Law No. 19 of 2013 Regarding the Reorganization of the Audit Bureau

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Law No. (19) of the year 2013 Regarding the Reorganization of the Audit Bureau

The General National Congress

After reviewing:

• The Provisional Constitutional Declaration issued on 3/August/2011 and its amendments.
• The General National Congress Decision No. (62) of the year 2013 regarding the adoption of the amendment to the Congress's internal regulations.
• The Penal Code and Criminal Procedures Law and the legislation supplementing them.
• The State Financial System Law and the Budget, Accounts, and Stores Regulations.
• Law No. (11) of the year 1996 regarding the reorganization of popular supervision and its amendments.
• The Judicial System Law and its amendments.
• Law No. (2) of the year 2007 regarding the establishment and organization of the Financial Audit Agency.
• Law No. (3) of the year 2007 regarding the establishment and organization of the Financial Audit Agency.
• The Transitional National Council Decision No. (119) of the year 2011 regarding the establishment of the Audit Bureau and the determination of its competencies.
• Law No. (12) of the year 2010 regarding the issuance of the Labor Relations and Executive Friction Law.
• And what the General National Congress concluded in its 99th ordinary session held on 16/6/2013.

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Those granted by the government the privilege of exploiting a public utility or a natural resource source, without prejudice to any special provisions that may be stipulated in laws or agreements concluded with the government for their implementation.

-3 Entities responsible for managing pension and solidarity funds, as well as entities and bodies guaranteed or supported by the government or any of the entities subject to the Bureau's supervision.

-4 Private public-interest bodies and associations supervised by the State or supported directly or indirectly, and general syndicates and political parties.

-5 Projects whose owners receive direct subsidies from the State and loans from it if the loan contract stipulates their submission to the Bureau's audit.

-6 Any other entity entrusted with examining and auditing it by a decision of the legislative authority or at the request of the government.

In all cases, the Bureau's supervision does not prejudice the right of the entities mentioned in paragraphs (2-3) of this Article to have auditors appointed by the General Assembly in accordance with the provisions of the Commercial Activity Law.

Article (4) The Audit Bureau shall be formed of a President, one or more Vice Presidents, and a sufficient number of members and employees. The President and Vice President shall be appointed for a period of three years, renewable once.

Article (5) The Bureau shall be presided over by a person known for competence and integrity. He shall be appointed and dismissed from his post, and his resignation shall be accepted, by a decision of the legislative authority. He shall be treated in terms of salary and benefits as a Minister.

Article (6) The President of the Bureau shall represent the Bureau in its dealings with third parties and before the judiciary.

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Article (7) The term of office of the Bureau's President ends in the following cases:

-1 Resignation. -2 Reaching retirement age. -3 Proven inability to perform his duties for health reasons. -4 Assignment to another job or task with his consent. -5 Issuance of a decision dismissing him by the legislative authority.

Article (8) The Vice President shall be appointed by a decision of the legislative authority of the State and shall be treated in terms of salary and benefits as a Deputy Minister. No disciplinary penalty may be imposed on him, nor may he be dismissed from his post or transferred except by a decision of the legislative authority of the State based on a proposal from the President of the Bureau. The executive regulations of this law shall determine the competencies of the Vice President.

Article (9) The President shall manage the affairs of the Bureau, draw up its policies, and follow up on their implementation. He shall also issue regulations and instructions that enable the Bureau to perform its duties. He shall have the authority of a Minister specifically granted to him in laws and regulations regarding employees of the Bureau, and the authority delegated to the Minister of Finance regarding the use of appropriations allocated in the Bureau's budget. In the absence of the President, the Vice President shall perform his duties.

Article (10) The Bureau shall exercise its competencies directly in the process of examining and auditing the accounts and financial statements of the entities subject to its supervision in accordance with accepted accounting standards and rules.

Article (11) The Minister of Finance shall submit the State's final account to the Audit Bureau within a period not exceeding six months from the date of the end of the financial year, and the President of the Bureau

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shall prepare an annual report on the State's final account for the past year, setting out his financial observations and the differences that occur between him and the various entities, and shall submit this report to the legislative authority of the State and a copy to the Council of Ministers and the Minister of Finance within a period not exceeding four months following the receipt of the final account.

