History of the Board of Audit from 1880 to 2010

Board of Audit of Japan

Greeting the Publication of History of the Board of Audit from 1880 to 2010(English Translation of Kaikei Kensain Hyaku-sanju Nen Shi)
The Board of Audit (hereinafter referred to as "BOA") was founded on March 5, 1880. Since then, it
has compiled histories of its activities several times. On March 5, 2010, in commemoration of its 130th
anniversary, BOA published the Japanese version of this book, Kaikei Kensain Hyaku-sanju Nen Shi,
which is now translated into English. As President of BOA, I am extremely pleased that the publication of
the English version of the book will provide an opportunity for Supreme Audit Institutions (SAIs) andother stakeholders around the world to learn about BOA's activities to date and understand the audit
activities in Japan.
Japan embarked on a course of modernization when the Meiji government declared the restoration ofimperial rule 150 years ago in 1868. BOA was established in 1880 amid such transformation process.
After investigating the audit systems in western countries from 1887 to 1888, the government enacted
Japan's first Board of Audit Act (BOA Act) in 1889, modeling it after the audit systems of various
countries, mainly Prussia at the time. In the audit system established under the Constitution of the Empireof Japan, BOA was placed under the direct control of the Emperor. Then, the Constitution of Japan cameinto effect in 1947 after World War II, and financial democracy was to be achieved more strictly under the
new Constitution. BOA became an organization which is independent from the Cabinet, and neither
belongs to the Diet (Legislature) nor the court, and has fulfilled the great responsibilities of being the sole
SAI in Japan.
BOA conducts audit with the objectives of accuracy, regularity, economy, efficiency, effectiveness,
etc. and reports the results of audit to the Diet via the Cabinet. The matters reported to the Diet include"improprieties" which are found to be in violation of laws, cabinet orders, or the approved budget or foundto be improper as a result of the audit, and "presented opinions and demanded measures" whereby BOA
directly presents its opinions to or demands measures from the relevant government offices for rectificationand improvement and presents its opinions to and demand measures for improvement of laws, regulations,or systems, if necessary. In addition, with the 1997 amendment of the BOA Act, etc., BOA came to also
report to the Diet the results of audit requested by the Diet. Furthermore, the amendment of the BOA Act
in November 2005 enabled BOA to report to the Diet and the Cabinet on matters regarding which BOA
has presented its opinions or demanded measures, or on other matters that BOA finds it particularly
necessary to report, at any time without waiting for the preparation of the annual audit reports.
The Japanese society and economy currently face difficult issues including a notably fast decline of
the birthrate, aging and a decrease of population compared to other developed countries, an increase insocial security expenses in line with the decline of the birthrate and aging of the population, slowdown of
economic growth potential, and the aging of social capital. At the same time, Japan's financial condition
has been deteriorating with the amount of outstanding government bonds continuing to swell as a result of
issuing government bonds every year, for example. Under such circumstances, BOA makes effort todiversify its audit methodologies and the fields of auditing in order to respond to the increased complexityof the society and economy and the associated changes in administration and public finance. In doing so,

BOA is enhancing its audit capability by exploring new audit methodologies through study and research ofinternational audit trends and other matters, and is conducting audit with a view to achieve audit results on
matters of special public concern. History of the Board of Audit from 1880 to 2010 introduce, inter alia,
the historical transition of how the Japanese audit system has been expanded, and how BOA's audit
activities have substantially contributed to the securing of transparency of public sector accounting and to
the government's fulfillment of accountability.
In recent years, the international community has widely shared the recognition that SAIs could play
an important role in initiatives to improve the administration's accountability and transparency and toprevent corruption to promote sustainable development. In such context, increasing emphasis is placed on
further improving the functions of SAIs and promoting their effective audit of public procurement, throughinternational cooperation.
Amidst such development, in order to share information with other SIAs and cooperate in the capacity
development of SAIs of developing countries as a member of the International Organization of Supreme
Audit Institutions (INTOSAI), BOA has actively participated in decision making at INTOSAI, and has
played a central part in driving the capacity development activities of the Asian Organization of Supreme
Audit Institutions (ASOSAI) as the Secretary General of ASOSAI for nine years from 1991 and as the
Capacity Development Administrator of ASOSAI from 2000.
Founded in 1880 and having a history of over 130 years, BOA has persistently made efforts to
respond to the needs of the respective times. This year marks the 50th anniversary of the adoption of the
INTOSAI Standing Orders and establishment of INTOSAI as a permanent international institution at the
VI International Congress of the International Organization of the Supreme Audit Institutions (INCOSAI)
held in Tokyo in 1968. While the public sector accounting systems around the world are undergoing
dramatic changes, INTOSAI has been also stepping up its activities to promote international cooperation in
public sector auditing. I hope this History of the Board of Audit from 1880 to 2010, which looks back at
the historical transition, background and BOA's audit activities, would be of help to SAIs and otherstakeholders for future studies.
October 2018

Teruhiko KAWATO, President of the Board of Audit

Foreword for Original Japanese Version

Welcoming the Publication of Kaikei Kensain Hyaku-sanju Nen Shi ＊BOA was founded on March 5, 1880, and it will commemorate its 130th anniversary on March 5 ofthis year. It was five years after BOA's establishment that the Cabinet system was introduced, and five
more years later that the Imperial Diet was inaugurated. BOA is a state organ with a long history,
conducting audit of the government account for a full 130 years.
Japan's modern fiscal supervision system can be further traced back to the Shi of Audit, which wasestablished in 1869, approximately ten years earlier than BOA. After that, the Ryo of Audit wasestablished in 1871, and it was renamed the Audit Bureau in 1877. However, the system of audit by anindependent state organ became established with the founding of BOA.
BOA is a constitutional organization which enjoys independence from the Cabinet, and it is mandated
to audit final accounts of the expenditures and revenues of the State, prepare an annual audit report basedon the audit results, and submit it to the Diet through the Cabinet. Under this mandate, BOA has
endeavored to conduct audit that precisely responds to changes in the social and economic situations anddemands of the times.
Audit is a task that will always be required as long as a State continues to exist. I hope that BOA willcontinue to sufficiently fulfill the expectation of performing this important role by enhancing its audits andsecuring neutrality, and thereby gaining further trust of the people and taxpayers, on top of the tradition
and trust it has built over the long years of history.
The work of writing, editing and compiling Kaikei Kensain Hyaku-sanju Nen Shi has been carried out
by BOA officials under the initiative of the BOA 130-year history editing project team formed in the
General Executive Bureau since around October 2008 while I was in office as President of BOA. I deeply
appreciate the great efforts of the officials, and sincerely hope that Kaikei Kensain Hyaku-sanju Nen Shi
will be helpful for many people in contemplating BOA's future audits.
March 2010

Kazuhiko FUSHIYA, former President of the Board of Audit＊

The Japanese original version of History of the Board of Audit from 1880 to 2010.

Preface to Original Japanese Version

Preface
BOA was founded on March 5, 1880, as an independent state organ under the direct control of
Dajokan (the forerunner of the Cabinet), and commemorates its 130th anniversary this year. During thiscourse, BOA has consistently fulfilled the mission of the State's fiscal supervision authority, first as anorgan directly controlled by the Cabinet under the cabinet system established in 1885, then as aconstitutional organ under the direct control of the Emperor under the Constitution of the Empire of Japan
promulgated in 1889, and subsequently as a constitutional organ independent from the Cabinet under theConstitution of Japan that came into effect in 1947.
Looking back, BOA has engaged in various audit activities over the past 130 years. Under the former
system, BOA established various systems that served as the basis of the current audit system, including inoffice audits and field audits, in its early days. It also conducted extensive audits of the growing
armaments expenditures, though under some restriction, and achieved many good audit results. In addition,
BOA presented addresses to the Emperor, recommending legal or administrative revisions, based on
Article 15 of the former Board of Audit Act (BOA Act).
Meanwhile, under the new system, BOA reported large numbers of cases of fraud and illegal acts,
which had frequently occurred due to the postwar confusion and disordered accounting, as "improprieties"
between the mid-1940s and mid-1950s under its drastically reinforced audit framework. In the early 1960s,
BOA's activity expanded from merely reporting improprieties, to also proactively making "presentation of
opinions" and "demand for measures" on laws and regulations, systems, or administration. Between the
mid-1960s and mid-1970s, BOA conducted effectiveness audit from the viewpoint of the effects produced
by projects, and introduced "measures taken" in annual audit reports in order to publicize diverse audit
achievements. Between the mid-1970s and mid-1980s, BOA introduced "special description" in annual
audit reports as a new category for presenting audit findings so as to also actively focus on difficult
matters that, for example, involve the State's policy issues and to raise issues widely to the public.
Between the mid-1980s and the late 1990s, BOA conducted audit of new audit subject matters, such as
intangible subjects including medical expenses and pension as well as official development assistance, in
response to the rapid aging and globalization trends, in addition to tangible subjects including public works
which had been the main subjects until then. It also started to report on matters of special public concern
as "reports on specific matters" in annual audit reports in order to publicize the states of audit on thosematters.
In recent years, BOA has further pushed forward efforts to rectify auditees' financial management so
as to meet the people's expectations, by also actively examining basic accountancy, such as conducting
audit with focus on the presence of fraud or the properness of bidding and contract work, and reporting
many improprieties of outsourcing fees, etc. as service providers to whom work was outsourced by theState, etc. were also included in audit subject matters with the 2005 amendment of the BOA Act.
Moreover, BOA has conducted audit that responds to concerns of the Diet and the people more proactively
than ever before by also preparing "special report on audit requested by the Diet" which was introduced by

the 1998 amendment of the BOA Act and preparing "special report to the Diet and the Cabinet" which
was introduced by the 2005 amendment of the BOA Act. Furthermore, the individual audit findings havebecome more diverse and deeper regarding audit objectives of accuracy, regularity, economy, efficiency,
effectiveness, etc.
Such transition of audit activities testifies to BOA's continuous efforts to meet the demands of thetimes amid changes in the social and economic situations and in the people's expectations in administrationand public finance.
Looking at the environment surrounding BOA today, Japan's society and economy are facing
numerous issues such as the rapid progress of population aging and declining birth rate, world economiccrisis, and global environmental issues, and Japan's fiscal conditions are worsening with the outstanding
amount of national government bonds rising constantly as a result of issuance of national government
bonds year after year. In addition, increasing emphasis has been placed in recent years on ex post
verification and fulfillment of accountability on budget execution and policy implementation, so BOA's
expected role has been growing substantially as well.
BOA intends to continue to pursue its tasks with an aim to make audit results that meet the people's
expectations by venturing to address audit subject matters in new fields and develop new audit techniques,
while constantly questioning itself as to whether its audit is adapted to the changes of the times.
Kaikei Kensain Hyaku-sanju Nen Shi has been compiled in commemoration of BOA's 130th
anniversary primarily for the purpose of reaffirming BOA's mandate and way of being and contributing to
its future audit activities. It would be a pleasure if this book will help promote people's understanding of
BOA's work and assist them in studying the ideal future of BOA's audit.
March 2010

