Board of Audit of JapanAs an organization that reviews public financesYear 2024

Message from the President, Board of Audit
This booklet provides an explanation of the mandate,organization, and activities of the Board of Audit as well as
the outline of the FY2022 Audit Report.
On November 7, 2023, the Board of Audit sent the FY2022
Audit Report on findings and other matters from the Board ofAudit’s audit activities in 2023 to the Cabinet. The Audit
Report, along with the final accounts of the expenditures andrevenues of the State, was submitted to the Diet on November
20 of that year.
The FY2022 Audit Report points out and draws publicattention 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) social security, (iii) ensuring safety of people’s lives, (iv) digitalization, (v) environment
and energy, (vi) effectiveness of programs and projects, (vii) proper execution of the budget and adequacy of thefinancial management, and (viii) stocks including assets and funds. This Report identifies 344 cases totaling 58
billion yen as audit findings, including summaries of three cases of Special Report to the Diet and to the Cabinet
and four cases of Special Report on audit requested by the Diet.
Japan’s society and economy have faced the significant task of responding to issues such as the decrease of the
population that are progressing rapidly, the declining birthrate and the aging society, stagnant potential growthrate, and increased frequency and severity of natural disasters. In addition, there arise challenges to deal with theglobal surge in prices, severe security environment, and delay in the digitalization of the Japanese government.
Against this backdrop, budgets have been allocated for a broad range of measures in recent years, such as thosefor social security, education and science promotion, defense, and public works. Furthermore, a large amount ofreserve funds has been appropriated to respond to global surge in prices on people’s lives and prepare forunexpected changes in the situation. Meanwhile, as for the fiscal position of the Japanese government, continual
issuance of government bonds, including those for COVID-19 countermeasures, is steadily increasing theoutstanding debt following the previous year, which is estimated to reach about 1105 trillion yen (180% ofGDP) at the end of FY2024, and poses a major challenge for achieving a sound fiscal position.
Moreover, the importance of grasping the results of the State budget execution and reflecting them in thefollowing budgets is deliberated in the Diet, from the viewpoint of enhancing and strengthening fiscal
administration control by the Diet.
In light of these circumstances, the Board of Audit, as an organization that reviews public finances, will continue
to commit itself to living up to the expectations of the public.
It is my sincere hope that this booklet will serve to enhance your understanding of the Board of Audit.
June 2024											TANAKA Yayoi
											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

10Perspectives of the Audit

14

Procedures of the Audit

16

Audit Report

24

Promotion of the Audit Findings

32

Other Activities

37

Exchange of Information and Views with External Bodies38
International Activities

40

Audit Result Outline －FY2022 Audit Report－43
The Board of Audit Act67

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 formof 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 anindependent 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 alsosupervises financial management to ensure its adequacy.
The Board has been given the mandate of reviewing the public finance 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 theDiet, together with the statement of audit, (Note) during the fiscal year
immediately following the period covered.

The organization andcompetency 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 andexpenditures of the State, pursuant to the provisions of Article 90 of
the Constitution of Japan, and also audits the accounts provided forby 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 andincorporated 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 isformulated 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 theState, which are the results of the State budget execution, are prepared by the Cabinet anddeliberated on in the Diet.
For sound management of administrative and financial operations of the State, it is essential toaudit 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 andrevenues 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 arealso 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 Stateare also subject to the Board’s audit.
The Board is a constitutional organization which is independent of the Cabinet and belongs toneither the Diet nor the Courts for the purpose of strictly performing such important functions
without any interference by any other bodies.

2(as of January 2024)◆ Organization Chart of the Government of Japan ◆Legislature

Imperial
Household Agency

Diet

Fair Trade Commission
National Public
Safety Commission

Cabinet Office

Board of Audit

Digital Agency

Reconstruction Agency

Executive

Status of the Board

Personal Information
Protection Commission
Japan Casino
Regulatory Commission
Financial Services
AgencyConsumer Affairs
AgencyChildren and Families
AgencyMinistry of Internal
Affairs andCommunications

CabinetCabinetSecretariat
Cabinet Legislation
BureauNational Personnel
Authority

Ministry ofJustice
Ministry ofForeign Affairs
Ministry of Finance
Ministry of Education,
Culture, Sports, Scienceand Technology
Ministry of Health,Labour and Welfare
Ministry of Agriculture,
Forestry and Fisheries
Ministry of Economy,
Trade and Industry
Ministry ofLand, Infrastructure,
Transport and Tourism
Ministry of
the Environment

Judiciary

Courts

Ministry of
Defense3

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 byconsensus of the Commissioners, as well as directing and supervising activities carried out by theGeneral Executive Bureau.

Board of Audit

Audit Commission

Commissioner(President)

Commissioner

Commissioner

Secretariat
Senior ASG
ASG forRecords and Archives
Management
ASG for
Cybersecurity andInformation Technology
ASG(13)
Management Division
Office of Public
Relations

Information Systems
Division

Legal Affairs Division

4

Annaka Training Center is located in Annaka City, Gunma Prefecture

Office of the Review
Board of the Board of
Audit
for the Information
A
Disclosure and Personal
Information Protection

Personnel Division

Accounts Division(Note)

Office of Audit Supportand Innovations

Health and Welfare
Service Division

Office ofInternational Affairs

AD：Audit Division

Audit Policy Planning
Division

Office of Audit Planningand Coordination

Research andInternational Division(Abbreviation) ASG：Assistant Secretary General

Adjudication Division

Office of Information
Disclosure and Personal
Information Protection
Office of Records andArchives Management

Capacity
Development Division
Annaka Training
CenterOffice of Public Sector
Audit Cooperation
Office of Data andInformation
Technical Counselors(3)

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 fiveyear term, and their status is guaranteed during the term to ensure the Board’s independence.
Organization of the Board

A person elected by the Commissioners from among themselves is appointed President of theBoard by the Cabinet. The President represents the Board and presides over the Audit Commission.

(as of January 2024)

General Executive
Bureau

1st Bureau

Secretary General
Deputy Secretary
General2nd Bureau

Review Board of the Board of Audit for the Information
Disclosure and Personal Information Protection

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

Finance AD

Health and Welfare AD

Construction Planningand Housing AD

Education, Science andTechnology AD for
General Issues

Digital Services AD

National Properties AD

Labour AD

Port and Aviation AD
Education AD

Judicial Affairs AD

Medical Care AD

Water Resources AD

Grant for Local
Government AD

Public Pension AD

Road Construction AD

Foreign Affairs AD

Medical Institution AD

Surface Transportation AD

1st Tax AD

Ground Defense AD

Environment AD

2nd Tax AD

Maritime Defense AD

Expressway AD

NHK, NTT and Postal
Services AD
Trade and Industry AD

Science and Technology AD

Natural Resources andEnergy AD

Agriculture AD

Government Financial
Institutions AD

Agricultural Infrastructure
AD
Fisheries and Livestock
AD
Forestry AD

Special Issues AD for
Ministries
Special Issues AD for
Agencies

Air Defense AD

5

■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 ofeach bureau and division.
(as of January 2024)
BureauOrganization of the Board

1st
Bureau2nd
Bureau3rd
Bureau

4st
Bureau5st
BureauAudit Division

Ministries and Bodies subject to Audit

Finance AD

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 /Ministry of Finance(except for the matters on which the other Audit Divisions are in charge ofaudits 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

National Properties AD

Consolidation of the audit of national property carried out by the Board /National Personnel Authority / Fair Trade Commission / Japan Casino Regulatory Commission/ Consumer Affairs Agency / Japan Mint / National Printing Bureau / Japan Tobacco Inc. (JT)

Judicial Affairs AD

Courts / Board of Audit / National Public Safety Commission / Ministry of Justice / Immigration
Services Agency of Japan / Public Security Intelligence Agency / Japan Legal Support Center

Grant for Local Government AD

Office for Promotion of Regional Revitalization (Cabinet Office) / Reconstruction Agency /Ministry of Internal Affairs and Communications (MIC) (except for the matters on which theother 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
2nd Tax AD

Tax Bureau of Ministry of Finance / Customs and Tariff Bureau of Ministry of Finance / National
Tax Agency / Customs

Health and Welfare AD
Labour AD
Medical Care AD
Public Pension AD
Medical Institution AD

Children and Families Agency / Ministry of Health, Labour and Welfare / Japan Pension
Service / Welfare and Medical Service Agency / National Hospital Organization / Japan
Organization for Employment of the Elderly, Persons with Disabilities and Job Seekers /Government Pension Investment Fund

Ground Defense AD
Maritime Defense AD
Air Defense AD

Ministry of Defense / Acquisition, Technology and Logistics Agency / Ground, Maritime and
Air Self-Defense Forces

Construction Planning andHousing AD
Port and Aviation AD
Water Resources AD
Road Construction AD
Surface Transportation AD
Expressway AD

Ministry of Land, Infrastructure, Transport and Tourism (MLIT) / Tourism Agency / Meteorological
Agency / Coast Guard / Urban Renaissance Agency / Japan Water Agency / Japan Railway
Construction, Transport and Technology Agency / Narita and New Kansai International Airport
Co., Ltd.s / Tokyo Metro Co., Ltd / East Nippon, Central Nippon, West Nippon and HonshuShikoku Bridge Expressway Co., Ltd.s

Environment AD

Ministry of the Environment / Environmental Restoration and Conservation Agency / Japan
Environmental Storage & Safety Corporation

Education, Science andTechnology AD for General Issues
Education AD
Science and Technology AD

Ministry of Education, Culture, Sports, Science and Technology / Japan Sports Agency /Agency for Cultural Affairs / The Promotion and Mutual Aid Corporation for Private Schools ofJapan / Japan Science and Technology Agency / Japan Sport Council / Japan Student
Services Organization / RIKEN / Japan Aerospace Exploration Agency / Japan Atomic Energy
Agency / National University Corporations

Agriculture AD
Agricultural Infrastructure AD
Fisheries and Livestock AD
Forestry AD

Ministry of Agriculture, Forestry and Fisheries / Forestry Agency / Fisheries Agency / Japan
Racing Association / Agriculture & Livestock Industries Corporation / National Agriculture andFood Research Organization / Forest Research and Management Organization

Digital Services AD

Digital Agency, Global Strategy Bureau, Information and Communications Bureau,
Telecommunication Bureau, and Director-General for Cybersecurity of the MIC / National
Institute of Information and Communications Technology / Special issues on which theSecretary General of the Board requires audit concerning the accounting related to Information
and Communications

NHK, NTT and Postal Services AD

Japan Post Holdings / Organization for Postal Savings, Postal Life Insurance and Post Office
Network / Japan Broadcasting Corporation (NHK) / Nippon Telegraph and Telephone
Corporation (NTT)

Trade and Industry AD
Natural Resources and Energy AD

Ministry of Economy, Trade and Industry / Agency for Natural Resources and Energy / Japan
Patent Office / Small and Medium Enterprises Agency / National Institute of Advanced
Industrial Science and Technology / Japan External Trade Organization / New Energy andIndustrial Technology Development Organization / Japan Organization for Metals and Energy
Security/ Nuclear Damage Compensation and Decommissioning Facilitation Corporation

Government Financial Institutions The Okinawa Development Finance Corporation / Japan Finance Corporation / JapanAD
Housing Finance Agency / Development Bank of Japan
Special Issues AD for Ministries
Special Issues AD for Agencies

6

Audit in response to the requests by the Diet based on the provision of the Diet Act / Special
issues on which the Secretary General of the Board requires audits

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 1,251 (as of January2024). 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.
Organization of the Board

The term “Accounting,” that is subject to audit by the Board, does not just mean accounting for theincoming and outgoing funds or bookkeeping in a narrow sense, but covers broader issues ofwhether tax payers’ money has been properly and effectively collected and used for
implementing administrative activities of the State. Auditors of the Board therefore must havebroad knowledge of not only management and operations of the auditees, but also of other relevant
fields such as law, finance, economics, electricity, digital services, machinery, civil engineering,
construction.
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 andeconomics, the Board recruits a considerable number of personnel who specialized in electricity,
digital services, civil engineering, construction from a list of successful examinees.
The Board also utilizes outside expertise by recruiting mid-career staff or by employing as 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 ofaudit 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, theBoard established a training center (refer to page 8) and provides systematic training to its staff.