Article (12)

A- The Bureau, when auditing state revenues, shall pay attention to the following:

1- Monitoring the collection of revenues and ensuring that all amounts collected have been transferred to the public treasury and recorded in their respective accounts.

2- Verifying the observance of all provisions of financial laws and implementing regulations and their proper application, and drawing attention to any deficiencies or shortcomings apparent to him.

3- Applying supervisory controls that ensure the collection of public revenues and detect any deficiency or delay in their collection.

4- Studying the effective financial regulations and systems to ensure their application and adequacy and suitability for ensuring the collection of taxes, fees, and other public revenues in accordance with prevailing laws.

B- The Bureau shall specifically verify the following:

1- That revenue transfer safes and documents serving as such and records have been reviewed by competent employees and that the amounts stated therein have been added to public revenues correctly.

2- That revenue or arrears statements submitted by public services clearly indicate that what has been collected of revenues, added to the uncollected arrears, is all that the government is entitled to collect by virtue of prevailing laws and regulations, and that the services have not neglected or delayed in collecting these arrears.

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• 3 - That no exemption from tax, fee, or payment of any other dues has been granted except in the circumstances stipulated in laws and after approval by competent authorities according to law.

• 4 - That the collection of taxes, fees, and other public revenues has been carried out in accordance with the laws.

Article (13)

A- The Bureau shall have jurisdiction regarding expenditures as follows:

• 1 - Verifying that all appropriations have been spent on the purposes for which they were allocated and that spending has been carried out in accordance with prevailing laws and regulations.

• 2 - Verifying that all payments are supported and justified by correct documents and ensuring the conformity of documents and vouchers with the figures recorded in the accounts.

• 3 - Applying supervisory controls that prevent any excesses or violations during spending.

• 4 - Ensuring the observance of all regulations and systems regarding public stores and their branches, and the soundness of their application, and drawing attention to any deficiencies or defects he may see in them.

B- The Bureau shall specifically verify the following:

• 1 - That the amounts spent on each item of the budget match exactly the figures contained in the related documents.

• 2 - That all spending vouchers have been issued correctly and within the scope of their authorizations, and that they have been issued by competent authorities in accordance with laws and regulations, and are accompanied by the required papers, receipts, and documents.

• 3 - That all expenditures have been allocated from the chapter and item designated for this type of expenditure in the budget, and that the amounts have actually been allocated to achieve the intended purpose.

• 4 - That no excess has occurred against the appropriations allocated to any chapter or item of the budget except after obtaining permission from competent authorities.

• 5 - That all amounts spent on the development plan have been spent on the purposes for which those amounts were allocated, and that no spending has occurred on an item not included in the budget without the approval of competent authorities.

• 6 - The validity of the reasons that led to not spending all or part of the appropriations allocated for development, and that the surplus in a specific appropriation was not intended to cover an excess in an appropriation allocated for another work unless there was a permit issued by the competent authority to face the increase in the final costs of that work.

• 7 - That no government service is bound by any commitments that would result in exceeding the appropriations allocated to any chapter of the budget, even if no spending has actually occurred.

• 8 - Ensuring the observance of provisions regarding the state of non-approval of the budget, whether contained in the Constitution or any other law.

• 9 - Ensuring that decisions regarding appointment, promotion, and granting allowances and increments of any kind have been issued in accordance with the laws and regulations governing them within the budget and financial rules, and observing the rules regarding job grades granted personally or those decided to be abolished or modified upon the first vacancy.

• 10 - Ensuring that pensions and retirement and basic bonuses have been determined or settled in accordance with the provisions of prevailing laws and regulations.

Article (14)

The Bureau, in the course of exercising its competencies specified in this law, shall examine accounts and the documents supporting them, either at the Bureau's headquarters or its branches, or at the entities whose accounts it audits. The Bureau may conduct surprise inspections or audits at any time.

The Bureau may examine, in addition to the documents stipulated in laws or regulations, any document, record, or paper he deems necessary for audit purposes, including confidential ones. He may seize such documents, records, or papers, or obtain copies thereof, and may request any person

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entrusted with or responsible for such documents, records, or papers to provide a signed certificate verifying the authenticity of these documents, records, or papers.