Masaki NISHIMURA, President of the Board of Audit

Table of contents

Table of contents
Greeting the Publication of History of the Board of Audit from 1880 to 2010 (English Translation of
Kaikei Kensain Hyaku-sanju Nen Shi) .....................Teruhiko KAWATO, President of the Board of Audit
Foreword for Original Japanese Version Welcoming the Publication of Kaikei Kensain Hyaku-sanju Nen Shi.......................................................................Kazuhiko FUSHIYA, former President of the Board of Audit
Preface to Original Japanese Version Preface ......................Masaki NISHIMURA, President of the Board of Audit

I. BOA over the Past 130 Years
Part 1

Founding of BOA

Chapter 1
Section 1

Forerunners of BOA........................................................................................................................5
Shi of Audit .................................................................................................................................5

Subsection 1

Establishment of the Shi of Audit .....................................................................................5

Subsection 2

Organization........................................................................................................................7

Subsection 3

Mandate ..............................................................................................................................7

Subsection 4

Operations...........................................................................................................................9

Hashutsu (dispatch) / Ritsuan (proposal) / Ringi (request for approval)
Subsection 5

Rules on Finance and Accounting soon after the establishment of
the Meiji government .......................................................................................................10

Subsection 6

Rules on the organization of the Kan of Finance and Accounting ................................11

Subsection 7

Account ledgers and reports.............................................................................................12

Section 2

Ryo of Audit and Audit Bureau................................................................................................14

Subsection 1

Establishment of the Ryo of Audit ..................................................................................14

Subsection 2

Organization......................................................................................................................14

Subsection 3

Mandate ............................................................................................................................15

Subsection 4

Divisions ...........................................................................................................................16

Subsection 5

Operations.........................................................................................................................17

Budget survey/Audit of the final accounts/Audit conducted by dispatching officials/Rules on OnSite Documentary Audits by Auditors and the Audit Bylaw/Development of public accounting law
and adoption of double-entry bookkeeping
Chapter 2
Section 1

Establishment of BOA ..................................................................................................................28
Changes in BOA's Organization................................................................................................29

Subsection 1

Office Organization ..........................................................................................................29

BOA's initial structure/Enactment of the Rules on the Organization of the Board of Audit/
Amendment of the Rules on the Organization of the Board of Audit/Promulgation of the Rules on
the Board of Audit/Changes in the President of BOA immediately after its establishmentiTable of contents

Subsection 2

Divisions and Responsibilities .........................................................................................30

Divisions and responsibilities as designated in March 1880/Divisions and responsibilities as
designated in June 1881/Divisions and responsibilities as designated in January and February 1882/
Divisions and responsibilities as designated in August 1882 and January 1883/Divisions andresponsibilities as designated in December 1883/Divisions and responsibilities as designated in
October 1886
Subsection 3

Authority...........................................................................................................................33

BOA's initial authority/Enactment of the Public Accounting Act/Enactment of the Rules on the
Board of Audit/Amendment of the Rules on the Board of Audit and the Public Accounting Act
Section 2

Operation of Audit Activities ....................................................................................................36

Subsection 1

Audit Methods ..................................................................................................................36

Changes in audit methods/Reform of the method of providing supporting evidence
Subsection 2

Documentary Evidence.....................................................................................................38

Subsection 3

Implementation of Audit ..................................................................................................39

Audit of auditees' revenue and expenditure/Audit of accounting of treasury money/Audit of reportson the revenue and expenditure accounts/Audit of statements of increase and decrease of national
government bonds/Audit of operation expenses/Audit of separate accounts/Audit of various reports/
Audit of government property and goods/On-site (field) audit
Subsection 4

Proposals...........................................................................................................................47

Discussions on establishment of retirement allowance for civil officials/Proposal on Inspection of
Branches/Proposal on the bearers of expenses/Proposal on amendment of the Regulations on
Domestic Travel Expenses/Proposal on numeric notation/Discussion on establishing a northern
capital in Kamikawa, Hokkaido
Subsection 5

Audit and Report of the Audit Results............................................................................50

Report on audit/Report on audit results
Subsection 6
Part 2Other activities..................................................................................................................52

BOA under the Constitution of the Empire of Japan

Chapter 1
Section 1

Establishment of BOA under the Constitution of the Empire of Japan ......................................57
Provisions on Settlement of Accounts under the Constitution of the Empire of Japan ..........57

Subsection 1

Changes in Article 72 of the Constitution of the Empire of Japan ................................57

Subsection 2

Explanation of Article 72 of the Constitution in Kenpo Gikai (Commentaries on theConstitution) .....................................................................................................................60

Section 2

Background of Enactment of the BOA Act..............................................................................62

Subsection 1

Three Drafts of the Ordinance on the Board of Audit....................................................62

Subsection 2

Deliberation Process of the Draft BOA Act....................................................................64

Section 3

Outline and Amendments of the BOA Act...............................................................................67

Subsection 1

Outline of the BOA Act...................................................................................................67ii

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Organization/Authority, etc.
Subsection 2

Reform of the finance and accounting system and amendment of the BOA Act..........76

Reform of the finance and accounting system/Amendment of the BOA Act/Measures on theRegulations on Accounting
Chapter 2
Section 1

BOA under the Former Constitution in the Meiji Era (1889〜1912).........................................84
Changes in BOA's Organization................................................................................................84

Changes in BOA's organization/Setting up of members/Developments on establishment of the Taiwan
Branch Office/Dispatch of officials to the Korean Empire/Changes in the tasks of Audit Bureaus andDivisions
Section 2

Operation of Audit Activities ....................................................................................................88

Subsection 1

Submission of accounts and in-office audit.....................................................................88

Establishment of the Rules on the Submission of Accounts/In-office audit
Subsection 2

Field audits .......................................................................................................................90

Establishment of field audits
Subsection 3

Commissioned audits........................................................................................................93

Implementation of commissioned audits
Subsection 4

Changes in rules on audit affairs .....................................................................................96

Changes in rules on audit affairs
Subsection 5

Determination against Accounting Officers.....................................................................97

System of determination against Accounting Officers/Comparison between the Japanese and Frenchsystems of liability for indemnity/Number of cases and examples of determination on liability forindemnity
Subsection 6

Annual audit report and annual audit report to the Emperor........................................111

Annual audit report/Preparation of annual audit reports/Period for submission of the annual audit
report/Annual audit report to the Emperor/Issue of attendance of Members at the Diet
Subsection 7

Restrictions on audit.......................................................................................................116

Special law that restricted audit of armaments expenditures
Subsection 8

Audit of emergency armaments expenditures................................................................118

Audit of emergency armaments expenditures
Section 3

Overview of Audit Results ......................................................................................................121

Subsection 1

Audit cases reported in the annual audit report ............................................................121

Outline/Audit of armaments expenditures/Gifu earthquake disaster recovery projects/Diverse
Improper/Unreasonable Matters of the Imperial Railway/Criticism of state monopoly on salt/State's
loss caused by state monopoly on tobacco/Audit of sugar excise tax/Emergency armaments
expenditures of the Sino-Japanese War/Emergency armaments expenditures of the Russo-JapaneseWar
Subsection 2

Annual audit report to the Emperor...............................................................................131

Opinion for legal or administrative revisions/Opinion on revision of subsidies for regional civiliii

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engineering expenditures
Section 4

Discussions on BOA's Authority.............................................................................................136

Subsection 1

Problems in Application of Article 14 of the BOA Act ...............................................136

Verification and confirmation of the final accounts/Scope of violations of laws and regulations to
be reported in annual audit reports
Subsection 2

Argument with the Ministry of Postal and Telecommunications over audit mandate...137

Subsection 3

Dispute over presentation of the graph of progress in Audit on Emergency Armaments
Expenditures of the Sino-Japanese War to the Emperor ..............................................139

Subsection 4
Chapter 3
Section 1

Issue of attendance of Members at the Diet..................................................................141

BOA in the Taisho Era (1912〜1926) .......................................................................................143
Changes in BOA's Organization..............................................................................................144

Changes in BOA's organization/Setting up of technical advisors/Treatment of officials
Section 2

Operation of Audit Activities ..................................................................................................148

Subsection 1

Submission of accounts and in-office audits .................................................................148

Consolidation of rules on the submission of accounts
Subsection 2

Field audits .....................................................................................................................151

Establishment and development of field audits
Subsection 3

Changes in the rules on audit affairs .............................................................................151

Changes in rules/Procedures of audit affairs
Subsection 4

Determination on Accounting Officers..........................................................................155

Changes in the system/Status of determination on the liability for indemnity of Accounting
Officers/Exemption from the liability for indemnity through a pardon/Consideration of the unsworn
witness system
Subsection 5

Annual audit report and annual audit report to the Emperor........................................158

Acceleration of the time for preparation of the annual audit report/Audit report on national property
Subsection 6

Others..............................................................................................................................160

Audit of emergency armaments expenditures for World War I/Great Kanto Earthquake and BOA/
Audit of subsidized or specially guaranteed entities, etc.
Section 3

Overview of Audit Results ......................................................................................................168

Subsection 1

Audit cases reported in the annual audit report ............................................................168