Training sessions

7

Training System of the Board
The Board provides the following training to its staff.

Organization of the Board

1) A course for new recruits and other general staff to learn basic knowledge thatis 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
Report3) 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 IT4) 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 ofTokyo), 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
Aims of the Audit

Audit Activities

The basic mandate of the Board is to ensure the adequacy offinancial management by continuously auditing and supervisingfinancial management, and to verify the final accounts of therevenues and expenditures of the State based on the results of theaudit.
(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 offacilitating 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 takemeasures for the improvement, if the Board finds that there are items that violate laws andregulations 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 expendituresof 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 declarecompletion 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, anofficial 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

Scope of the Audit
Those which are subject to audit by the Board are classified into two categories, i) those which theBoard 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 Stateaccounts 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 fromthe State.
Audit Activities
Monthly revenues and expenditures of theState
Receipts and payments of cash, andreceipts and transfers of goods owned by theState as well as those of national properties

Subject tothe Board’s
mandatory audit

Acquisition or loss of claims held by the State,or an increase or decrease in government
bonds and other obligations

Diet, Courts,
Board of Audit,
Cabinet, Cabinet
Office and 11
Ministries, etc.

Receipts and payments of cash, andreceipts and transfers of precious metals
and securities handled by the Bank ofJapan on behalf of the StateScopeof theAudit(as of January 2024)

Subject tothe Board’s
discretionary audit

10

Accounts of juridical persons to which theState has contributed 50 percent or moreof their stated capital

209 bodies

Accounts specified by law as being
subject to audit by the Board of Audit

1 bodySee page 13.

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.

Audit Activities

Refer to the “Organization Chart of the Government of Japan” on page 3.
Government
AffiliatedInstitutions
4 bodies

Others37 bodies

The Okinawa Development Finance Corporation
Japan Finance Corporation
Account of ODA Loan of Japan International Cooperation Agency (Note 1: see page 13.)
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 JapanTokyo Metro Co., Ltd
Japan Environmental Storage & Safety Corporation
Narita International Airport Corporation
East Nippon Expressway Company Limited
Central Nippon Expressway Company LimitedWest Nippon Expressway Company Limited
Honshu-Shikoku Bridge Expressway Company Limited
Japan Legal Support Center
Japan Health Insurance Association
Development Bank of Japan Inc.
Nippon Automated Cargo And Port Consolidated System, Inc.
Japan Investment Corporation
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 andExpansion 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)
Japan Green Investment Corp. for Carbon Neutrality (JICN)
Fukushima Institute for Research, Education and Innovation (F-REI)
7 other bodies are under liquidation

Incorporated Administrative Agencies 83 bodies

See Page 12.
National University Corporations and Inter-University
Research Institute Corporations

86 bodies

Nippon Hoso Kyokai (NHK : Japan Broadcasting Corporation)

11

Incorporated Administrative Agencies

Audit Activities

Incorporated
Administrative
Agencies
83 bodies

National Archives of Japan
National Research Institute of Brewing
National Institute of Special Needs Education
National Center for University Entrance Examinations
National Institution for Youth Education
National Women’s Education Center, Japan
National Museum of Nature and Science
National Museum of Art
National Institutes for Cultural Heritage
Food and Agricultural Materials Inspection Center
National Livestock Breeding Center
National Institute of Technology and Evaluation
Japan agency of Maritime Education and Training for Seafarers
Civil Aviation College
National Institute for School Teachers and Staff Development
Labor Management Organization for USFJ Employees
National Agency for Automobile and Land Transport Technology
Japan Mint
National Printing Bureau
National Consumer Affairs Center of Japan
Agriculture & Livestock Industries Corporation
Agriculture, Forestry and Fisheries Credit Foundations
Northern Territories Issue Association
Japan International Cooperation Agency (JICA) (Note1 : see page 13)
Japan Foundation
Japan Society for the Promotion of Science
Japan Sport Council
Japan Arts Council
Japan Organization for Employment of the Elderly, Persons with
Disabilities and Job Seekers
Welfare And Medical Service Agency(WAM)
National Center for Persons with Severe Intellectual Disabilities,
Nozominosono
The Japan Institute for Labour Policy and Training
Japan External Trade Organization (JETRO)Japan Railway Construction, Transport and Technology Agency
Japan National Tourism Organization(JNTO)
Japan Water Agency (JWA)
National Agency for Automotive Safety and Victims’ Aid
Airport Land Development Organization
Information-Technology Promotion Agency, Japan
Japan Organization for Metals and Energy Security
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

National
University
Corporations
andInter-University
Research
Institute
Corporations
86 bodies

12

Hokkaido University
Hokkaido University of Education
Muroran Institute of Technology
Hokkaido National Higher Education and Research System
Asahikawa Medial University
Hirosaki University
Iwate University
Tohoku University
Miyagi University of Education
Akita University
Yamagata University
Fukushima University
Ibaraki University
University of Tsukuba
Tsukuba University of Technology
Utsunomiya University
Gunma University
Saitama University
Chiba University
The University of Tokyo
Tokyo Medical and Dental University
Tokyo University of Foreign Studies
Tokyo Gakugei University
Tokyo University of Agriculture and Technology
Tokyo University of the Arts
Tokyo Institute of Technology
Tokyo University of Marine Science and Technology
Ochanomizu University
University of Electro-Communications
Hitotsubashi University
Yokohama National University
Niigata University
Nagaoka University of Technology
Joetsu University of Education
University of Toyama
Kanazawa University
University of Fukui
University of Yamanashi
Shinshu University
Shizuoka University
Hamamatsu University School of Medicine
Tokai National Higher Education and Research System
Aichi University of Education

National Institute of Technology
National Institution for Academic Degrees and Quality Enhancement of Higher
Education(NIAD-QE)
Organization for Small & Medium Enterprises and Regional Innovation, Japan
Urban Renaissance Agency
Fund for the Promotion and Development of the Amami Islands
Japan Expressway Holding and Debt Repayment Agency
Japan Community Health care Organization
Government Pension Investment FundJapan Housing Finance Agency
Organization for Postal Savings, Postal Life Insurance and Post Office Network
Organization for Workers’ Retirement Allowance Mutual Aid
National Research and Development Agency
National Institute of Information and Communications Technology
National Institute for Materials Science
National Research Institute for Earth Science and Disaster Resilience
National Institute for Quantum and Radiological Science and Technology
National Agriculture and Food Research Organization
Japan International Research Center for Agricultural Sciences
Forest Research and Management Organization
Japan Fisheries Research and Education Agency
National Institute of Advanced Industrial Science and Technology
Public Works Research Institute
Building Research InstituteNational Institute of Maritime, Port and Aviation Technology
National Institute for Environmental Studies
New Energy and Industrial Technology Development Organization (NEDO)
Japan Science and Technology Agency
RIKEN (The Institute of Physical and Chemical Research)
Japan Aerospace Exploration Agency
Japan Agency for Marine-Earth Science and Technology
National Institute of Biomedical Innovation, Health and Nutrition
Japan Atomic Energy Agency
National Cancer Center Japan
National Cerebral and Cardiovascular Center
National Center of Neurology and Psychiatry
National Center for Global Health and Medicine
National Center for Child Health and Development
National Center for Geriatrics and Gerontology
Japan Agency for Medical Research and Development

Nagoya Institute of Technology
Toyohashi University of Technology
Mie University
Shiga University
Shiga University of Medical Science
Kyoto University
Kyoto University of Education
Kyoto Institute of Technology
Osaka University
Osaka Kyoiku University
Hyogo University of Teacher Education
Kobe University
Nara National Institute of Higher Education and Research
Wakayama University
Tottori University
Shimane University
Okayama University
Hiroshima University
Yamaguchi University
The University of Tokushima
Naruto University of Education
Kagawa University
Ehime University
Kochi University
Fukuoka University of Education
Kyushu University
Kyushu Institute of Technology
Saga University
Nagasaki University
Kumamoto University
Oita University
University of Miyazaki
Kagoshima University
National Institute of Fitness and Sports in Kanoya
University of the Ryukyus
The National Graduate Institute for Policy Studies
The Graduate University for Advanced Studies
Japan Advanced Institute of Science and Technology
Nara Institute of Science and Technology
Inter-University Research Institute Corporations
National Institutes for the Humanities
National Institutes of Natural Sciences
High Energy Accelerator Research Organization
Research Organization of Information and Systems

Securities owned orretained by the State,or cash and goods
retained by the State
47 prefectures

Receipts andpayments of cash orreceipts and transfersof goods andsecurities handled byentities other than theState, on behalf of
the State

Subject to theBoard’s
discretionary
audit

Accounts of an entity
less than half of
whose stated capitalhas been contributedby the State

Accounts of an entity
whose stated capitalhas been contributedby an entity whosestated capital has
been contributed by
the State

Accounts of an entity
for whose borrowings
the State guarantees
the payment of theprincipal or interest

Accounts of acontractor forconstruction work
implemented or otherservices provided by
the State or juridical
persons to which theState has contributed
half or more of thestated capital, or an
entrustee to whomadministrative workor services are
entrusted by theState, etc. or a
supplier of goods,
which relate to thecontract with theState, etc.

60 bodies

Organizations
including KKR (Federationof National Public Service
Personnel Mutual Aid
Associations)
12 bodies

1,603 Municipalities
Fiscal year
Designation
5,366 bodies(in 2023)

Audit Activities

Accounts of an entity
for which the Statehas directly or
indirectly granted a
subsidy or extended
other financial
assistance such as aloanContinuous
Designation

Judicial persons including
JA (Japan Agricultural
Co-operatives)
2,411 bodies
Other 1,352 bodies

Continuous
Designation
9 bodies

Continuous
Designation
15 bodies

Continuous
Designation
3 bodies

Central Japan International Airport Co., Ltd.
NTT
Metropolitan Expressway Co., Ltd.
Hanshin Expressway Company Limited
Japan Alcohol Corporation
Shoko Chukin Bank (Note 2)
JT(Japan Tobacco Inc.)
Kobe-Osaka International Port Corporation
Japan Post Holdings Co.,Ltd.
Hokkaido Railway Company
Shikoku Railway Company
Japan Freight Railway Company
Trans-Tokyo Bay Highway Corporation
NTT East (Nippon Telegraph and Telephone
East Corp.)
NTT West (Nippon Telegraph and Telephone
West Corp.)
Japan Post Co., Ltd.
Japan Post Bank Co., Ltd.
Japan Post Insurance Co., Ltd.
The Resolution and Collection Corporation
REVIC (Regional Economy Vitalization
Corporation of Japan)
The Corporation for Revitalizing EarthquakeAffected Business
Kansai International Airport Land Co., Ltd. (Note 2)
Tokyo Electric Power Company Holdings, Inc.
INCJ, Ltd.

(Note 2)

Organization for Promoting Urban Development(Note2)Farmers Pension Fund (Note 2)
Japan Finance Organization for Municipalities
104 bodies(in 2023)(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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
Audit Activities(Regularity); iii) whether the implementation of projects and programs or budget execution isadministered at minimum cost (Economy); iv) whether the projects and programs achieve themaximum 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
accounts accuratelyreflect the financial status,
such as the execution of
the budgets.

Whether the financial
management is properly
conducted in conformity
with the approved
budgets, laws andregulations.

Accuracy

Regularity

Whether the projects andprograms achieve theintended results andproduce the expected
effects.

Auditee

Whether the
implementation of projects
and programs or budget
execution is administeredat minimum cost.

