Board of Audit of Japan, "Board of Audit of Japan, Year 2022"
Summary
An English-language booklet published in October 2022 by the Board of Audit of Japan, Board of Audit of Japan, Year 2022, with a message from President Morita Yuji explaining the Board's mandate, organization and the FY2020 Audit Report submitted to the Prime Minister on November 5, 2021 and to the Diet on December 6. While field audits were suspended during a State of Emergency in 2021, the Board expanded remote and digital auditing and identified 210 audit finding cases totaling 210.8 billion yen, including two Special Reports to the Diet and Cabinet and five Diet-requested Special Reports. It also notes COVID-19 countermeasure spending and projected government debt of about 1026 trillion yen, or 182% of GDP, at the end of FY2022.
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“Board of Audit of Japan, ‘Board of Audit of Japan, Year 2022.’”
Original at www.jbaudit.go.jp. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/board-of-audit-of-japan-board-of-audit-of-japan-year-2022-ce1e437af7/
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Board of Audit of Japan
会 計 検 査 院
Year 2022
Message from the President, Board of Audit
On November 5, 2021, I submitted the FY2020 Audit Report on
findings and other matters from the Board of Audit's audit activities
in 2021 to the Prime Minister. The Audit Report, along with the
final accounts of the expenditures and revenues of the State, was
submitted to the Diet on December 6.
This booklet provides an explanation of the mandate, organization,
and activities of the Board of Audit as well as the audit result outline
of the submitted FY2020 Audit Report.
The audits for the year 2021 were significantly affected by COVID-
19 pandemic. As part of countermeasures, for example, all field
audits were suspended while a State of Emergency was declared,
and the scope of the audit was limited even after the suspensions
were lifted. Despite these circumstances, the Board of Audit has
worked all together to keep conducting audit by using and further
developing audit methods such as remote and digital auditing.
The FY2020 Audit Report points out and draws public attention to
various issues from a broad perspective, in response to Japan’s
social and economic trends and its current financial condition. In
particular, it covers a number of audit findings on matters of great public concern, such as (i) the total
expenditure incurred with regard to COVID-19 countermeasures (ii) ensuring safety of people’s lives, (iii) social
security, (iv) information technology (IT), (v) effectiveness of programs and projects, (vi) stocks including
assets and funds, and (vii) proper execution of the budget and adequacy of the financial management. This
Report identifies 210 cases totaling 210.8 billion yen as audit findings, including summaries of two cases of
Special Report to the Diet and to the Cabinet and five cases of Special Report on audit requested by the Diet.
Japan’s society and economy are facing significant challenges, such as accelerated decrease of population, rising
social security expenses due to the declining birthrate and the aging population, not invigorated growth potential,
and having to respond with disaster recovery and disaster prevention efforts for frequent large-scale natural
disasters such as when the Great East Japan Earthquake occurred 11 years ago. In addition, the ongoing COVID-
19 pandemic has been seriously affecting Japan's society and economy. The call for an urgent response to the
pandemic has made it clear to address issues such as the delay in digitalization of public administration. An
appropriate response to these issues is being demanded by the government and other administrative bodies.
Meanwhile, as for the fiscal position of the Japanese government, the outstanding debt has been ever more
increasing due to frequent issuance of public bonds including those for COVID-19 countermeasures. The
amount of outstanding debt is estimated to reach about 1026 trillion yen (182% of GDP) at the end of FY2022,
which poses a major challenge for achieving a sound fiscal position.
Against this backdrop, the government is aiming to achieve its fiscal consolidation goal of bringing the primary
balance, including the national and local government budgets, into surplus through its efforts in continuing to
move forward with integrated economic and fiscal reform.
In addition, the importance of grasping the result of the State budget execution and reflecting it in subsequent
budgets is deliberated in the Diet from the viewpoint of enhancing and strengthening fiscal administration
control by the Diet.
In light of these circumstances, as an organization stipulated in the Constitution of Japan, the Board of Audit
will continue to commit itself to living up to the expectations of the public and fulfill its duties to "supervise
financial management, ensure its adequacy, and rectify any defects."
It is my sincere hope that this booklet will serve to enhance your understanding of the Board of Audit.
October 2022
MORITA Yuji
President
Board of Audit
Contents
Overview of the Board of Audit 2
Status of the Board 2
Organization of the Board 4
Audit Activities
Aims of the Audit 9
Scope of the Audit 10
Perspectives of the Audit 14
Procedures of the Audit 16
Audit Report 24
Promotion of the Audit Findings 28
Other Activities 33
Exchange of Information and Views with External Bodies 34
International Activities 36
Audit Result Outline －FY2020 Audit Report－ 39
The Board of Audit Act 59
History of the Board of Audit
The Board of Audit (hereinafter referred to as ‘the Board’) originates from a division
established in 1869 under the forerunner of the Ministry of Finance in the previous
form of the current Cabinet of Japan, called “Dajokan”. Through several changes in its
name, the Board was organized as an auditing organ under the direct control of the
“Dajokan” in 1880. Following promulgation of the Meiji Constitution in 1889, the
Board acquired constitutional status and supervised public finances over the next sixty
years as an independent organ directly subordinate to the Emperor.
In 1947, with the enactment of the Constitution of Japan, the present Board of Audit
Act came into effect pursuant to Article 90 of the Constitution, which made the Board
independent of the Cabinet. Important changes were as follows:
1) The relationship with the Diet was strengthened;
2) The scope of the audit was expanded; and
3) Measures were established by which the results of the Board’s audit could be
immediately reflected in the public administration.
As a constitutional organization that is independent of the Cabinet and belongs
to neither the Diet nor the Courts, the Board audits State accounts as well as
those of public organizations and other bodies as provided by law, and also
supervises financial management to ensure its adequacy.
The Board has been given the mandate of government auditing since its establishment in 1880,
despite some changes in its status.
Every country in the world has its own government auditing institution, while varying in name,
status or type of organization, in order to ensure proper administration of public finances.
The Constitution of Japan
Article 90 Final accounts of the expenditures and revenues of the State shall be
audited annually by a Board of Audit and submitted by the Cabinet to
the Diet, together with the statement of audit, (Note) during the fiscal
year immediately following the period covered.
The organization and competency of the Board of Audit shall be
determined by law.
The Board of Audit Act
Article 1 The Board of Audit is independent from the Cabinet.
Article 20 (1) The Board of Audit audits the final accounts of the revenues and
expenditures of the State, pursuant to the provisions of Article 90
of the Constitution of Japan, and also audits the accounts provided
for by law.
(2) The Board of Audit continuously conducts audit, supervises
financial management, ensures its adequacy, and rectifies any
defects.
(3) The Board of Audit is to conduct audits in terms of accuracy,
regularity, economy, efficiency, effectiveness, and from other
perspectives necessary for auditing.
(Note) The statement of audit is also called the Audit Report.
1
Status of the Board
Status of the Board
The Board is a constitutionally independent organization which
audits the final accounts of the revenues and expenditures of the
State, accounts of government affiliated institutions and
incorporated administrative agencies, and those of bodies which
receive financial assistance from the State such as subsidies.
Government activities are implemented through the State budget execution. The State budget is
formulated by the Cabinet, deliberated and approved by the Diet and then executed by ministries,
agencies and other public bodies. The final accounts of the revenues and expenditures of the
State, which are the results of the State budget execution, are prepared by the Cabinet and
deliberated on in the Diet.
For sound management of administrative and financial operations of the State, it is essential to
audit whether the budget has been executed properly and effectively, and to ensure that audit
results be reflected in the State budget formulation and execution in the following year.
To achieve this purpose, the Constitution provides that the final accounts of the expenditures and
revenues of the State shall be audited annually by the Board of Audit and submitted by the
Cabinet to the Diet, together with the audit report, during the fiscal year immediately following
the period covered.
In addition, the accounts of national properties, claims held by the State and State obligations are
also audited by the Board. Furthermore, accounts of entities whose stated capital has been
contributed by the State and local public entities which receive financial assistance from the State
are also subject to the Board’s audit.
The Board is a constitutional organization which is independent of the Cabinet and belongs to
neither the Diet nor the Courts for the purpose of strictly performing such important functions
without any interference by any other bodies.
2
Status of the Board
◆Organization Chart of the Government of Japan◆
Imperial
Legislature Diet Household Agency
Fair Trade Commission
National Public
Safety Commission
Personal Information
Cabinet Office Protection Commission
Japan Casino
Regulatory Commission
Board of Audit Digital Agency
Financial Services
Agency
Consumer Affairs
Reconstruction Agency Agency
Ministry of Internal
Executive Cabinet Affairs and
Communications
Cabinet
Secretariat Ministry of
Justice
Cabinet Legislation Ministry of
Bureau Foreign Affairs
Ministry of Finance
National Personnel
Authority
Ministry of Education,
Culture, Sports, Science
and Technology
Ministry of Health,
Labour and Welfare
Ministry of Agriculture,
Forestry and Fisheries
Ministry of Economy,
Trade and Industry
Ministry of
Land, Infrastructure,
Transport and Tourism
Ministry of
the Environment
Ministry of
Defense
Judiciary Courts
3
Organization of the Board
Organization of the Board
The Board is composed of the Audit Commission, a decision-making
organ, and the General Executive Bureau, an executive organ.
Decision-making and executing functions are separated to ensure
discreet decision-making and fair judgment.
■Audit Commission
The Audit Commission, comprising of three Commissioners, makes the Board’s decisions by
consensus of the Commissioners, as well as directing and supervising activities carried out by the
General Executive Bureau.
Board of Audit
Audit Commission
Commissioner
(President) Commissioner Commissioner Secretariat
Senior ASG
Adjudication Division
ASG for
Records and Archives Audit Policy Planning
Management Division
ASG for Office of the Review
Cybersecurity and Board of the Board of
Information Technology Audit for the Information
ASG(13) Disclosure and Personal
Information Protection
Management Division
Health and Welfare
Office of Public Service Division
Relations
Office of Audit Planning Information Systems
and Coordination Division
Personnel Division Capacity
Development Division
Research and
International Division Annaka Training
Center
Office of
International Affairs
Office of Public Sector
Accounts Division Audit Cooperation
Legal Affairs Division Office of Data and
Information
Office of Information
Disclosure and Personal Technical Counselors
(Abbreviation) ASG：Assistant Secretary General Information Protection (3)
AD：Audit Division
Office of Records and
(Note) Annaka Training Center is located in Annaka City, Gunma Prefecture Archives Management
4
Organization of the Board
The Audit Commission adopts a consensus system to ensure fairness and adequacy in its
judgments.
Commissioners are appointed by the Cabinet with the consent of both Houses of the Diet. The
Emperor attests to the appointment of the Commissioners. A Commissioner holds office for a
seven (7)-year term, and their status is guaranteed during the term to ensure the Board’s
independence.
A person elected by the Commissioners from among themselves is appointed President of the
Board by the Cabinet. The President represents the Board and presides over the Audit
Commission.
(as of January 2022)
Secretary General Review Board of the Board of Audit for the Information
General Executive
Bureau Disclosure and Personal Information Protection
Deputy Secretary
General
1st Bureau 2nd Bureau 3rd Bureau 4th Bureau 5th Bureau
Director General Director General Director General Director General Director General
Coordination Division Coordination Division Coordination Division Coordination Division Coordination Division
Construction Planning Education, Science and Information and
Finance AD Health and Welfare AD and Housing AD Technology AD for Communications AD
General Issues
NHK, NTT and Postal
National Properties AD Labour AD Port and Aviation AD
Services AD
Education AD
Judicial Affairs AD Medical Care AD Water Resources AD Trade and Industry AD
Grant for Local Natural Resources and
Government AD Public Pension AD Road Construction AD Energy AD
Agriculture AD Government Financial
Foreign Affairs AD Medical Institution AD
Institutions AD
Agricultural Infrastructure
Ground Defense AD AD Special Issues AD for
1st Tax AD Ministries
Fisheries and Livestock
AD Special Issues AD for
2nd Tax AD Maritime Defense AD Expressway AD Agencies
Forestry AD
Air Defense AD
5
Organization of the Board
■General Executive Bureau
The General Executive Bureau is comprised of the Secretariat and five bureaus, under which
many divisions are set up to perform audits and administrative work.
Audit activities are performed by the five bureaus. The following table shows the responsibility
of each bureau and division.
(as of January 2022)
Bureau Audit Division Ministries and Bodies subject to Audit
Consolidation of the audit of the State final accounts, credits, and goods carried out by the
Board /
Diet / Cabinet / Cabinet Office(except for the matters on which the other Audit Divisions are in
charge of audits in Cabinet Office) / Imperial Household Agency / Financial Services Agency /
Finance AD
Ministry of Finance(except for the matters on which the other Audit Divisions are in charge of
audits in Ministry of Finance) / Bank of Japan / Deposit Insurance Corporation of Japan /
Special issues on which the Secretary General of the Board requires the cross-division audit
concerning the fiscal condition to be conducted as audit on financial management of the State
Consolidation of the audit of national property carried out by the Board /
1st National Properties AD National Personnel Authority / Fair Trade Commission / Japan Casino Regulatory Commission
Bureau / Consumer Affairs Agency / Japan Mint / National Printing Bureau / Japan Tobacco Inc. (JT)
Courts / Board of Audit / National Public Safety Commission / Ministry of Justice / Immigration
Judicial Affairs AD
Services Agency of Japan / Public Security Intelligence Agency / Japan Legal Support Center
Office for Promotion of Regional Revitalization (Cabinet Office) / Reconstruction Agency /
Grant for Local Government AD Ministry of Internal Affairs and Communications (MIC) (except for the matters on which the
other Audit Divisions are in charge of audits in MIC) / Fire and Disaster Management Agency
Foreign Affairs AD Ministry of Foreign Affairs / Japan International Cooperation Agency (JICA) / Japan Foundation
1st Tax AD Tax Bureau of Ministry of Finance / Customs and Tariff Bureau of Ministry of Finance / National
2nd Tax AD Tax Agency / Customs
Health and Welfare AD
Children and Child-Rearing Administration / Ministry of Health, Labour and Welfare / Japan
Labour AD
Pension Service / Welfare and Medical Service Agency / National Hospital Organization /
Medical Care AD
Japan Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers
2nd Public Pension AD
/ Government Pension Investment Fund
Bureau Medical Institution AD
Ground Defense AD
Ministry of Defense / Acquisition, Technology and Logistics Agency / Ground, Maritime and
Maritime Defense AD
Air Self-Defense Forces
Air Defense AD
Construction Planning and
Housing AD Ministry of Land, Infrastructure, Transport and Tourism (MLIT) / Tourism Agency /
Port and Aviation AD Meteorological Agency / Coast Guard / Urban Renaissance Agency / Japan Water Agency /
Water Resources AD Japan Railway Construction, Transport and Technology Agency / Narita and New Kansai
3rd Road Construction AD International Airport Co., Ltd.s / Tokyo Metro Co., Ltd / East Nippon, Central Nippon, West
Bureau Surface Transportation AD Nippon and Honshu-Shikoku Bridge Expressway Co., Ltd.s
Expressway AD
Ministry of the Environment / Environmental Restoration and Conservation Agency / Japan
Environment AD
Environmental Storage & Safety Corporation
Ministry of Education, Culture, Sports, Science and Technology / Japan Sports Agency /
Education, Science and
Agency for Cultural Affairs / The Promotion and Mutual Aid Corporation for Private Schools of
Technology AD for General Issues
Japan / Japan Science and Technology Agency / Japan Sport Council / Japan Student
Education AD
Services Organization / RIKEN / Japan Aerospace Exploration Agency / Japan Atomic Energy
4th Science and Technology AD
Agency / National University Corporations
Bureau Agriculture AD
Ministry of Agriculture, Forestry and Fisheries / Forestry Agency / Fisheries Agency / Japan
Agricultural Infrastructure AD
Racing Association / Agriculture & Livestock Industries Corporation / National Agriculture and
Fisheries and Livestock AD
Food Research Organization / Forest Research and Management Organization
Forestry AD
Digital Agency, Global Strategy Bureau, Information and Communications Bureau,
Telecommunication Bureau, and Director-General for Cybersecurity of the MIC / National
Information and Communications Institute of Information and Communications Technology /
AD Special issues on which the Secretary General of the Board requires audit concerning the
accounting related to Information and Communications
Japan Post Holdings / Organization for Postal Savings, Postal Life Insurance and Post Office
NHK, NTT and Postal Services AD Network / Japan Broadcasting Corporation (NHK) / Nippon Telegraph and Telephone
Corporation (NTT)
5th Ministry of Economy, Trade and Industry / Agency for Natural Resources and Energy /
Bureau Trade and Industry AD
Japan Patent Office / Small and Medium Enterprises Agency / National Institute of
Advanced Industrial Science and Technology / Japan External Trade Organization / New
Natural Resources and Energy
Energy and Industrial Technology Development Organization / Japan Oil, Gas, and Metals
AD
National Cooperation / Nuclear Damage Compensation and Decommissioning Facilitation
Corporation
Government Financial Institutions The Okinawa Development Finance Corporation / Japan Finance Corporation / Japan
AD Housing Finance Agency / Development Bank of Japan
Special Issues AD for Ministries Audit in response to the requests by the Diet based on the provision of the Diet Act /
Special Issues AD for Agencies Special issues on which the Secretary General of the Board requires audits
6
Organization of the Board
Among these divisions, both the Special Issues Audit Division for Ministries and the Special
Issues Audit Division for Agencies of 5th Bureau do not have any specific ministries or agencies
subject to their mandatory audit, and conduct flexible and cross-cutting audits.