Outline/Audit of armaments expenditures/Audit of the recovery and reconstruction expenses/
Siemens-Vickers-Mitsui scandal/Yahata Steel Works case/Opium-trafficking incident/Audit ofpublic money/Audit of emergency armaments expenditures for World War I
Subsection 2

Annual audit report to the Emperor...............................................................................177

Opinion for law amendment or administrative revision/Audit findings on subsidized or speciallyguaranteed entities, etc.
Section 4

Discussions on BOA's Authority.............................................................................................179

Subsection 1

Concept of the pre-supervision system..........................................................................179iv

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Subsection 2

Submission of a Bill Partially Amending the BOA Act by Diet members..................181

Subsection 3

Dispute on audit of the Co-operative Societies Central Bank ......................................184

Chapter 4
Section 1

BOA under the Former Constitution in the Showa Era (1926〜1947).....................................187
Changes in BOA's Organization..............................................................................................188

Expansion of organization into a four-Bureau structure/Downsizing of BOA's structure/Dispatch of
officials overseas/Decrease of officials
Section 2

Operation of Audit Activities ..................................................................................................193

Subsection 1

The finance and accounting system during war ............................................................193

Changes in the systems of budget and final accounts/Expansion of exceptions to the Public
Accounting Act/Enactment of and changes in the Wartime Exceptional Public Accounting Act andthe Wartime Exceptional Regulations on Accounting
Subsection 2

Submission of accounts and in-office audit...................................................................196

Simplification of submission of accounts during war
Subsection 3

Field audits .....................................................................................................................199

Audit of the Special Accounts for Overseas Territories
Subsection 4

Commissioned audits......................................................................................................202

Simplification of the commissioned audit system
Subsection 5

Determination on Accounting Officers..........................................................................203

Wartime exceptions to the system of determination on liability for indemnity of Accounting
Officers/Number of determinations on liability for indemnity of Accounting Officers andamendment of the system/Setting up of members of the Examination Committee on Determination/
Simplification of certificates of grant of discharge
Subsection 6

Annual audit report and annual audit report to the Emperor........................................206

Revival of the issue of attendance/Limits of the effect of the presentation of annual audit report to
the Emperor
Subsection 7

Restrictions on audit.......................................................................................................207

Expansion of restrictions on audit
Section 3

Overview of Audit Results ......................................................................................................210

Subsection 1

Audit cases reported in the annual audit report ............................................................210

Outline/Audit of armaments expenditures/Audit of improper bonuses/Improper/unreasonable matterson the Imperial Railway/Audit reports on Special Accounts for Overseas Territories
Section 4

Special Account for Emergency Armaments Expenditures and Audit ..................................222

Subsection 1

Special Account for Emergency Armaments Expenditures ..........................................222

Establishment and developments/End of World War II
Subsection 2

Audit of the Special Account for Emergency Armaments Expenditures .....................224

Audit of the Special Account for Emergency Armaments Expenditures/Audit of munitions arsenals/
Final audit report of the Special Account for Emergency Armaments Expenditures
Section 5

BOA Office Building...............................................................................................................232v

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Subsection 1

Before the Great Kanto Earthquake...............................................................................232

Subsection 2

Use of the barrack office building .................................................................................233

Subsection 3

Construction of the new office building........................................................................234

Part 3

BOA under the Constitution of Japan

Chapter 1

Establishment of BOA under the Constitution of Japan............................................................239

Section 1

Provisions on Final Accounts under the Constitution of Japan .............................................239

Section 2

Background of Enactment of the BOA Act............................................................................242

Publication of the draft for the Amendment of the Constitution of the Empire of Japan/Developmentof the outline of the Bill to Amend the BOA Act/Development of the Tentative Draft of the Bill to
Amend the BOA Act/Development of the First Draft of the Bill to Amend the BOA Act/Developmentof the Second Draft of the Bill to Amend the BOA Act/Presentation of the Third Draft of the Bill to
Amend the BOA Act by the Cabinet Legislation Bureau/Development of the Fourth Draft of the Bill
to Amend the BOA Act/Adoption of the Final Draft of the Bill to Amend the BOA Act/Deliberation
at the Imperial Diet and the Sumitsuin/Enactment of the Public Finance Act and the full amendmentof the Public Accounting Act
Section 3

Outline of the BOA Act ..........................................................................................................250

Subsection 1

Organization....................................................................................................................250

Status and independence/Organization
Subsection 2

Mandate ..........................................................................................................................253

Scope of audit/Auditing methods/Adjudication and demand of disciplinary action/Notification to the
Public Prosecutors Office/Presentation of opinions and demand of measures/Establishment of theexamination system/Presentation of opinions on matters that accounting officials are unsure of in
performing their duties
Subsection 3
Chapter 2
Section 1

BOA regulations .............................................................................................................258

Audit between the mid-1940s and mid-1960s............................................................................259
Amendments of the BOA Act .................................................................................................260

Subsection 1

Status of amendments.....................................................................................................260

Amendment by Paragraph (2) of the Supplementary Provisions of the Act on the Responsibility ofGovernment Employees Who Execute the Budget (Act No. 172 of 1950)/Amendment by the Act
Partially Amending the BOA Act (Act No. 110 of 1955)/Amendment by the Act Partially
Amending the BOA Act (Act No. 137 of 1956)
Section 2

Changes in BOA's Organization..............................................................................................267

Changes in the organization/Changes in the structure of positions/Changes in the fixed number ofofficials
Section 3

Audit activities .........................................................................................................................271

Subsection 1

Audit subject matters......................................................................................................271
vi

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Scope of audit/Establishment, revision and abolition of bodies subject to mandatory audit/
Determination of the audit subject for discretionary audit subject matters
Subsection 2

Audit objectives..............................................................................................................275

Regularity-focused audit and accuracy audit between the mid-1940s and mid-1950s/Development ofaudit focused on economy and efficiency between the mid-1950s and mid-1960s/Relation between
the audit objectives and the BOA Act
Subsection 3

Procedures of audit.........................................................................................................277

Audit cycle/Audit plan/Conduct of audit/Analysis and review of the audit findings
Subsection 4

Annual audit report ........................................................................................................283

Audit cases reported in the annual audit report/Deliberation of the annual audit report/Submissionof annual audit reports to the Cabinet and the Diet/Follow-up of improper/unreasonable matters
Subsection 5

Reflection of audit results ..............................................................................................295

Operations concerning the Diet/Round-table conference with the financial authorities
Section 4

Overview of Audit Results ......................................................................................................298

Subsection 1

Audit results between the mid-1940s and mid-1960s ...................................................298

Between the mid-1940s and mid-1950s/Between the mid-1950s and mid-1960s/Audit results related
to end-of-war settlements
Subsection 2

Taxes...............................................................................................................................305

Audit cases reported in the annual audit reports between the mid-1940s and mid-1950s/Audit cases
reported in the annual audit reports between the mid-1950s and mid-1960s
Subsection 3

Social security.................................................................................................................307

Audit cases on social insurance expenses reported in the annual audit reports/Audit cases on social
welfare expenses reported in the annual audit reports/Audit cases on public assistance expenses
reported in the annual audit reports/Audit cases on employment measure expenses reported in theannual audit reports
Subsection 4

Public Works ..................................................................................................................308

Audits immediately after the war/Fictitious accounting for works implemented by the national
government/Audits on disaster recovery projects and other government-aided construction projects/
Rise of defective construction works/Audit cases of presented opinions or demanded measures
Subsection 5

Education and science technologies...............................................................................313

Audit cases reported in the annual audit reports between the mid-1940s and mid-1950s/Audit cases
reported in the annual audit reports between the mid-1950s and mid-1960s
Subsection 6

Defense ...........................................................................................................................315

Audit cases reported in the annual audit reports between the mid-1940s and mid-1950s/Audit cases
reported in the annual audit reports between the mid-1950s and mid-1960s
Subsection 7

Agriculture, forestry and fisheries..................................................................................318

Audit cases reported in the annual audit reports between the mid-1940s and mid-1950s/Audit cases
reported in the annual audit reports between the mid-1950s and mid-1960s
Subsection 8

Commerce and industry .................................................................................................324vii

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Subsection 9

State-owned bodies.........................................................................................................324

Three public corporations/Finance corporations, public corporations, etc.
Chapter 3
Section 1

Audit between the mid-1960s and late 1980s ............................................................................332
Amendments of the BOA Act and Discussions on BOA's Organization and Mandate ........335

Subsection 1

Status of amendments.....................................................................................................335

Subsection 2

Legal Discussions on BOA's Organization and Mandate .............................................335

Issue on the change of BOA officials' status to national government employees in special service/
Issue on BOA's audit mandate over the financial aid for Okinawa/Audit of financial assistanceunder the auditee's mandate and the amendment of the BOA Act in 1979
Section 2

Changes in BOA's Organization..............................................................................................344

Changes in the organization/Changes in the structure of positions/Changes in the fixed number ofofficials/Changes in the personnel system
Section 3

Audit Activities ........................................................................................................................353

Subsection 1

Audit subject matters......................................................................................................353

Scope of audit/Establishment, revision and abolition of bodies subject to mandatory audit/
Determination of the audit subject for discretionary audit subject matters
Subsection 2

Audit objectives..............................................................................................................355

Establishment and development of the effectiveness audit between the mid-1960s and early-1980s/
Audits with the objectives of economy and efficiency between the mid-1980s and late 1980s
Subsection 3

Procedures of audit.........................................................................................................357

Audit plan/Conduct of audit/Analysis and review of the audit findings
Subsection 4

Audit report ....................................................................................................................362

Audit cases reported in the annual audit reports/Deliberation of the annual audit reports/Submissionof annual audit reports to the Prime Minister
Subsection 5

Reflection of audit results ..............................................................................................370

Operations concerning the Diet/Regular meetings with the financial authorities
Section 4

Overview of Audit Results ......................................................................................................373

Subsection 1

Audit results between the mid-1960s and late 1980s....................................................373

Between the mid-1960s and mid-1970s/Between the mid-1970s and mid-1980s/In the late 1980s
Subsection 2

Taxes...............................................................................................................................374

Audit cases reported in the annual audit reports between the late 1960s and mid-1970s/Audit cases
reported in the annual audit reports since the mid-1970s
Subsection 3

Social security.................................................................................................................376