Effectiveness

Whether the projects andprograms achieve themaximum possible resultswith the given cost or havethe most cost-efficient
outcome.

EconomyEfficiency

14

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
GeneralSocial Security

Public Works

Agriculture,
Forestry and
Fisheries

ODA: Official
Development
Assistance

Audit Activities

Tax

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
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 oftaxable 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 adjustmentof 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)
Was the huge amount of data processing and disbursement work of pension operations carriedout 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 theconstruction 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)
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 thebusiness scale of each farmhouse been contributed sufficiently to the attainment of theintended results? (Effectiveness)
Are there any projects or systems of which the original purposes have become less 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, andhas disbursement of grants and loans been properly made in conformity with the approved
budgets and laws? (Regularity)
Was the project reviewed on its relevance in view of the actual conditions of the recipient
country, has the progress of the project properly been monitored and evaluated, and have anynecessary 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 the Were the businesses and projects under special accounts of the State and State-owned
State and Stateowned enterprises economically and efficiently managed in line with the objectives of their foundation?
(Economy and Efficiency)
enterprises
Were subsidies provided only to eligible projects or bodies? (Regularity)
Subsidies etc.
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 made toobtain 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

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.
Audit Activities

Preparation of Basic Policy on
Audit and Audit Plan
Conduct of Audits

Analysis and Review ofAudit findings
Presentation ofOpinions and/or
Demand for Measures○In-office audit○Field audit at the office or
project site of auditees○Written inquiries to auditees○Request for submission ofdata and technical appraisals
from third party institutions orexpertise

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 toreport 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 Schedule
Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov.

Basic Policy on Audit andAudit Plan
In-office audit
Field audit

Audit Activities

Analysis and review of theaudit findings
Presentation of Opinions and/or
Demand for Measures
Special Report to the Diet andthe Cabinet
Special Report on audit
requested by the Diet
Preparation of the Audit Reportand 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, eachdivision prepares its own Audit Plan.
In preparing the Audit Plan, each division identifies its priority audit issues based on thoroughanalysis 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 theme, manpower allocation etc. regarding priority audit issues.

The Audit Commission on formulating the Audit Plan

17

Basic Policy on Audit for 2024 (Excerpt)

Audit Activities(As established September 14, 2023)
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 thefollowing 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・Digitalization
Additionally, the Board appropriately and in a timely manner audits various countermeasures against the spread of COVID-19 and price surges,
noting that a large amount of national expenses has been spent until now for these purposes.
Furthermore, for measures besides these areas, the Board appropriately and in a timely manner carries out audits while bearing public interestin mind.
B. Audit with various perspectives
The Board conducts audits not only to identify and disclose fraudulent or improper cases but also to evaluate the performance of operations andprojects. 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 have been 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 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 ofoperations, 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 thegovernment for efficient and effective implementation of administrative work and projects. The Board also conducts audits with attention to thesituations of the assets possessed by the State and funds developed by subsidies.
When there is any problem with the implementation of the operations and projects and the budget execution, the Board thoroughly investigatesthe causes and considers measures for improvement and if needed, abolishment of the program itself.
For the purpose of contributing to contribute to the improvement of the transparency and accountability of public administration and finance aswell as better project implementation, the Board enhances its audits by conducting analyses based on the financial accounts of the State andentities 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 utilizes 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, the Board pays due attention to the effectiveness of the internal control. The Board also requests theauditees to improve their internal control systems, if necessary, so that they ensure the adequate level of financial management.
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, when improper cases are identified in the Audit Report, the Board will specify matters related to the relevant case, such as the cause
and improvement measures, and contribute to ensuring adequacy of financial management not only of the auditee in question, but also of otherauditees. In addition, the Board conducts audits as necessary to confirm if similar cases are occurring 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 under 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 researchcontents in the Board’s audit activities, paying full attention to the intention of the Diet’s request. The Board also makes efforts to actively submit
reports to the Diet and the Cabinet to communicate its audit results in a timely manner in order to contribute to the Diet’s sufficient examinationof the final accounts.
F. Improvement of audit capability and effectiveness of its work
The Board enhances its ability to conduct audits and the effectiveness of its work through continuous review 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 canplay 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 this 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 andcontent 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 withseveral ministries and agencies.
In auditing, the Board attempts to enhance and strengthen audit activities by promptly and flexibly responding to the progress status of audits aswell as public interests, for example, by reviewing the audit plan when necessary.

18

〈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:
Audit Activities

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 checkthe 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 designatedperiod, 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 ofaccounts are accurate, legal and reasonable.
In addition to the submission of paper-based statements of accounts and documentary evidence, the use ofelectronic 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 numericalaccuracy 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 system19

(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 andgovernment agencies, or project sites to conduct field audits. As for local governments that carryout 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
Audit Activities

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 bychecking 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 2023.
The Board conducted field audits in 2023, taking measures to prevent the spread of COVID-19 following on
from 2022, taking into consideration impacts of COVID-19 on Auditees.
The Board spent approximately 27,000 person-days on these field audits.
Auditee classification(1) Important Organizations in audits(Head office of ministries and agencies,
major local branches, etc.)(2) Organizations equivalent to the above(Other local branches, etc.)

Total

Number of units

Number of units
field audited

Field Audit
Implementation Rate

4,556

1,717

37.6%
(Prev. year 35.8%)

6,568

751

11.4%
(Prev. year 10.2%)

11,124

2,468

22.1%
(Prev. year 20.5%)(Note) For auditees other than (1) and (2), such as post offices and railway stations, field audits were conducted at 41
out of 20,346 units. Field Audit Implementation Rate including these figures is 7.9%.

20

Field audit

Audit Activities(At the airport facility)(Rockfall prevention work)(At the auditee’s office)(In the research facility)21

〈Analysis and Review of Audit Findings〉
Audit findings by the Board demonstrate criticism to the auditees and are to be informative to otherinstitutions 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 thefollowing procedures to confirm the situation, in addition to double-checking and ample analysisof the causes and remedial measures.

(1) Inquiry letters to the auditees
Audit Activities

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 fromthird 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 otherexperts 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 andreview of the audit findings, the Board presents its opinions to, or demands measures from theauditees, 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, afterdue 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 themto take appropriate measures for the financial management, and may have them take measures torectify 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 competentauthorities or other responsible parties, or demand them to take measures for the improvement.

22

These opinions and/or measures are issued to the auditees immediately after the Board reaches aconclusion, 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 Activities

Audit Commission

Audit Report

General Executive Bureau
Secretary General

Audit Report Coordination Committee

Bureau Audit Report Committee

Auditees

Inquiry letters
Written replies

Each Audit Division* 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 thesystem, each audit case is reviewed critically in advance by one of the members in eachCommittee 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 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 Reportshowing 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
Audit Activities

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 deliberationof 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 Statebudget execution. News media reports on the submission of the Audit Report to the Cabinet attracts
the attention of the public.

Former President Okamura (left) hands
the FY2022 Audit Report to Prime Minister
Kishida[Prime Minister’s Office, November 7, 2023]

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 notgone through the procedures for obtaining Diet approval and so on, and may include other mattersthat the Board finds particularly necessary to report.

24

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.”
Item being found, as a result of audit, in violation of the law, Cabinet Order, or theapproved budget, or being found improper.

2) Presentation of Opinions
and/or Demand for Measures

Matters regarding which the Board has presented its opinions to, or demandedmeasures from, relevant ministers etc. pursuant to the provisions of Article 34 and
36 of the Board of Audit Act.

3) Measures Taken

Matters for which the auditee took measures for improvement in response to thefindings of the Board.

4) Special Description

Matters which the Board finds particularly necessary to report in order to draw theattention of the public.

5) Special Report to the Dietand the Cabinet

Matters reported to the Diet and the Cabinet pursuant to the provision of Article30-2 of the Board of Audit Act.

6) Special Report on audit
requested by the Diet

Results of audit reported to the Diet regarding matters audited pursuant to theprovision 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.

7) Report on Specific Matters

Report on specific matters which the Board finds necessary to report among audit
activities of the Board.

Audit Activities

1) Improprieties【The Board of Audit Act Article 34】
If the Board of Audit finds that, in the course of its audit, there are items that violate laws andregulations 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.
【The Board of Audit Act 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 takemeasures for the improvement.
【The Board of Audit Act 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.
【The Board of Audit Act 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 provisionsof Article 105 of the Diet Law, it may conduct an audit of the specific matters requested andreport the results.

25

〈the Audit Report for the fiscal year 2022〉

Number of audit cases and improper amounts reported in the Audit Report for the fiscal year 2022 are as follows:
Category

Number of audit
cases

Improper amounts(Unit: million YEN)

Number of audit cases withbackground amounts

285

9,763.75－

2) Presentation of Opinions
and/or Demand for Measures
Article 34(Note 1)3

314.091

Articles 34 and 36(Note 1)
3549.991

Articles 36(Note 1)14

30,096.64

93) Measures Taken(Note 1)28

17,306.15

41) Improprieties

Audit Activities

Total of items 1) to 3)

3335) Special Report to
the Diet and the Cabinet

36) Special Report on
audit requested by the Diet

47) Report on Specific Matters

4

Total

344

<327 cases>(Note 2)
58,022.14<327 Cases>(Note 2)
58,022.14(Note 1) 9 cases of “Presentation of Opinions and/or Demand for Measures” and “Measures Taken”, in multiple situations, have both improper amounts
and background amounts.
(Note 2) Some cases are counted both as “Improprieties” and “Presentation of Opinions and/or Demand for Measures”. As such duplication is deductedfrom the total, adding each improper amount does not correspond with the total.
(Note 3) No case is reported as 4)Special Description in the FY2022 Audit Report.

Improper amounts and Background 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 accountand financial statements.
While the total amount of them tend to be referred as “the total amount of wasteful expenses”, the Board of Audit ofJapan does not use the term "wasteful expenses" when explaining the Improper/Unreasonable matters, having in
mind that they concern various situations as set forth above.
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 andregulations, 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.

26

The Board conducts audits with diverse perspectives in a broad range of fields, and the following
is a list of selected audit findings in the "the Audit Report for FY2022" by feature.
It summarized the main points of these audit findings in an easy-to-understandformat and published them on the Board’s website "Selected Audit Findings of the
Audit Report for FY2022 (https://www. jbaudit. go. jp/english/report/pdf/fy 2022
report_3. pdf)".

keynotes

Selected Audit Findings of the Audit Report for FY2022
Audit Activities

Ⅰ Audit Findings related to the total expenditure incurred with regard to COVID-19 countermeasures⑥ Status of Use of the Reserve Funds⑦ Status of Filing of Tax Returns for Sustainability Subsidies⑦ Status of COVID-19 Special Loans provided by Japan Finance Corporation and Other Financial Institutions② Status of Use of Next Generation Sequencers③ Return of Excess Amount Paid by Rough Estimate in the Subsidy Program for Sustaining Businesses③ Project to Install Negative Pressure Devices in Nursing Homes① Excessive Payment of the Emergency Comprehensive Support Grant For COVID-19
Ⅱ Audit Findings related to social security② Settled Amount of Refunds in Calculation of the State Contribution to the Livelihood Assistance Subsidy② Effects of Subsidies for Health Services for the Elderly and Utilization of Medical Information
Ⅲ Audit Findings related to ensuring safety of people’s lives② Construction Methods for Bridge Pier Reinforcement for Expressways
Ⅳ Audit Findings related to digital services② Status of Use of Transmission Line Facilities Installed in the Project on Promoting Advanced Radio
Environment Improvements
Ⅴ Audit Findings related to environment and energy⑦ Implementation Status of the Project for Measures to Mitigate Drastic Changes in Fuel Oil Prices
Ⅵ Audit Findings related to effectiveness of programs and projects② Implementation of Direct Payment Grant Project for Promoting Utilization of Paddy Fields⑦ Initiatives for Securing a Stable Supply of Food
Ⅶ Audit Findings related to proper execution of the budget and adequacy of the financial management① Contract on Procurement of Domestic Pork to be Served at the Tokyo Olympic and Paralympic Games
Athletes' Village
Ⅷ Audit Findings related to stocks including assets and funds③ Size of reserve funds Based on Management Expense Grants Provided to National University Corporationsfor Specified Expenditures
Ⅸ Other① Improper Design of Catch Basins(Note) The numbers in the circles correspond to the seven categories of audit results reported, which is listed on page 25.