The number of authorized personnel of the General Executive Bureau is 1,250 (as of January
2022). Many of these personnel are assigned to various audit divisions as auditors and assistant
auditors.
The audit staff of the Board must have a high level of competency in auditing.
The term “Accounting,” that is subject to audit by the Board, does not just mean accounting for
the incoming and outgoing funds or bookkeeping in a narrow sense, but covers broader issues of
whether tax payers’ money has been properly and effectively collected and used for
implementing administrative activities of the State. Auditors of the Board therefore must have
broad knowledge of not only management and operations of the auditees, but also of other
relevant fields such as law, finance, economics, civil engineering, construction, electricity,
information and telecommunications.
The Board recruits its staff from those who have passed the Public Service Entrance
Examination conducted by the National Personnel Authority. Besides those who have
specialized in law and economics, the Board recruits a considerable number of personnel who
specialized in civil engineering, construction, engineering, electricity or electronics from a list of
successful examinees.
The Board also utilizes outside expertise by recruiting fixed-term staff from those who have
specialized knowledge and skills, such as certified public accountants (CPA).
After recruitment, new staff members undergo extensive training and examinations in various
fields to acquire necessary knowledge and skills, and then become auditors after several years of
audit experience.
Auditors also have to attend advanced professional training in order to cope with more
diversified and specialized administrative activities of the auditees.
To strengthen its training activities in order to improve the auditing competency of its staff, the
Board established a training center (refer to page 8) and provides systematic training to its staff.
Training sessions (before the COVID 19 pandemic)
7
Organization of the Board
Training System of the Board
The Board provides the following training to its staff.
1) A course for new recruits and other general staff to learn basic knowledge
that is necessary for audit work such as knowledge on financial and accounting
systems and fundamental auditing techniques
2) A course for assistant auditors to improve their auditing competency by
learning practical auditing techniques through study of audit cases reported in
the Audit Report
3) More advanced professional courses for auditors to further upgrade their
auditing skills by learning in-depth knowledge in various fields such as
construction work, corporate accounting and IT
4) Training through dispatching staff to outside educational institutes (graduate
schools in Japan and abroad, National Tax College, etc.) to acquire professional
knowledge and skills in specific fields
The in-house training courses described in 1)-3) above are mainly held at the Annaka
Training Center (Annaka City, Gunma Pref., about 110 kilometers northwest of
Tokyo), a training center with accommodation facilities. The Center has construction
audit training facilities, including full-scale structure models for practical training of
construction audits.
Annaka Training Center
Full-scale structure models
(Bridge models)
8
Audit Activities
Audit Activities
Aims of the Audit
The basic mandate of the Board is to ensure the adequacy of
financial management by continuously auditing and supervising
financial management, and to verify the final accounts of the
revenues and expenditures of the State based on the results of the
audit.
(1) Supervision of financial management
The Board continuously audits and supervises financial management to ensure adequacy and to
rectify any defects.
When the Board finds cases of improper or unreasonable financial management in the course of
its audit, the Board not only points out these improper cases, but also performs a positive function
of facilitating their rectification and improvements by identifying the cause of such improprieties.
For this reason, the Board is given a mandate to present its opinions to, or demand auditees to
take measures for the improvement, if the Board finds that there are items that violate laws and
regulations on financial management or that are improper, or if the Board finds that there are any
matters concerning laws and regulations, systems or administration that need to be improved.
(2) Verification of the final accounts of the revenues and expenditures
of the State
Verifying the final accounts of the revenues and expenditures of the State is another aim of the
audit by the Board. The Board has a mandate to verify them based on the results of audit.
Verification of the final accounts of the revenues and expenditures of the State means to declare
completion of the audit after determining the accuracy of the statements and adequacy of financial
management.
The Constitution stipulates that the final accounts of the expenditures and revenues of the State
shall be submitted by the Cabinet to the Diet together with the Audit Report of the Board. Thus,
an official declaration of completion of the audit by the Board enables the submission of the final
accounts of the expenditures and revenues of the State by the Cabinet to the Diet.
9
Audit Activities
Scope of the Audit
Those which are subject to audit by the Board are classified into two categories, i) those which
the Board must audit regularly (mandatory audit subject) and ii) those which the Board may
audit when the Board finds it necessary (discretionary audit subject), ranging from the whole
of State accounts to entities whose stated capital has been contributed by the State and prefectures,
municipalities and other organizations as grantees of subsidies and other financial assistance from
the State.
Monthly revenues and expenditures of the
State
Diet, Courts,
Receipts and payments of cash, and
Cabinet, Cabinet
receipts and transfers of goods owned by the
Office and 11
State as well as those of national properties
Ministries, etc.
Subject to Acquisition or loss of claims held by the State,
the Board’s or an increase or decrease in government
mandatory audit bonds and other obligations
Receipts and payments of cash, and
receipts and transfers of precious metals
and securities handled by the Bank of
Japan on behalf of the State
Accounts of juridical persons to which the
Scope State has contributed 50 percent or more 210 bodies
of the of their stated capital
Audit
Accounts specified by law as being
1 body
(as of January 2022) subject to audit by the Board of Audit
Subject to
the Board’s See page 13.
discretionary audit
10
Audit Activities
To conduct an audit of those which are subject to the Board’s discretionary audit, an Audit
Commission decision is required. The Board notifies such decision to the relevant auditees.
Refer to the “Organization Chart of the Government of Japan” on page 3.
Government The Okinawa Development Finance Corporation
Affiliated Japan Finance Corporation
Institutions Account of ODA Loan of Japan International Cooperation Agency (Note 1: see page 13.)
4 bodies Japan Bank for International Cooperation
The Promotion and Mutual Aid Corporation for Private Schools of Japan
Bank of Japan
Japan Racing Association
Deposit Insurance Corporation of Japan
Tokyo Metro Co., Ltd
Japan Environmental Storage & Safety Corporation
Narita International Airport Corporation
East Nippon Expressway Company Limited
Central Nippon Expressway Company Limited
West Nippon Expressway Company Limited
Honshu-Shikoku Bridge Expressway Company Limited
Japan Legal Support Center
Japan Health Insurance Association
Development Bank of Japan Inc.
Others Nippon Automated Cargo And Port Consolidated System, Inc.
Japan Investment Corporation
35 bodies Japan Pension Service
Nuclear Damage Compensation and Decommissioning Facilitation Corporation
Agricultural and Fishery Co-operative Savings Insurance Corporation
New Kansai International Airport Company, Ltd.
Agriculture, forestry and fisheries Fund corporation for Innovation, Value-chain and
Expansion Japan (A-FIVE)
Private Finance Initiative Promotion Corporation of Japan (PFIPCJ)
Cool Japan Fund Inc.
Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development
Yokohama-Kawasaki International Port Corporation
Organization for Technical Intern Training
Fund Corporation for the Overseas Development of Japan’s ICT and Postal Services
Inc.(Japan ICT Fund)
Nippon Export and Investment Insurance (NEXI)
7 other bodies are under liquidation
Incorporated Administrative Agencies 83 bodies
See Page 12.
National University Corporations and Inter-University
Research Institute Corporations 89 bodies
Nippon Hoso Kyokai (NHK : Japan Broadcasting Corporation)
11
Audit Activities
Incorporated Administrative Agencies
National Archives of Japan National Institute of Technology
National Research Institute of Brewing National Institution for Academic Degrees and Quality Enhancement of Higher
National Institute of Special Needs Education Education(NIAD-QE)
National Center for University Entrance Examinations Organization for Small & Medium Enterprises and Regional Innovation, Japan
National Institution for Youth Education Urban Renaissance Agency
National Women’s Education Center, Japan Fund for the Promotion and Development of the Amami Islands
National Museum of Nature and Science Japan Expressway Holding and Debt Repayment Agency
National Museum of Art Japan Community Health care Organization
National Institutes for Cultural Heritage Government Pension Investment Fund
Food and Agricultural Materials Inspection Center Japan Housing Finance Agency
National Livestock Breeding Center Organization for Postal Savings, Postal Life Insurance and Post Office Network
National Institute of Technology and Evaluation Organization for Workers' Retirement Allowance Mutual Aid
Japan agency of Maritime Education and Training for Seafarers
National Research and Development Agency
Civil Aviation College
National Institute for School Teachers and Staff Development National Institute of Information and Communications Technology
Labor Management Organization for USFJ Employees National Institute for Materials Science
National Agency for Automobile and Land Transport Technology National Research Institute for Earth Science and Disaster Resilience
Japan Mint National Institute for Quantum and Radiological Science and Technology
National Printing Bureau National Agriculture and Food Research Organization
Japan International Research Center for Agricultural Sciences
Incorporated National Consumer Affairs Center of Japan
Forest Research and Management Organization
Agriculture & Livestock Industries Corporation
Administrative Agriculture, Forestry and Fisheries Credit Foundations Japan Fisheries Research and Education Agency
Northern Territories Issue Association National Institute of Advanced Industrial Science and Technology
Agencies Japan International Cooperation Agency (JICA) (Note1 : see page 13) Public Works Research Institute
Japan Foundation Building Research Institute
Japan Society for the Promotion of Science National Institute of Maritime, Port and Aviation Technology
National Institute for Environmental Studies
83 bodies Japan Sport Council
New Energy and Industrial Technology Development Organization (NEDO)
Japan Arts Council
Japan Organization for Employment of the Elderly, Persons with Japan Science and Technology Agency
Disabilities and Job Seekers RIKEN (The Institute of Physical and Chemical Research)
Welfare And Medical Service Agency(WAM) Japan Aerospace Exploration Agency
National Center for Persons with Severe Intellectual Disabilities, Japan Agency for Marine-Earth Science and Technology
Nozominosono National Institute of Biomedical Innovation, Health and Nutrition
The Japan Institute for Labour Policy and Training Japan Atomic Energy Agency
Japan External Trade Organization (JETRO) National Cancer Center Japan
Japan Railway Construction, Transport and Technology Agency National Cerebral and Cardiovascular Center
Japan National Tourism Organization(JNTO) National Center of Neurology and Psychiatry
Japan Water Agency (JWA) National Center for Global Health and Medicine
National Agency for Automotive Safety and Victims’ Aid National Center for Child Health and Development
Airport Land Development Organization National Center for Geriatrics and Gerontology
Information-Technology Promotion Agency, Japan Japan Agency for Medical Research and Development
Japan Oil, Gas and Metals National Corporation (JOGMEC)
Japan Organization of Occupational Health and Safety
National Hospital Organization
Pharmaceuticals and Medial Devices Agency
Environmental Restoration and Conservation Agency(ERCA)
Japan Student Services Organization
National University Corporations Nagoya Institute of Technology
Hokkaido University Toyohashi University of Technology
Hokkaido University of Education Mie University
Muroran Institute of Technology Shiga University
Otaru University of Commerce Shiga University of Medical Science
Obihiro University of Agriculture and Veterinary Medicine Kyoto University
Asahikawa Medial University Kyoto University of Education
Kitami Institute of Technology Kyoto Institute of Technology
Hirosaki University Osaka University
Iwate University Osaka Kyoiku University
Tohoku University Hyogo University of Teacher Education
Miyagi University of Education Kobe University
Akita University Nara University of Education
Yamagata University Nara Women's University
Fukushima University Wakayama University
National Ibaraki University Tottori University
University of Tsukuba Shimane University
University Tsukuba University of Technology Okayama University
Utsunomiya University Hiroshima University
Corporations Gunma University Yamaguchi University
and Saitama University The University of Tokushima
Chiba University Naruto University of Education
Inter-University The University of Tokyo Kagawa University
Tokyo Medical and Dental University Ehime University
Research Tokyo University of Foreign Studies Kochi University
Tokyo Gakugei University Fukuoka University of Education
Institute Tokyo University of Agriculture and Technology Kyushu University
Corporations Tokyo University of the Arts Kyushu Institute of Technology
Tokyo Institute of Technology Saga University
Tokyo University of Marine Science and Technology Nagasaki University
Ochanomizu University Kumamoto University
89 bodies University of Electro-Communications Oita University
Hitotsubashi University University of Miyazaki
Yokohama National University Kagoshima University
Niigata University National Institute of Fitness and Sports in Kanoya
Nagaoka University of Technology University of the Ryukyus
Joetsu University of Education The National Graduate Institute for Policy Studies
University of Toyama The Graduate University for Advanced Studies
Kanazawa University Japan Advanced Institute of Science and Technology
University of Fukui Nara Institute of Science and Technology
University of Yamanashi
Shinshu University Inter-University Research Institute Corporations
Shizuoka University National Institutes for the Humanities
Hamamatsu University School of Medicine National Institutes of Natural Sciences
Tokai National Higher Education and Research System High Energy Accelerator Research Organization
Aichi University of Education Research Organization of Information and Systems
12
Audit Activities
Securities owned or
retained by the State,
or cash and goods
retained by the State
47 prefectures
Receipts and Continuous Organizations
payments of cash or Designation including KKR (Federation
receipts and transfers
of goods and of National Public Service
securities handled by 60 bodies Personnel Mutual Aid
entities other than the Associations)
State, on behalf of 12 bodies
the State
1,572 Municipalities
Accounts of an entity
for which the State Fiscal year
Judicial persons including
has directly or Designation
JA (Japan Agricultural
indirectly granted a
subsidy or extended Co-operatives)
5,968 bodies
other financial 2,471 bodies
(in 2021)
assistance such as a
loan Other 1,925 bodies
Central Japan International Airport Co., Ltd.
NTT
Accounts of an entity Continuous Metropolitan Expressway Co., Ltd.
Subject to the less than half of Designation Hanshin Expressway Company Limited
Board’s whose stated capital Japan Alcohol Corporation
has been contributed Shoko Chukin Bank (Note 2)
discretionary by the State 9 bodies JT(Japan Tobacco Inc.)
audit Kobe-Osaka International Port Corporation
Japan Post Holdings Co.,Ltd.
Accounts of an entity Hokkaido Railway Company
whose stated capital Continuous
Shikoku Railway Company
has been contributed Designation
Japan Freight Railway Company
by an entity whose
Trans-Tokyo Bay Highway Corporation
stated capital has 15 bodies
been contributed by NTT East (Nippon Telegraph and Telephone
the State East Corp.)