Audit findings on social security
Subsection 4

Public works ...................................................................................................................380

Audit findings on estimation standards/Audit findings on the project effect/Audit findings on
individual construction projects
Subsection 5

Education, science and technology ................................................................................387
viii

Table of contents

Audit cases reported in the annual audit reports between the mid-1960s and mid-1970s/Audit cases
reported in the annual audit reports between the mid-1970s and mid-1980s/Audit cases reported in
the annual audit reports in the late 1980s
Subsection 6

Agriculture, forestry and fisheries..................................................................................390

Audit cases reported in the annual audit reports between the mid-1960s and mid-1970s/Audit cases
reported in the annual audit reports between the mid-1970s and mid-1980s/Audit cases reported in
the annual audit reports in the late 1980s
Subsection 7

Defense ...........................................................................................................................395

Audit findings on defense
Subsection 8

Official Development Assistance (ODA) and foreign affairs .......................................397

Development of the organizational structure for assistance/Establishment of the Foreign Affairs
Audit Division/Outline of audit cases reported in annual audit reports
Subsection 9

State-owned bodies.........................................................................................................398

Status of State-owned bodies/Japanese National Railways/Nippon Telegraph and Telephone Public
Corporation/Other public corporations
Subsection 10

Others............................................................................................................................406

Audits on the postal services/Fictitious business trips by employees of Japan Railway Construction
Public Corporation/Purchase of goods by government authorities at high prices resulting from highpressure selling/Wrongful receipt of subsidies, etc. by Minowa Town
Chapter 4
Section 1

Audit in the Heisei Era (1989〜) ...............................................................................................410
Amendments of the BOA Act and Discussions on BOA's Mandate .....................................411

Subsection 1

Status of amendments.....................................................................................................411

Amendment by Article 2 of the Act Partially Amending the Diet Act, etc. (Act No. 126 of 1997)/
Amendment by the Act Partially Amending the Board of Audit Act (Act No. 36 of 1999)/
Amendment by Article 1 of the Act on Arrangement of Relevant Acts Incidental to Enforcement of
the Act on Access to Information Held by Administrative Organs (Act No. 43 of 1999)/
Amendment by Article 1 of the Act on Arrangement of Relevant Acts Incidental to Enforcement of
the Act on Use of Information and Communications Technology in Administrative Procedure (ActNo. 152 of 2002)/Amendment by Article 2 of the Act on Arrangement of Relevant Acts Incidental
to Enforcement of the Act on the Protection of Personal Information Held by Administrative
Organs, etc. (Act No. 61 of 2003)/Amendment by the Act Partially Amending the Board of Audit
Act (Act No. 112 of 2005)
Subsection 2

Enactment of an Act that includes BOA in the definition provisions of "administrative
organ" .............................................................................................................................424

Outline of the law amendment/Background and developments of the amendment
Subsection 3

Discussions on amendment of the Constitution ............................................................426

Discussions at the House of Representatives' Commission on the Constitution/Discussions at theHouse of Councillors' Commission on the Constitution/Explanation by BOA
ix

Table of contents

Section 2

Changes in BOA's Organization..............................................................................................431

Changes in BOA's organization/Changes in the structure of positions/Changes in the fixed number ofofficials/Changes in the personnel system
Section 3

Audit Activities ........................................................................................................................449

Subsection 1

Audit subject matters......................................................................................................449

Scope of audit/Establishment, revision, and abolition of bodies subject to mandatory audit/
Determination of the audit subject for discretionary audit subject matters
Subsection 2

Audit objectives..............................................................................................................453

Diversification of audit objectives and expansion of 3E audit in the Heisei era/Relationship between
audit objectives and the BOA Act
Subsection 3

Procedures of audit.........................................................................................................455

Audit cycle/Audit plan/Conduct of audit/Analysis and review of the audit findings
Subsection 4

Annual audit reports .......................................................................................................463

Audit cases reported in the annual audit reports/Deliberation on annual audit reports/Time forsubmission of the final accounts and the annual audit report to the Cabinet and the Diet
Subsection 5

Reflection of audit results ..............................................................................................472

Activities between BOA and the Diet/Regular meetings with the financial authorities/Briefings on
the annual audit report for auditees/Estimation of the financial impact of audit work
Section 4

Overview of Audit Results ......................................................................................................478

Subsection 1

Characteristics of audit results between the late 1980s and mid-2000s .......................478

Between the late 1980s and mid-1990s/Between the mid-1990s and mid-2000s
Subsection 2

Taxes...............................................................................................................................479

Audit of excess and deficiency in collected tax/Audit of matters other than excess and deficiency incollected tax
Subsection 3

Social security.................................................................................................................484

Audit findings on social insurance/Audit findings on social welfare/Audit findings on social
security projects in general
Subsection 4

Public works ...................................................................................................................492

Audit findings on effectiveness of public works/Audit findings on safety and security/Audit
findings on bidding and contact work/Individual improprieties
Subsection 5

Education, science and technology ................................................................................496

Audit findings on education, etc./Audit findings on science and technology
Subsection 6

Agriculture, forestry and fisheries..................................................................................498

Subsection 7

Defense ...........................................................................................................................502

Outline/Reporting categories
Subsection 8

Official Development Assistance and foreign affairs....................................................505

Official Development Assistance/Foreign affairs
Subsection 9

Finance............................................................................................................................511

Policy-based finance/Financial system stabilization measuresxTable of contents

Subsection 10

State-owned bodies.......................................................................................................513

Reform of State-owned bodies/Cross-cutting audit on State-owned bodies/Audit of State-owned
bodies focusing mainly on their operation and administration/Audit with focus on accuratepresentation of financial statements/Audit with focus on appropriateness of asset management andretention/Audit with focus on bidding and contact work
Subsection 11

Special accounts ...........................................................................................................521

Subsection 12

Information and communications.................................................................................523

Cross-cutting audit on information and communications (IT)/Individual audit
Subsection 13

Others............................................................................................................................527

Cross-cutting audit/Financial management
Chapter 5
Section 1

Changes in Other Operations ......................................................................................................536
Adjudication, Demand of Disciplinary Action, Notification to Public Prosecutors Office andExamination .............................................................................................................................536

Subsection 1

Adjudication....................................................................................................................536

Outline of the system/Trends of adjudication cases/Matters worth noting in connection withadjudication/Court cases relating to BOA's adjudication/Exemption from liability for indemnity
Subsection 2

Demand of disciplinary action .......................................................................................540

Outline of the system/Number of demands of disciplinary action
Subsection 3

Notification to Public Prosecutors Office ......................................................................541

Outline of the system/Number of notifications to the Public Prosecutors Offices
Subsection 4

Examination ....................................................................................................................541

Outline of the system/Number of requests for examination
Section 2

Capacity Development of Officials .........................................................................................543

Subsection 1

Changes in training courses ...........................................................................................543

From the mid-1940s to 1988/From 1989 to 1998/From 1999
Subsection 2

Review of the training system .......................................................................................546

Subsection 3

Current training course system ......................................................................................547

Section 3

Collaboration with Auditees and Auditing Departments ........................................................549

Subsection 1

Interaction with secretariats to audit and inspection commissioners of local
governments....................................................................................................................549

Subsection 2

Public sector auditing forum ..........................................................................................549

Subsection 3

Training courses, etc. for auditees .................................................................................549

Section 4

Investigation and Research ......................................................................................................552

Subsection 1

Research on audit ...........................................................................................................552

Audit Issue Study Group/Publication of Kaikei-kensa Kenkyu (Journal of Government Auditing)/
Introduction of Visiting Research Fellows/Technical seminars/Participation in academic societies/
Research projects carried out by BOA and outsourced research projects
Subsection 2

Library ............................................................................................................................554xi

Table of contents

Section 5

International Affairs .................................................................................................................556

Subsection 1

Investigation of fiscal supervision systems of other countries......................................556

Under the former Constitution/Under the current Constitution
Subsection 2

International Organization of Supreme Audit Institutions (INTOSAI) ........................558

Holding of the International Congress of Supreme Audit Institutions (INCOSAI)/Holding of the
INCOSAI in Tokyo and establishment of the International Organization of Supreme Audit
Institutions (INTOSAI)
Subsection 3

Asian Organization of Supreme Audit Institutions (ASOSAI) .....................................559

Establishment of ASOSAI/Holding of the Third Assembly and the Second International Seminar inTokyo/Activities as the Secretary General, etc.
Subsection 4

Participation in the Advisory Board on Tsunami-Related Audit of the Audit Board of
the Republic of Indonesia (BPK)...................................................................................562

Subsection 5International cooperation activities ................................................................................562

Holding of International Seminar, etc. for audit/Exchange with the audit institutions of othercountries/Working Level Meeting of the SAIs of China, Korea and Japan
Section 6

Exchanges with the General Public and Relevant Institutions ...............................................565

Subsection 1

Public Relations..............................................................................................................565

Publication Relations for the General Public
Subsection 2

Dialogue with Experts....................................................................................................568

Government Auditing Consultative Committee
Subsection 3

Exchanging Information and Opinions with Other Relevant Institutions, etc..............570

Exchanging Information and Opinions with Other Audit Institutions, etc.
Section 7

Information Disclosure and Protection of Personal Information............................................573

Subsection 1

Information disclosure....................................................................................................573

Outline of the system/Status of operations for information disclosure at BOA
Subsection 2

Protection of personal information ................................................................................574

Outline of the system/Status of operations for protection of personal information at BOA
Subsection 3

Information Disclosure and Personal Information Protection Review Board of BOA...576

Outline of the organization/Investigation and deliberation procedure/Status of operation of the
Review Board and handling of consultation cases/Opinions given by the Review Board in pastcases
Section 8

Working Conditions.................................................................................................................580

Subsection 1

BOA Office Building .....................................................................................................580

Changes in BOA Office Building/Annaka Training Center
Subsection 2

Housing Facilities ...........................................................................................................587

Subsection 3

History of the Use of Information Technology (IT) .....................................................588

Development of the Use of Large-Size Computers for Audit Activities/Development of Personal
Computers (PC) and Operation Processing/Final Accounts Verification System/Communication
Infrastructurexii