27

〈Examples of Selected Audit Findings of the Audit Report for FY2022〉 keynotes

Status of Use of the Reserve Funds
Special Report on audit requested by the Diet
https://www.jbaudit.go.jp/english/report/pdf/fy2022report_3.pdf

Details of the Request for Audit

Audit Activities■

The matters requested by the Diet, with regard to the amount of carry-over out of the COVID-19-related reserve funds for FY2020,and contingency funds for COVID-19 for FY2021, were as follows:(i) the status of execution of budget items that were newly established or for which the budget amount was increased using thereserve funds, and(ii) the status of use of the reserve funds; in particular, the grounds for the use and the basis for the estimation of the used amount.

■

Under the Constitution, State budget is subject to a prior decision of the Diet in principle; reserve funds are exempt from theprinciple of requiring a prior decision of the Diet.

■

The amount of reserve funds which was allocated for a budget item based on decisions to use them is executed integrally with its
existing budget, including the initial budget. Accordingly, it is not possible to distinguish and concretely ascertain the execution
status of the amount equivalent to the used reserve funds (the allocated amount funded with reserve funds) from the overall
execution status of the budget item, except in very limited cases.

Main Results of the Audit
Management of budget execution by project■For 47 line items of 22 budget items under the jurisdiction of 8 ministries and agencies for FY2021 (50 decision items – the usedreserve funds : 12.6005 trillion yen) to which budgets were allocated from the COVID-19-related reserve funds, the execution
status of the amount equivalent to the used reserve funds was not able to be distinguished from the overall execution status of thesebudget items.

■

8 ministries and agencies practically managed budget execution by project using a management ledger, for example, and wereable to distinguish the execution status of the amount equivalent to the used reserve funds, although their methods of deciding
the order of selecting financial sources (the methods of deciding in what order to be used among multiple financial sources)
differed.
The Board checked the execution status of the amount equivalent to the used reserve funds through the management ofproject budgets execution by using mainly management ledgers.

Status of budget execution by project■

The amount equivalent to the used reserve funds for FY 2021 was 9.4149 trillion yen, Expended amount for its amount was 8.2335
trillion yen, Carry-over to the following fiscal year was 728.2 billion, and Unused budget was 453.2 billion yen.

■

In one project of one ministry for FY2021, the amount equivalent to the used reserve funds was diverted to other projects inother line items. In three projects of one ministry for FY2020 and two projects of one ministry for FY2021, the amount equivalent
to the used reserve funds was diverted within the same line item.

■

In 14 projects of six ministries and agencies for FY2020 and four projects of two ministries and agencies for FY2021, the entire
amount equivalent to the used reserve funds for a single decision item was carried over to the following fiscal year.

Status of the basis for calculation of the used reserve funds■

In four projects of two ministries and agencies, the requested amount of reserve funds for use was calculated using a period
exceeding the number of days from the day deciding the use of the reserve funds up to the end of the fiscal year (for all the
projects, the entire amount equivalent to the used reserve funds for a single decision item was carried over to the following fiscal
year).

■In addition to the execution status of the overall project budgets, as a breakdown thereof, the execution status of the amountequivalent to the used reserve funds for each project should be published.

■

The methods of deciding the order of selecting financial sources should be clearly indicated for each project.

■

When the amount equivalent to the used reserve funds is diverted to other projects in other line items or within the sameline item, the circumstances leading to the diversion should be indicated in detail.

■When a large amount of carry-over occurs for the amount equivalent to the used reserve funds, the assumption at the time of
deciding the use of the reserve funds pertaining to the implementation of the project and the execution of the budgets therefor
and the developments leading to the carry-over should be indicated in detail.

Findings

28(Note.) This material is a simplified version of the original Audit Report, and does not necessarily correspond to it; see the September15,
2023 Audit Report (Japanese only).

〈Examples of Selected Audit Findings of the Audit Report for FY2022〉 keynotes

Implementation Status of the Project for Measures to Mitigate Drastic Changes in Fuel Oil Prices
Report on Specific Matters
https://www.jbaudit.go.jp/english/report/pdf/fy2022report_3.pdf

Background of the Audit
The Agency for Natural Resources and Energy (ANRE) implemented the project with the aim of taking measures to control
wholesale prices of fuel oil and curb sharp rises in retail prices, thereby reducing burdens on consumers.

■

The ANRE provided subsidies to establish a fund to a fund establishment corporation in charge of establishing, managing, andoperating the fund. The fund establishment corporation provided fund subsidies for fuel oil wholesalers depending on their sales
volumes. (Examinations and other operations were entrusted to an entity other than the fund establishment corporation, as asecretariat.)■

The period for providing fund subsidies was extended several times and the maximum price of the fund subsidies per-unit of fueloil was also altered several times. Therefore, a large budget was appropriated (a total of 6.2133 trillion yen for FYs 2021 and2022).

Audit Activities■

Main Results of the Audit
Status of the execution of the budget (as of March 2023)

ANRE(Carry-over
3.0222 trillion yen)■

Subsidies3.1910 trillion yen

Fund establishment
corporation(The National Petroleum
Association)

Subsidies2.9893 trillion yen

Entrustment
12.6 billion yen(the upper limit)

Secretariat(Hakuhodo Inc.)

Examinations
Re-entrustment
10.8 billion yen(the upper limit)

Wholesalers
Four parties

Out of 6.2133 trillion yen for FY2022, 3.0222 trillion yen was carried over to FY2023(The fund establishment corporation was
not able to secure a financial institution to deposit such a large amount for the fund)Methods of calculating the amount of fund subsidies■

The prices of fuel oil that wholesalers domestically procured had already incorporated the fund subsidies. If the subsidies areprovided for the sale of such fuel oil, it would result in double funding. Accordingly, the volume of fuel oil domestically procured
needs to be subtracted when calculating the volume covered by subsidies.
Two wholesalers did not offset the amount of the fund subsidies for the portion that became negative with the amount of
those for other types of fuel oil, and thus, fund subsidies (366.11 million yen) were provided twice for the same fuel oil.

Status of Entrusted Operations by the Secretariat■

The upper amount of entrustment costs from the Fund establishment corporation to the Secretariat increased from the original 2.4
billion to 12.6 billion due to the extension of the period.

■

The secretariat re-entrusted price monitoring (at a fee of 6.2 billion yen (the upper limit), i.e., conducting a price survey of morethan 20,000 service stations nationwide every week by phone or through on-site visits) to a subcontractor. However, the results ofthe monitoring were not utilized for analyzing whether retail price increases were properly curbed or not, so it was not clear how
the telephone and on-site survey contributed to the curb of retail prices.

Effects of curbed price by the provision of fund subsidies■

The amount of curbed price increases (2.4508 trillion yen) of gasoline, diesel oil and kerosene was below the amount of theprovided fund subsidies (2.4713 trillion yen) by 20.4 billion yen. Of this amount, gasoline was below the amount of the provided
fund subsidies by 10.1 billion yen. Analysis of the difference between retail and wholesale prices before and after the project
implementation found that the difference expanded after the project at more than half of the analyzed service stations.

Findings■

In order to ensure that the fund subsidies are provided properly in cases where the total domestic sales volume is below thedomestic procurement volume in future estimated payments and settlements, the ANRE should resolve the cases where fundsubsidies were provided twice for the same fuel oil and provide appropriate guidance to wholesalers to prevent the recurrenceof similar cases.

■

ANRE should sufficiently consider the details, implementation methods and report contents of the telephone and on-site
survey, as well as the necessity for the survey, at any time even during the project period.

(Note.) This material is a simplified version of the original Audit Report, and does not necessarily correspond to it: see the FY2022
Audit Report (Japanese only).

29

〈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 inaccounts actually audited. Auditees take remedial action not only for cases reported but also to
Audit Activities

similar cases not actually referred to in the Audit Report.

(2) Rectification and improvement by instruction/advice made in thecourse of the audit
The Board gives instructions/advice to auditees in the course of the audit to rectify and improveinappropriate 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 haveany 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.

30

〈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, bycollecting reports from auditees as to whether damages incurred to the State or organization havebeen 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?
Audit Activities

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 ofmanuals 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.
In addition, with regard to measures taken by auditees in response to "Presentation of Opinions
and/or Demand for Measure" and "Measures Taken", the statuses of implementation of measuresby auditees are to be followed up, and if any situations are found where the measures are not being
implemented, they are to be described in the audit report as "Improprieties".

(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. incharge against the officials (responsible persons and their supervisors) in charge of improprieties in
the Audit Report.

31

Promotion of the Audit Findings
The Board explains the contents of the Audit Report to the Dietand other financial authorities to ensure that audit results will beproperly reflected in future budget compilation and execution.
(1) Submission and Explanation of the Audit Report to the Diet
Audit Activities

The Audit Report is submitted, with the final accounts of the expenditures and revenues of theState, 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 ofAdministration in the House of Representatives and Committee on Audit in the House ofCouncillors. The effectiveness of the audit can be fully achieved only when the Audit Report issufficiently utilized in the Diet, which is the representative organ of the public, and wheninvestigation 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 contents of theProcedures to submit the final accounts of the expenditures
Audit Report or to express theand revenues of the State and the Audit Report to the Diet
Board’s opinions as required.
) )1 , 2 The Cabinet prepares the final

In preparing the audit planand implementing its audits,
the Board fully takes into
consideration requests fromthe Diet and deliberations inorder to respond to the
expectations of the Diet andthe public.

accounts of the State and sends it to theBoard3), 4) The Board audits and verifies the final

accounts of the State and then returns
them to the Cabinet, together with the
Audit Report5), The Cabinet submits the final accountsof the State and the Audit Report to theDiet.

5) Submit

Board of Audit
Audit Report

4) Send4) Return3) Audit

2) SendFinal Accounts

1) Prepare of the State(2) Explanation to financial authorities
The Board holds regular meetings with the Budget Bureau and Financial Bureau of the Ministryof 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 compilationand financial administration.
At these meetings, the Board hears, in return, the background and intention of the budget compilationand points to be noted in budget execution by the financial authorities for reference toward theaudit.

32

〈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
Audit Activities

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 ofState-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, theBoard organizes the following training courses for accounting officials and internal auditors of all
ministries, government-sponsored judicial-persons such as government affiliated institutions andincorporated administrative agencies and local governments on accounting practices and relevantlaws 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 andConstruction 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 findingson 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 ofinternal 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.