NTT West (Nippon Telegraph and Telephone
West Corp.)
Japan Post Co., Ltd.
Japan Post Bank Co., Ltd.
Accounts of an entity Japan Post Insurance Co., Ltd.
Continuous
for whose borrowings The Resolution and Collection Corporation
Designation
the State guarantees REVIC (Regional Economy Vitalization
the payment of the Corporation of Japan)
principal or interest 3 bodies
The Corporation for Revitalizing Earthquake-
Affected Business
Kansai International Airport Land Co., Ltd.
(Note 2)
Tokyo Electric Power Company Holdings, Inc.
Accounts of a
contractor for INCJ, Ltd. (Note2)
construction work
implemented or other
services provided by (Note 2)
the State or juridical Organization for Promoting Urban Development
(Note2)
persons to which the Farmers Pension Fund (Note 2)
State has contributed Japan Finance Organization for Municipalities
half or more of the
stated capital, or an
entrustee to whom 160 bodies
administrative work
or services are (in 2021)
entrusted by the
State, etc. or a
supplier of goods,
which relate to the
contract with the
State, etc.
(Note 1) In calculating the total number of the accounts of juridical persons to which the State has contributed half or more of the stated capital, Japan
International Cooperation Agency includes Account of ODA Loan of Japan International Cooperation Agency.
(Note 2) These 4 bodies are also included in the continuous designation of the accounts of an entity that the State has directly or indirectly granted a subsidy
or extended other financial assistance such as a loan.
13
Audit Activities
Perspectives of the Audit
The Board conducts audits with broad and diverse perspectives.
The Board conducts audits with such perspectives as i) whether the final accounts accurately
reflect the financial status such as the execution of the budgets (Accuracy); ii) whether the
financial management is properly conducted in conformity with the approved budgets, laws and
regulations (Regularity); iii) whether the implementation of projects and programs or budget
execution is administered at minimum cost (Economy); iv) whether the projects and programs
achieve the maximum possible results with the given cost or have the most cost-efficient outcome
(Efficiency); and v) whether the projects and programs achieve the intended results and produce
the expected effects (Effectiveness).
The audit with the perspectives of Economy, Efficiency and Effectiveness is collectively called
the ‘3E audit’, derived from the initial letters of each word.
◆ Main Audit Perspectives ◆
Whether the final Whether the financial
accounts accurately management is properly
reflect the financial status, conducted in conformity
such as the execution of with the approved
the budgets. budgets, laws and
regulations.
Accuracy
Regularity
Whether the projects and Whether the
programs achieve the Auditee implementation of projects
intended results and and programs or budget
produce the expected execution is administered
effects. at minimum cost.
Effectiveness Whether the projects and Economy
programs achieve the
maximum possible results
with the given cost or have
the most cost-efficient
outcome.
Efficiency
14
Audit Activities
The followings are examples of the audit aspects, based on each perspectives of the Board’s audits
in major areas of auditing.
Areas of auditing Examples of the audit aspects
Were cash inflow/outflow, revenue/expense, and owned properties/goods properly
reflected in the statements of accounts and financial statements etc., in conformity with the
relevant laws, regulations and principles? (Accuracy)
Were contracts concluded within the approved budget, and was the budget used in conformity
General with the relevant laws and regulations, and were there any misappropriations? (Regularity)
Were management of credits, collection of revenues and disbursement made properly in conformity
with the relevant laws and regulations, and were accounting records kept properly? (Regularity)
Was the competitiveness well secured in regard to contract methods, selection of
contractors and preparation of the specifications? (Economy)
In collecting tax, were the relevant laws and regulations applied properly, were the amounts
Tax of taxable income and profit, etc. properly identified as the basis for calculation of the tax
amount, and were there any mistakes in calculation of the tax amount? (Regularity)
Were any medical fees paid for improper medical claims? (Regularity)
Were pensions paid to eligible recipients only, and were payment suspensions and
adjustment of double pension applied properly where necessary? (Regularity)
Was the collection of social insurance premiums and fees for welfare services from beneficiaries
determined properly in conformity with the relevant laws and regulations? (Regularity)
Social Security Was the huge amount of data processing and disbursement work of pension operations
carried out economically and efficiently? (Economy and Efficiency)
Were subsidies for welfare and employment programs utilized for the intended purpose of
upgrading the quality of welfare services or promoting job stability of employees? (Effectiveness)
Has the social security system achieved its results and has it been operated effectively?
(Effectiveness)
Was the design of the construction appropriate, ensuring required safety levels, and was
the construction carried out as designed? (Regularity)
Was the contract amount for the construction reasonable? (Economy)
Was the plan of the project or the construction schedule economical and efficient?
(Economy and Efficiency)
Public Works
Was the design of the construction economical and efficient? (Economy and Efficiency)
Are there any projects in which the expected results have not been achieved due to the
delay, and are the facilities constructed or installed utilized for the intended purposes and
producing the expected results? (Effectiveness)
Have constructed facilities been effectively utilized? (Effectiveness)
Have various State programs to develop new agricultural entrepreneurs or to expand the
business scale of each farmhouse been contributed sufficiently to the attainment of the
Agriculture, intended results? (Effectiveness)
Forestry and
Are there any projects or systems of which the original purposes have become less
Fisheries meaningful due to socio-economic and agricultural changes, and thus continuation of the
projects / systems can be questioned? (Effectiveness)
Was the assistance provided in accordance with the Exchange of Notes/Loan
Agreement, and has disbursement of grants and loans been properly made in
conformity with the approved budgets and laws? (Regularity)
ODA: Official Was the project reviewed on its relevance in view of the actual conditions of the
Development recipient country, has the progress of the project properly been monitored and
Assistance evaluated, and have any necessary follow-up measures been taken? (Effectiveness)
Have facilities, equipment or transferred technology provided by the ODA been fully utilized, and
have the projects been managed properly to achieve the intended results? (Effectiveness)
Special Accounts of Were the businesses and projects under special accounts of the State and State-owned
the State and State- enterprises economically and efficiently managed in line with the objectives of their
owned enterprises foundation? (Economy and Efficiency)
Were subsidies provided only to eligible projects or bodies? (Regularity)
In applying for and making adjustment of subsidies, were the project costs accurately
calculated according to the standards, were there any false statements for expenses
Subsidies etc. made to obtain unjustified subsidies, and in outsourcing projects, was the proper amount
of payment made based on the actual performance ? (Regularity)
Have subsidized facilities and funds been being operated properly and achieved the
intended results? (Effectiveness)
Auditors conduct their audit with the above mentioned general audit aspects, and analyze
accounting practices of the auditee and related evidence, and then specify audit aspects and
methods to conduct their audit.
15
Audit Activities
Procedures of the Audit
The audits by the Board are conducted as illustrated in the chart below.
The procedures are a cycle starting from the preparation of the Basic Policy on Audit and Audit
Plan to the submission of the Audit Report to the Cabinet.
In respect to the matters reported in the Audit Report, the Board follows them up until remedial
measures are fully implemented.
Preparation of Basic Policy on
Audit and Audit Plan
○In-office audit
Conduct of Audits ○Field audit at the office or
project site of auditees
Analysis and Review of ○Written inquiries to auditees
Audit findings ○Request for submission of
data and technical appraisals
from third party institutions or
Presentation of expertise
Opinions and/or
Demand for Measures
Audit Report
Follow-up of Audit Findings
■Special Report to the Diet and the Cabinet and Special Report on
Audit Requested by the Diet
In November 2005, the Board of Audit Act was amended. This amendment enabled the Board to
report to the Diet and the Cabinet at any time on matters on which the Board presented its
Opinions and/or Demanded Measures and matters which the Board finds particularly necessary
to report, even prior to the completion of the Audit Report for that fiscal year.
Since 1997, if the Board receives a request from the Diet under the Diet Law, the Board may
conduct an audit of the specific matters requested and report the results.
Summaries of above reports are also included in the Audit Report.
16
Audit Activities
Audit Schedule
Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov.
Basic Policy on Audit and
Audit Plan
In-office audit
Field audit
Analysis and review of the
audit findings
Presentation of Opinions and/or
Demand for Measures
Special Report to the Diet and
the Cabinet
Special Report on audit
requested by the Diet
Preparation of the Audit Report
and its submission to the Cabinet
〈Basic Policy on Audit and Audit Plan〉
It is very important to set an appropriate audit plan for the Board to conduct its audits efficiently
and effectively for the best audit results with limited human resources.
Every year, the Board prepares its Basic Policy on Audit for the next year, and based on this,
each division prepares its own Audit Plan.
In preparing the Audit Plan, each division identifies its priority audit issues based on thorough
analysis of the scale and contents of the budget of auditees, the condition of internal controls,
previous audit results, public interests and deliberations at the Diet. Then each division determines
specific audit perspectives, auditing ideas and methods, manpower allocation etc. regarding
priority audit issues.
The Audit Commission on formulating the Audit Plan
17
Audit Activities
Basic Policy on Audit for 2022 (Excerpt)
(As established September 7, 2021)
1. Missions of the Board of Audit (abbrev.)
2. Social and Economic Trends and the Situation Surrounding the Board of Audit (abbrev.)
3. Basic Policy on Audit (Excerpt)
A. Focus of audit
In response to Japan’s social and economic trends and its current financial condition, the Board has decided to focus its audit activities on the
following policy areas of public administration.
•Social security •Education, science and technology •Public works •Defense •Agriculture, forestry and fisheries
•Environment and energy •Economic cooperation •Small and medium enterprises •Information technology (IT)
In addition, the Board appropriately and in a timely manner audits various measures for COVID-19 countermeasures according to the progress
of those measures, also noting that a large amount of national expenses have been spent during a certain period for the purpose of preventing
the spread of infection, securing systems for the provision of medical care, and maintaining employment and keeping businesses afloat. When
it conducts the audit, the Board takes into account the urgency required for the implementation of these programs and responds to the situation
in a prompt and flexible manner, monitoring policies and trends of the government's efforts.
Furthermore, for measures besides these areas, the Board appropriately and in a timely manner carries out audits while bearing public interest
in mind.
B. Audit with various audit perspectives
The Board conducts audits not only to identify and disclose fraudulent or improper cases but also to evaluate the performance of operations and
projects. Moreover, the Board conducts audits with a focus on the necessity of specific operational systems, if necessary.
As for the perspectives of accuracy and regularity, the Board continues to duly conduct audits because there are still many cases of improprieties.
The Board focuses on examining basic accountancy while considering the fact that there were frauds or improprieties in some ministries.
Furthermore, the Board conducts audits bearing in mind the competitiveness and the transparency of bidding and contracts.
With regard to the perspectives of economy, efficiency, and effectiveness, in light of the serious financial condition in recent years, the Board
puts greater importance on these perspectives. With the perspective of effectiveness, in particular, the Board actively endeavors to review the
results of operations, projects and budget execution. In such cases, the Board conducts audits with attention to auditees’ self-evaluation of their
policies and various measures carried out by the government for efficient and effective implementation of administrative work and projects.
Also, the Board conducts audits with attention to the situations of the assets possessed by the State and funds developed by subsidies.
If there is any problem with the implementation of the operations and projects and the budget execution, the Board thoroughly investigates the
causes and considers measures for improvement and if needed, abolishment of the program.
In addition, to contribute to the improvement of the transparency and accountability of public administration and finance as well as better project
implementation, the Board enhances its audits by conducting analyses based on the financial accounts of the State and corporations regarding
the State’s financial position, the government’s efforts toward fiscal consolidation, and the financial status of the special accounts and the
incorporated administrative agencies. In the above cases, the Board pays attention to utilize information on public accounting such as financial
documents of special accounts prepared with reference to practices of corporate accounting.
C. Approach corresponding to conditions of internal control
Since the conditions of internal control, such as internal audits and internal checks, in auditees affect the level of adequacy of financial
management to be ensured in auditees, etc., the Board pays due attention to the effectiveness of the internal control. The Board also requests the
auditees to improve their internal control systems, if necessary, so that they ensure the adequate level of financial management, etc.
D. Follow-up of the audit findings
The Board continually checks on the state of improvements made by remedial and preventative measures against improper and irregular cases
to ensure that audit results are reflected in the State budget compilation as well as in project implementation adequately and effectively.
Moreover, concerning improper cases in the Audit Report, the Board conducts audits necessary for improving similar cases with other auditees.
E. Cooperation with the Diet
The Board always pays attention to the deliberations in the Diet. In auditing issues in response to audit requests concerning the Provisions of
Article 105 in the Diet Act, the Board makes every effort to facilitate the Diet’s examination and investigation by including the necessary research
contents in the Board’s audit activities, paying full attention to the intention of the Diet’s request. In addition, to contribute to the Diet’s sufficient
examination on the final accounts, the Board makes efforts to actively submit reports to the Diet and the Cabinet to communicate its audit results
in a timely manner.
F. Improvement of audit capability and effectiveness of audit activities
The Board enhances its ability to conduct audits and the effectiveness of audit activities through efforts such as the development of new audit
methods to respond to the movements of current society and economy, and the changing social environment derived from various factors,
including the COVID-19 pandemic and the accompanying changes in the State’s financial and administrative operations, and efforts to promote
the digitalization of administrative operations.
Furthermore, through improving operational efficiency, the Board will promote the development of a work environment where all personnel can
play an active role, and will strive to secure and educate human resources and improve their auditing abilities.
4. Designing an Appropriate Audit Plan
The Board designs appropriate audit plans and carries them out in order to conduct audits more effectively and efficiently and to achieve its
mission, based on the above-mentioned Basic Policy on Audit.
In the audit plan, the Board establishes its priority audit issues, on which it should focus in audits, taking into full consideration the scale and
content of the budgets of auditees, measures, projects and programs, the situations of internal control, the previous audits and results, etc. In
doing so, the Board will conduct cross-cutting audits on policies jointly executed by several ministries and agencies and cases commonly related
with several ministries and agencies.
Also, in auditing, the Board attempts to enhance and strengthen audit activities by promptly and flexibly responding to the progress status of
audits as well as public interests, for example, by reviewing the audit plan when necessary. In addition, the Board pays due attention to the
effects of the COVID-19 pandemic on auditees.
18
Audit Activities
〈Audit Practice〉
Audits are divided into two types: in-office audit and field audit.
(1) In-office audit
The Board continuously conducts in-office audit by:
1. Checking the contents of documents such as statements of accounts, which show the numeric
results of financial management of each entity, as well as supporting documentary evidence
including contract documents, invoices and receipts, submitted by auditees in accordance with
the Regulations on the Submission of Accounts established by the Board. (Refer to the
"Statements of Accounts and Documentary Evidence" below.)
2. Having auditees submit materials and data on the implementation of projects in order to check
the contents, and by interviewing relevant persons using an information communication system.
Statements of Accounts and Documentary Evidence
Auditees are required to submit statements of accounts reflecting all financial management for a
designated period, with documentary evidence, to the Board according to the Regulations on the
Submission of Accounts established by the Board to prove the accuracy, legality and reasonableness of
such financial management.
While statements of accounts show the numeric results of financial management, the documentary evidence
including, but not limited to, contract documents, invoices and receipts helps verify that the statements of
accounts are accurate, legal and reasonable.
In addition to the submission of paper-based statements of accounts and documentary evidence, the use of
electronic data processing systems (online) or electromagnetic recording media has increased in recent
years due to the development of systems in line with the progress of electronic accounting.
Upon finishing the auditing of statements of accounts for the fiscal year, the Board confirms the numerical
accuracy of the final account of the State prepared by the Cabinet according to the established procedures.
Documentary evidence stored at the Board Interview using a web conferencing system
19
Audit Activities
(2) Field audit
Information which can be obtained from the statements of accounts and documentary evidence
submitted to the Board is limited and not always enough to determine the adequacy of financial
management or projects implementation.