Table of contents

II. Appendix
Audit Commission as of September 2018..................................................................................................597
Successive Presidents of BOA....................................................................................................................599
Secretaries General under the current BOA Act (excluding those who served as President of BOA).................................................................................................................................................................605
Section 1

Changes in Structure, Number of Personnel and Budget of BOA.........................................608

Subsection 1

Structure..........................................................................................................................608

Subsection 2

Fixed number of officials of BOA ................................................................................618

Subsection 3

Budget of National Government and BOA ...................................................................620

Section 2

Annual Audit Report................................................................................................................624

Subsection 1

Improprieties ...................................................................................................................624

Subsection 2

Date of Receipt of Final Accounts, Sending of the Annual Audit Report andSubmission to the Diet ...................................................................................................632

Subsection 3

Date of Resolution of the Annual Audit Report to the Emperor, etc. at the General
Meeting, and Date of Submission to the Emperor........................................................634

Subsection 4

Date of Sending of the National Property Audit Report and Submission to the Diet, etc.
....................................................................................................................................635

Subsection 5
Section 3

Date of Sending of the Goods Audit Report and Submission to the Diet ...................636

BOA Related Laws and Regulations .....................................................................................637

Rules on the Organization of the Board of Audit (Circular Notice of Dajokan No. 35 of April 28,1881)/Rules on the Organization of the Board of Audit (Circular Notice of Dajokan No. 5 of January
16, 1882)/Ordinance on the Board of Audit (Imperial Ordinance No. 20 of April 17, 1886)/
Comparison between the BOA Act upon promulgation (May 10, 1889) and the BOA Act after the last
amendment (March 20, 1943)/Comparison between the BOA Act at the time of enforcement (May 3,1947) and the current BOA Act (after the latest amendment on April 1, 2007)
Section 4

Chronology...............................................................................................................................658

xiii

Explanatory Notes

Explanatory Notes
1. The main text and appendix materials are based on information available as of December 2009.
2. The following abbreviations are used for the names of laws that are frequently used in this book, except
when they should be written in full.
Constitution of the Empire of Japan (promulgated on February 11, 1889): Meiji Constitution (alsoreferred to as the "former Constitution" in Part III)
Constitution of Japan (promulgated on November 3, 1946): Constitution (also referred to as the "newConstitution" and the "current Constitution" in Part III)The Board of Audit Act (Act No. 15 of 1889): BOA Act (also referred to as the "former BOA Act" inPart III)The Board of Audit Act (Act No. 73 of 1947): BOA Act (also referred to as the "new BOA Act" andthe "current BOA Act" in Part III)
3. Mandate of BOA
BOA audits the final accounts of the expenditures and revenues of the State, prepares an annual audit
report, and sends it to the Cabinet, pursuant to the provisions of Article 90 of the Constitution. Then,the Cabinet submits the annual audit report to the Diet together with the audited final accounts. The
categories of reported matters and indications of examples of audit reports in this book are as follows.
〈Category of reported matters〉
Matters found to be in violation of law, Cabinet Order, or an approved budget, or found to be improper:
improprieties
Matters regarding which BOA has presented its opinions: presented opinions
Matters regarding which BOA has demanded measures: demanded measures
Matters for which the auditee took measures for improvement in response to the findings of BOA:
measures taken
Matters which BOA finds it particularly necessary to report: special description
A report on specific matters which BOA finds it necessary to report: report on specific matters
Matters reported to the Diet and the Cabinet: special report to the Diet and the Cabinet
Results of audit reported to the Diet regarding matters audited based on a request by the Diet: special
report on audit requested by the Diet
〈Indications of examples of annual audit reports〉Bold characters
4. Japanese era name (gengo)
In addition to the western calendar, Japan has adopted a system of assigning one era to the reign of one
emperor since 1868. The name of the era changes only when the imperial throne has been succeeded to.
xivExplanatory Notes

The names of eras that appear in the main text correspond to the following dates on the westerncalendar.
Meiji era: January 25, 1868-July 29, 1912
Taisho era: July 30, 1912-December 24, 1926
Showa era: December 25, 1926-January 7, 1989
Heisei era: January 8, 19895. Names of Japanese individuals
The names of Japanese individuals are written in the order of "family name―given name" in theJapanese. However, names are commonly written in the order of "given name―family name" inEnglish. In History of the Board of Audit from 1880 to 2010, names are written in the order of "given
name―family name (capitalized)" with the family name written in capital letters.
6. Explanation of terms
The following terms are used as explained below in this book.
Type of audit: Generally, audit is divided into financial audit, performance audit and compliance audit.
BOA conducts audit with the objectives of accuracy, regularity, economy, efficiency, effectiveness,and other objectives necessary for auditing. Among these, audit with the objective of accuracy mainly
corresponds to financial audit, that with the objectives of economy, efficiency and effectivenessmainly corresponds to performance audit, and that with the objective of regularity corresponds tocompliance audit. BOA does not conduct assurance engagement in any of its audits.
Auditees: The auditees of BOA's audit include the State's organs, entities to which the State has madecontributions such as government-affiliated organizations, and local governments and corporations towhich the State has granted subsidies or other financial assistance. Some of these auditees are
required to be audited by BOA, while others may be audited if BOA considers it to be necessary. For
example, the State's organs and juridical persons to which the State has contributed half or more of
the stated capital are auditees that are required to be audited. On the other hand, organizations towhich the State has directly or indirectly granted or lent subsidies, etc. are auditees that may be
audited if BOA considers it to be necessary.
Auditors: Auditors are BOA's considers who engage in the audit mentioned above and who play acentral role in audit.
Diet: The Diet is the highest organ of state power, and the sole law-making organ of the State,consisting of two houses―the House of Representatives and the House of Councillors.

xv

I. BOA over the Past 130 Years

Part 1

Founding of BOA

Section 1

Chapter 1

Shi of Audit

Forerunners of BOA

The modern fiscal supervision system in

Audit Bureau in January 1877, and eventuallyJapan can be traced back to the Shi of Audit (adeveloped into BOA which has been given

forerunner of BOA), which was established under

independence within the executive branch. The

the Kan (the forerunner of ministry) of financecourse of the development is described in History

and accounting on May 8, 1869, soon after theof the Board of Audit published by BOA inestablishment of the Meiji government.

October 1896.

The Shi of Audit was abolished only two

The series of events from the establishment

years later in July 1871. In August 1871, the Ryoof the Shi of Audit to formation of the Audit

of Audit was established under the jurisdiction of

Bureau can be regarded as the history leading up

the Ministry of Finance in place of the Shi ofto the birth of Japan's modern fiscal supervision

Audit. The Ryo of Audit was renamed to thesystem.

Section 1 Shi of Audit
Subsection 1

Establishment of the Shi of
Audit

notes (inconvertible notes).
In this way, the fiscal measures taken by the
Meiji government were stopgap measures without

In October 1867, Yoshinobu TOKUGAWA

decent plans. Also, there were still no statutory

returned the ruling power to the Imperial Court,

regulations or procedures established for theand the reign of the Tokugawa Shogunate which

finance and accounting system. The government

lasted for 265 years came to an end. The new

basically processed its finance and accounting

government (Meiji government) declared theaccording to the customary practice from therestoration of imperial rule in December of theformer shogunate era and opinions of the officials

same year, marking the arrival of the era of theconcerned, and still had no arrangements in place

Emperor's direct administration. However, theto supervise finance and accounting.

new government had hardly any effective income

In December 1867, the Treasury Accounting

sources because feudal lords' fiefs remained as

Office (the first finance and accounting organ of

they were and income actually could not be

the Meiji government) was establihed in Kyoto as

acquired from confiscated land which had been

an organ to take charge of the government's

directly controlled by the former shogunate

finance and accounting. In the following year, ingovernment. The Meiji

orderedApril 1868, the government established the

expedition to the eastern part of Japan, but thefollowing seven Kan2 in the Dajokan: Kan ofgovernment was also short of war funds. The

Legislation; Kan of Administration; Kan ofgovernment's finance at the time was initially

Shinto Rituals; Kan of Finance and Accounting;supported by contributions and loans from1

government"Dajokan" is a successor of Sanshoku and a precursor of
the Cabinet.
2"Kan" is an organization under the Dajokan system, whichis the forerunner of Ministry.

wealthy merchants in the Kyoto-Osaka area, andthen by issuance of large amounts of Dajokan1
5Part 1

Chapter 1

Forerunners of BOA

Kan of Military Affairs; Kan of Foreign Affairs;

establish a separate Kan for fiscal supervision

and Kan of Justice. Further, the government

which could advise the government to cut

established the following Shi in the Kan of

unnecessary

expensesFinance and Accounting and assigned the tasks ofgovernment

foradministration of finance and accounting to the

response, the Shi of Audit was established in therespective Shi: Shi of Receipts and Payments; Shi

Kan of Finance and Accounting in May 1869.

of Supplies; Shi of Postal Service; Shi of

The Shi of Audit is said to have been modeled

Building and Repairs; Shi of Tax; Shi ofafter Kanjoginmiyaku6 that had been in place

Minting; and Shi of Civil Affairs. In March 1869,

from the late 17th century to the mid-19th

the government relocated the Kan of Finance andcentury. It was the first fiscal supervision organ

Accounting to Tokyo, and at the end of thatthat was established after the restoration ofmonth, it ordered Shigenobu OKUMA, who

imperial rule.