33

Activities of the Board
The Board has developed audit activities to respond to social and economicchanges, and public expectations, which have led to a great number of audit
results.
Expansion and development of audit scopes, perspectives and methods
1955

1965

Audit Activities

1947

The Board of Audit Act

Reports on massive improprieties in financial
management of subsidies

Audits to determine whether projects achieve theintended results and produce the expected
effects (objective of “Effectiveness”)
Use of computers in audit to cope withincreasingly complex and growing work ofauditees and to respond to the development of
information society
Audits on public pensions in response toincreasing pension payments due to the aging
society
Audits on medical expenses in response toincreasing national medical expenditure due tothe aging society
Audits on Official Development Assistance(ODA) in response to the expansion of ODA
volume and ODA-related scandals
Audits on consumption tax, following the
introduction of the consumption tax system in1989 and research on audit viewpoints andmethods
Audits on transparency and competitivenessof public procurement to determine whether thebidding and contracting process allows effective
competition and contributes to economical
procurement (“Regularity”)
Improvement of analysis of auditees’ final
accounts to provide more information that helps
reviewing public finance in response to publicconcern about the financial situation andchallenges
Audits on information technology (IT) in linewith the advancement of the informatization in
public administration
Enhancement of audits on stocks of funds
created by the use of state assets and subsidies
in light of the severe fiscal situation
Improvement of audit on matters relating to
the safety of people’s lives in response to
growing concern following disasters including theGreat East Japan Earthquake
Audits related to the expenses for COVID-19
countermeasures, in response to the situation
where those measures are urgent issues

34

1975

1985

1995

2005

2015

1980

Centennial of the establishment of the Board

The Act on Rationalization of Budgetary Execution on Subsidies（1955）

1965

1985

1985
1987

1987

1993

1998

2001

2002

2007

2011

2020

Expansion of types of audit results reported in the Audit Report
1955

Improprieties
Presentation of Opinions and/or
Demand for Measures
Measures Taken

Report on Specific Matters

1975

1985

1995

2005

2015

1947
1962(Audit Report for FY1961)
1967(Audit Report for FY1966)
Audit Activities

Special Description

1965

1976(Audit Report for FY1975)
1991(Audit Report for FY1990)

Special Report on audit requested by
the Diet

1998(Audit Report for FY1997)

Special Report to the Diet and the
Cabinet2006(Audit Report for FY2005)

Measures taken to remedy the
improprieties

2008(Audit Report for FY2007)

Audits on financial statements ofspecial accounting

2009(Audit Report for FY2008)

The first Audit Report after the
implementation of the current Board
of Audit Act
The FY1946 Audit Report
The FY2022 Audit Report35Use of digital services 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 digital services for calculation and analysis of various audit
Audit Activities

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 thesemeasures,the Board conducts field audits efficiently and effectively.

(Audit Information Systems)
Final Accounts Verification Systemverifies 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 digital services to facilitate in-officeaudits 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 digital services technology for their audit activities.

36

Other Activities
Besides the audit, the Board carries out the following audit-related
activities.
(1) Adjudication on the liability for indemnity
Other Activities

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 violationof 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 aprudent manager, or intentionally or by gross negligence, and adjudicates whether the official isliable 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 theBoard.

(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 handlingneeds 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 thenotification of the judgement.

37

Exchange of Information and Views with External Bodies
The Board is engaged in the following activities to make audits
more effective.
(1) Public relations
Exchange of Information and Views with External Bodies

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 audit 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 informationfrom the public.
Furthermore, the Board started official social media accounts: a Facebook page (https://www.
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 2024):●Mr. Mimura Akio (Chairperson: Honorary Chairman, Nippon Steel Corporation.)●Dr. Iio Jun (Professor, National Graduate Institute for Policy Studies)●Dr. Egawa Masako (Chancellor, Seikei Gakuen)●Mr. Kanemaru Yasufumi (Chairman and President, Group CEO, Future Corporation)●Dr. Tomita Toshiki (Visiting Analyst, Nomura Institute of Capital Markets Research)●Mr. Hayashi Makoto (Lawyer)●Ms. Miyajima Kasumi (Commentator, Nippon Television Network Corporation)(In Japanese alphabetical order except for the Chairperson)38

(3) Exchange of views with other audit and inspection institutions
The Board strives to raise its audit efficiency through exchanges of information with other publicaudit and evaluation 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 officesof local governments. Since some of the auditees of the Board may also be subject to audits by
Exchange of Information and Views with External Bodies

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 fromorganizations involved in public
sector auditing gather anddiscuss public audit issues inorder to improve public audits.
34nd Public Audit Forum (2023)(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 toinvestigate 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 ofauditing. They advance their research from the perspective of their respective specialized fields andexchange opinions with Board staff.
The Board issues a biannual Research Journal, including articles contributed by scholars andresearchers, and government officers to enhance communication with researchers in otherinstitutions, 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 developmentof new audit methodologies and future improvements in audit activities.

39

International Activities(1) Research on national audit systems abroad
The Board conducts research on foreign financial control systems such as activities and audit casesof Supreme Audit Institutions (SAIs) around the world.
The Board hosts the Tokyo International Meeting on Audit, inviting high-level officials and senior
International Activities

auditors from SAIs of leading countries in order to seek possible solutions to the common issues
and challenges that SAIs face.

27th Tokyo International Meeting on Audit(Participating SAIs: SAI France, Germany, U.K., U.S.A. and Japan)(2) Participation in International Organization of SAIs
The Board joins the International Organization of Supreme Audit Institutions (INTOSAI: 195
participating SAIs) and the Asian Organization of Supreme Audit Institutions (ASOSAI: 48 SAIs),
one of the INTOSAI regional organizations, to promote international cooperation in the field ofgovernment 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 inorder to discuss important audit-related issues, and to share the latest knowledge and experiences.
Furthermore, the Board, as Capacity Development Administrator of ASOSAI, is in charge ofplanning and implementing capacity development programs to provide audit techniques andpromote knowledge sharing on government auditing among ASOSAI member SAIs.

40

International Activities

77th INTOSAI Governing Board Meeting in Vienna, Austria

Instructors' Design Meeting for ASOSAI Capacity Development Program Workshop in Tokyo(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.
In 2023, the Board co-hosted the programfor SAI auditors of developing countries tolearn audit skills and techniques.

The Knowledge Co-Creation Program in Government
Audit on Public Construction Works (2023)

41

Audit Result Outline- FY2022 Audit Report-

AUDIT RESULT OUTLINE – FY2022 Audit Report –I

Basic Policy on Audit ........................................................................................................ 46
Basic Policy on Audit for 2023............................................................................ 46

II

Summary of Audit Results .............................................................................................. 50
1.

Audit Results by Category and by Auditee ......................................................... 50

2.

Brief Description of Audit Cases ......................................................................... 56
A

Improper/Unreasonable Matters by Ministry/Agency ......................................... 56

B

Improper/Unreasonable Matters by Entity ........................................................... 62

C

Special Report to the Diet and the Cabinet, and Special Reporton audit requested by the Diet, etc. ............................................................. 64(1)

Special Report to the Diet and the Cabinet ................................................. 64(2)

Special Report on audit requested by the Diet ............................................. 64(3)

Report on Specific Matters ............................................................................... 64

4145

I

Basic Policy on Audit

The FY2022 Audit Report constitutes the results of the audit conducted in 2023 based on the Basic Policy
on Audit for 2023.
Basic Policy on Audit for 2023
Approved by
the Audit Commission
on September 6, 2022
To carry out audits for the year 2023 (audit implementation period: October 2022 - September 2023)
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 2023 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, andalso audits such accounts as provided by law.
The Board continuously conducts audits, supervises financial management, ensures its adequacy, andrectifies any defects. Also, the Board verifies the final accounts of the expenditures and revenues of theState through the results of its audits.
The Board prepares and sends the Audit Report to the Cabinet. This Report, together with the final accountsof 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 the significant task of responding to issues suchas the decrease of population, the declining birthrate and the aging society, stagnant potential growth rate,and increased frequency and severity of natural disasters. In addition to these, lingering impacts of the
COVID-19 pandemic remain, and tackling this health crisis continues to be a challenge. Another challenge
is to deal with the impact of increasing international tension on people's lives and economic activities.
Against this backdrop, budgets have been allocated for a broad range of measures, such as those for social
security, education and science promotion, defense, and public works, in recent years. In addition,budgetary provisions have been taken in response to the impact of COVID-19 countermeasures andincreasing international tension on people’s lives and economic activities, and a large amount of reserve
funds have been put in place to prepare for unexpected changes in the situation. Furthermore, in responseto the COVID-19 pandemic, the government has identified inefficiencies in government administration
due to inadequate system coordination between administrative agencies, and is promoting the digitalizationof government with the goal of developing a digital society.
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 reachabout 1029 trillion yen at the end of FY2022. In the budget (after the approval of the supplementarybudgets) for FY2022, the level of dependence on government bonds is about 35% and the total expenditure
required for redemption of national debt comprises about 22% of the general account expenditure, which
poses a major challenge in achieving a sound fiscal position. Under these circumstances, the government
stated that it will not "lower the flag" of fiscal consolidation, working toward the fiscal consolidation goals
stipulated to date. Meanwhile, it also expressed a need to keep a close eye on both domestic andinternational economic conditions, including the impact of the pandemic and the recent rise in prices, andto conduct necessary investigations depending on the situation.

46
46

Moreover, the importance of grasping the results of the State budget execution and reflecting them in thefollowing 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 theaudit results to be better reflected in the budget.
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. Furthermore, significant national expenses have been invested
in order to implement a broad range of measures, including those against the spread of COVID-19, andpublic interest is growing in terms of accountability for administrative and financial related matters.
Against this backdrop, the role of the Board, which audits the execution of budgets and reports the resultsof audits, including raising issues with the public on public administration and finance, has become evenmore important.
3.

Basic Policy on Audit

The Board has been striving to conduct audits in order to respond to public expectations in light of socialand economic trends at all times. With the aim of continuing to properly fulfill its missions in the situation
mentioned above, the Board will make every effort to ensure the strict and fair discharge of its duties andmaintain 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. Furthermore, the Board will strive to
explain the audit results to the public in an understandable manner.
(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•

Digitalization

Additionally, the Board appropriately and in a timely manner audits various measures for COVID-19
countermeasures according to the progress of those measures, noting that a large amount of national
expenses have been spent during a certain period for the purpose of securing systems for the provision of
medical care, and support for employment, business, and daily life.
Furthermore, for measures besides these areas, the Board appropriately and in a timely manner carries out
audits while bearing public interest in mind.

47
49

(2) Audits with various perspectives
The Board conducts audits not only to identify and disclose fraudulent and improper cases but also toevaluate 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 executionof the budgets(b) Regularity: whether the financial management is properly conducted in conformity with theapproved budgets, laws and regulations(c) Economy: whether the implementation of projects and programs or budget execution isadministered 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 theexpected 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 whileconsidering the fact that there have been fraud and improprieties in some ministries. Furthermore, theBoard conducts audits bearing in mind the competitiveness and the transparency of bidding and contracts.
With regard to the economy, efficiency, and effectiveness, in light of the serious financial condition inrecent years, the Board puts greater importance on these perspectives. 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 theirpolicies and various measures carried out by the government for efficient and effective implementation ofadministrative work and projects. The Board also conducts audits with attention to the situations of theassets possessed by the State and funds developed by subsidies.
When 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 itself.
For the purpose of contributing to the improvement of the transparency and accountability of public
administration and finance as well as better project implementation, the Board enhances its audits byconducting analyses based on the financial accounts of the State and entities 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 utilizes information
on public accounting such as financial documents of special accounts prepared with reference to practicesof 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 thelevel of adequacy of financial management to be ensured in auditees, the Board pays due attention to theeffectiveness 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.
(4) Follow-up of the audit findings
The Board continually checks on the state of improvements made by remedial and preventative measuresagainst 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.

48
50

Moreover, when improper cases are identified in the Audit Report, the Board will specify matters related
to the relevant case, such as the cause and improvement measures, and contribute to ensuring adequacy offinancial management not only of the auditee in question, but also of other auditees. In addition, the Board
conducts audits as necessary to confirm if similar cases are occurring 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 under the Provisions of Article 105 in the Diet Act, the Board makes every effort to facilitate theDiet’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. The Board also makes efforts toactively submit reports to the Diet and the Cabinet to communicate its audit results in a timely manner inorder to contribute to the Diet’s sufficient examination of the final accounts.
(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 continuous
review, such as the development of new audit methods to respond to the movements of society andeconomy, 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.
The efforts include: research studies to vary the method and scope of audit activities, including those inlight of international trends of auditing, human resource development for auditing areas of expertise as
well as use of personnel who have acquired practical skills and experts from the private sector, and more
active use of information and communications technology in audit activities, including the use of remote
audit methods. By adopting these practices, the Board conducts a more fulfilling audit for project/programof auditee matters as a whole.
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 humanresources 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 this 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.
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.