The Board, therefore, dispatches its auditors to the headquarters and branches of ministries and
government agencies, or project sites to conduct field audits. As for local governments that carry
out various projects with State subsidies, the Board also conducts field audits to examine whether
the subsidies have been used properly. The Board also dispatches staff to various overseas
locations such as ODA project sites and the diplomatic missions for audit work.
Sites to be audited are selected by taking into consideration priority audit issues and human
resource allocation determined by the Audit Plan, results of the in-office audit, frequency and
results of past audits, deliberations in the Diet, and information from the media or public.
In the field audits, auditors examine the actual conditions of administrative work and projects by
checking accounting books as well as documentary evidence which is retained by the auditees,
interviewing the officials in charge and other relevant persons, observing property management,
and inspecting completed physical works.
Most audit findings reported in the Audit Report are brought to light through the field audits,
which are of great importance in the audits conducted by the Board.
Field Audit Implementation Rate
The following table shows the implementation rate of the field audits conducted in 2021.
The Board conducted field audits in 2021, taking measures to prevent the spread of COVID-19 following
on from 2020, taking into consideration impacts of COVID-19 on Auditees and limiting auditees to be
audited. All field audits were suspended during the period in which a state of emergency was declared in
the area including the Tokyo Metropolis starting in January 2021. Consequently, the field audit
implementation rate has been further lower than that of the previous year.
The Board spent approximately 10,000 person-days on these field audits.
Number of units Field Audit
Auditee classification Number of units
field audited Implementation Rate
(1) Important Organizations in audits 18.5 %
(Head office of ministries and agencies, 4,468 828
major local branches, etc.) (Prev. year 24.3 %)
(2) Organizations equivalent to the above 4.7%
6,635 313
(Other local branches, etc.) (Prev. year 9.6 %)
10.2 %
Total 11,103 1,141
(Prev. year 15.5 %)
(Note) For auditees other than (1) and (2), such as post offices and railway stations, field audits were conducted at 17
out of 20,409 units. Field Audit Implementation Rate including these figures is 3.6%.
Despite the impact of the COVID-19 pandemic, the Board has managed to implement efficient and effective audits by
taking alternatives to or complementary means for field audits, and by implementing in-office audits by further means
of promoting making use of digital data and IT tools.
20
Audit Activities
Field audit
( before the COVID-19 pandemic )
（At the airport facility）
（At the Japan Self-Defense Force Base）
（At the auditee’s office）
（In the medical facility）
21
Audit Activities
〈Analysis and Review of Audit Findings〉
Audit findings by the Board demonstrate criticism to the auditees and are to be informative to
other institutions to be audited and the nation. As such, misjudgment should be avoided.
If any improper financial management comes to light in the course of audit, the Board takes the
following procedures to confirm the situation, in addition to double-checking and ample analysis
of the causes and remedial measures.
(1) Inquiry letters to the auditees
As for any improper or unreasonable financial management found in the course of audit, the Board
sends inquiry letters to those who are responsible in each auditee.
These inquiry letters describe the outline of improper financial management, related questions,
tentative evaluation and reasoning, in order to confirm the facts and views of auditees and to
clarify any questions.
The Board examines the situation by requesting written auditee replies to the inquiry letters.
(2) Request for relevant information and/or technical appraisal from
third parties
In dealing with highly technical issues, there are cases in which the Board’s own staff alone cannot
make a fair decision. In such cases, the Board asks independent professional organizations or
other experts for their professional views or opinions, and makes its final judgment with due
consideration to their views or opinions.
If any improper or unreasonable financial management is found as a result of thorough analysis
and review of the audit findings, the Board presents its opinions to, or demands measures from
the auditees, or reports them in the Audit Report as, for example, matters that the Board has
identified as being in violation of laws and regulations or the approved budget, or as being
improper.
The final judgment is made by the Audit Commission, a decision-making body of the Board, after
due deliberation with sufficient care in order to avoid misjudgment (refer to page 23).
〈Presentation of Opinions and/or Demand for Measures〉
If the Board finds that, in the course of its audit, there are items that violate laws and regulations
on financial management or that are improper, it may immediately present its opinions on
financial management to the head of the relevant ministry or agency or a relevant person, or
demand them to take appropriate measures for the financial management, and may have them
take measures to rectify and improve subsequent management.
If, as a result of the audit, the Board finds that there are any matters concerning laws and
regulations, systems or administration that need to be improved, it may present its opinions to
the competent authorities or other responsible parties, or demand them to take measures for the
improvement.
22
Audit Activities
These opinions and/or measures are issued to the auditees immediately after the Board reaches a
conclusion, and the Board also reports in the Audit Report these opinions and measures as
Presentation of Opinions and/or Demand for Measures.
Audit results are deliberated through the following
procedures.
Audit Report Audit Commission General Executive Bureau
Secretary General
Audit Report Coordination Committee
Bureau Audit Report Committee
Inquiry letters
Auditees Each Audit Division
Written replies
* This deliberation system is also applied to the cases of Presentation of Opinions and/or Demand for Measures.
Composition and operation of the Committees and deliberations are as follows.
【Committee Structure】
Each bureau establishes a Bureau Audit Report Committee composed mainly of the
Director General of each bureau (as a chairperson) and Senior Directors of each bureau.
The Secretariat sets up the Audit Report Coordination Committee composed of the
Deputy Secretary General (as a chairperson) and Senior Directors of the Secretariat.
【Deliberation】
Deliberation is conducted on various aspects such as 1) correct understanding of the
facts, 2) analysis of the system and application of the laws and regulations, 3)
consideration of relevant past circumstances and changing situations and 4) analysis of
the causes and remedial measures.
【Adoption of Peer Review System】
Both the Bureau Audit Report Committee and the Audit Report Coordination
Committee adopt a peer review system for securing objectivity and credibility of their
judgment. In the system, each audit case is reviewed critically in advance by one of the
members in each Committee regarding the accuracy of the description of facts and
relevance of the conclusion, and the result of the review is reported to the relevant
Committee.
23
Audit Activities
Audit Report
The Audit Report shows the annual audit results of the Board.
According to the provision of Article 90 of the Constitution, the Board prepares an Audit
Report showing the results of all audits conducted each year and sends it to the Cabinet with
the audited final accounts of the revenues and expenditures of the State. The Cabinet then
submits both of them to the Diet. The Audit Report is used for deliberation of the State’s final
accounts in the Diet session and for future administration by financial authorities. The Board
has been striving to submit its Audit Report to the Cabinet earlier than before, which helps
the Diet to accelerate the deliberation of the final accounts of the State and enables the audit
results to be further reflected in the budget.
The Audit Report has another important function of informing the public of the results of the
State budget execution. News media reports on the submission of the Audit Report to the
Cabinet attracts the attention of the public.
President Morita (left) submits the FY2020
Audit Report to Prime Minister Kishida
[Prime Minister’s Office, November 5, 2021]
Source: Website of the Prime Minister’s Office
The Audit Report must cover eight categories of matters as provided by the Board of Audit Act
including i) verification of the final accounts of the revenues and expenditures of the State, ii)
whether the amounts in the final accounts of the revenues and expenditures of the State are
equal to the amounts in the statements of accounts submitted by the Bank of Japan, iii) whether
any item is found to be in violation of the law, Cabinet Order, or the approved budget, or to be
improprieties, based on audit findings, iv) whether there are any payments from the reserve
fund that have not gone through the procedures for obtaining Diet approval and so on, and may
include other matters that the Board finds particularly necessary to report.
Audit results reported in the Audit Report are grouped into mainly the following seven
categories, of which 1) to 4) are usually called “Improper/Unreasonable Matters.”
24
Audit Activities
Item being found, as a result of audit, in violation of the law, Cabinet Order,
1) Improprieties or the approved budget, or being found improper.
Matters regarding which the Board has presented its opinions to, or
2) Presentation of Opinions
demanded measures from, relevant ministers etc. pursuant to the provisions
and/or Demand for Measures of Article 34 and 36 of the Board of Audit Act.
Matters for which the auditee took measures for improvement in response to
3) Measures Taken the findings of the Board.
Matters which the Board finds particularly necessary to report in order to
4) Special Description draw the attention of the public.
5) Special Report to Matters reported to the Diet and the Cabinet pursuant to the provision of
the Diet and the Cabinet Article 30-2 of the Board of Audit Act.
Results of audit reported to the Diet regarding matters audited pursuant to
6) Special Report on audit the provision of Article 30-3 of the Board of Audit Act based on the request
requested by the Diet made under the provision of Article 105 of the Diet Law.
Report on specific matters which the Board finds necessary to report among
7) Report on Specific Matters audit activities of the Board.
Number of audit cases and improper amounts reported in the Audit Report for the fiscal
year 2020 are as follows:
(Note 1) (Note 1)
Number of audit
Category Improper amounts Number of audit cases with
cases
(Unit: million YEN) background amounts
1) Improprieties 157 663,301 －
2) Presentation of Opinions
and/or Demand for Measures (Note 2)
20,864 2
Article 34 4
(Note 2)
Articles 34 and 36 362,962 3
4
Article 36 1,665,047 1
7
(Note 2)
3) Measures Taken 20 18,375,057 6
<187 cases>
Total of items 1) to 3) 192
21,087,231
5) Special Report to
2
the Diet and the Cabinet
6) Special Report on
audit requested by the Diet 5
7) Report on Specific Matters 11
Total 210 <187 cases>
21,087,231
(Note)
1) Improper amounts represent any deficiency in the collection of taxes or social insurance premiums to be collected;
overpayments for construction or purchases; overpayment of subsidies; amount of credit managed improperly;
amount of assets not utilized effectively; and any amount of assets stated improperly in the statements of account
and financial statements.
Background amounts represent overall amounts of payments or investments etc. regarding matters concerned.
Background amounts are presented when improper amounts cannot be calculated for audit cases such as: 1) where
the Board finds, as a result of audit, any matters that it finds necessary to be improved with regard to laws and
regulations, system or administration; and 2) which the Board reports to draw public attention to project cases of
non-realization of investment effect due to problems in project progress caused by policy issues. Besides, the
background amounts are not totaled up since the basis for determining the background amounts differ from case
to case.
2) 7 cases of ‘‘Presentation of Opinions and/or Demand for Measures’’ and ‘‘Measures Taken’’, in multiple situations,
have both improper amounts and background amounts.
3) No case is reported as 4)Special Description in the FY2020 Audit Report.
25
Audit Activities
〈Audit Effect〉
Audit effect is not confined to improper amounts referred in the annual Audit Report but also
includes the following:
(1) Rectification and improvement by conducting internal audits, making use of
audit results
The Board does not audit all accounts of the auditees. Improper amounts represent those
found in accounts actually audited. Auditees take remedial action not only for cases reported
but also to similar cases not actually referred to in the Audit Report.
(2) Rectification and improvement by instruction/advice made in the course of
the audit
The Board gives instructions/advice to auditees in the course of the audit to rectify and
improve inappropriate cases which are not serious enough to be referred to in the Audit
Report.
(3) Ripple effect
Board audit also produce some effects, for example, ministries and agencies that reviewed
audit findings for other auditees reported in the Audit Report voluntarily can examine
whether they have any similar issues and rectify the problem or prevent the same case from
occurring by paying attention to their respective execution of accounting.
(4) Deterrent effect
The deterrent effect against illegal and improper auditee accounting can be expected because
being subjected to the Board's audit itself can be a significant deterrent factor.
26
Audit Activities
〈Follow-up of Audit Findings〉
The Board follows up the audit findings reported in the Audit Report, including improprieties,
matters on which the Board presented its opinions and/or demanded corrective measures, by
collecting reports from auditees as to whether damages incurred to the State or organization
have been rectified, as to what measures have been taken to prevent any recurrence, or as to
how relevant persons are disciplined. Collection of reports continues until the case has been
completed.
(1) Have damages of the State been rectified?
The Board checks the progress of corrective action taken to rectify improprieties described
in the Audit Report, including:
a. Collection of additional tax
b. Repayment of insurance benefits and State subsidies
c. Advanced redemption of loans
d. Remedial works
e. Others
The Board reports the status of these corrective actions in the Audit Report.
(2) What kind of measures have been taken to prevent recurrence?
The Board ensures whether auditees, in regard to audit findings, have taken steps to rectify
or improve the current system (such as amendments to related laws and regulations, revision
of manuals and specifications, and improvements in administrative procedures), and have
provided the officers in charge with proper advice (via official documents, meetings and
training courses, internal audit and examinations, etc.).
The result of the follow-up on audit findings of which the Board presented its opinions and/or
demanded measures are required to be described in the Audit Report, usually for the
following fiscal year.
Also, the Board continually follows up matters on which auditees took measures for
improvement following the Board’s audit findings until Board confirmation that the measures
have been duly implemented, and describes the results of the follow-up in the Audit Report.
(3) What disciplinary action has been taken against officials in charge?
The Board grasps what kind of disciplinary action is taken by the Ministries and Agencies
etc. in charge against the officials (responsible persons and their supervisors) in charge of
improprieties in the Audit Report.
27
Audit Activities
Promotion of the Audit Findings
The Board explains the contents of the Audit Report to the Diet and
other financial authorities to ensure that audit results will be properly
reflected in future budget compilation and execution.
(1) Submission and Explanation of the Audit Report to the Diet
The Audit Report is submitted, with the final accounts of the expenditures and revenues of the
State, through the Cabinet to the Diet for deliberation of the State’s final accounts.
Deliberation on the State’s final accounts is held by the Committee on Audit and Oversight
of Administration in the House of Representatives and Committee on Audit in the House of
Councillors. The effectiveness of the audit can be fully achieved only when the Audit Report
is sufficiently utilized in the Diet, which is the representative organ of the public, and when
investigation into causes and measures for improvement in respect to matters incorporated in
the Annual Report are thoroughly realized.
Senior officials of the Board always attend the above-mentioned deliberations of the
Committees to explain the contents of the Audit Report or relevant audit activities, and to
present the Board’s opinion. As such, the Audit Report is an essential document for
deliberations in these Committees.
Senior officials of the Board also attend the Committees on Budget and other Diet
Committees to explain the
Procedures to submit the final accounts of the expenditures
contents of the Audit Report and revenues of the State and the Audit Report to the Diet
or to express the Board’s
opinions as required.
In preparing the audit plan
and implementing its audits,
the Board fully takes into
consideration requests from
the Diet and deliberations in
order to respond to the
expectations of the Diet and
the public.
(2) Explanation to financial authorities
The Board holds regular meetings with the Budget Bureau and Financial Bureau of the
Ministry of Finance to provide explanations of the findings in the Audit Report and to express
opinions on items of interest discovered during the audit to serve as sources of reference for
budget compilation and financial administration.
At these meetings, the Board hears, in return, the background and intention of the budget
compilation and points to be noted in budget execution by the financial authorities for reference
toward the audit.
28
Audit Activities
〈Training Courses for Auditees〉
In order to enhance and reinforce auditees’ internal audit and internal check systems, and to
prevent recurrence of the audit findings, the Board organizes the following training courses
and briefings.
The internal audit of each ministry and agency is expected to work efficiently for appropriate
budget execution together with the external audit by the Board.
(1) Briefing on the Audit Report
The Board conducts briefing sessions on the Audit Report for (1) deputy vice-ministers of
all ministries, (2) senior directors of accounts divisions of all ministries, (3) relevant
accounting officers of all ministries, (4) auditors and board members in charge of budget
execution of State-owned enterprises, and (5) prefectural accounting managers.
At this briefing, officials of the Board explain audit findings in detail for better auditee
understanding and prevention of recurrence of the reported findings.
(2) Training courses for auditee personnel
In order to contribute to the improvement in accounting and audit capability of auditee officials,
the Board organizes the following training courses for accounting officials and internal auditors
of all ministries and agencies, incorporated administrative agencies and local governments on
accounting practices and relevant laws and regulations, as well as audit techniques.
