inspection teams only focus on examining the implementation of financial handling proposals but not closely monitor the reorganization of the management, organization, implementation of the Program, as well as revoke the decision of recognizing met the new rural standards for communes that still "lack” of criteria The inspection teams have not conducted the assessment and analysis of the reasons why the audited units have not implemented the audit recommendations (due to the unit’s intensionally not implement or the SAV's recommendations are not satisfactory) Since then, there have been suggestions to improve the quality of auditing in general and the quality of implementation of audit recommendations in particular 24 2.3.3 The cause of the shortcomings and limitations in the procedure of auditing NTP-NRD conducted by SAV Firstly, the overlap, delay, and ambiguity of several documents guiding the management, organization, and implementation of NTP-NRD Secondly, due to the old thinking, some auditors believed that the data of NTPNRD are national secret data so that it should not be disclosed and SAV should only consider contents related to public assets Third, the audit procedure in general, the approach, the method of auditing risk analysis in particular for complex programs such as the NTP-NRD has not followed the reality Fourthly, SAV still has a part of cadres affected by the old management mechanism, who are not ready to convert to modern management mechanism, to apply new methods and techniques in auditing such as using information technology in managing and implementing the audit CHAPTER III SOLUTIONS TO COMPLETE THE PROCESS OF AUDITING NTP-NRD CONDUCTED BY SAV 3.1 DEVELOPMENT ORIENTATIONS OF SAV IN THE COMING TIME AND REQUIREMENTS, PRINCIPLES FOR COMPLETING THE PROCEDURE OF AUDITING NTP-NRD CONDUCTED BY SAV 3.1.1 Development orientation of SAV in the coming time SAV defines the basic content of the Development Strategy for the period of 20202030 and vision to 2035 including: Ensuring a complete and comprehensive institutionalization of the Party's strategy, policies and guidelines on SAV development; complying with law provisions and going along with with the country's socio-economic development orientations; Developing SAV must meet the requirements of international economic integration, in accordance with the international principles, practices and practical conditions of Vietnam, being a responsible member for promoting the development of public audit in the region and the world; Ensuring high independence for SAV activities; commensurates with the position and role of the SAV as the highest inspection agency in inspecting financial and public asset established by the National Assembly, operates independently and always obeys 25 the law; Developing SAV must be associated with the 4.0 technology revolution, of which the application of information technology in all SAV activities must be considered a regular, continuous task, both in the short and long term 3.1.2 Requirements and principles of completing the procedure of auditing NTP-NRD conducted by SAV 3.1.2.1 Requirements of completing the procedure of auditing NTP-NRD conducted by SAV (1) Must ensure the quality of audits, the quality of audit conclusion through checking, evaluating and confirming the reliability in the implementation of the NTPNRD, at the same time, provide valuable and useful consultation for management levels (2) Satisfy the requirements of the governing bodies (National Assembly, People's Council, Government, functional agencies, and local authorities) and implementing NTP-NRD organizations and people (3) Meet the requirements of information technology application and requirements for the digital revolution, 4.0 technology revolution (4) Meet the requirements of International Economic Integration, harmony with international auditing principles, practices, and standards 3.1.2.2 Principles of completing the procedure of auditing NTP-NRD conducted by SAV (1) Compliance principle: Comply with Financial - Accounting - Auditing Laws, auditing standards, and requirements (2) Appropriateness principle: suit with the characteristics, nature, implementation mechanism, and management mechanism of NTP-NRD (3) Feasibility principle: Completed solutions must be feasible and practically applicable (4) Economics and effectiveness principle: The solution should require the least cost, and bring up the possible highest results and efficiency 3.2 OUTLOOK AND ORIENTATIONS FOR COMPLETING THE PROCESS OF AUDITING NTP-NRD CONDUCTED BY SAV 3.2.1 Outlook for completing the process of auditing NTP-NRD conducted by SAV 3.2.1.1 Completing the process of auditing NTP-NRD to improve accountability of SAV In order to improve accountability in the organization, management and 26 implementation of the NTP-NRD of the National Assembly and all management levels and functional agencies, besides raising the awareness of ministries, functional agencies, local authorities, and people, the SAV needs to provide useful and timely information on the results achieved as well as the limitations, shortcomings, causes, consequences of those limitations and solutions to