49
51

II

Summary of Audit Results

1. Audit Results by Category and by Auditee
The total number of cases listed in the Audit Report for FY2022 was 344. Of these, the numberof cases which were found not appropriate (Improper/Unreasonable Matters) was 333 and theimproper amounts 1 totalled 58,022.14 million yen. (There were also background amounts 2
concerning the problem cases.) The following Table 1 shows the breakdown of the 344 cases
by category.
Table 1: Audit Findings by Category
Category

Number of audit cases

Improper amounts(Unit: million YEN)

• Improprieties (Note 1)285

9,763.75• Presentation of Opinions and/or Demand for

20 (Note 7)

30,960.72

28 (Note 7)

17,306.15

Total of Improper/Unreasonable Matters

333

58,022.14 (Note 8)• Special Report to the Diet and the Cabinet (Note 4)3• Special Report on Audit Requested by the Diet(Note 5)

4• Report on Specific Matters (Note 6)

4Grand total

344

Measures (Note 2)• Measures Taken(Note 3)(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 theBoard 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 inresponse to the findings of the Board.

50

(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 ofAudit 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) 9 cases of “Presentation of Opinions and/or Demand for Measures” and “Measures
Taken”, in multiple situations, have both improper amounts and background amounts.
(Note 8) Some cases are counted both as “Improprieties” and “Presentation of Opinions and/or
Demand for Measures”. As such duplication is deducted from the total, adding each
improper amount does not correspond with the total.

1

Improper Amounts: Improper amounts represent any deficiency in the collection of taxes orsocial 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. The total sum of improper amounts in the Audit Report is sometimes referred to as "thetotal amount of wasteful expenditure." While the total amount of them tend to be referred as “thetotal amount of wasteful expenses”, the Board of Audit of Japan does not use the term "wastefulexpenses" when explaining the Improper/Unreasonable matters, having in mind that they concern
various situations as set forth above.
2
Background Amounts: Background amounts represent overall amounts of payments orinvestments etc. regarding matters concerned. Background amounts are presented when improperamounts 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 oradministration; and 2) which the Board reports to draw public attention to project cases of nonrealization 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 backgroundamounts differ from case to case.

51

Table 2 shows the breakdown of 333 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)
Improprieties

Presentation of Opinions and/or
Demand for Measures

Cases

AmountArticle/Cases

12

59.32

20

298.49

Ministry of Foreign
Affairs1

13.02

Ministry of Finance1240.86

Ministry of Education,
Culture, Sports, Scienceand Technology

24174.59Category
AuditeeCabinet Office

Ministry of Internal
Affairs andCommunications(Note 1)

(Note 4)(Note 3)36 2○

(Note 3)36 2○

(Note 6)

36 1
○

34 ・○
36 1
○

34
○
Ministry of Health,Labour and Welfare

146

3,798.56(Note 6)2

(Note 6)

34 ・○
36 1
○
(Note 6)

36 2
○

52

Ministry ofAgriculture, Forestry
and Fisheries

18

227.03

Ministry of Economy,
Trade and Industry

5

34.81

(Note 6)

36 3○

Measures Taken(Note2)(Note 2)

Amount Cases

Amount(Note 3)14

14,647.76

1

134.1018.63(16.35)

1

9.08

2

1

258.69(Note 3)23

(Note 6)3(Note 6)1

(Note 3)15,080.35

575.31

3

816.17

1,640.58

26

2,073.86

220.95(283.44)5,899.36(1,499.80)

3,534.93(2,821.08)(Note 4)(Note5)154

6,060.45(13.63)(12,016.64)(7,604.44)(283.44)(Note 6)

19,701.98(2,779.84)(1,721,224.61)(1,499.80)

1,772.30(7,604.44)
13,575.59 (Note 6)(2,779.84)
2(1,721,224.61)(Note 3)141.6840.73(16.35)(Note 6)(Note 6)

Amount3179.02(13.63)
98.11(12,016.64)(Note 2)

Cases

(Note 3)82.36

(Note 3)

Total

23

(Note 6)

63,569.74(2,821.08)

Improprieties

Presentation of Opinions and/or
Demand for Measures

Cases

AmountArticle/Cases

Ministry of Land,
Infrastructure,
Transport and Tourism

33

1,457.57

36 1○

Ministry of theEnvironment

11134.53

Ministry of Defense

2

41.74

Category
Auditee

The Okinawa
Development FinanceCorporation
The Promotion and
Mutual Aid
Corporation for Private
Schools of Japan

3(Note 1)34○

Measures Taken(Note2)

Amount Cases(2,632.40)

1135.07

34 ・○
36 1
○

193.19(Note 6)53(Note 2)

Amount1,987.31(442.98)

600.06

8.92

Total(Note 2)

Cases

Amount(Note 6)39

3,444.88(2,632.40)(442.98)11

134.536776.871

193.193

8.92

East Nippon
Expressway Company
Limited36 1○(60,288.39)

1

26.50

2

26.50
(60,288.39)

Central Nippon
Expressway Company
Limited36 1○(47,628.86)

1

23.40

2

23.40
(47,628.86)

West Nippon
Expressway Company
Limited36 1○(282,434.49)

1

61.20

2

61.20
(282,434.49)

Honshu-Shikoku
Bridge Expressway
Company Limited

36 1○(22,639.57)

1(22,639.57)

Japan Pension Service

1

57.00

National Center for
University Entrance
Examinations
Japan Agency of
Maritime Education
and Training for
Seafarers

1

65.98

2

927.91

3

984.91

1

70.05

1

70.05

1

65.98

53

CategoryCategory

Improprieties
Improprieties

Auditee
Auditee
Cases
Cases

Presentation
Presentation ofof Opinions
Opinions and/or
and/orDemand forfor Measures
Measures
Demand(Note 1)1)
(Note

AmountAmount Article/Cases
Article/Cases

Measures
Measures Taken
Taken(Note2)(Note2)

AmountAmount Cases
Cases(Note2)2)(NoteAmountAmount

Total
Total(Note2)
2)
(Note

Cases
Cases

AmountAmountNew
NewEnergy
EnergyandandInIndustrial
Technology
dustrial Technology
Development
Development
Organization (NEDO)
Organization(NEDO)

11

4.18
4.18

11

4.18
4.18

Information-technology
Information-technolPromotion
Agency,ogy Promotion
JapanJapan
Agency,

11

42.90
42.90

11

42.90
42.90

22

1,495.46
1,495.46

Organization
Organization for
for
Small&&Medium
MediumEnSmallEnterprises
andterprises
and Regional
RegionalInnovation
Innovation

22

1,495.46
1,495.46

Asahikawa Medial
MedialAsahikawa
University
University

11

277.03277.0311277.03277.03

Osaka University
University
Osaka

11

2,801.85
2,801.85

112,801.85
2,801.85

Yamaguchi
Yamaguchi
UniverUniversity
sity

11

Hanshin Expressway
Expressway
HanshinCompany
Company Limited
Limited11(Note(Note4)4)(Note(Note4)
4)

4.99
4.99

11

19.99
19.99

11

19.99
19.99

11

99.95
99.95

11

5.30
5.30

Japan Post
Post Co.,
Co., Ltd.
Ltd.
Japan

11

Japan
Japan Sewage
Sewage Works
Works
AgencyAgency

11

5.30
5.30

Total
Total

285
285

9,763.75
9,763.75(Note(Note4)4)(Note(Note 3)3)

20
20

30,960.72
30,960.72

28
28

99.95
99.95

17,306.15
17,306.15

4.99
4.99

(Note
(Note4)4)(Note(Note5)5)(Note3)3) (Note

333
333

58,022.14
58,022.14

34 refer to audit findings under Article 34 of the Board of Audit(Note 1) The cases identified with ○Act, and the cases identified with ○36 refer to those under Article 36.

(Note 2) The amounts in parentheses are background amounts, which are not totaled since the basis
for determining the background amounts differs from case to case.

one casecaseinvolves
involvesboth
boththetheCabinet
CabinetOfficeMinistryof Internal
Affairs(Note 3) Although one
OfficeandandthetheMinistryof Internal
Affairs
andand Communications,the amount
has been
the column
the Ministryof InCommunications,the amount
has been
listedlisted
only onlyin theincolumnof theofMinistryof Internal
ternal Affairs
and Communications.
In addition,
duplication
has eliminatedbeen eliminatedtheAffairs
and Communications.
In addition,
duplication
has beenfrom fromthe total
total numberof cases.
numberof cases.

54

(Note 4) Although one case involves both Ministry of Education, Culture, Sports, Science andTechnology and Yamaguchi University, duplication has been eliminated from the total
amounts.
(Note 5) Some cases are counted both as “Improprieties” and “Presentation of Opinions and/or
Demand for Measures” (related to the emergency comprehensive support grant for COVID19 (for medical care)(the portion pertaining to the facility development project for infection
testing institutions )(refer to 58 page)). As such duplications are deducted from the total,
adding each improper amount does not correspond with the total.
(Note 6) Concerning the categories “Presentation of Opinions and/or Demand for Measures” and“Measures Taken”, 9 cases in total have both improper amounts and background amounts.

55

2.

Brief Description of Audit Cases

The following is a brief description of individual cases.
A Improper/Unreasonable Matters by Ministry or Agency(1) Cabinet Office(Cabinet Office)Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Excessive billing of cost for projects with subsidies or grants:(a) Excessive billing for the costs for a project for child education and childcare benefit
grants(b) Excessive billing for the costs for the project covered by the temporary special benefit
subsidies for child-rearing households (temporary special benefits to be provided tochild-rearing households (advance payments))
b. Not eligible for a subsidy or a grant:
Some of the costs for the project covered by the regional revitalization promotion grant were
not eligible.
c. Non-implementation of a part of projectNon-implementation of a part of the project covered by the regional revitalization promotion
grantd. Excessive design quantities of works
Incorrect calculation for the design quantity for waterproofing urethane coating resulted in
the contract price higher than the actual price.
Demand for Measures ○36 - Calculation of the amount of child education and childcare benefit grants
for certified centers for early childhood education and care(2) Ministry of Internal Affairs and Communications

Improprieties - Some of the costs for the project for the temporary grant for regional revitalization
for COVID-19 were not eligible.
Improprieties - Excessive payment of special allocation tax grant
Improprieties - Excessive payment of special allocation tax grant for post-disaster restoration due toimproper cost calculation when calculating tax grant for post-disaster restoration
Presentation of Opinions ○36 - Status of use of transmission line facilities installed in the Project on
Promoting Advanced Radio Environment Improvements
Measures Taken - Tax credits for special allocation tax grant for expenses required for implementing
the host town exchange initiative(3) Ministry of Foreign Affairs

Improprieties - Fraud by officials
Presentation of Opinions ○36 - Implementation status of grant assistance (Grant Assistance for
Grassroots Human Security Projects)
Measures Taken - Procurement of power generators to be installed in residences of staff of diplomatic
missions abroad

56

(4) Ministry of FinanceImproprieties - Cases of deficiency in tax collection
Measures Taken – Examination of tax returns regarding basic exemption for income tax filed byresidents who received the payment of retirement allowances
Measures Taken – Lease of national land for school facilities at lower rent(5) 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 the improvement of information equipment for publicschoolsb. Excessive State contribution to the cost of compulsory educationc. Excessive payment of subsidies for the university reform promotion (project to enhance
education using digital technologies)
d. Excessive payment of subsidies for the improvement of information equipment for National
Institute of Technology
e. Excessive payment of subsidies for improvement of private school facilities (the emergency
special project for promoting the reinforcement of disaster prevention and other functions)f. Improper design of air-conditioning equipment
g. Excessive payment of grants for improvement of school facilities and the environmenth. Excessive payment of the extraordinary special grant for responding to block fences and airconditioners
i. Excessive payment of subsidies for the project to facilitate utilization of cultural resources
Demand for Measures ○34 ○36 Presentation of Opinions ○36 - Implementation of the project to develop
public school information and communication network environment facilities
Measures Taken - Size of reserve funds based on management expense grants provided to National
University Corporations in relation to significant changes in household economy(6) 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 - Under a contract agreement concerning the storage, management and distribution ofarticles procured for the purpose of preventing the spread of COVID-19, while the excessive
numbers of packets in which fabric masks were packed were recorded in contract by mistakeand excessive expense claims were made, checking was insufficient and subsidies were paid
excessively.
Improprieties - Improper payment of industrial employment stabilization grant-in-aid under employment
insurance
Improprieties - Improper payment of human resource development grant-in-aid under employment
insurance
Improprieties - Improper payment of career enhancement grant-in-aid under employment insurance
Improprieties - Improper payment of old-age employees’ pension benefits under employees’ pension
insurance
Improprieties - Improper State contribution to medical expenses