3

any

and
wastefuladmonishspending.

theIn

concurrently served as Sanyo and Fukuchiji of

The Shi of Audit first belonged to the Kan

the Kan of Foreign Affairs, to also serve asof Finance and Accounting, but its organizational

Fukuchiji of the Kan of Finance and Accounting.

affiliation changed several times in line with theSince most of the diplomatic issues at the time

reform of the Kan system of the Dajokan. Two

were issues involving the monetary system, suchmonths after the establishment of the Shi ofas complaints from foreign consuls and others

Audit, in July 1869, the seven Kan of theabout counterfeit money and reminting of coins

Dajokan were abolished, and organs including theinto those with lower content of silver or gold

following six Ministries were newly establishedand their applications for converting kinsatsu

in the Dajokan: Ministry of Popular Affairs;(notes exchangeable for gold coins) into gold

Ministry of Finance; Ministry of the Military;coins, the government decided to have Fukuchiji

Ministry of Justice; Ministry of the Imperialof the Kan of Foreign Affairs also serve as

Household; and Ministry of Foreign Affairs. At

Fukuchiji of the Kan of Finance and Accounting

this time, the Shi of Audit became an organ

andunder the Ministry of Finance. Then, in August

4

process

diplomaticand5fiscalmattersof the same year, the Ministry of Finance wastogether.
Ever since the establishment of the Kan of

consolidated with the Ministry of Popular Affairs,

Finance and Accounting, the authorities ofand the Shi of Audit was transferred to thesettlement of accounts and supervision of finance

Ministry of Popular Affairs.

and accounting had been executed solely by the

Ministry of Finance and the Ministry of Popular

Shi of Accounting in the Kan of Finance andAffairs were separated again in July 1870, so the

Accounting. However, OKUMA pointed out that

Shi of Audit returned to the Ministry of Finance.

this was not appropriate, and proposed to

In this manner, the Shi of Audit changed its

However,theaffiliation three times within a span of only two"Shi" is an organization in each Kan or Ministry under the
Dajokan system.
4"Sanyo" is one of Sanshoku (three posts) newly establishedby the Meiji Government. Sanshoku became the Dajokan
system, and then the Cabinet system in 1885.
5"Fukuchiji" is an official who takes the second highest postin each Kan under the Dajokan system.
3

years or so until the Shi was finally abolished in
6

6"Kanjouginmiyaku" is an organization in the Edo era(preceding the Meiji era), which is the forerunner of Shi of
Audit.

Section 1

Shi of Audit

July 1871. The changes in the affiliation of thesupervising prefectures and other administrative

Shi of Audit are summarized below.

districts.
When the Kan of Finance and Accounting(i) Kan of Finance and Accounting: May 8-July

was abolished and the Shi of Audit was placed

7, 1869(ii) Ministry of Finance: July 8-August 10, 1869

under the jurisdiction of the Ministry of Finance(iii) Ministry of Popular Affairs: August 11,

in July 1869, it was positioned as the fifthranking Shi. The officials of the Shi of Audit

1869-July 9, 1870
(iv) Ministry of Finance: July 10, 1870-July 27,
1871
Subsection 2

Organizationconsisted

of

Sei10

(Soninkan;

Gonnosei(Soninkan;

noofficials),Daiyu,

fixed

one

person),numberGonnodaiyu,

ofShoyu,

Gonnoshoyu, Daireishi, and Shoreishi (officials
from Daiyu to Shoreishi were Hanninkan; no

When the Shi of Audit was placed under theKanofFinanceandAccounting,it

fixed number of officials). There was no change

wasin the organizational structure of the Shi of Audit

positioned as the top Shi among the one Bureau

until the Shi was subsequently transferred to theand six Shi that belonged to the Kan of Finance

Ministryand Accounting (Bureau of Minting; Shi oftransferred back to the Ministry of Finance.

ofPopularAffairsandfurtherSupervision; Shi of Tax; Shi of Accounting; Shi

Upon the establishment of the Shi of Audit

of Supplies; Shi of Building and Repairs; and Shi

in May 1869, branches were also established inof Mining). The officials of the Shi of Audit

Kyoto and Osaka, and another branch wasconsisted of Chiji (Soninkan of fifth-ranking

established in Yokohama in July of the sameofficials; two persons), Hanji (Hanninkan9 ofyear. These three branches were all abolishedsixth-ranking officials; two persons), Gonnohanji

when the Shi of Audit was abolished in July

(Hanninkan of seventh-ranking officials; two

1871.

7

8

persons), and Fuzoku (five persons). The Chiji
wereresponsibleforoverseeing

Subsection 3

theMandateadministration within the Kan, examining matterson money and grain as well as notifications from

Rules on the organization of the Shi ofthe respective Kan, Bureaus, and prefectures, andAudit were formulated in December 1870. Until

checking the ledgers, while Hanji and otherthen, there were no provisions stipulating theofficials were assigned with affairs of these tasks.

mandate of the Shi of Audit. According to

Besides these officials, 10 Hanji, 10 Gonnohanji,

History of the Board of Audit, the affairs

and 30 Fuzoku were assigned with affairs ofprocessed by the Shi of Audit underwent
considerable changes along with the changes in"Chiji" is an official who is the head of each Shi in Kan
under the Dajokan system.
8
Prewar officials are classified by the way of appointment
and dismissal into Chokuninkan, Soninkan and Hanninkan.
"Soninkan" is an official of whom the Emperor makes
decision the appointment and dismissal.
9"Hanninkan" is an official who is appointed by the head of
the relevant department.
7

its affiliation.
The affairs processed by the Shi of Audit
10

7"Sei" is an official who is the head of each Shi in the
Ministry under the Dajokan system (the successor of
Chiji).

Part 1

Chapter 1

Forerunners of BOA

when it was under the jurisdiction of the Kan ofof Audit returned to the Ministry of Finance,

Financetheaffairs of civil administration were excluded fromjurisdiction of the Ministry of Finance for thethe work undertaken by the Shi of Audit. When

first time roughly included the following:

the office organization of the Shi was stipulated(i)

examination of matters on accounting ofin December 1870, the contents of the mandate

money and grain;of the Shi of Audit were clearly defined for theaudit of statements of accounts (Kanjocho);first time.

(ii)

and

Accounting

and

under

The rules provided for the tasks of the Shi(iii) deliberation on grounds and costs forcommencing civil engineering work forofbuilding and repairs;

beginning stating that "This Shi serves as thefollowing

theprovisionintheeyes and ears of the Ministry of Finance, and(iv) audit of the progress status of civil(v)

Audit,

engineering work;

other respective Shi serve as the hands and feettreasury inspection;of the Ministry. The hands and feet can be used
only when the eyes and ears are very clear.

(vi) proposal and review of accounting laws andTherefore, the Shi needs to constantly survey andregulations;(vii) proposal on the acceptability of requests foroversee affairs in and outside the Ministry even

Imperial gift of money and grain or forthough it is not exclusively mandated to do so."loans;In addition, the rules stipulated that the Shi of
Audit is to also supervise administration other(viii) proposal on the method for disposing ofthan that of the Ministry of Finance.

counterfeit money and the method for

Meanwhile, History of the Board of Audit

exchanging damaged currency notes; and(ix) request for authentication to exchange local

published in 1896 summarizes the contents ofcurrencies into the currency issued by the

mandate of the Shi of Audit as provided in thegovernment

rules on the organization as follows:

When the Shi of Audit came under the(i)deliberation on non-statutory spending;control of the Ministry of Popular Affairs in(ii)

investigation on the appropriateness of theAugust 1869, affairs under its jurisdiction were

method for granting rewards or paying

substantially expanded. It came to take part instipends;

management of land owned by the government,(iii) audit of statements of accounts;

deliberation and proposal on the location and(iv) inspection of ledgers of the respective Shi;building of prefectural government offices as well(v)

as affairs of the selection of officials of the(vi) supervision of the progress status of civil

oversight of vaults;
engineering work for building and repairs;

respective Shi. In addition, it came to be involvedin various matters of civil administration such as(vii) audit of the prices of purchased goods;

the deliberation and proposal on notifications of(viii) review

familyregisters,

policeaffairs,ofdraftsofdirectiveson

notifications of the respective Bureaus of

emergency

regional Kan;

stockpiles, land reclamation, commodities, etc.

(ix) review of drafts on amendment or abolition

After the Ministry of Popular Affairs and theof laws or regulations; andMinistry of Finance were separated and the Shi
8Section 1(x)

Subsection 4

audit of the positions of officials in theShi of Audit

Operations

Ministry.
Furthermore, the rules provided the matters

In the beginning of the Meiji era, when there

including the following as matters which the Shi

were still no laws on budget compilation andof Audit should oversee by sending its officials

there was a particular need to save expenses andto prefectures: accounting of all money and grain;

reduce spending, it was an extremely importantdegree of tax burden; appropriateness of various

task to make resolutions on revenues andexpensesauthorities;

expenditures. The Shi of Audit also participatedinconvenience of money circulation; dispositionin discussions on the monetary system, law on

on exchanges between genuine and counterfeit

salaries, tax increase or reduction, and creation

money; land fertility; amount of commodities;

and amendment of Rules on Finance andand presence or absence of trade.

Accounting, among other matters. To audit

ofgovernment

revenues and expenditures, the Shi of Accounting
checked the statements of accounts that were
submitted by the auditees and passed them on to
the Shi of Audit, and the Shi of Audit reviewed
and authorized them, affixed a seal on their cover
page, and returned them to the respective
auditees.
Officials of the Shi of Audit often had wideranging tasks to perform on business trips toregions. For example, there were times when the
Sei of Audit was ordered to preside over the
railway construction work stretching between
Tokyo and Yokohama, or took a business trip toTransmitted notification of a business trip made by
Masaomi KITADAI, Gonnosei of Audit( Important cultural property, Kyoto Prefecture
administrative document "Document dispatched andaccepted between Kan," (December 1870), owned by
Kyoto Prefectural Library and Archives)

the Kingdom of Hawaii to recall Japanese people
as mentioned below.
The affairs under the jurisdiction of the
Kyoto and other branches included the following:
consultation

on

cases

of

revenues

andexpenditures of Shi's branch offices; review of
the revenues and expenditures documents forapproval;

audit

of

statementsofaccounts;

explanation of accounting laws and regulations;and treasury inspection. Cases of revenues andexpenditures refer to such cases as where the Shi

Order to dispatch Kagenori UENO, Sei of Audit, to
Hawaii (September 1869) (owned by the National Diet
Library)of Supplies purchases goods, the Shi of Building
and Repairs builds a government office building,or the Shi of Commerce provides yen loans. In
9Part 1

Chapter 1

Forerunners of BOA

such cases, each Shi was supposed to consult(i) Rinshin, which was submitting an opinion towith the Shi of Audit in advance. Meanwhile, theor seeking a decision from the Dajokan;

for(ii) Tocho, which was submitting an opinion inapproval were used by the Shi of Accounting as

response to the Dajokan's request for advice;certificates for receiving or spending money or(iii) Kaito, which was sending a written response

revenues

andexpenditures

documents

on matters inquired by Ministries;

grain, and statements of accounts were documents(iv) Shirei, which was giving directions onprovided by the Shi of Accounting after settling

matters notified by prefectures; andthe money and grain received or spent. These(v) Shintatsu, which was giving notices todocuments were to be audited by the Shi of

Ministries and Agencies.