Entities whose accounts are subject to the Bureau's audit shall submit their accounts within the periods prescribed by law. The Bureau has the right to communicate directly with account managers, their auditors, and heads, and those acting in their place among the competent employees in the aforementioned entities, and the right to correspond with them and request the data he deems necessary from them.

Article (15)

The Bureau shall audit all settlement accounts, trusts, and current accounts to verify the correctness of the balances of their operations and that the figures recorded in the accounts are supported by correct and complete documents.

He shall also audit advances and loans granted by the government or public institutions or bodies, and verify that these advances or loans have been repaid to the public treasuries in accordance with the conditions of their granting.

Article (16)

Employees who have been granted the authority to authorize the spending of appropriations allocated to each ministry, service, body, or public institution shall study the Bureau's observations and respond immediately to any inquiries addressed to them. The Bureau shall inform the competent authority of any observations resulting from the audit that require taking necessary measures regarding them.

Article (17)

The Bureau may request competent administrative authorities to take necessary measures to collect amounts due to the government for any institution or public body, which have not taken the necessary measures to collect them, and which have been spent improperly or in violation of prevailing laws and regulations.

Article (18)

The President of the Bureau shall notify the Prime Minister and the competent Minister of any loss that can be avoided or any burden on the state's financial resources that is not necessary, if that burden or loss may result from adopting a certain financial policy in his ministry or in one of the services under it.

He shall also notify the Minister of Finance of cases where he believes that any law or regulation related to financial or accounting aspects, if applied or likely to be applied, will harm the interests of the country or requires amendment.

Any measure taken under this Article shall be reported to the Council of Ministers.

Article (19)

The President of the Bureau may order any employee in entities subject to his supervision or any person tasked with public service to pay any amount he believes was spent or ordered to be spent from public funds without justification or in violation of established rules, or to pay compensation for any loss of public funds, or loss or damage to stores or property, or other damages incurred by the State or one of the bodies, institutions, or public companies due to his negligence or intentional error. The President of the Bureau's decision shall determine the amount of such compensation.

The person against whom the aforementioned decision was issued may appeal it before the administrative judiciary circles through the methods prescribed by law.

Article (20)

If the President of the Bureau establishes that there are actions that have harmed public funds, he may stop transactions in the accounts of the entities that suffered the harm at banks, and may place them under accompanying audit and review until the causes are removed and the harm is lifted.

Chapter Two On Performance Audit and Evaluation

Article (21)

The Bureau shall exercise the audit and evaluation of the performance of entities subject to its supervision to determine the extent of

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their sufficiency and effectiveness in carrying out their activities, and to ensure that their programs and projects are managed scientifically and economically, and that they achieve the objectives specified for them, and that those entities have used their financial resources in the activities and tasks entrusted to them to the highest degree of sufficiency, effectiveness, and economy in spending.

Article (22)

The Bureau shall have jurisdiction to verify the application of laws, decisions, and financial regulations related to the entity under supervision or audit to verify their application, efficiency for the purposes for which they were enacted, and their suitability for developments that occur in the state's public administration, and to propose amendments aimed at eliminating deficiencies in them. He shall investigate the causes of deficiency, delay, or deviation in their application and propose means capable of remedying and eliminating them.

The Bureau shall also have jurisdiction to verify the continuity and stability of adopted monetary and financial policies, enhance the concept of good governance, and confirm the application of the law, raise the efficiency of government devices, the integrity of administration, and the optimal use of available economic resources.

Article (23)

The Bureau shall follow up the stages of implementation of contracted projects to verify procedures and the soundness of implementation. He shall also periodically follow up on implemented projects that have been received to ensure the soundness of their operation, care for their maintenance, and the extent to which they achieve the purposes for which they were established.

Chapter Three On Review and Examination of Contracts (1)

Article (24)

The Bureau's supervision on contracting and spending covers supply, contract, and commitment contracts, and other contracts in which the government and its services,

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and bodies and institutions subject to the Bureau's supervision are parties, which entail rights or financial obligations, the value of each exceeding five million (5,000,000) dinars. The reference in determining this value shall be the total value of the items or works subject to the contract, and in the case of tendering, it shall be calculated based on the lowest prices of the submitted bids meeting the conditions. In these cases, it is not permissible to fragment the contract with the aim of reducing its value to a level that removes it from supervision. Fragmentation is considered to occur if the concerned entity attaches another tender for items or works of the same type within a period of not less than one year. A contract shall not be considered valid until approved by the Bureau.