・Courses for Internal Auditors of Ministries and Agencies
・Courses for Internal Auditors of State-owned enterprises
・Courses for Accounting Officials of Prefectural Governments
・Courses for Internal Auditors of Local Governments
・Courses for Internal Auditors of Prefectural Governments (General Audit Courses and
Construction Audit Courses)
The Board also dispatches staff members as lecturers to the training courses organized by
auditees such as ministries, agencies and local governments for prevention of recurrence of the
audit findings on the condition that the dispatched lecturer does not hinder his/her audit
activities.
(3) Internal audit related services
The Board conducts researches and analyses on auditees’ internal control such as the status of
internal audits and internal check systems etc., and has meetings with officials in charge of
internal audit in ministries, agencies and so on in order to help them improve and strengthen
their internal audits.
29
Audit Activities
Activities of the Board
The Board has developed audit activities to respond to social and economic
changes, and public expectations, which have led to a great number of audit
results.
Expansion and development of audit scopes, perspectives and methods
1955 1965 1975 1985 1995 2005 2015
1947 1980
The Board of Audit Act Centennial of the establishment of the Board
Reports on massive improprieties in financial
management of subsidies
The Act on Rationalization of Budgetary Execution on Subsidies（1955）
Audits to determine whether projects achieve the 1965
intended results and produce the expected
effects (objective of “Effectiveness”)
Use of computers in audit to cope with 1985
increasingly complex and growing work of
auditees and to respond to the development of
information society
Audits on public pensions in response to 1985
increasing pension payments due to the aging
society
1987
Audits on medical expenses in response to
increasing national medical expenditure due to
the aging society
1987
Audits on Official Development Assistance
(ODA) in response to the expansion of ODA
volume and ODA-related scandals
1993
Audits on consumption tax, following the
introduction of the consumption tax system in
1989 and research on audit viewpoints and
methods
Audits on transparency and competitiveness 1998
of public procurement to determine whether the
bidding and contracting process allows effective
competition and contributes to economical
procurement (“Regularity”)
Improvement of analysis of auditees’ final 2001
accounts to provide more information that helps
reviewing public finance in response to public
concern about the financial situation and
challenges
Audits on information technology (IT) in line 2002
with the advancement of the informatization in
public administration
Enhancement of audits on stocks of funds 2007
created by the use of state assets and subsidies
in light of the severe fiscal situation
Improvement of audit on matters relating to 2011
the safety of people’s lives in response to
growing concern following disasters including the
Great East Japan Earthquake
Audits related to the expenses for COVID-19 2020
countermeasures, in response to the situation
where those measures are urgent issues
30
Audit Activities
Expansion of types of audit results reported in the Audit Report
1955 1965 1975 1985 1995 2005 2015
1947
Improprieties
1962(Audit Report for FY1961)
Presentation of Opinions and/or
Demand for Measures
1967(Audit Report for FY1966)
Measures Taken
1976(Audit Report for FY1975)
Special Description
1991(Audit Report for FY1990)
Report on Specific Matters
Special Report on audit requested by
1998(Audit Report for FY1997)
the Diet
Special Report to the Diet and the
2006(Audit Report for FY2005)
Cabinet
Measures taken to remedy the
2008(Audit Report for FY2007)
improprieties
Audits on financial statements of
2009(Audit Report for FY2008)
special accounting
The first Audit Report after the
implementation of the current Board
of Audit Act
The FY1946 Audit Report
The FY2020 Audit Report
31
Audit Activities
Use of IT (Information Technology) in the audit
In order to enhance and strengthen audit work, the Board has developed the Audit
Information Systems, which are used for verification of the final accounts of the
State, and management of various data and materials related to the audit.
Also, the Board utilizes IT for calculation and analysis of various audit related data,
thus allowing auditors to identify focus points and sites to be further investigated.
The data collected at the field audit sites is analyzed by utilizing mobile information
processing devices to ensure rapid processing of audit related data. With these
measures, the Board conducts field audits efficiently and effectively.
(Audit Information Systems)
Final Accounts Verification System verifies final accounts
revenue and expenditure
claims held by the State and State obligations
national property
goods
Electronic Vouchers and Other Supporting inspects and manages electronic
Documents Management System documentary evidence
Audit Findings Retrieval System performs searches of information on
audit results in the Audit Report
Furthermore, the Board has been making use of IT to facilitate in-office audits
through teleworking and a web conferencing system.
The Board has established a division responsible for developing and operating these
Audit Information Systems, as well as providing assistance to each audit division
regarding further utilization of IT technology for their audit activities.
32
Other Activities
Other Activities
Besides the audit, the Board carries out the following audit-related
activities.
(1) Adjudication on the liability for indemnity
If an official responsible for cash handling, handling goods or budget execution has been involved
in loss or damage to cash or goods under their control, or otherwise has made payments in
violation of laws and regulations, or the approved budget resulting in damage to the State, the
Board examines whether the official has caused loss or damage through their failure to exercise
due care of a prudent manager, or intentionally or by gross negligence, and adjudicates whether
the official is liable to indemnity.
If the Board adjudicates that the official is liable to indemnity, the Minister to which the official
belongs must order the official to pay the indemnity.
(2) Demand for disciplinary action
If the Board finds, as a result of audit, that an official who handles the accounting for the State
has caused substantial damage to the State intentionally or by gross negligence, or that a budget
executing official has made payments in violation of the laws and regulations or the approved
budget intentionally or by gross negligence and caused damage to the State, the Board may
demand the Minister to which the official belongs to take disciplinary action against the official.
The Board is also authorized to execute the same rights in cases where an official who handles
accounting for the State neglects to submit statements of accounts or documentary evidence to
the Board.
(3) Examination
If the Board has been requested by an interested party to examine the handling of financial
management conducted by an official who handles the accounting for the State, the Board must
examine that official's handling and as a result of that, if the Board concludes that the handling
needs to be corrected, the Board must notify its judgement to the competent authorities or other
responsible parties.
Competent authorities or other responsible parties must take appropriate measures pursuant to the
notification of the judgement.
33
Exchange of Information and Views with External Bodies
Exchange of Information and Views with External Bodies
The Board is engaged in the following activities to make audits
more effective.
(1) Public relations
The most important factor for appropriate State budget execution is that each member of the
public is interested in the State budget execution and continues to pay attention to it. The Audit
Report helps the public find out how tax payers’ money is used.
The Board publishes a summary version of the Audit Reports which describes the au
dit results briefly, and has put all contents of past Audit Reports on its website (https://
www.jbaudit.go.jp/english/index.html).
The website provides information on audit activities of the Board and the latest organization chart,
and also has a section to accept opinions on the work of the Board, and audit-related information
from the public.
Furthermore, the Board started official social media accounts: a Facebook page (https://w
ww.facebook.com/baudit.japan), and a YouTube channel (https://www.youtube.com/channel
/UCcofwP_DkLK0HBtqLvLzgUQ), where it shares information about its activities.
(2) Discussions with opinion leaders
To make audit activities more effective and appropriate, the Board administers the Government
Auditing Consultative Committee, the membership of which includes opinion leaders in various
areas. The Board esteems the views and opinions of these members concerning various issues
related to audits from diverse viewpoints.
The members of the Committee are as follows (as of January 2022):
●Mr. Mimura Akio (Chairperson: Honorary Chairman, Nippon Steel Corporation.)
●Dr. Iio Jun (Professor, National Graduate Institute for Policy Studies)
●Dr. Egawa Masako (Specially Appointed Professor, Graduate School of Business
Administration, Hitotsubashi University)
●Mr. Ohno Kotaro (Lawyer)
●Mr. Kanemaru Yasufumi (Chairman and President, Group CEO, Future Corporation)
●Dr. Tomita Toshiki (Visiting Analyst, Nomura Institute of Capital Markets Research)
●Ms. Miyajima Kasumi (Commentator, Nippon Television Network Corporation)
(In Japanese alphabetical order except for the Chairperson)
34
Exchange of Information and Views with External Bodies
(3) Exchange of views with other audit and inspection institutions
The Board strives to raise its audit efficiency through exchanges of information with other public
audit and inspection institutions, while it recognizes the importance of conducting audits from an
independent standpoint.
For example, the Board holds regular or irregular meetings to exchange information with the
Administrative Evaluation Bureau of Ministry of Internal Affairs and Communications, which
evaluates and monitors Government agency operations and activities, and with audit offices of
local governments. Since some of the auditees of the Board may also be subject to audits by
certified public accountants, the Board also holds meetings with the Japanese Institute of
Certified Public Accountants to
regularly exchange professional
opinions and information.
The Board also hosts the Audit
Forum in which people from
organizations involved in public
sector auditing gather and
discuss public audit issues in
order to improve public audits.
32nd Public Audit Forum (Keynote speech)
(Note) The meeting in 2021 was held online due to the impact of the COVID-
19 pandemic.
(4) Research activities
In response to more diversified and specialized State administrative operations, the Board
conducts both in-house and outsourced research, on both domestic and foreign audit systems,
in order to investigate more efficient and effective audit methodologies.
The Board also invites researchers from outside institutions as Visiting Research Fellows to
research and review recent trends and/or more practical audit methodologies in specific fields of
auditing. They advance their research from the perspective of their respective specialized fields
and exchange opinions with Board staff.
The Board issues a biannual Research Journal, including articles contributed by scholars and
researchers, and government officers to enhance communication with researchers in other
institutions, and to promote interdisciplinary audit methodologies both in theory and practice.
These activities will eventually lead to the expansion of the field of auditing and the development
of new audit methodologies and future improvements in audit activities.
35
International Activities
International Activities
(1) Research on national audit systems abroad
The Board conducts research on foreign financial control systems such as activities and audit
cases of Supreme Audit Institutions (SAIs) around the world.
The Board hosts the Tokyo International Meeting on Audit, inviting high-level officials and senior
auditors from SAIs of leading countries in order to seek possible solutions to the common issues
and challenges that SAIs face.
Furthermore, the Board participates in the annual Global Audit Leadership Forum in order to
introduce the Board’s current situation and to exchange opinions on common audit-related
themes in order to promote knowledge sharing. The forum in 2021 was canceled due to the
impact of the COVID-19 pandemic.
25th Tokyo International Meeting on Audit
(Participating SAIs: SAI France, Germany, U.K., U.S.A. and Japan)
(Note 1) The meeting in 2021 was held online due to the impact of the COVID-19 pandemic.
(Note 2) The screen image has been partially processed.
(2) Participation in International Organization of SAIs
The Board joins the International Organization of Supreme Audit Institutions (INTOSAI: 196
participating SAIs) and the Asian Organization of Supreme Audit Institutions (ASOSAI: 47 SAIs),
one of the INTOSAI regional organizations, to promote international cooperation in the field of
government auditing and to build up closer relations with SAIs of various countries and areas.
The Board also serves as a member of the INTOSAI Governing Board and Capacity Development
Administrator of ASOSAI.
The Board participates in conferences and workshops held by these international organizations in
order to discuss important audit-related issues, and to share the latest knowledge and experiences.
36
International Activities
Furthermore, the Board, as Capacity Development Administrator of ASOSAI, is in charge of
planning and implementing capacity development programs to provide audit techniques and
promote knowledge sharing on government auditing among ASOSAI member SAIs.
75th INTOSAI Governing Board Meeting
57th Governing Board Meeting of ASOSAI 15th ASOSAI Assembly
(Note) These meetings were held online in 2021 due to the impact of the COVID-19 pandemic.
(3) International Cooperation
The Board co-hosts the training programs on government auditing with the Japan International
Cooperation Agency (JICA) for developing countries as part of Japanese technical cooperation.
(Note 1) In 2021, a seminar for returned trainees
was held online due to the impact of the
COVID-19 pandemic, instead of The
Knowledge Co-Creation Program in
Government Audit on Public Construction
Works held annually.
(Note 2) The screen image has been partially
processed.
Online Follow-up Seminar to Government Audit on
Public Construction Works (2021)
37
Audit Result Outline
- FY2020Audit Report-
41
AUDIT RESULT OUTLINE – FY2020 Audit Report –
I Basic Policy on Audit .............................................................................................. 42
Basic Policy on Audit for 2021 ............................................................................ 42
II Summary of Audit Results ..................................................................................... 46
1. Audit Results by Category and by Auditee ......................................................... 46
2. Brief Description of Audit Cases ......................................................................... 51
A Improper/Unreasonable Matters by Ministry/Agency.......................................... 51
B Improper/Unreasonable Matters by Entity............................................................ 55
C Special Report to the Diet and the Cabinet, and Special Report
on audit requested by the Diet, etc. ............................................................. 56
(1) Special Report to the Diet and the Cabinet ................................................. 56
(2) Special Report on audit requested by the Diet.............................................. 56
(3) Report on Specific Matters ............................................................................... 56
41
41
I Basic Policy on Audit
The FY2020 Audit Report constitutes the results of the audit conducted in 2021 based on the Basic
Policy on Audit for 2021.
Basic Policy on Audit for 2021
Approved by
the Audit Commission
on September 9, 2020
To carry out audits for the year 2021 (audit implementation period: October 2020 - September 2021)
efficiently and effectively and to perform its missions accurately in keeping with social and economic
trends, the Board of Audit established its Basic Policy on Audit for the year 2021 as follows:
1. Missions of the Board of Audit
The Board of Audit (the Board) has the following missions as a constitutional organization independent
from the Cabinet.
The Board audits all of the final accounts of the expenditures and revenues of the State every year, and
also audits such accounts as provided by law.
The Board continuously conducts audits, supervises financial management, ensures its adequacy, and
rectifies any defects. Also, the Board verifies the final accounts of the expenditures and revenues of the
State through the results of its audits.
The Board prepares and sends the Audit Report to the Cabinet. This Report, together with the final
accounts of the expenditures and revenues of the State, shall be submitted to the Diet.
2. Social and Economic Trends and the Situation Surrounding the Board of Audit
In recent years, Japan’s society and economy have faced significant challenges, such as accelerated
decrease of population, rising social security expenses due to the declining birthrate and the aging
population, not invigorated growth potential, and an increase in large-scale natural disasters. In addition,
the ongoing COVID-19 pandemic has been seriously affecting Japan's society and economy, made it
clear to address issues that call for urgent responses such as delay in digitalization of public
administration.
In addition, reconstruction from the Great East Japan Earthquake (the earthquake and tsunami that
occurred along the Pacific Ocean coast in the Tohoku Region on March 11, 2011, and the resultant
accident at a nuclear power plant) has remained as an issue for Japan, therefore, the administrative
authorities are required to deal with these challenges appropriately.
As for the fiscal position of the State government, continual issuance of government bonds, including
those for COVID-19 countermeasures, is steadily increasing the outstanding debt, which is estimated
to reach about 964 trillion yen at the end of FY2020. In the budget for FY2020 (after the approval of
the supplementary budgets), the level of dependence on government bonds is about 56% and the total
expenditure required for redemption of national debt comprises about 15% of the general account
expenditure, which poses a major challenge in achieving a sound fiscal position.
Against this backdrop, the government has decided to move forward with integrated economic and
fiscal reform to address structural problems relating to the sustainability of social security and public
finance and to devise a concrete roadmap for implementing the reform by the end of 2020.
Moreover, the importance of grasping the results of the State budget execution and reflecting them in
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42
the following budgets is deliberated in the Diet from the viewpoint of enhancing and strengthening
fiscal administration control by the Diet.
Taking into consideration that the Diet requested the Cabinet to submit the final accounts of the State
earlier, the Board has been striving to submit its Audit Report to the Cabinet earlier than before, which
helps the Diet deliberate the final accounts of the State earlier and enables the audit results to be better
reflected in the budget. Furthermore, the Board has been steadily undertaking audits requested by the
Diet under the provisions of Article 105 of the Diet Act and reporting the audit results to the Diet, as
well as issuing “Special Reports to the Diet and the Cabinet” on an as-needed basis every year for the
purpose of contributing to enhancement of the Diet’s deliberations of the final accounts of the State.