Audit.
History of the Board of Audit categorized

3. Ringi (request for approval)

the operations conducted by the Shi of Audit at
RitsuanRingi was an act of the Shi of Audit to(proposal), and Ringi (request for approval), andrequest approval of the Kyo of the Ministry inindicated some examples as mentioned below.

writing. For example, Ringi was submitted about

the time into

Hashutsu(dispatch),

regulations on travel expenses or regulations on
handling at the Shi of Supplies.

1. Hashutsu (dispatch)
In July 1869, the Acting Chiji of the Shi of

As mentioned above, the rules on the

Audit was dispatched to Hakodate Prefecture,organization of the Shi of Audit did not clearly

Niigata Prefecture, and Nagasaki Prefecture todemarcate the scope of operations of the Shi, so

conduct inspection of counterfeit money. This

the contents of its authority were wide-ranging

was a measure in response to notifications given

and overly burdening, but the Shi only had 88

by Ministers of foreign legations from various

officials at the most and less than 50 officials

countries requesting the Japanese government towhen the number was the fewest.

take measures against counterfeit gold coins that

Government offices had a strong tendency towere in circulation at ports and other areas at the

avoid supervision by the Shi of Audit, andtime. Also, in September 1869, the Sei of Audit

showedwas dispatched to the Kingdom of Hawaii toundergoing audit. When officials of the Shi ofrecall Japanese people. Further, in June 1870, theAudit visited Shi for audit, they are said to have

Sei of Audit was dispatched to Kozuke Province

been subjected to grim stares from the auditee'sand Musashi Province together with a French

officials.

anuncooperative

attitudewhen

person to take a tour to investigate buildings ofSubsection 5silk reeling facilities in these provinces.
2. Ritsuan (proposal)

Rules
on
FinanceandAccounting soon after theestablishment of the Meiji
government

Ritsuan was an act of drafting documents forcommunicating opinions or directives by thename of the Kyo

11Since the Meiji government continued toof the Ministry. There were11

the following five types of Ritsuan:
10"Kyo" is an official who is the head of each Ministry
under the Dajokan system.

Section 1

Shi of Audit

suffer from fiscal stringency, it issued an imperial

expenditure, which was one of the most critical

instruction to save costs in May 1869, and sought

issues in financial processing at the time, and set

the opinions of fifth- or higher-ranking officials

forth the principle of using the gross method in

as well as Imperial princes, court nobles, andrecording revenues and expenditures.

feudal lords. Moreover, the Dajokan issued an
official notice to Kan, Ministries, and prefectures

Subsection 6

in December of the same year, instructing themRules on the organization of theKan of Finance and Accounting

to save on supplies, while various stipulations on
finance and accounting and various regulations

In May 1869, the "Rules on the organization

on reporting of account ledgers were alsoof the Kan of Finance and Accounting" wasestablished as follows in response to the new

announced. The rules provided that "Kan ofadministration.

Finance and Accounting

determines matters

In January 1869, "Regulations of the Shi ofincluding tax, supplies, stipends, contributions,

Accounting" was promulgated with a preamble

gold and silver coins, warehouses, land surveys,

stating that "the Shi of Accounting has a mandatebuilding and repairs, and mining from a broad

to

money

perspective, and has jurisdiction over the Bureau

transactions and shall implement the handling asof Minting, Shi of Audit, Shi of Tax, Shi ofdescribed below." The regulations provided for

Accounting, Shi of Supplies, Shi of Building andthe method of processing the accounting of

Repairs, and Shi of Mining." The Shi of Audit

money and grain from the standpoint of exclusive

was established for the first time based on thisregulation. They prescribed various types ofprovision.

exclusively

regulate

rice

and

account ledgers and enabled calculation of the

The Rules on the organization of the Kan ofvarious expenses of the respective Kan and Shi,

Finance and Accounting showed the first signs ofprovidedthemodern financial management, such as theaccounting of matters including monthly salaries,

systems of budget and final accounts, provisions

pension rice, rice allowance, travel expenses,

on taxation, expense control, and financial

extraordinary necessary expenses, extraordinary

disclosure, which had already been implemented

expenses of rice and money, and interest-freein advanced countries at the time, and alsoloans, and stipulated the relationships between theprovided for field audits. The rules were intended

Shi of Accounting and the respective Shi offor controlling the costs and spending andMinting / Mining / Building

andreducing exceptional and emergency expenditures

between the Shi of Accounting and prefectures.

of Kan and prefectures and securing concentrated

They also stipulated work rules requiring thefinancial management, with a view that cost

Extraordinary Levies Section, the Rice Section,

reduction is of primary importance in public

and the Section of Investigation on Delivery offinance.

for

rules

and

deadlines

and

for

Repairs

In feudal domains under the Tokugawa

Rice Allowance in the Shi of Accounting to work

shogunate, the feudal lords were appointed asin cooperation with each other.
Meanwhile, the Regulations of the Shi ofprefectural governors by the imperial sanction on

Accounting prohibited netting of revenue andthe return of the land and people from the feudal
11Part 1

Chapter 1

Forerunners of BOA

lords to the Emperor in June 1869, and were

Shi of Accounting and an officer of the Shi of

institutionallyadministrative

Audit must attend and put their seals of approval

officials of the central government instead ofon the account book that states the amount of

feudal lords. Then, in September 1870, themoney received or disbursed; and the Sei of

Dajokan issued an order of the new domain

Audit and the Sei of Accounting must inspect thesystem.

outstanding amount impromptu every month.

positionedasWhen the Shi of Accounting delivered

The Dajokan categorized feudal domains bysize into large (150,000 koku or more), medium

money(50,000 koku or more), and small (less than

expenses, or reserve funds or the like to Kan or a

50,000 koku), and specified the actual number of

Ministry, the Shi had the Kan or Ministry receive

officials in the domain according to the domain

the money by issuing a receipt certificate eachsize. It limited the hereditary stipend of atime. However, this practice was revised in

prefectural governor to one-tenth of the amountFebruary 1870. Two account ledgers of a specificof koku of the feudal domain in order to separate

form (Kaicho) were created, with each of themdomainprefectural

being kept at the Shi of Accounting and thegovernor's household management, and orderedcounterpart Kan or Ministry, and the two ledgers

the use of the remaining nine-tenths for expenses

were collated upon every receipt or disbursement.

of public or government organizations. It alsoThis revision was intended to prevent errors thatordered that ledgers of revenue and expenditure

had been caused due to the large number offor the period of October to September of thereceipt certificates issued. Public dues also camefollowing year be submitted in specified forms at

to be processed by this procedure. In April, thethe end of every year, and that the total amountShi of Accounting demanded Kan, Ministries,of the debts of the feudal domain should be

and prefectures not to delay in sending theirredeemed in yearly installments, and currency

monthly accounting ledgers, and warned themnotes issued by each feudal domain should bethat the Shi would not deliver the money andcollected and redeemed.

grain for the following month if the delay

12

administration

from

the

for

ordinary

expenses,

extraordinary

continued.
Subsection 7

In October 1870, the forms of the account

Account ledgers and reports

ledgers of Kan, Ministries, Ryo13, and Shi were
In January 1869, various account ledgers

revised. In November of the same year, internal

were stipulated by the Regulations of the Shi of

regulations of the Ministry of Finance were

Accounting as mentioned above. Then, in January

established for processing expense items such as

1870,

established,rice offered as government stipend, monthly

following:allowances, rice offered as reward, rice offered as

officers of the Shi of Accounting shall manage

hereditary stipend, money and grain spent as

the receipts and disbursements of vault money

expenses of Kan and Ministries, money for travel

and their daily and monthly balances; when

expenses,

opening and closing the vault, an officer of the13treasury

providing12

regulations werematters

includingthe"koku" is the unit of the amount of rice to be produced.
12

building

andrepairs

expenses,"Ryo" is an organization in each Ministry under the
Dajokan system, which is the forerunner of a Bureau.

Section 1purchases of gold and silver bullions, war funds,
temporary

tax,

loans

corresponding

to

Kokudaka , and tributes. In January 1871,
14

regulations on accounting of tax, money, andgrain for prefectures and land deposited withfeudal domains were revised, and the forms fortheir account ledgers were promulgated.
The purpose for repeatedly issuing orders on
forms, formats, and reporting of account ledgers
in this manner was not only to reduce thefrequent errors and omissions made by theofficials engaged in finance and accounting who
were often inexperienced, but also to securerevenues and cut costs by eliminating the adverse
practice of government offices that receive
revenue, such as prefectures and the Ministry ofJustice, to directly use the received money andgrain to temporarily pay expenses, thereby
delaying

therecordingofrevenueandexpenditure and arbitrarily retaining funds.

14"Kokudaka" is the amount of rice to be produced.
13

Shi of Audit

Part 1

Chapter 1

Forerunners of BOA

Section 2 Ryo of Audit and Audit Bureau
Subsection 1

Taijo18 of the Ministry of Finance in August

Establishment of the Ryo ofAudit

1871, criticized the abolition of the Ministry of
PopularAffairs andreformoftheofficeorganization of the Ministry of Finance.