Article (25)

Entities whose contracts are subject to prior review shall submit to the Bureau copies of the necessary approvals for contracting and copies of the letters requesting permission to launch the project for contracting, accompanied by a statement of the subject of the contracting and the documents related to it required by prevailing legislation. The Bureau shall rule on the documents submitted to it by the entity requesting approval for contracting within a maximum period of one month from the date of receiving the documents and all related documents, records, and explanations the Bureau deems necessary and essential for the examination and review process, and to state his opinion on whether the appropriations included in the plan and budget allow for contracting and spending, and any observations he may have on the subject of the contracting or its conditions.

If the Bureau does not rule on the matter or does not notify the concerned entity before the expiration of the period mentioned in the previous paragraph, this entity may contract at its own responsibility, without prejudice to the Bureau's right to exercise its competencies in subsequent supervision.

All entities whose contracts are subject to the Bureau's supervision must notify him of the dates of their bid committees' meetings in good time. A member of the Bureau must attend the bid committee sessions in those entities as an observer, and prepare a report on the procedures taken by those committees and his opinion on them.

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Article (26)

The Bureau shall have jurisdiction to verify the correctness of documents and records related to the spending of any amount resulting from any contract immediately after spending. Employees specialized in making these payments must notify the Bureau of this, sending copies of documents indicating the spending immediately after spending.

Article (27)

If examination, review, and audit operations result in matters requiring investigation, the President of the Bureau or his Vice President shall refer the documents to the Administrative Control Authority.

Chapter Four On Members and Employees of the Bureau

Article (28)

The President of the Bureau, his Vice President, his members, and his technical employees must be Libyan nationals holding a higher or university degree in Law, Economics, Accounting, Engineering, or any other qualification encompassed by the nature of the Bureau's work, which the President of the Bureau shall specify for its members. It is not permissible to appoint members to the Bureau from those who do not hold the aforementioned qualifications. In addition to what is stipulated in this Article, it is required of those nominated for one of the positions of members of the Bureau that they have served for a period of not less than three consecutive years in the field of work of the Bureau.

The qualification requirement mentioned is exempted for holders of administrative, clerical, and craft positions.

Article (29)

Members of the Bureau are the technical employees whose membership status is issued by a decision of the President of the Bureau. The executive regulations of this law shall determine the conditions for acquiring membership.

Article (30)

The President of the Bureau, his Vice President, his members, or his employees may not hold any public office or practice any other activity during their tenure, whether that activity is commercial, industrial, financial, or service-related. They are also not permitted to conclude a contract or commitment with the government, bodies, or public institutions, or to hold membership on the boards of directors of companies and monitoring and audit committees, or to purchase or rent directly or indirectly government property for exploitation, even by auction. They are also not permitted to sell or rent any of their property to the government.

Article (31)

The appointment, promotion, transfer, secondment, and loan of members and employees of the Bureau, and the acceptance of their resignations and termination of their services shall be by a decision issued by the President of the Bureau in accordance with the provisions of this law and the regulations issued pursuant to it. The Bureau is committed to raising the competence of its workers in line with its objectives and keeping pace with developments in supervisory work according to the controls specified by the executive regulations of this law.

Article (32)

The President of the Bureau, his Vice President, and his members shall have the status of judicial police officers with respect to the implementation of the provisions of this law. By a decision of the President of the Bureau, this status may be granted to other employees whose work nature requires them to obtain it.

Article (33)

Disciplinary trials of members of the Bureau shall be conducted before a council consisting of:

• A counselor from the Supreme Court, nominated by the General Assembly of the Court (President)
• A counselor from the Court of Appeal, nominated by the General Assembly of the Court (Member)
• One member of the Bureau at the rank of General Manager, nominated by the President of the Bureau (Member) The executive regulations of this law shall specify the procedures for the disciplinary trial.