Achievement of fiscal soundness has been an important issue, and importance is placed on the strict
assessment and verification of the results of the State budget execution as well as the Government’s
fulfillment of accountability to the public. In front of these situations mentioned above, the role of the
Board, which has been raising the awareness of the public on various issues relating to public
administration and finance by such means as the Audit Report, has become even more important, and
the public expectations for audit functions are also growing.
3. Basic Policy on Audit
The Board has been striving to conduct audits in order to respond to public expectations in light of
social and economic trends at all times. With the aim of continuing to properly fulfill its missions in the
situations mentioned above, the Board will make every effort to ensure the strict and fair discharge of
its duties and maintain and further improve the quality of audit activities while paying due attention to
the public interest, and will carry out audits in accordance with the following policies.
(1) Focus of audits
In response to Japan’s social and economic trends and its current financial condition, the Board has
decided to focus its audit activities on the following policy areas of public administration:
• Social security
• Education, science and technology
• Public works
• Defense
• Agriculture, forestry and fisheries
• Environment and energy
• Economic cooperation
• Small and medium enterprises
• Information technology (IT)
In addition, the Board enhances cross-cutting audits on policies jointly executed by several ministries
and agencies and cases commonly related with several ministries and agencies, and, if necessary, also
responds to matters of great public concern by conducting prompt and flexible audit activities, in a
timely and proper manner.
Furthermore, the Board appropriately and in a timely manner audits various measures for promoting
the reconstruction from the Great East Japan Earthquake and for COVID-19 countermeasures according
to the progress of those measures, also noting that a large amount of national expenses will be spent
43
43
during a certain period.
In particular, with regard to the COVID-19 countermeasures, various programs have been implemented
based on the first and second supplementary budget for FY2020 to disburse additional expenses
required for the countermeasures. In light of this, when it conducts the audit, the Board takes into
account the urgency required for the implementation of these programs and responds to the situation in
a prompt and flexible manner, monitoring policies and trends of the government's efforts.
(2) Audits with various audit perspectives
The Board conducts audits not only to identify and disclose fraudulent and improper cases but also to
evaluate the performance of operations and projects. Moreover, the Board conducts audits with a focus
on the necessity of specific operational systems, if necessary.
The Board conducts audits with the following perspectives:
(a) Accuracy: whether the final accounts accurately reflect the financial status such as the
execution of the budgets
(b) Regularity: whether the financial management is properly conducted in conformity with the
approved budgets, laws and regulations
(c) Economy: whether the implementation of projects and programs or budget execution is
administered with the minimum cost
(d) Efficiency: whether the projects and programs gain the maximum results with the given cost
or have the best cost-efficient outcome
(e) Effectiveness: whether the projects and programs achieve the intended results and produce the
expected effects
(f) Other objectives necessary for auditing
As for the perspectives of accuracy and regularity, the Board continues to duly conduct audits because
there are still many cases of improprieties. The Board focuses on examining basic accountancy while
considering the fact that there was fraud and improprieties in some ministries. Furthermore, the Board
conducts audits bearing in mind the competitiveness and the transparency of bidding and contracts.
With regard to the perspectives of economy, efficiency, and effectiveness, in light of the serious
financial condition in recent years, the Board puts greater importance on these objectives. With the
objective of effectiveness, in particular, the Board actively endeavors to review the results of operations,
projects and budget execution. In such cases, the Board conducts audits with attention to auditees’ self-
evaluation of their policies and various measures carried out by the government for efficient and
effective implementation of administrative work and projects. Also, the Board conducts audits with
attention to the situations of the assets possessed by the State and funds developed by subsidies.
If there is any problem with the implementation of the operations and projects and the budget execution,
the Board thoroughly investigates the causes and considers measures for improvement and if needed,
abolishment of the program.
In addition, to contribute to the improvement of the transparency and accountability of public
administration and finance as well as better project implementation, the Board analyzes the public
finances of the State and evaluates the government’s efforts toward fiscal consolidation, and more
closely audits the financial status of the special accounts and the incorporated administrative agencies.
In the above cases, the Board utilizes information on public accounting such as financial documents of
special accounts prepared with reference to practices of corporate accounting.
(3) Approach corresponding to conditions of internal control
Since the conditions of internal control, such as internal audits and internal checks, in auditees affect
the level of adequacy of financial management to be ensured in auditees, etc., the Board pays due
attention to the effectiveness of the internal control. The Board also requests the auditees to improve
their internal control systems, if necessary, so that they ensure the adequate level of financial
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44
management, etc.
(4) Follow-up of the audit findings
The Board continually checks on the state of improvements made by remedial and preventative
measures against improper and irregular cases to ensure that audit results are reflected in the State
budget compilation as well as in project implementation adequately and effectively.
Moreover, concerning improper financial management in the Audit Report, the Board conducts audits
necessary for improving similar cases with other auditees.
(5) Cooperation with the Diet
The Board always pays attention to the deliberations in the Diet. In auditing issues in response to audit
requests from the Diet, the Board makes every effort to facilitate the Diet’s examination and
investigation by including the necessary research contents in the Board’s audit activities, paying full
attention to the intention of the Diet’s request. In addition, to contribute to the Diet’s sufficient
examination on the final accounts, the Board makes efforts to actively submit reports to the Diet and
the Cabinet whenever necessary.
(6) Improvement of audit capability and effectiveness of audit activities
The Board enhances its ability to conduct audits and the effectiveness of audit activities through efforts
such as the development of new audit methods to respond to the movements of current society and
economy, and the changing social environment derived from various factors, including the COVID-19
pandemic, as well as the accompanying changes in the State’s financial and administrative operations.
The efforts include: research studies to vary the method and scope of audit activities, including those in
light of international trends of auditing, human resource development for auditing areas of expertise as
well as recruitment of personnel who have acquired practical skills and experts from the private sector,
and more active use of IT in audit activities. By adopting these practices, the Board conducts a more
fulfilling audit for project/program of auditee matters as a whole.
4. Designing an Appropriate Audit Plan
The Board designs appropriate audit plans and carries them out in order to conduct audits more
effectively and efficiently and to achieve its mission, based on the above-mentioned Basic Policy on
Audit.
In the audit plan, the Board establishes its priority audit issues, on which it should focus in audits, taking
into full consideration the scale and content of the budgets of auditees, measures, projects and programs,
the situations of internal control, the previous audits and results, etc.
Also, in auditing, the Board attempts to enhance and strengthen audit activities by promptly and flexibly
responding to the progress status of audits as well as public interests, for example, by reviewing the
audit plan when necessary.
In addition, the Board pays due attention to the effects of the COVID-19 pandemic on auditees.
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45
II Summary of Audit Results
1. Audit Results by Category and by Auditee
The total number of cases listed in the Audit Report for FY2020 was 210. Of these, the number
of cases which were found not appropriate (Improper/Unreasonable Matters) was 192
and the improper amounts 1 totalled 210,872.31 million yen. (There were also background
amounts2 concerning the problem cases.) The following Table 1 shows the breakdown of the
210 cases by category.
Table 1: Audit Findings by Category
Number of Improper amounts
Category
audit cases (Unit: million YEN)
• Improprieties (Note 1) 157 6,633.01
• Presentation of Opinions and/or Demand for 15 (Note 7) 20,488.73
Measures (Note 2)
• Measures Taken(Note 3) 20 (Note 7) 183,750.57
Total of Improper/Unreasonable Matters 192 210,872.31
• Special Report to the Diet and the Cabinet(Note 4) 2
• Special Report on Audit Requested by the Diet (Note 5) 5
• Report on Specific Matters(Note 6) 11
Grand total 210
(Note 1) Improprieties: Matters being found, as a result of audit, in violation of the law,
Cabinet Order, the approved budget, or being found improper.
(Note 2) Presentation of Opinions and/or Demand for Measures: Matters regarding which the
Board has presented its opinions or demanded measures to relevant ministers etc.
pursuant to the provisions of Article 34 and 36 of the Board of Audit Act.
(Note 3) Measures Taken: Matters for which the auditee took measures for improvement in
response to the findings of the Board.
4646
(Note 4) Special Report to the Diet and the Cabinet: Matters reported to the Diet and the
Cabinet pursuant to the provision of Article 30-2 of the Board of Audit Act.
(Note 5) Special Report on audits requested by the Diet: Results of audit reported to the Diet
regarding matters audited pursuant to the provision of Article 30-3 of the Board of
Audit Act based on the request made under the provision of Article 105 of the Diet
Law.
(Note 6) Report on Specific Matters: A report on specific matters which the Board finds
necessary to report among audit activities of the Board.
(Note 7) 7 cases of “Presentation of Opinions and/or Demand for Measures” and “Measures
Taken”, in multiple situations, have both improper amounts and background amounts.
1
Improper Amounts: Improper amounts represent any deficiency in the collection of taxes or
social insurance premiums to be collected; overpayments for construction or purchases;
overpayment of subsidies; amount of credit managed improperly; amount of assets not utilized
effectively; and any amount of assets stated improperly in the statements of account and financial
statements.
2
Background Amounts: Background amounts represent overall amounts of payments or
investments etc. regarding matters concerned. Background amounts are presented when improper
amounts cannot be calculated for audit cases such as: 1) where the Board finds, as a result of audit,
any matters that it finds necessary to be improved with regard to laws and regulations, system or
administration; and 2) which the Board reports to draw public attention to project cases of non-
realization of investment effect due to problems in project progress caused by policy issues.
Besides, the background amounts are not totaled up since the basis for determining the background
amounts differ from case to case.
4747
Table 2 shows the breakdown of 192 cases of“Improper/Unreasonable Matters”(Improprieties,
Presentation of Opinions and/or Demand for Measures and Measures Taken in Table 1）by auditee.
Table 2: Improper/Unreasonable Matters by Category and by Auditee
(unit of monetary amount, million YEN)
Category Presentation of Opinions
Improprieties Measures Taken Total
and/or Demand for Measures
Auditee (Note 1) (Note 1) (Note 1)
Cases Amount Article (Note 2) Amount Cases Amount Cases Amount
/Cases
(Note 3) (Note 4) (Note 3) (Note 3)
○
34 2 136.61 (Note 4) (Note 3)
3 29.75 (65.67) 6 202.14
Cabinet Office
(65.67)
○1
36 35.78
Cabinet Office
(National Police 1 (21,336.32) 1 (21,336.32)
Agency)
Ministry of Internal
Affairs and 8 199.83 1 350.47 9 550.30
Communications
Ministry of Finance 1 154.92 ○
36 1 (920.97) 1 160,197.76 3 160,352.68
(920.97)
Ministry of Education,
Culture, Sports,
19 182.12 1 (4,492.43) 20 182.12
Science and
(4,492.43)
Technology
(Note 3) (Note 4) (Note 3) (Note 3)
Ministry of Health, ○
34 3 72.03 (Note 4) (Note3)
54 1,971.12 (50,681.32) 1 20.87 59 2,064.02
Labour and Welfare
○・ 36
34 ○1 (50, 681.32)
(380.88) (380.88)
(Note 4)
Ministry of ○・ 36
34 ○1 3,360.98 (Note 4) (Note 4)
15 1,100.78 (2,696.72) 4 2,554.21 24 22,770.18
Agriculture, Forestry
(1,113.52) (2,696.72)
and Fisheries
○4
36 15,754.21 (3,309.71) (1,113.52)
(3,309.71)
Ministry of Economy,
Trade and Industry
1 3.51 ○・ 36
34 ○1 154.87 1 512.54 3 670.92
Ministry of Land, (Note 4) (Note 4)
Infrastructure, 25 209.25 ○1
36 860.48 1 143.34 27 1,213.07
Transport and Tourism (2,653.59) (2,653.59)
4848
Category Presentation of Opinions
Improprieties Measures Taken Total
and/or Demand for Measures
Auditee (Note 1) (Note 1) (Note 1)
Cases Amount Article (Note 2) Amount Cases Amount Cases Amount
/Cases
Ministry of the
8 365.49 8 365.49
Environment
(Note 4) (Note 4)
Ministry of Defense 3 499.37 3 537.02 6 1,036.39
(2,834.37) (2,834.37)
(Note 4) (Note 4)
Japan Pension Service ○
34 ・○
36 1 113.77 1 113.77
(65.72) (65.72)
New Energy and
Industrial Technology
1 14.85 1 14.85
Development
Organization
Japan Sport Council 2 620.74 2 620.74
Japan Railway
Construction,
1 83.30 1 83.30
Transport and
Technology Agency
Japan Housing
17 1,290.79 1 7,400.00 18 8,690.79
Finance Agency
Nippon Hoso Kyokai
(NHK:Japan
1 5.29 1 207.77 2 213.06
Broadcasting
Corporation)
Nippon Telegraph and
Telephone East 1 1,002.05 1 1,002.05
Corporation
Nippon Telegraph and
Telephone West 1 10,726.39 1 10,726.39
Corporation
(Note 3) (Note 3)
Total 157 6,633.01 15 20,488.73 20 183,750.57 192 210,872.31
4949
(Note 1) The amounts in parentheses are background amounts, which are not totaled since the basis
for determining the background amounts differs from case to case.
(Note 2) The cases identified with ○ 34 refer to audit findings under Article 34 of the Board of Audit
Act, and the cases identified with 36
○ refer to those under Article 36.
(Note 3) Although one case involves both the Cabinet Office and the Ministry of Health, Labour and
Welfare, the amount has been listed only in the column of the Cabinet Office. In addition,
duplication has been eliminated from the total number of cases.
(Note 4) Concerning the categories “Presentation of Opinions and/or Demand for Measures” and
“Measures Taken”, 7 cases in total have both improper amounts and background amounts.
5050
2. Brief Description of Audit Cases
The following is a brief description of individual cases
A Improper/Unreasonable Matters by Ministry/Agency
(1) Cabinet Office
(Cabinet Office)
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Improper calculation of subsidized amounts:
(a) Excessive payment of child and child-rearing support grants (the portion for the
community child care support centers project)
(b) Excessive payment of child and child-rearing support grants (the portion for the after-
school classes for children project)
b. Improper design and construction of works:
Improper design and construction of hot and chilled water generators and other machines,
which were aided by the regional revitalization base development grant
Demand for Measures 34 ○ - Calculation of the amount of the subsidies for the operation cost of
company-led childcare projects
Demand for Measures 36 ○ - Calculation of the grant for projects for developing Off−Site
Emergency Managing Control Centers, out of grant for emergency safety measures for
nuclear power generation facilities
(National Police Agency)
Measures Taken - Measures to prevent water intrusion into police facilities
(2) Ministry of Internal Affairs and Communications
Improprieties - The purpose of the subsidies was not achieved, because seismic measures were not
taken in the existing storage racks for installing parent machines of wireless access devices
purchased with the aid of the public wireless LAN environment development support
project.