57

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 subsidies for securing the outpatient acceptance of fever clinics in the flu
season (project to support medical institutions participating in the project to secure structures forcare and examinations for outpatients with fever in preparation for the flu season)b. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion for a prevention of COVID-19 spread project)c. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to the facility development project for medical institutions
hospitalizing COVID-19 patients)
d. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to the outpatient facility development project for returnees & people
having contact with COVID-19 patients)
e. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to the facility development project for infection testing institutions)f. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to medical team (incl. DMAT/DPAT) dispatch project)g. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to the COVID-19 intensive medical institution facility development
project)
h. Excessive payment of the emergency comprehensive support grant for COVID-19 (for medicalcare) (the portion pertaining to the emergency, perinatal & pediatric care system securing project
for acceptance of suspected COVID-19 patients)
i. Unnecessary payment of subsidies for the project to promote medical care provision systems (theportion pertaining to the project to offer daytime support)
j. Excessive payment of State contribution to medical treatment benefits under national healthinsurance
k. Excessive payment of fiscal adjustment grants under the advanced elderly medical service
systeml. Excessive payment of fiscal adjustment grants under national health insurance
m. Excessive payment of subsidies for the project to take disease prevention measures (the portion
pertaining to the project to strengthen functions of core hospitals for collaborative cancer
treatment)
n. Excessive State contribution to specified health checkups and health guidance under national
health insuranceo. Excessive payment of grant for the development of childcare centers
p. Excessive payment of national subsidies for the restoration of social welfare facilities damaged
by disasters
q. Excessive State contribution to the livelihood assistance subsidy
r. Excessive State contribution to disability benefits for children with disabilities in living support
facilities
s. Excessive State contribution to medical expenses of people with disabilities
t. Excessive State contribution to the nursing care benefit58

u. Excessive payment of fiscal adjustment grants under nursing care insurance
v. Excessive payment of comprehensive grant to support disaster victims
Improprieties - Improper collection of expenses required for paying labor insurance benefits
Improprieties - Improper State contribution to nursing care benefits for elderly persons
Improprieties - Improper State contribution to training benefits included in benefits for services andsupports
Improprieties - Improper State contribution to outpatient benefits for children with disabilities
Demand for Measures ○34 - Calculation of settled amount of refunds in calculation of the State
contribution to the livelihood assistance
Demand for Measures ○34 - Payment of introduction support grant for promoting the computerizationof procedures for claiming medical expenses regarding workers' accidents
Demand for Measures ○34 Presentation of Opinions ○36 - Calculation of the amount to be paid asState contribution for specified health checkups conducted by municipalities as an insurer
under national health insurance program and the utilization of medical information
36 - Status of use of next generation sequencers installed using the emergency
Presentation of Opinions ○comprehensive support grant for COVID-19 (for medical care) (the portion pertaining to thefacility development project for infection testing institutions)
Presentation of Opinions ○36 - Effect of subsidies for health services for the elderly conducted by
the Associations of Medical Care Services for Older Senior Citizens and utilization of medical
information
Measures Taken - Implementation status of projects covered by the subsidies for the restoration ofsocial welfare corporations damaged by disasters
Measures Taken - Implementation of the project to install negative pressure devices in nursing homes
Measures Taken - Payment of rewards to labor insurance administrative affairs associations(7) Ministry of Agriculture, Forestry and Fisheries

Improprieties - Violation of accounting laws and regulations of the contract on procurement ofdomestic pork to be served at the Tokyo Olympic and Paralympic Games athletes' village
Improprieties - With regard to a disaster-related project for forest facilities, as the design based onan estimated work volume was not properly altered in accordance with the actual volume, thecontract price was higher than the actual price.
Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Not eligible for a subsidy or a grant:(a) The business continuity support project was not eligible as another government grant
has already been received by the beneficiary for other projects.
(b) Checking of farm bridges conducted as a seismic resistance inspection in the rural area
disaster prevention and mitigation project was not eligible.
(c) Some people were granted the investment fund for next-generation agricultural humanresources but did not start working as farmers and were not eligible.
(d) Some of the costs for the project covered by the grant for agricultural production
measures after the Great East Japan Earthquake were not eligible.
b. Excessive billing of cost for projects with subsidies or grants:(a) Excessive billing for the costs for the project covered by the subsidies for supporting
expanded utilization of flowers in public facilities

59(b) Excessive billing for the costs for a project that received a grant through a grant projectfor developing market scale expansion measures toward the sixth industrializationc. Improper design of works:
Improper design of bed protection worke. Excessive estimate of the cost of works:
Excessive estimate of the cost of the revetment work
f. Excessive receipt of subsidies
Subsidies for the amount of consumption tax after purchase tax credit were not returned.
Presentation of Opinions ○36 Demand for Measures ○36 – Implementation of the direct payment
grants on utilization of rice paddy fields
Demand for Measures ○36 – Maintenance of guard fences installed in the project for forest environment
preservation and improvement
Demand for Measures ○36 – Measures against flood for agricultural water facilities where emergency
power generation systems are installed
Measures Taken – Implementation of the project by using funds created with subsidies for the costof strengthening dairy and livestock profitability (project to introduce machines)
Measures Taken – Estimate of cost for transporting personnel in a commission contract on crop
surveys(8) Ministry of Economy, Trade and Industry

Improprieties – Improper execution of and accounting for projects with subsidies or grants:
a. Excessive payment of subsidies:(a) Excessive payment of subsidies for the restoration cost for common facilities of SME
Cooperatives damaged by disasters, due to inappropriate calculation of the upper limitof national subsidies(b) Excessive payment of subsidies for the commissioned work conducted by the use of thesubsidies for the support project to promote the introduction of renewable energy inFukushima Prefecture due to the failure to alter the amount of commission fees despite
the altered content of the commissioned workb. Improper use of funds created by subsidies:
In the project using a fund created with the subsidies for the project to support self-help ofdisaster-affected businesses, purchased facilities are used for other purposes, and some of
the costs for the project covered by the subsidies were not eligible.
c. Use for purpose other than subsidized objective:
Facilities purchased in the project through the receipt of support subsidies for the improvementof management capabilities in the manufacturing, commercial and service industries wereused for other purposes.
d. Excessive billing of cost for projects with subsidies or grants:
Excessive billing for the costs for the project covered by the subsidies for management
support for SMEs (project to support the strategic enhancement of fundamental technology)
Measures Taken – Requirements for the exclusion from the post adjustment of the granted amountin the project to promote the creation of global demand for content

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(9) Ministry of Land, Infrastructure, Transport and Tourism

Improprieties – Inappropriate separate accounting for the decrease of property value and disposal
credit in public indemnity
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 catch basins(d) Improper design of the bearing portion and abutment of a bridge(e) Improper design of conduits(f) Improper design pertaining to the decision of a site to transport soil arising fromconstruction work(g) Excessive cost of works as a result of improper design of floor slab reinforcement work(h) Improper design of drainage facilities
b. Not eligible for a subsidy or a grant:(a) Some of the costs for the project covered by the subsidies for promoting the revitalizationof and adding high value to existing sightseeing spots were not eligible.
(b) Portion of the grant paid by the government for the project for anti-erosion work should
not have been received.
c. Improper procedures for the disposal of property acquired through a project with subsidies
Improper procedures for the disposal of the site for a city planning roadd. Improper calculation of subsidized amounts:
Improper calculation of the cost of projects relating to cheaper rent on public housing
Improprieties - Fraud by officials
Demand for Measures ○36 - Securing of the quake resistance of communications towers andcommunications stations necessary for maintaining functions of multiplex wireless networks
Measures Taken - Implementation status of measures to prevent deterioration of sewerage systemfacilities
Measures Taken - Registration of departure and arrival sites and no-fly zones for air ambulances
under the system to share information on flights of unmanned planes
Measures Taken - Design of floor slab waterproofing work in bridge construction
Measures Taken - Statements of information on underpasses in water damage hazard maps
Measures Taken - Estimate of a target price for a contract for dispatching personnel who engage in
air traffic controller training as instructors(10) Ministry of the Environment

Improprieties - Improper execution of and accounting for projects with subsidies or grants:
a. Not eligible for a subsidy or a grant:
Cost incurred for development of facilities in projects with grants for promoting establishmentof a sound material-cycle society was not eligible.
b. Excessive payment of a subsidy or a grant:(a) Excessive payment of a grant for the project for promoting the establishment of a soundmaterial-cycle society as a result of inappropriate calculation of site expenses

61

c.

d.

e.

(b) Excessive payment of a grant for the project to curb CO2 emissions (project to promote
introduction of advanced facilities) due to the failure to deduct the proceeds from thesale of iron scraps from the project cost
Unauthorized disposal of property acquired through a project with subsidies
Unauthorized disposal of facilities developed in the project covered by a subsidy for the
project to curb CO2 emissions
Improper design of works
The size of the photovoltaic installation was unreasonable and inappropriate and wasexcessive.
Excessive estimate of the cost of works:
Excessive estimate of the cost of installing heat pumps in the project covered by a subsidy
for the project to curb CO2 emissions(11) Ministry of Defense

Improprieties - As a result of incorrect calculation for accommodation expenses upon conducting
repair work on housing facilities, the contract price was higher than the actual price.
Improprieties - Fraud by officials
Demand for Measures ○34 - Settlement pertaining to the provision of services based on the Acquisition
and Cross-Servicing Agreement (ACSA)
Measures Taken - Estimate of a target price for security and labor expenses for construction work
Measures Taken - Contract agreement concerning the modification of Type 94 minelayers
Measures Taken - Execution of PBL contracts on the supply of components for minesweeping
helicopters and cargo helicopters(1. Cabinet Office (Cabinet Office), 2. Ministry of Internal Affairs and Communications)
Demand for Measures ○36 - Implementation of the project to distribute goods with the temporary
grant for regional revitalization for COVID-19
B

Improper/Unreasonable Matters by Entity(1) The Okinawa Development Finance Corporation

Demand for Measures○
34 Presentation of Opinions ○36 - Ascertaining of the situation after providing
loans for covered housing pertaining to personal home loans in the project to lend housing
funds(2) The Promotion and Mutual Aid Corporation for Private Schools of Japan
Improprieties - Improper accounting of subsidies for private universities’ current expenses(3) East Nippon Expressway Company Limited, (4) Central Nippon Expressway Company Limited, (5)West Nippon Expressway Company Limited, (6) Honshu-Shikoku Bridge Expressway Company Limited

Presentation of Opinions ○36 - Construction methods for reinforcing bridge piers of expressways((3) East Nippon Expressway Company Limited, (4) Central Nippon Expressway Company Limited, (5)West Nippon Expressway Company Limited)
Measures Taken - Frequency of non-destructive testing for precast concrete floor slabs

62

(7) Japan Pension Service

Improprieties - When estimating a target price for a commission contract on security services, perhour labor cost for security guards was calculated incorrectly and the number of hours per
day for deploying security guards on weekdays was set excessively, and as a result, thecontract price was higher than the actual price.
Measures Taken - Estimate of a target price for a contract agreement concerning affairs of receiving
national pension premiums
Measures Taken - Information security measures for statistics management devices (servers) or otherequipment used at call centers of the Japan Pension Service(8) National Center for University Entrance Examinations