Article (34)

Administrative investigation procedures with employees of the Bureau who are not members

Article (35) The disciplinary penalties that may be imposed on members of the Bureau are: 1- Reprimand. 2- Warning. 3- Deduction from salary for a period not exceeding one month per year. 4- Deprivation of annual increments for two years. 5- Deprivation of promotion for one year. 6- Withdrawal of membership. 7- Dismissal from the post.

The President of the Bureau shall have the authority to impose the penalties of reprimand, warning, or salary deduction not exceeding fifteen days at a time. These penalties shall not be imposed except after hearing the member's statements and investigating his defense through a committee of three members whose ranks are not lower than that of the investigator.

Article (36) The work of members of the Bureau and his technical employees shall be subject to internal audit in accordance with professional conduct standards and rules determined by a decision of the President of the Bureau.

Article (37) A committee for the affairs of its members and employees shall be formed in the Bureau by a decision of the President of the Bureau in accordance with the provisions of the Labor Relations Law. This committee shall exercise all competencies and authorities delegated to it by prevailing legislation related thereto.

Article (38) In cases other than flagrant crime, no arrest or investigative measures may be taken against members of the Bureau, nor may a criminal lawsuit be brought against them except with written permission from the President of the Bureau. In cases of flagrant crime, the President of the Bureau must be notified within twenty-four hours following the arrest.

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Article (39) The salaries of employees of the Bureau and all other benefits shall be determined by a decision issued by the legislative authority based on a proposal from the President of the Bureau.

Article (40) Employees of the Bureau shall have the right to healthcare, treatment allowance, and compensation for injuries sustained during or due to work that are not attributable to their personal fault. The executive regulations of this law shall specify the necessary bases and controls.

Article (41) A fund for employees of the Bureau shall be established with the aim of providing social and cultural care, and granting financial allowances and assistance to employees of the Bureau. A decision by the President of the Bureau shall be issued to regulate the fund, manage it, and determine its resources and rules for spending from it.

Article (42) The provisions of the Labor Relations Law shall apply to the President of the Bureau, his Vice President, his members, and his employees, insofar as no special provision regarding them is stipulated in this law.

Article (43) Members of the Bureau and their employees shall take the legal oath before commencing their work, promising to perform their duties with honesty and integrity. The executive regulations of the law shall specify the form of the oath and the authority before which the oath is taken.

Chapter Five General and Transitional Provisions

Article (44) The Bureau shall prepare its annual budget project and submit it to the Minister of Finance no later than August 31 of each financial year. The Minister of Finance shall include the project as prepared by the Bureau in the draft general budget of the State. If the Bureau's draft project includes an increase over the total allocations of the previous financial year, the Minister of Finance may request explanations and justifications for the increase from the Bureau. In case the increase is not approved, the matter shall be referred to the legislative authority of the State for a decision. The Bureau's accounts shall be audited by auditors through a specialized committee formed by a decision of the legislative authority, and the standards and controls for the audit shall be specified in this decision.

Article (45) The Bureau shall receive financial fees for the examination of accounts and auditing of budgets it performs for entities subject to its supervision that do not receive funding from the general budget. Ministries, bodies, institutions, and other public entities funded directly from the general budget of the State are exempt from bearing the aforementioned fees, with respect to the device's examination and auditing of their annual accounts. The executive regulations shall determine the standards for determining the fees for examination and review operations by the Bureau.

Article (46) The following are considered financial violations in the application of the provisions of this law:

• 1 - Violation of financial rules and systems and any instructions or directives issued regarding them.
• 2 - Violation of the provisions of contracts, purchases, or other financial rules and systems.
• 3 - Any incorrect action, negligence, or delay that results in the spending of amounts from public funds without justification or the loss of any financial rights of the State.
• 4 - Failure to provide the Audit Bureau with the documents it requests.
• 5 - Failure to respond to inquiries or observations of the Audit Bureau, or delay in responding to them in a timely manner.
• 6 - Failure to take necessary measures regarding the violations contained in the Bureau's observations.

-7 Violation of budget rules or the principles of its preparation or implementation. -8 Fragmentation of contracts with the aim of evading the Bureau's supervision. -9 Concluding contracts subject to the Bureau's prior supervision before their review by him and the expression of his observations regarding them. -10 Any action or position that hinders the Audit Bureau from exercising its competencies.