Improprieties - Excessive payment of special allocation tax grant
Measures Taken - Reduction adjustment for nuclear power-related special grant tax
(3) Ministry of Finance
Improprieties - Cases of deficiency in tax collection
Demand for Measures 36 ○ - Establishment of audit systems for recording refunds as revenue as a
result of applying the special bankruptcy prevention mutual aid for income tax return
Measures Taken – Effective use of gold bullion possessed in the reserve fund for the collection of
coinage
(4) Ministry of Education, Culture, Sports, Science and Technology
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Excessive payment of subsidies for facility development of certified center for early
childhood education and care
b. Excessive payment of subsidies for improvement of private school facilities (the emergency
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special project for promoting the reinforcement of disaster prevention functions and the
project for promoting the use of ICT)
c. Excessive payment of grants for improvement of school facilities and the environment
d. Excessive payment of the extraordinary special grant for responding to block fences and air-
conditioners
e. Excessive payment of the grant for projects for developing cultural-property multilingual
commentary projects
f. Excessive State contribution to the cost of compulsory education
Measures Taken - Accounting processes relating to educational expenses for Japanese Government
Scholarships in national universities
(5) Ministry of Health, Labour and Welfare
Improprieties - Cases of excess and deficiency in collection of labor insurance premiums
Improprieties - Deficiency in collected premiums of health insurance and employees’ pension
insurance
Improprieties - Excessive payment of consignment expenses for the project for supporting
establishment in the agriculture and forestry industry
Improprieties - Excessive payment of consignment expenses for the nation-wide project for
supporting employment of women
Improprieties - Improper payment of career enhancement subsidies under employment insurance
Improprieties - Improper payment of old-age employees’ pension benefits under employees’
pension insurance
Improprieties - Improper State contribution to medical expenses
Improprieties - Excessive payment of costs for medical consultation fees required for medical
benefits under workers' accident compensation insurance
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Excessive payment of State contribution to medical treatment benefits under national health
insurance
b. Excessive payment of fiscal adjustment grants under national health insurance
c. Excessive State contribution to the livelihood assistance subsidy
d. Excessive State contribution to the benefits for services and supports for people with
disabilities
e. Excessive State contribution to disability benefits for children with disabilities in living
support facilities
f. Excessive State contribution to the nursing care benefit
g. Excessive payment of fiscal adjustment grants under nursing care insurance
h. Excessive payment of the subsidy for projects for workers' welfare
Improprieties - Improper State contribution to nursing care benefits for elderly persons
Improprieties - Improper State contribution to training benefits included in benefits for services
and supports
Improprieties - Improper State contribution to outpatient benefits for children with disabilities
Demand for Measures ○ 34 - Grant amounts of insurance foundation stability payment for national
health insurance
Demand for Measures ○ 34 - Calculation of subsidies for disabled children who make regular visits
to care facilities when care facilities for disabled children are over-capacity
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Demand for Measures ○ 36 - Development and maintenance of COVID-19 Contact-Confirming
34 ○
Application (COCOA), under the contract related to the development and maintenance of
the “Health Center Real-time Information-sharing System on COVID-19” (HER-SYS)
Measures Taken - Calculation of consignment expenses for the projects for training unemployed
people for reemployment
(6) Ministry of Agriculture, Forestry and Fisheries
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Not eligible for a subsidy:
(a) Some people were granted the investment fund for next-generation agricultural human
resources but did not start working as farmers and were not eligible for the grant.
(b) Part of the cost of projects that received grants through the grant project concerning
measures to strengthen agriculture and the food industry was not eligible.
(c) Part of the cost of the projects that received subsidies for expenses of projects for
promoting forestry, fishery and food exports was not eligible for the subsidies.
(d) Forest thinning implemented as projects for forest environment conservation and
preparation was not eligible for the subsidy.
b. Improper design of works:
(a) Improper design of bed protection work
(b) Improper design of guardrails
(c) Improper design of office buildings
c. Improper use of funds created by subsidies:
(a) Part of the expenses for projects implemented using funds created with subsidies for the
cost of strengthening dairy and livestock profitability was not eligible for the subsidy.
(b) Excessive payment of subsidies for projects implemented using funds created with
subsidies for the cost of fisheries business stability measures (the portion for urgent
measures for the introduction of equipment to enhance competitiveness)
d. Subsidized objective not achieved:
A shared warehouse for storing rice, which was established using the grant project for
strengthening agriculture/food industry, did not integrate functions of existing warehouses
affected by the disaster, and distribution costs were significantly higher than before the
project, resulting in a failure to achieve the purpose of the subsidy.
e. Improper calculation of subsidized amounts:
Improper calculation of amounts of subsidies for implementation of the project for
management support measures in specified regions
Demand for Measures ○ 36 - Implementation of the comprehensive support grant project for
34 ○
building strong agriculture and farmers (support for core facilities in producing districts)
Presentation of Opinions ○ 36 Demand for Measures ○ 36 - Implementation of the project for
establishing an agricultural information disclosure system
Demand for Measures ○ 36 - Estimation of expenses related to transporting logs by truck
Demand for Measures ○ 36 - Status of farmland consolidation by the cultivation condition
improvement project
Demand for Measures ○ 36 - Calculation of unit prices of mesh-check cargo-handling expenses in
consignment contracts for operations such as sales of government-owned rice
Measures Taken - Highway charges for government-owned cars
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Measures Taken - Grant project for direct payment to farmers in hilly and mountainous areas
Measures Taken - Setting of a fixed unit price for projects for producing timber from forest
thinning
Measures Taken - Implementation of program for urgent measures for the introduction of
equipment to enhance competitiveness
(7) Ministry of Economy, Trade and Industry
Improprieties - Improper design of fire hydrant plumbing that was prepared using the grant for
areas that have power generation facilities
Demand for Measures ○ 36 Presentation of Opinions ○
34 ○ 36 - Implementation of the project for
ensuring stable supply of petroleum products, and operation of a system for collecting
information in times of disaster
Measures Taken - Method of managing funds for overseas Supply Chain (SC) contributions
(8) Ministry of Land, Infrastructure, Transport and Tourism
Improprieties - Because measures were not taken to protect obligations of burden changes, the
obligations were canceled by the statute of limitations.
Improprieties - As a result of incorrect calculation for design and amount for demolition of
government buildings, pavement and other work, contract prices were higher than actual
prices.
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Improper design of works:
(a) Improper design of foot protection works
(b) Improper design of retaining walls
(c) Improper design of retaining walls
(d) Improper design of fences around airports
(e) Improper design of guardrails
(f) Improper design of electrical distribution panels installed at designated shelters
(g) Improper design of rock fall protection works
b. Improper calculation of subsidized amounts:
(a) Improper calculation of compensation costs for relocation of telecommunication lines
and gas pipes
(b) Excessive subsidy payment due to improper calculation of subsidized amounts
c. Improper design and construction of works:
(a) Improper design and construction of receivers, controllers
(b) Improper design and construction of dam management equipment
d. Improper construction of works:
Improper construction for installing power center panels
e. Not eligible for a subsidy:
Portion of grant paid by the government for projects for landslide prevention work was not
eligible for the grant.
Demand for Measures ○ 36 - Methods for storing portable power supply equipment kept as backup
power supply equipment for aviation security facilities
Measures Taken - Maintenance of pieces of mechanical equipment for river management
facilities
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(9) Ministry of the Environment
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Not eligible for a subsidy:
(a) Cost incurred for development of facilities in subsidized projects for promoting
establishment of a sound material-cycle society was not eligible for the grant.
(b) Part of the project expenses covered by the subsidy for special emergency business
expenses for reducing radiation quantity was not eligible for the subsidy.
b. Improper use of funds created by subsidies:
Improper design of facilities in projects financed by funds for supporting introduction of
renewable energy
(10) Ministry of Defense
Improprieties - Operation of new TACAN and other devices could not be started, and the expected
goals were not achieved.
Improprieties - Personal portable life-saving radios used by crew on T-4 exercise aircraft were not
used, and the purpose of procurement was not achieved.
Improprieties - Fraud by officials
Measures Taken - Estimation of increased expenses associated with suspension of work
Measures Taken - Acceptance inspection for sonobuoys for overseas training
Measures Taken - Selection when implementing early purchases of special lease accommodations
(1. Cabinet Office (Cabinet Office), 5. Ministry of Health, Labour and Welfare)
Demand for Measures ○ 34 - Status of the calculation of the grant to support children and childcare
relating to the project for sound rearing of children after school
B Improper/Unreasonable Matters by Entity
(1) Japan Pension Service
Demand for Measures ○ 36 - Procurement of portable terminals
34 ○
(2) New Energy and Industrial Technology Development Organization
Measures Taken - Calculation of transfer prices related to paid transfer of R&D assets acquired
through consignment projects
(3) Japan Sport Council
Improprieties - Contract processes were improper, because lease contract was concluded that did
not meet specifications stated in the public notice.
Improprieties - As a result of improper calculation of the amount equivalent to consumption tax,
compensation costs for relocation were excessive.
(4) Japan Railway Construction, Transport and Technology Agency
Measures Taken - Design of muddy water treatment in tunnel construction
(5) Japan Housing Finance Agency
Improprieties - Breach of restriction on lease conditions of rental housing loan
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Measures Taken - Scale of the interest rate fluctuation preparation fund, whose source is
government investment
(6) Nippon Hoso Kyokai (NHK:Japan Broadcasting Corporation)
Improprieties - Fraud by officials
Measures Taken - Procurement of photocopiers
(7) Nippon Telegraph and Telephone East Corporation, (8) Nippon Telegraph and Telephone West
Corporation
Measures Taken - Maintenance and management of utility poles
C Special Report to the Diet and the Cabinet, and Special Report on audit requested by the
Diet, etc.
(1) Special Report to the Diet and the Cabinet
The following reports were submitted to the Diet and the Cabinet prior to the submission of the
Audit Report pursuant to the provision of Article 30-2:
- Status of loss carried forward in incorporated administrative agencies
- PFI projects implemented by the Japanese government
(2) Special Report on audit requested by the Diet
The following reports were submitted to the Diet based on requests from the Diet:
- Status of expressway fees, debt repayment
- Status of treatment of waste, removed soil contaminated with radioactive material as a result of the
accident at the Fukushima Daiichi Nuclear Power Plant
- Status of maintenance, operation, use of government information systems
- Measures related to acceptance of foreign human resources
- Implementation of services related to the maintenance of public statistics.
(3) Report on Specific Matters
The Board conducted audits on the following matters which were found necessary to be
included in the Audit Report:
- Execution status of budget regarding measures for COVID-19
- Financing support for small and medium-sized enterprises in measures related to COVID-19 control
- Implementation of fabric mask distribution project
- Provision of employment adjustment subsidies to respond to unemployment due to the influence of
the COVID-19 pandemic
- Project to stimulate consumption in the service industry (Go to Campaign project)
- Implementation of the sustainability subsidy project
- Implementation of a support policy package for airlines and airport-related companies under the
influence of the COVID-19 pandemic, and the status regarding revenue of airport improvement
account and the income of three airport companies
- Government debts
- Measures for creating proper financial documents of special accounts
- Status of the tax on dividends paid by listed companies to individual shareholders who apply for
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special dividends that do not have to be filed
- Status of construction delay and increased project expenses related to construction of the Hokuriku
Shinkansen (between Kanazawa and Tsuruga)
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The Board of Audit Act
I hereby sanction and promulgate the amendment of the Board of Audit Act effected
following the consultation with the Privy Council and the decision of the Imperial Diet.
Signed: HIROHITO, Seal of the Emperor
Act No.73 of 1947 (latest amendment by Act No. 37 of 2021)
THE BOARD OF AUDIT ACT CONTENTS
CHAPTERⅠ ORGANIZATION ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
SectionⅠ General Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
SectionⅡ Commissioners ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 62
SectionⅢ Audit Commission ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63
SectionⅣ General Executive Bureau ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 63
SectionⅤ The Review Board of the Board of Audit for the Information Disclosure
and Personal Information Protection 64
CHAPTERⅡ MANDATE ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 66
SectionⅠ General Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 66
SectionⅡ Scope of Audit ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 66
SectionⅢ Auditing Methods ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 67
SectionⅣ Statement of Audit ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 68
SectionⅤ Liabilities of Accounting Officials ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 69
SectionⅥ Miscellaneous Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
CHAPTERⅢ REGULATIONS OF THE BOARD OF AUDIT ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
61
THE BOARD OF AUDIT ACT
CHAPTERⅠ ORGANIZATION
SectionⅠ General Provisions
Article 1 The Board of Audit is independent from the Cabinet.
Article 2 The Board of Audit is composed of the Audit Commission consisting of three
Commissioners, and the General Executive Bureau.
Article 3 The person elected by the Commissioners from among themselves is appointed
President of the Board of Audit by the Cabinet.
SectionⅡ Commissioners
Article 4 (1) Commissioners are appointed by the Cabinet, with the consent of both Houses
of the Diet.
(2) Notwithstanding the provisions of the preceding paragraph, if the term of office
of a Commissioner expires or a vacancy occurs among the Commissioners, and
the consent of both Houses of the Diet cannot be obtained because the Diet is
not in session or due to the dissolution of the House of Representatives, the
Cabinet may appoint a Commissioner without obtaining the consent of both
Houses of the Diet.
(3) In the case referred to in the preceding paragraph, approval must be sought from
both Houses of the Diet at the first session of the Diet convened after the
appointment. If approval is not obtained from both Houses of the Diet, the
relevant Commissioner will retire from office by operation of law.
(4) The Emperor attests the appointment and dismissal of Commissioners.
(5) The remuneration for Commissioners is provided for separately in another Act.
Article 5 (1) A Commissioner's term of office is seven years, and a Commissioner may be
reappointed for only another term.
(2) If a vacancy arises in the office of Commissioner during their term of office,
the succeeding Commissioner will hold office for the remaining term of the
predecessor.
(3) Commissioners retire from office upon reaching the age of 65.
Article 6 A Commissioner retires from office if a resolution is adopted by both Houses of the
Diet following a decision by mutual consent of the other Commissioners that the
Commissioner is unable to perform their duties due to a mental or physical disorder
or that the other Commissioners made a decision by mutual consent that the
Commissioner has in fact breached their obligation in the course of duty.
Article 7 A Commissioner forfeits their office if the Commissioner is sentenced to a
punishment of imprisonment without work or greater by a criminal court.
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Article 8 Except in cases referred to in the latter part of Article 4, paragraph (3) and the
preceding two Articles, a Commissioner does not forfeit their office against their
own will.
Article 9 A Commissioner may neither concurrently hold any other office, nor become a
member of the Diet, an employee of a local government, or a member of a local
assembly.
SectionⅢ Audit Commission
Article 10 The President of the Board of Audit assumes the role of the Chair of the Audit
Commission.
Article 11 The following matters are decided by the Audit Commission:
(i) enactment, amendment, or repeal of the Regulations of the Board of Audit
under the provisions of Article 38;
(ii) the statement of audit under the provisions of Article 29;
(ii)-2 a report under the provisions of Article 30-2;
(iii) determination of the entities subject to audit under the provisions of Article
23;
(iv) matters relating to the Submission of Accounts under the provisions of Article
24;
(v) matters relating to a demand for disciplinary action under the provisions of
Article 31 of this Act; Article 13, paragraph (2) of the Act on Prevention of
Delays in Payment under Government Contracts (Act No.256 of 1949); and
Article 6, paragraphs (1) and (4) of the Act on the Responsibilities of
Government Employees Who Execute the Budget (Act No.172 of 1950)
(including as applied mutatis mutandis pursuant to the provisions of Article 9,
paragraph (2) of that Act);
(vi) adjudication and re-adjudication under the provisions of Article 32 of this Act
(including as applied mutatis mutandis pursuant to the provisions of Article 10,
paragraph (3) and Article 11, paragraph (2) of the Act on the Responsibilities
of Government Employees Who Execute the Budget); and Article 4, paragraph
(1) and Article 5 of the Act on the Responsibilities of Government Employees
Who Execute the Budget (including as applied mutatis mutandis pursuant to
the provisions of Article 8, paragraph (3) and Article 9, paragraph (2) of that
Act);
(vii) decision for examination under the provisions of Article 35;
(viii) presentation of opinions or demand for measures under the provisions of
Article 36;
(ix) presentation of opinions under the provisions of Article 37 of this Act and
Article 9, paragraph (5) of the Act on the Responsibilities of Government
Employees Who Execute the Budget.
SectionⅣ General Executive Bureau
Article 12 (1) The General Executive Bureau undertakes general affairs and functions of
audit and examination under the direction and supervision of the Audit
Commission.