Measures Taken - Procurement of exam question booklets and listening test equipment for the unified
university entrance exam
(9) Japan Agency of Maritime Education and Training for Seafarers

Improprieties - Upon executing a contract for separating terminals used at the Agency from theinternet as information security enhancement measures, the Agency failed to perform
required duties appropriately on a timely basis, and as a result, part of the equipment rented
for building a separation system remained unused and additional expenses occurred.
(10) New Energy and Industrial Technology Development Organization (NEDO)

Improprieties - The Organization failed to manage machines and devices that subcontractors
purchased or manufactured in commissioned projects as its acquired property, and as a result,suffered a shortage in the proceeds from the sale of its own assets.
(11) Information-technology Promotion Agency, Japan

Improprieties - Upon payments to the treasury of unnecessary property related to the government's
contributions in the account for capital contributions to regional projects, the Agency filed an
application that included the amount of dividends from profit and loss transactions, and adecrease of the Agency's capital of the same amount was determined and the relevant notice
was issued by the competent Minister, and as a result, it was inappropriate that the amount of
capital was understated at the same amount in the Agency's financial statements.
(12) Organization for Small & Medium Enterprises and Regional Innovation, Japan

Measures Taken - Retention of funds for loans in the project to support development of facilities andequipment of SMEs affected by the Kumamoto Earthquake
Measures Taken - Retention of project expenses granted as funds for subsidies for sustaining small
businesses(13) Asahikawa Medial University, (14) Osaka University

Improprieties - Inappropriate indications in financial statements due to the misunderstanding of theuseful life for tangible fixed assets to be applied upon their depreciation

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(15) Yamaguchi University

Improprieties - Under a contract on the development of students’ health checkup support and data
management system, the provision of services was not completed due to the failure toappropriately provide information to the contractor as defined in the specifications, but the
University had the contractor submit a delivery slip and paid the contract amount in full inviolation of its accounting rules, while pretending that the provision of services was completed.
(16) Hanshin Expressway Company Limited

Improprieties - In a commission contract on seismic reinforcement and design work, the applied
standards for the judgment on the necessity of seismic reinforcement work for bridge piers
and the design based on the judgment results were not appropriate, and as a result, the outcome
failed to achieve the original purpose, as it became necessary to conduct the work again.
(17) Japan Post Co., Ltd.

Measures Taken - Payment of commission fees for the service to sort out packages by delivery areathat is contingent to a commission contract on the collections and deliveries of packages(18) Japan Sewage Works Agency

Improprieties - Upon conducting seismic reinforcement work for an aqueduct bridge, the design ofthe bridge fall prevention system was inappropriate and the safety required in the event of anearthquake was not secured for the box culverts, and the purpose of the work was not achieved.
C

Special Report to the Diet and the Cabinet, and Special Report on audit requested by theDiet, 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:- Implementation status of the project to secure sickbeds for COVID-19 patients- Implementation status of the project for the reconstruction from the Great East Japan Earthquake- Implementation status of the COVID-19 vaccination project(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 initiatives toward the Tokyo Olympic and Paralympic Games- Status of bidding, closing of bids, contract amounts for three projects under the Act on Special
Measures Concerning the Handling of Environmental Pollution by Radioactive Materials- Implementation status of the 3-year emergency measures for preventing and mitigating disasters andbuilding national resilience- Status of use of the reserve funds(3) Report on Specific Matters

The Board conducted audits on the following matters which were found necessary to be included in the
Audit Report:

64

- Status of filing of tax returns for sustainability subsidies granted to sole proprietorships- Initiatives for securing a stable supply of food
- Implementation status of the project for measures to mitigate drastic changes in fuel oil prices- Status of loan claims pertaining to COVID-19 special loans to SMEs provided by the Japan FinanceCorporation and other financial institutions

65

The Board of Audit Act

I hereby sanction and promulgate the amendment of the Board of Audit Act effectedfollowing 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. 61 of 2021)
THE BOARD OF AUDIT ACT CONTENTS
CHAPTERⅠ ORGANIZATION ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
SectionⅠ General Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
SectionⅡ Commissioners ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 70
SectionⅢ Audit Commission ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71
SectionⅣ General Executive Bureau ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 71
SectionⅤ The Review Board of the Board of Audit for the Information Disclosureand Personal Information Protection
72
CHAPTERⅡ MANDATE ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 74
SectionⅠ General Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 74
SectionⅡ Scope of Audit ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 74
SectionⅢ Auditing Methods ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 75
SectionⅣ Statement of Audit ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 76
SectionⅤ Liabilities of Accounting Officials ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 77
SectionⅥ Miscellaneous Provisions ꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 78

CHAPTERⅢ REGULATIONS OF THE BOARD OF AUDITꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏꞏ 78

69
63

THE BOARD OF AUDIT ACT

CHAPTERⅠⅠ ORGANIZATION
SectionⅠ
Ⅰ 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
Ⅱ Commissioners
Article 4 (1) Commissioners are appointed by the Cabinet, with the consent of both Housesof the Diet.
(2) Notwithstanding the provisions of the preceding paragraph, if the term of officeof a Commissioner expires or a vacancy occurs among the Commissioners, andthe 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, theCabinet may appoint a Commissioner without obtaining the consent of bothHouses of the Diet.
(3) In the case referred to in the preceding paragraph, approval must be sought fromboth Houses of the Diet at the first session of the Diet convened after theappointment. If approval is not obtained from both Houses of the Diet, therelevant 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 five years, and a Commissioner may bereappointed 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 thepredecessor.
(3) Commissioners retire from office upon reaching the age of 70.
Article 6 A Commissioner retires from office if a resolution is adopted by both Houses of theDiet following a decision by mutual consent of the other Commissioners that theCommissioner 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 theCommissioner has in fact breached their obligation in the course of duty.
Article 7 A Commissioner forfeits their office if the Commissioner is sentenced to apunishment of imprisonment without work or greater by a criminal court.

70
64Article 8 Except in cases referred to in the latter part of Article 4, paragraph (3) and thepreceding two Articles, a Commissioner does not forfeit their office against theirown will.
Article 9 A Commissioner may neither concurrently hold any other office, nor become amember of the Diet, an employee of a local government, or a member of a local
assembly.

SectionⅢ
Ⅲ 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 ofArticle 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); andArticle 6, paragraphs (1) and (4) of the Act on the Responsibilities ofGovernment 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 thatAct);(vii) decision for examination under the provisions of Article 35;(viii) presentation of opinions or demand for measures under the provisions ofArticle 36;(ix) presentation of opinions under the provisions of Article 37 of this Act andArticle 9, paragraph (5) of the Act on the Responsibilities of Government
Employees Who Execute the Budget.

SectionⅣ
Ⅳ General Executive Bureau
Article 12 (1) The General Executive Bureau undertakes general affairs and functions ofaudit and examination under the direction and supervision of the Audit
Commission.

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65

(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 theorganizational 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, andother 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 officeof 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 ordersof 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 Regulationsof the Board of Audit.

SectionⅤ
Ⅴ 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

7266and deliberate the request for administrative review under the provisions ofArticle 19, paragraph (1) of the Act on Access to Information Held byAdministrative 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 andPersonal 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 andstrong 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 thequalifications 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 Housesof the Diet cannot be obtained because the Diet is not in session or due to thedissolution 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 fromboth 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 ofoffice 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 tocontinuously 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 performtheir duties due to a mental or physical disorder, or finds that a Member is inbreach of obligation in the course of duty or has engaged in conduct
unbecoming a Member, the President of the Board of Audit may dismiss theMember, after having obtained the consent of both Houses of the Diet.
(8) A Member must not divulge any confidential information learned in the courseof duty. The same applies after a Member has left office.
(9) While in office, a Member may neither become the officer of a political partyor 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 andPersonal Information Protection. In this case, the phrase the "Review Board" inthat chapter is deemed to be replaced with the "Review Board of the Board ofAudit for the Information Disclosure and Personal Information Protection.."

Article 19-5

A person who has divulged any confidential information, in violation of the73
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provisions of Article 19-3, paragraph (8), is subject to imprisonment with workfor 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.

CHAPTERⅡⅡ MANDATE
SectionⅠ
Ⅰ General Provisions
Article 20 (1) The Board of Audit audits the final accounts of the revenues and expendituresof the State, pursuant to the provisions of Article 90 of the Constitution ofJapan, 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 forauditing.
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
Ⅱ 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 ingovernment 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 ormore 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 theState;(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 the74
68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 thepreceding 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 thepreceding paragraph, they are to notify the parties concerned of this.

SectionⅢ
Ⅲ Auditing Methods
Article 24 (1) An entity subject to audit by the Board of Audit must, pursuant to theregulations 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 iscreated in electronic form, magnetic form, or any other form that cannot beperceived by the human senses, and which are established by the Regulationsof 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 statedin the relevant statement of accounts have been recorded; the same applies
hereafter) and documentary evidence (including electromagnetic records onwhich 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 thereceipts and payments of cash, and receipts and transfers of goods andsecurities 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 aregular 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, othermaterials, 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 orrequested 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 thesupervisory 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 preparedpursuant 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 theapproved 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 theresults 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 thatAct);(vii) matters on which the Board of Audit has presented its opinions or for whichmeasures 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 whichmeasures 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 thestatement of audit referred to in the preceding Article, it may explain the statementby having a Commissioner appear before the Diet or in writing.
Article 30-2

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The Board of Audit may, at any time, report to the Diet and the Cabinet on matterson which the Board of Audit has presented its opinions or for which measures aredemanded pursuant to the provisions of Article 34 or 36, or on other matters thatthe Board of Audit finds it particularly necessary to report.

Article 30-3

If the Board of Audit receives a request from either one of the Houses, theCommittees thereof, or any of the Research Committees of the House ofCouncillors 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 mattersrequested and report the results.

SectionⅤ
Ⅴ 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 headof 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 theregulations 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 tocomply 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 theirfailure 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 orotherwise caused damage to the State by handling goods in violation of theprovisions 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, theBoard 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 theindemnity 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 toindemnify pursuant to the provisions of paragraph (1) or (2), the Board ofAudit may re-adjudicate the liabilities for only another five years if it findsthat the adjudication was improper, due to an error or omission, etc., in thestatement of accounts or documentary evidence. The provisions of thepreceding 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.
7771SectionⅥ
Ⅵ 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 therelevant ministry or agency or a relevant person, or demand them to takeappropriate measures for the financial management, and may have them takemeasures to rectify and improve subsequent management.
Article 35 (1) If the Board of Audit has been requested by an interested party to examine thehandling of financial management conducted by an official who handles theaccounting 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 thehandling needs to be corrected, it must notify its judgement to the competentauthorities or other responsible parties.
(2) Upon receipt of a notification referred to in the preceding paragraph, thecompetent 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 mattersconcerning 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 andmay present its opinions thereon:(i) enactment, amendment, or repeal of laws and regulations concerning Statefinancial management;(ii) enactment, amendment, or repeal of rules and regulations concerning receipts
and payments of cash, receipts and transfers of goods and securities, andbookkeeping of the State.
(2) If an official who handles the accounting for the State seeks the opinion of theBoard of Audit regarding the matters on which the official has questions in
performing their official duties, the Board of Audit must give its feedback onthese matters.

CHAPTERⅢⅢ REGULATIONS OF THE BOARD OF
AUDITArticle 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:
Toranomon (Subway: Ginza Line)
Kasumigaseki (Subway: Chiyoda Line, Hibiya Line, Marunouchi Line)
Toranomon-hills (Subway: Hibiya Line)
Published by:
Board of Audit 3-2-2, Kasumigaseki, Chiyoda-ku, Tokyo 100-8941 Japan
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