Article (47) The President of the Bureau may suspend any employee in entities subject to the Bureau's supervision from his job if there are strong justifications for taking this measure and for serious reasons related to the requirements of public interest. The suspension period may not exceed three months except by a decision of the competent disciplinary council.

Article (48) Entities subject to the Bureau's supervision shall submit copies of all their contracts, plans, and correspondence to the Bureau that entail financial obligations for the State. They shall also notify the Bureau of financial violations committed by them immediately upon discovery, and inform him of the results of the investigation into those violations. The Bureau shall take legal measures regarding them.

Article (49) Entities subject to the examination and review of the Bureau shall submit their final accounts and budgets to the Bureau within a period not exceeding four months from the end of the financial year.

Article (50) The President of the Bureau may propose, after consultation with the Minister of Finance, the aspects he deems necessary to ensure the proper implementation of the provisions of this law, and in particular the aspects necessary to specify the proper method of keeping accounts, or preserving cash or government property, or examining and auditing the accounts he is competent to audit, as well as the type and components of supervisory controls that should be applied. These regulations shall be issued by decisions of the Council of Ministers.

Article (51) The Bureau may examine the effective financial regulations in ministries, government services, and institutions and public bodies to ensure their adequacy and propose amendments aimed at eliminating deficiencies in them.

Article (52) The Bureau may avail itself of experts in financial and technical matters from outside the Bureau based on a decision of the President of the Bureau. The financial reports prepared by the Bureau shall have the force of reports issued by the Center for Research and Judicial Expertise.

Article (53) The Bureau shall submit an annual report on its activities, observations, and recommendations to the legislative authority of the State. It shall also submit reports to concerned entities on matters and topics revealed by examination and review operations that he deems of such importance and severity that they require immediate consideration.

Article (54) The executive regulations of this law shall be issued by a decision of the legislative authority of the State based on a proposal from the President of the Bureau.

Article (55) The following laws and decisions are repealed:

• Law No. (2) of the year 2007 regarding the organization of popular supervision and inspection.

• Law No. (3) of the year 2007 regarding the establishment and organization of the Financial Audit Agency.

• Transitional National Council Decision No. (119) of the year 2011 regarding the establishment of the Audit Bureau. Any provision conflicting with the provisions of this law is also repealed.

Article (56) The provisions of this law shall be implemented from the date of its issuance, and it shall be published in the Official Gazette.

General National Congress - Libya

Issued in Tripoli: Date: 23/Ramadan/1434 AH. Corresponding to: 1/August/2013 AD.

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Law No. (24) of the year 2013 Amending Law No. (19) of the year 2013 Regarding the Reorganization of the Audit Bureau

After reviewing:

• The Provisional Constitutional Declaration issued on 3 August 2011 and its amendments.
• The General National Congress Decision No. (62) of the year 2013 regarding the adoption of the amendment to the Congress's internal regulations.
• The State Financial System Law and the Budget, Accounts, and Stores Regulations.
• Law No. (7) of the year 2013 regarding the adoption of the General State Budget for the year 2013 and its amendment.
• Law No. (19) of the year 2013 regarding the reorganization of the Audit Bureau.
• Law No. (20) of the year 2013 establishing the Administrative Control Authority.
• And what the General National Congress concluded in its 128th ordinary session held on 22 September 2013.

The following Law was issued:

Article One

The text of Article Twenty-Four of Law No. (19) of the year 2013 regarding the reorganization of the Audit Bureau mentioned above is amended as follows:

The Bureau's supervision on contracting covers supply, contract, and commitment contracts, and other contracts in which the government and its services,

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and bodies and institutions subject to the Bureau's supervision are parties, which entail rights or financial obligations, the value of each exceeding five million (5,000,000) dinars. The reference in determining this value shall be the total value of the items or works subject to the contract, and in the case of tendering, it shall be calculated based on the lowest prices of the submitted bids meeting the conditions. In these cases, it is not permissible to fragment the contract with the aim of reducing its value to a level that removes it from supervision. Fragmentation is considered to occur if the concerned entity attaches another tender for items or works of the same type within a period of not less than one year. A contract shall not be considered valid until approved by the Bureau.