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(2) The General Executive Bureau has a Secretariat and the following five
Bureaus:
1st Bureau
2nd Bureau
3rd Bureau
4th Bureau
5th Bureau
(3) Assignment of functions to the Secretariat and the Bureaus, and the
organizational subdivisions thereof, are as provided for by the Regulations of
the Board of Audit.
Article 13 The General Executive Bureau has one Secretary General, one Deputy Secretary
General, personal secretaries, administrative officials, technical officials, and
other necessary employees.
Article 14 (1) Employees referred to in the preceding Article are appointed, dismissed,
promoted, and demoted by the President of the Board of Audit pursuant to a
general agreement reached by mutual consent of the Commissioners.
(2) The President of the Board of Audit may delegate the authority referred to in
the preceding paragraph to the Secretary General pursuant to a consensus
decision made by the Commissioners.
Article 15 (1) The Secretary General presides over the functions of the General Executive
Bureau, and signs its official documents.
(2) The Deputy Secretary General assists the Secretary General and, if the office
of Secretary General becomes vacant or the Secretary General is incapacitated,
the Deputy Secretary General carries out the duties of that office.
Article 16 (1) Each Bureau has a Director General.
(2) The Director General administers the functions of the Bureau, under the orders
of the Secretary General.
Article 17 (1) Personal secretaries engage in functions involving confidential matters, under
the orders of the Commissioner.
(2) Administrative officials engage in general affairs, functions of audit, or
examination under the direction of their superiors.
Article 18 Technical officials engage in technical work, under the direction of their superiors.
Article 19 The Board of Audit may have branch offices as provided for by the Regulations
of the Board of Audit.
SectionⅤ The Review Board of the Board of Audit for the
Information Disclosure and Personal Information
Protection
Article 19-2 (1) The Board of Audit has the Review Board of the Board of Audit for the
Information Disclosure and Personal Information Protection, in order to
respond to inquiries from the President of the Board of Audit and to review
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and deliberate the request for administrative review under the provisions of
Article 19, paragraph (1) of the Act on Access to Information Held by
Administrative Organs (Act No.42 of 1999) and Article 105, paragraph (1) of
the Act on the Protection of Personal Information (Act No.57 of 2003).
(2) The Review Board of the Board of Audit for the Information Disclosure and
Personal Information Protection is composed of three Members.
(3) Members serve on a part-time basis.
Article 19-3 (1) Members are appointed by the President of the Board of Audit with the consent
of both Houses of the Diet, from among persons having broad knowledge and
strong acumen.
(2) Notwithstanding the provisions of the preceding paragraph, the President of
the Board of Audit may appoint a Member from among persons who have the
qualifications under the preceding paragraph, if the term of office of a Member
expires or a vacancy occurs in the Members and the consent of both Houses
of the Diet cannot be obtained because the Diet is not in session or due to the
dissolution of the House of Representatives.
(3) In the case referred to in the preceding paragraph, ex post facto approval must
be obtained from both Houses of the Diet at the first session of the Diet after
the appointment. In this case, if ex post facto approval is not obtained from
both Houses of the Diet, the President of the Board of Audit must immediately
dismiss the relevant Member.
(4) A Member's term of office is three years; provided, however, that the term of
office of a Member filling the vacancy is the remaining term of the predecessor.
(5) Members may be reappointed.
(6) When a Member's term of office expires, the relevant Member is to
continuously carry out their duties until a successor is appointed.
(7) If the President of the Board of Audit finds that a Member is unable to perform
their duties due to a mental or physical disorder, or finds that a Member is in
breach of obligation in the course of duty or has engaged in conduct
unbecoming a Member, the President of the Board of Audit may dismiss the
Member, after having obtained the consent of both Houses of the Diet.
(8) A Member must not divulge any confidential information learned in the course
of duty. The same applies after a Member has left office.
(9) While in office, a Member may neither become the officer of a political party
or other political organization, nor actively take part in political activities.
(10) The remuneration for Members is provided for separately in another Act.
Article 19-4 The provisions of Chapter III of the Act for Establishment of the Information
Disclosure and Personal Information Protection Board (Act No.60 of 2003) apply
mutatis mutandis to the procedures for review and deliberation implemented by
the Review Board of the Board of Audit for the Information Disclosure and
Personal Information Protection. In this case, the phrase the "Review Board" in
that chapter is deemed to be replaced with the "Review Board of the Board of
Audit for the Information Disclosure and Personal Information Protection.."
Article 19-5 A person who has divulged any confidential information, in violation of the
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provisions of Article 19-3, paragraph (8), is subject to imprisonment with work
for not more than one year or to a fine not exceeding 500,000 yen.
Article 19-6 Beyond what is provided for in Articles 19-2 to 19-5, particulars necessary for the
Review Board of the Board of Audit for the Information Disclosure and Personal
Information Protection are prescribed by the Regulations of the Board of Audit.
CHAPTERⅡ MANDATE
SectionⅠ General Provisions
Article 20 (1) The Board of Audit audits the final accounts of the revenues and expenditures
of the State, pursuant to the provisions of Article 90 of the Constitution of
Japan, and also audits the accounts provided for by law.
(2) The Board of Audit continuously conducts audit, supervises financial
management, ensures its adequacy, and rectifies any defects.
(3) The Board of Audit is to conduct audits in terms of accuracy, regularity,
economy, efficiency, effectiveness, and from other perspectives necessary for
auditing.
Article 21 The Board of Audit verifies the final accounts of the revenues and expenditures of
the State based on the results of its audit.
SectionⅡ Scope of Audit
Article 22 The following items require audits by the Board of Audit:
(i) monthly revenues and expenditures of the State;
(ii) receipts and payments of cash, and receipts and transfers of goods owned by
the State as well as those of national properties;
(iii) acquisition or loss of claims held by the State, or an increase or decrease in
government bonds and other obligations;
(iv) receipts and payments of cash, and receipts and transfers of precious metals
and securities handled by the Bank of Japan on behalf of the State;
(v) accounts of juridical persons to which the State has contributed 50 percent or
more of their stated capital;
(vi) accounts specified by law as being subject to audit by the Board of Audit.
Article 23 (1) The Board of Audit may audit financial management set forth below, if it finds
it necessary to do so, or at the request of the Cabinet:
(i) securities owned or retained by the State, or cash and goods retained by the
State;
(ii) receipts and payments of cash or receipts and transfers of goods and securities
handled by entities other than the State, on behalf of the State;
(iii) accounts of an entity for which the State has directly or indirectly granted a
subsidy, incentive, or aid, or extended other financial assistance such as a loan
or an indemnity;
(iv) accounts of an entity whose stated capital has been contributed in part by the
66
State;
(v) accounts of an entity whose stated capital has been contributed by an entity
whose stated capital has been contributed by the State;
(vi) accounts of an entity for whose borrowings the State guarantees payment of
the principal or interest;
(vii) accounts of a contractor for construction work implemented or other services
provided by the State or a juridical person provided for in item (v) of the
preceding Article (hereafter referred to as the "State, etc. " in this item), or an
entrustee to whom administrative work or services are entrusted by the State,
etc. or a supplier of goods to the State, etc., which relate to the contract with
the State, etc.
(2) When the Board of Audit conducts an audit pursuant to the provisions of the
preceding paragraph, they are to notify the parties concerned of this.
SectionⅢ Auditing Methods
Article 24 (1) An entity subject to audit by the Board of Audit must, pursuant to the
regulations on the Submission of Accounts established by the Board of Audit,
regularly submit statements of accounts (including electromagnetic records
(meaning a record used in computerized information processing which is
created in electronic form, magnetic form, or any other form that cannot be
perceived by the human senses, and which are established by the Regulations
of the Board of Audit as those for use in computer data-processing; the same
applies in the following paragraph) on which the matters that must be stated
in the relevant statement of accounts have been recorded; the same applies
hereafter) and documentary evidence (including electromagnetic records on
which the matters that must be stated in the relevant documentary evidence
have been recorded; the same applies hereafter) to the Board of Audit.
(2) Other documents specified by the Board of Audit (including electromagnetic
records on which the matters that must be stated in the relevant documents
have been recorded) may be submitted to the Board of Audit regarding the
receipts and payments of cash, and receipts and transfers of goods and
securities owned or retained by the State, in place of the statements of accounts
and documentary evidence set forth in the preceding paragraph.
Article 25 The Board of Audit may dispatch its employees to conduct a field audit on a
regular or temporary basis. In this case, the entity subject to the field audit must
accept it.
Article 26 When the Board of Audit finds it necessary for them to conduct an audit, the Board
may request the entity subject to the audit to submit its books, documents, other
materials, or reports, or may question any relevant entity or request the relevant
entity to appear. In this case, the entity that has been requested to submit its books,
documents, other materials, or reports, or the relevant entity questioned or
requested to appear must respond accordingly.
Article 27 If one of the following facts occurs with regard to financial management subject
to audit by the Board of Audit, the head of the relevant ministry or agency or the
supervisory government agency, or other responsible person equivalent thereto
must report this immediately to the Board of Audit:
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(i) revelation of a crime in relation to the accounting;
(ii) discovery of loss of cash, securities, or other properties.
Article 28 The Board of Audit, if it is necessary for an audit, may request government
agencies, public entities, and any other party to submit materials, give expert
opinions, etc.
Section Ⅳ Statement of Audit
Article 29 The following matters must be set forth in the statement of audit to be prepared
pursuant to Article 90 of the Constitution of Japan:
(i) verification of the final accounts of the revenues and expenditures of the State;
(ii) whether the amounts in the final accounts of the revenues and expenditures of
the State are equal to the amounts in the statements of accounts submitted by
the Bank of Japan;
(iii) whether any item is found to be in violation of the law, Cabinet Order, or the
approved budget, or to be improprieties, based on audit findings;
(iv) whether there are any payments from the reserve fund that have not gone
through the procedures for obtaining the Diet's approval;
(v) matters for which the Board of Audit has demanded disciplinary action
pursuant to the provisions of Article 31 of this Act, Article 13, paragraph (2)
of the Act on Prevention of Delay in Payment under Government Contracts,
and Article 6, paragraph (1) of the Act on the Responsibilities of Government
Employees Who Execute the Budget (including as applied mutatis mutandis
pursuant to the provisions of Article 9, paragraph (2) of that Act), and the
results thereof;
(vi) adjudication and re-adjudication under the provisions of Article 32 of this Act
(including as applied mutatis mutandis pursuant to the provisions of Article 10,
paragraph (3) and Article 11, paragraph (2) of the Act on the Responsibilities
of Government Employees Who Execute the Budget), and Article 4, paragraph
(1) and Article 5 of the Act on the Responsibilities of Government Employees
Who Execute the Budget (including as applied mutatis mutandis pursuant to
the provisions of Article 8, paragraph (3) and Article 9, paragraph (2) of that
Act);
(vii) matters on which the Board of Audit has presented its opinions or for which
measures are demanded pursuant to the provisions of Article 34, and the results
thereof;
(viii) matters on which the Board of Audit has presented its opinions or for
which measures are demanded pursuant to the provisions of Article 36, and
the results thereof.
Article 30 If the Board of Audit finds it necessary to appear before the Diet to explain the
statement of audit referred to in the preceding Article, it may explain the statement
by having a Commissioner appear before the Diet or in writing.
Article 30-2 The Board of Audit may, at any time, report to the Diet and the Cabinet on matters
on which the Board of Audit has presented its opinions or for which measures are
demanded pursuant to the provisions of Article 34 or 36, or on other matters that
the Board of Audit finds it particularly necessary to report.
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Article 30-3 If the Board of Audit receives a request from either one of the Houses, the
Committees thereof, or any of the Research Committees of the House of
Councillors under the provisions of Article 105 of the Diet Law (Act No.79 of
1947) (including as applied mutatis mutandis pursuant to the provisions of Article
54-4, paragraph (1) of that Act), it may conduct an audit of the specific matters
requested and report the results.
SectionⅤ Liabilities of Accounting Officials
Article 31 (1) If the Board of Audit has concluded, as a result of its audit, that an official who
handles the accounting for the State has caused substantial damage to the State
intentionally or by gross negligence, the Board of Audit may demand the head
of the relevant ministry or agency or other person responsible for supervision
to take disciplinary action.
(2) The provisions of the preceding paragraph apply mutatis mutandis if an
official who handles the accounting for the State does not observe the
regulations on the submission of accounts, for instance, a failure to submit
statements of accounts and documentary evidence due to negligence, or if an
official who has received a demand under the provisions of Article 26 fail to
comply with the demand.
Article 32 (1) If an official responsible for cash handling has lost cash, the Board of Audit
examines whether they have in fact caused damage to the State through their
failure to exercise the due care of a prudent manager, and adjudicates whether
they are liable to indemnify.
(2) If an official responsible for handling goods has lost or damaged the goods or
otherwise caused damage to the State by handling goods in violation of the
provisions of the State-Owned Goods Management Act (Act No.113 of 1956)
or by not handling the goods in compliance with the provisions of that Act, the
Board of Audit examines whether they have in fact caused damage to the State
intentionally or by gross negligence, and adjudicates whether they are liable
to indemnify.
(3) If the Board of Audit has adjudicated that an official responsible for cash
handling or an official responsible for handling goods is liable to indemnify,
the head of the relevant ministry or agency to which the official belongs or any
other person responsible for supervision must order the official to pay the
indemnity in accordance with the adjudication referred to in the preceding two
paragraphs.
(4) The liabilities to indemnify provided for in paragraph (1) or (2) is not reduced
or exempted unless otherwise based on the resolution adopted by the Diet.
(5) Even if the Board of Audit has adjudicated that an official responsible for cash
handling or an official responsible for handling goods is not liable to
indemnify pursuant to the provisions of paragraph (1) or (2), the Board of
Audit may re-adjudicate the liabilities for only another five years if it finds
that the adjudication was improper, due to an error or omission, etc., in the
statement of accounts or documentary evidence. The provisions of the
preceding two paragraphs apply mutatis mutandis in this case.
Article 33 If the Board of Audit concludes, as a result of its audit, that an official who handles
the accounting for the State has committed a crime in the course of duty, it must
notify the Public Prosecutors Office of the case.
69
SectionⅥ Miscellaneous Provisions
Article 34 If the Board of Audit finds that, in the course of its audit, there are items that
violate laws and regulations on financial management or that are improper, it may
immediately present its opinions on the financial management to the head of the
relevant ministry or agency or a relevant person, or demand them to take
appropriate measures for the financial management, and may have them take
measures to rectify and improve subsequent management.
Article 35 (1) If the Board of Audit has been requested by an interested party to examine the
handling of financial management conducted by an official who handles the
accounting for the State, the Board of Audit must examine that official's
handling and as a result of that, if the Board of Audit concludes that the
handling needs to be corrected, it must notify its judgement to the competent
authorities or other responsible parties.
(2) Upon receipt of a notification referred to in the preceding paragraph, the
competent authorities or responsible parties must take appropriate measures
pursuant to the notification of the judgement.
Article 36 If, as a result of its audit, the Board of Audit finds that there are any matters
concerning laws and regulations, systems or administration that need to be
improved, it may present its opinions to the competent authorities or other
responsible parties, or demand them to take measures for the improvement.
Article 37 (1) The Board of Audit shall be notified of the following cases in advance and
may present its opinions thereon:
(i) enactment, amendment, or repeal of laws and regulations concerning State
financial management;
(ii) enactment, amendment, or repeal of rules and regulations concerning receipts
and payments of cash, receipts and transfers of goods and securities, and
bookkeeping of the State.
(2) If an official who handles the accounting for the State seeks the opinion of the
Board of Audit regarding the matters on which the official has questions in
performing their official duties, the Board of Audit must give its feedback on
these matters.
CHAPTERⅢ REGULATIONS OF THE BOARD OF
AUDIT
Article 38 Beyond what is provided for in this Act, the Board of Audit sets regulations
necessary for the audits.
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Nearest Stations:
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