Is the Audit Ordinance consistent with the constitution?

The newly issued Public Accounts Audit Ordinance has not separated the BCS Audit and Accounts cadre as some had anticipated. Moreover, the Finance Division, responsible for revenue assessment and collection, has been kept outside the purview of audits. The ordinance stipulates that government approval is required for any agreement with regional, international, or foreign organisations. Additionally, if the Comptroller and Auditor General (CAG) wishes to formulate any rules, government approval will also be necessary.

Experts argue that the ordinance is structured in a way that could potentially undermine the constitutional authority of the CAG through executive control. Article 128(4) of the Constitution clearly states that the CAG "shall not be subject to the direction or control of any other person or authority" while performing their duties. This ordinance appears to contradict that provision.

These observations emerged from an analysis of the 7-page Public Accounts Audit Ordinance, 2025. The ordinance, prepared by the finance division, was approved by the advisory council led by chief adviser professor Muhammad Yunus on 17 April. The official gazette was published on 4 May.

Sources from the finance division note that since independence, Bangladesh has never enacted a formal public audit law. The caretaker government first attempted to do so in 2008 to ensure financial accountability in state institutions. A draft bill was later created in 2012, when Mohammad Tareque served as the finance secretary.

More than a decade passed, during which several finance secretaries—Fazle Kabir, Mahbub Ahmed, Hedayetullah Al Mamun, Mohammad Muslim Chowdhury, Abdur Rouf Talukder, and Fatima Yasmin—served, but none managed to bring the draft to the cabinet. Current finance secretary Md Khairuzzaman Mozumder is the first to have succeeded in getting it passed by the advisory council. Although in April 2023, under Fatima Yasmin, an 8-page draft law had already been prepared.

Reportedly, on 16 April that year, the draft was shared for public feedback with a three-week deadline. Some feedback was received. Two years later, the CAG’s office drafted a new version. While it did not recommend separating the audit cadre, the finance division’s initial draft did—though it was ultimately removed from the final version. On this, secretary Mozumder told Prothom Alo that "separating the cadre is not an issue to be included in the ordinance, hence it was excluded."

The ordinance includes a section titled Audit of Revenue and Receipts. It states that the CAG may audit tax and non-tax revenue and other receipts credited to the consolidated fund, to ensure they are properly deposited and recorded. However, it does not include auditing the accuracy of revenue assessment, which has raised concerns.

Sources from the CAG's office claim that this clause was present in the CAG's draft, but was removed by the finance division during finalisation—reportedly due to pressure from the National Board of Revenue (NBR).
Yet, the Supreme Court has ruled that any matter involving public funds falls under the CAG’s auditing authority. In the 2022 case Bangladesh and others vs. Radiant Pharmaceuticals Ltd., the court held that any transaction involving public funds is subject to CAG audit. The court further stated that failure to act on audit findings undermines the purpose of audits.

Former CAG Mohammad Muslim Chowdhury declined to comment when contacted. However, in a column published last Saturday in an English daily, he wrote that the approved ordinance curtails the constitutional authority of the CAG, and contradicts the constitution. He added that instead of expanding the CAG's administrative powers, the ordinance restricts them.

Chowdhury wrote that the ordinance must be aligned with the constitutional framework. Otherwise, it will not only weaken the CAG institutionally but also endanger public accountability, democratic integrity, and administrative transparency.

According to provisions on financial and administrative management in the ordinance, the CAG must obtain government approval for changes to its organisational structure, staffing, office integration, separation, or dissolution. Experts say this requirement conflicts with the CAG's independence as a constitutional body.

The clause on entering agreements states that the CAG may consult or collaborate with any regional, international, or foreign agency, but only with prior government approval. This means the executive branch would have control even over international audit cooperation, limiting the CAG's administrative independence.

On rule-making, the ordinance states that rules can be formulated by the government in consultation with the CAG and published in the official gazette—thus placing final authority with the government. As a result, the administration will effectively control the auditing process, despite Article 128(4) of the Constitution clearly stating that the CAG shall not be subject to control by any authority.

Dr Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB), told Prothom Alo that the manner in which the ordinance was passed shows disregard for the CAG’s constitutional status. He noted that it includes provisions that would hinder the CAG’s ability to operate independently of the government.

He called the ordinance a law that facilitates tax evasion and corruption, describing it as deeply disappointing and embarrassing for the government. He also pointed out that by giving rule-making powers to the government, the ordinance effectively places the CAG under government control.

He emphasised that despite Supreme Court directives, the ordinance excludes the CAG from auditing revenue assessment and collection—thus removing these areas from accountability. He stated, "Tax assessment and collection fraud, often in collusion, is a major source of tax evasion in Bangladesh. It is incomprehensible that the interim government would ignore this. I had hoped for more sensitivity on such critical issues."

The CAG operates under Articles 127 to 132 of the Constitution. Article 128(1) authorises the CAG to audit public accounts of the Republic and those of all courts, authorities, and public officers. The CAG—or any person authorised by them—has the right to examine all documents, books, receipts, property, cash, or other assets in the possession of any public servant.

Experts believe that auditing is essential for transparency and accountability in government financial management. However, ministries often ignore audit objections related to corruption and irregularities. A formal audit law could have helped prevent this.

A former secretary of the Financial Institutions Division told Prothom Alo anonymously, “There’s often no choice but to avoid answering. If they respond, they might implicate themselves.”

Under existing CAG regulations, a 90-day period is given to respond to audit objections. Most responses are not submitted on time, and reports are prepared without them. Once submitted to the President, audit reports are forwarded to the Parliamentary Committee on Public Accounts. During the past 15 years under the Awami League government, these committees often failed to even meet.

According to CAG office sources, from 2020 to 2024, no audits were conducted at the Kamalapur Custom House’s Internal Container Depot (ICD) due to NBR’s refusal to provide confidential documents and bills of entry. Similarly, the Chattogram Custom House refused to share data after three audit attempts, and tax circle 288 and the Mongla Port Authority also withheld information.

The NBR refuses to allow audit directorates to verify whether revenue collected in the consolidated fund is assessed properly. Officials told Prothom Alo that the Income Tax, VAT, and Customs Acts do not give audit authorities the right to interfere. These laws are considered to override all others.

For instance, the Income Tax Act states that no one other than tax authorities, appellate tribunals, or the Supreme Court can challenge tax assessments. The Customs Act makes it a punishable offence to share customs documents with anyone other than customs authorities or courts. The VAT Act similarly restricts audit authority to VAT officials. However, experts argue that no law supersedes the Constitution.

A recent 2024 Supreme Court ruling on a VAT-related case was cited by a CAG official. It stated that even if duties and VAT are paid, the CAG still has the right to examine importer records. If irregularities are suspected, the CAG can request documents from NBR, which must then provide the information.

Experts are alarmed at how a constitutional institution like the CAG is being undermined through this ordinance. Sources say that unresolved audit objections related to income tax, VAT, and customs have now accumulated to over Tk 550 billion.