overcome and prevent for the next stages In order to that, the SAV may study and collectively select international experiences on the procedure of auditing programs and projects that are similar to the NTP-NRD From there, completing the procedure of auditing NTP-NRD from the stage of audit planning, collecting information about the audited units, assessing potential risks, control risks, and establishing critical content in planning and implementing the audits 3.2.1.2 Completing the process of auditing NTP-NRD consistent with the development strategy of SAV in the coming time According to the General Auditor of Vietnam, Ho Duc Phoc (2019), besides implementing activities to accomplish the objectives set out in Resolution 927/2010 / UBTVQH12 dated April 19, 2010, of the Standing Committee of the National Committee on the Development Strategy of the SAV to 2020, the SAV has been developing a Development Strategy for the period 2020-2030, with a vision to 2035 including the following contents: Audit units; audit capacity; audit quality; high technology development, information technology application in all activities of SAV 3.2.2 Orientation to completing the process of auditing NTP-NRD conducted by SAV The auditing procedure of NTP-NRD must ensure compliance with the general provisions of SAV and relevant standards The steps in the audit procedure must be designed in a logical order, showing the logic in the specific work of the audit team members The audit results of each member not only support each other but also help to check and compare, in order to detect missing issues, lacking evidence, or inappropriate audit conclusion 3.3 SOLUTIONS TO COMPLETE THE PROCESS OF AUDITING NTPNRD CONDUCTED BY STATE AUDIT OFFICE 3.2.1 Completing the step of preparation for auditing Using the heat map model to identify potential risks, to assess risks as a basis for identifying audit objectives, assigning personnel in the audit team as well as making an audit plan for NTP-RC effectively 3.2.2 Completing the step of implementing the audit 27 - Completing the method of auditing the correctness, truthfulness, and reasonableness of the capital settlement data in NTP-NRD - Complete the evaluation criteria for the economics, effectiveness, effectiveness when performing program audits 3.2.3 Completing the step of preparing and approving the audit report - Completing the appraisal of the content of audit recommendations - Completing evaluation and experience drawing after each audit 3.2.4 Completing the step of monitoring and examining the implementation of audit conclusions and recommendations SAV should review the efficiency, effectiveness, and impacts of the audit recommendation in order to save costs and reduce causing troubles to the audited units The SAV should send a written request for audited units to report the implementation of audit conclusions and recommendations If the units not implement the recommendations, or the implementation rate is low, SAV should review whether the audit recommendations are really appropriate? Why did not the audited unit strictly implement the recommendations? If the cause is due to inappropriate audit recommendations, the SAV should strictly assess and draw experience If the reason is that the audited unit intentionally does not perform, the SAV should take measures to directly check and urge the units to implement 3.4 FACILITIES TO GUARANTEE THE PERFORMANCE OF PROCESS OF THE AUDITING NTP-NRD CONDUCTED BY SAV 3.4.1 From the National Assembly and the Government 3.4.2 From the State Audit Office 3.4.3 From ministries, functional agencies and local authorities CONCLUSION The dissertation has achieved some results as follows: Firstly, the dissertation has synthesized, generalized and systematized theories on state auditing, target program, NTPs , and audit procedure for NTPs; addressed lessons on the procedure of auditing NTP-NRD for State Audit Office of Vietnam based on the experience of some countries Secondly, the dissertation has presented the outcomes of the implementation of the NTP-NRD and the characteristics of auditing the NTP-NRD conducted by the SAV The author has also analyzed and assessed the current situation of the procedure 28 of auditing NTP-NRD by the SAV, addressed the advantages, disadvantages, and causes of limitations and solutions to complete the procedure Thirdly, the research has opened new research directions: studying the factors that affect the quality of the procedure of auditing NTPs in general, NTP-NRD in particular; applying accountability audit in auditing NTP-NRD, 29 ... OF RESEARCH PROJECTS HAVE BEEN PUBLISHED BY AUTHOR RELATED TO THE THESIS 1 Lai Phuong Thao, Do Quang Giam (2019) Japanese efficiency audit: Lessons learned for auditing national target programs... rural development Retrieved at: State Audit Office website: http://baokiemtoannhanuoc.vn/chuyende/nhan-dien-rui-ro-tiem-tang-trong-huy-dong-cac-nguon-luc-tai-chinh-chochuong-trinh-xay-dung-nong-tho-137552... solutions to effectively solve practical problems Review of domestic and foreign studies related to the dissertation topic 2.1 Overview of domestic studies 2.1.1 Studies on the NTP-NRD (1) Studies