Following the abolition of feudal domains
and establishment of prefectures in July 1871, theThe outline of the Ryo of Audit was

Ministry of Finance abolished the Shi of Audit

described in the "General Plan for Reform ofand established the Ryo of Audit in August of

Office Organization," which was a proposal forthe same year.

reform of the office organization of the Ministry

In the Ministry of Finance, which wasof Finance submitted by ITO in June 1871 as aexpanded by consolidating it with the former

result of his research and study in the United

Ministry of Popular Affairs, Shi were promoted

States. The Rules on the Organization and Affairs

in rank to Ryo. The Ministry provided that itof the Ryo of Audit, stipulated in August 1871,

would revise the ranks of the Ryo and Shi underwere modeled after this general plan.

its jurisdiction, and that minting and taxation
Subsection 2

would be governed by first-ranking Ryo, family

Organization

registers, building and repairs, currency notes,be

The Rules on the Organization and Affairs

governed by second-ranking Ryo, records, postalof the Ryo of Audit were enacted in August

services, and industry promotion would be

1871, and the following Kan were put in place:governed by third-ranking Ryo, and verification

Soninkan consisting of fourth-ranking to seventh-of accounts would be governed by first-ranking

ranking officials, namely Kami Gonnokami,

Shi. On this basis, the Ministry restored the Shi

Suke, and Gonnosuke; and Hanninkan consistingof Audit, which was abolished in July, as theof

Ryo of Audit, and newly established the Shi ofnamelyVerification of Accounts at the same time.

Gonnochuzoku, Shozoku, and Gonnoshozoku. In

accounting,statistics,

and

audit

would

eighth-ranking

addition,

The reason that the Ministry restored the Shi

toDaizoku,
Shisei13th-ranking

officials,

Gonnodaizoku,

Chuzoku,(14th-ranking

officials)

andof Audit, which it had abolished two weeks

Ryosho (15th-ranking officials) were put in placeearlier, is said to be due to strong opposition tounder Gonnoshozoku in December 1875.

the abolition from Hirobumi ITO, who was the

The Kami of the Ryo of Audit was

Kami15 of the Ryo of Tax and the Kami of the

responsible for auditing the appropriateness of all

Ryo of Minting. ITO submitted a written opinion

receipts and disbursements of money and grain

to Shigenobu OKUMA, who was Sangi16, Kaoru

by

INOUE, who was s Taifuof the Ministry of

expenditures and closely examining whether the

Finance, and Eiichi SHIBUSAWA, who was areceipt or disbursement was legitimate before"Kami" is an official who is the head of each Ryo in the
Ministry under the Dajokan system.
16"Sangi" is an official who is independent from Ministries,
and under direct control of Dajokan.

17

17

checking

the

bills

for

revenues

and"Taifu" is an official who takes the second highest postnext to Kyo in each Ministry under the Dajokan system.
18"Taijo" is an official who takes the post next to Shofu ineach Ministry under the Dajokan system.

15

14

Section 2

Ryo of Audit and Audit Bureau

preparing a written order, i.e. a slip, for the

The Rules on the Affairs of the Ryo ofreceipt or disbursement. The Kami also directs

Audit clearly stated in the beginning that "thethe officials in the Ryo to process affairs, andRyo of Audit shall investigate and audit affairs ofmanages the respective Bureaus and Divisions.

all receipts and disbursements of money andEstablishment and abolition of Bureaus andgrain," and clearly stipulated the tasks of the Ryo

Divisions and reallocation, increase, and decreaseof Audit in 18 items. The Ryo's affairs mainlyof officials of the Ryo were to be implemented

included the following:

after obtaining the approval of the Kyo of the(i)audit of written applications for receipts anddisbursements of money and grain;

Ministry of Finance, but after the revision of the(ii)

office organization in June 1876, revision andinspectionofreceipt

certificationsforrevenues;

abolition of Divisions became matters to be
exclusively decided by the Kami of the Ryo.

(iii) audit of statements of accounts;

Meanwhile, Gonnokami was to carry out the(iv) on-site audits;duties of the Kami if the Kami was incapacitated(v)

inspection of the books of the Ryo ofor the office of Kami was vacant. Suke andAccounting and oversight of administrative

Gonnosuke were in charge of affairs of Bureaus

processing;(vi) inspection of warehouses and keeping ofand Divisions of the Ryo, and after the above

their keys and locks;

revision of the office organization, they became
able to carry out affairs on behalf of the Kami(vii) inspection of manufacturing of public bondand Gonnokami. Zoku engaged in affairs of thecertificates, currency notes, and various

Ryo under the direction of higher officials.

stamps;(viii) drafting of regulations on audit; andOn January 11, 1877, the Ryo of Audit was(ix) preparation of evaluation reports.

renamed to the Audit Bureau, and Soninkan
officials,

When the Shi of Verification of Accounts

Gonnodaishokikan,

was abolished in October 1872, affairs of

Shoshokikan, and Gonnoshoshokikan of the"investigating and verifying the accounts of deeds

Ministry of Finance) and Hanninkan (eighth-or slips for the money or grain received or

ranking to 17th-ranking officials, namely the

disbursed" by government offices and prefectures,first-ranking to 10th-ranking Zoku of the Ministrywhich had been under the jurisdiction of the Shiof Finance) were put in place.

of Verification of Accounts, were added to the(fourth-ranking
namelythetoseventh-ranking

Daishokikan,

affairs of the Ryo of Audit.

One of the secretaries presided over theaffairs of the Bureau as the Director General, and

The Rules on the Affairs of the Ryo ofother secretaries respectively took charge ofAudit underwent a sweeping revision in June

section affairs as section chiefs, and staff engaged

1876. The Rules provided that "the Ryo of Auditin processing affairs under the supervision of theis an organ that audits the appropriateness of all

respective sections.

receipts and disbursements of money and grain
and sorting out the ledgers," and stipulated theSubsection 3

matters under its jurisdiction in further detail in a

Mandatetotal of 61 items: 19 items as matters to be
15

Part 1

Chapter 1

Forerunners of BOA

implemented after obtaining the approval of theaccounts, punishment of auditees which fail to

Kyo of the Ministry of Finance; and 42 items as

settle the preclosing

matters on which the Kami of the Ryo of Audit

diversion, and explanation and review of laws

can make an independent decision based on his

and regulations had increased from those underown opinion.

the former Rules.

accounts,

approvalof

The matters under the mandate of the Ryo

The main matters under its jurisdiction
include the following:of Audit included no administrative matters such(i)

audit of revenue and expenditure budgets;as "serving as the eyes and ears of the Ministry",(ii)

audit of tax and other revenues;"oversight to prevent illegality or fraud by(iii)

audit of fixed-amount and extraordinary

officials of the Ministry," "exchanges between

expenditures;

genuine and counterfeit money," and "inspection(iv)

audit of statements of accounts;of the amount of commodities and activeness of(v)

audit of ledgers recording the inventory of

trade," which had been under the jurisdiction of

goods;

the Shi of Audit. The Ryo of Audit wason-site audit;

established purely as an administrative organ for(vi)

supervising finance and accounting.

(vii) inspection of vaults and keeping of their

The Rules on the Affairs were not revised at

keys and locks;(viii) inspection of bank deposits;

the time of the establishment of the Audit(ix)

inspection of manufacturing of currency

Bureau, and the Bureau was to implement affairs

notes, public bond certificates, and various

according to the Rules for the Ryo of Audit.

stamps;Later, the Audit Bureau was abolished on Marchdelivery of certificates of verification of the5, 1880.

(x)

final accounts;(xi)

Subsection 4

punishment of auditees which fail to settle

Divisionsthe preclosing accounts
After the establishment of the Ryo of Audit,(xii) approval of diversion among appropriatedthe system of divisions was introduced for theordinary expenses;(xiii) drafting

of

laws

and

regulations

first time in order to assign the affairs under theon

implementation of audit;

jurisdiction of the Ryo of Audit (the system of(xiv) explanation of rules on accounts;

divisions was abolished in January 1877). Major(xv) review of the remuneration laws for thechanges in the affairs undertaken by divisions
and sections are as follows:

respective Ministries and Agencies;[Ryo of Audit](xvi) preparation of ledgers on description of theapproximate

calculation

and

the

(September 1871) Division

final

Acceptanceaccounts of revenue and expenditure; andofDispatchofandDocuments,

Division of Editing, Division(xvii) preparation of annual reports.
Among these, matters such as audit ofof Examination, and Divisionbudgets, audit of goods, audit of bank deposits,of Examination by Referencedelivery of certificates of verification of the final(four divisions)16Section 2(June 1872)

Ryo of Audit and Audit Bureau

Division of Examination by

Administration, and Section ofReference,

Divisionof

Editing (six sections)Examination,

Divisionof

Editing,

DivisionofandSubsection 5

Operations

Reception (four divisions)(October 1872)

Divisionof

Examination,

The operations of the Ryo of Audit and theDivisionof

Investigation,

Audit Bureau include budget survey, review ofDivision of Examination byreceipts and disbursements, audit of the final

Reference,

Divisionofaccounts,

Correction,

Divisionofbookkeeping system, and preparation of annualofreports. The major operations are described

Editing,andDivision

Division
Division(May 1876)ofof(June 1878)

of

the

1. Budget survey

Administration,

Division of Editing, and 1st to

The budget survey operations were divided

5th Divisions of Settlement

into examination of the budget of Ministries and(eight divisions) and Section of

Agencies and drafting of the budget statements to

Revisionbe promulgated.
Administration,

Budget statements were promulgated for theDivision of Editing, and 1st to

first time in October 1875 as "FY1875 Revenue

5th Divisions of Settlementand Expenditure Budget Statements." Before that,(seven divisions)the expenses of the Hokkaido Development

Divisionof

Agency and prefectures were decided in 1871.
Section of Budget, Section of

Further, in 1872, the fixed amount of annual

Ministries,

Sectionof

expenditures of the Ministry of Education was

Prefectures,

Sectionofplanned for the first time along with the annual

Verification,

Sectionof

expenses of the Sain19 and the five Ministries,

Tabulation,

Sectionof

namely the Ministry of Foreign Affairs, Ministry

Administration, and Section ofof Army, Ministry of Navy, Ministry of Works,

Editing (seven sections)and Ministry of the Imperial Household. In thisSection of Budget, Section ofmanner, methods were gradually introduced toInvestigation,

Sectionof

impose restrictions on revenues and expenditures,

Verification,

Sectionofbut the budget had not been promulgated yet.

Administration, and Section of(January 1880)

revision

Reception,[Audit Bureau](January 1877)

audits,below.

Reception (six divisions)(March 1875)

on-siteIn May 1873, Kaoru INOUE, who was theEditing (five sections)Taifu of the Ministry of Finance at the time, andSection of Budget, Section ofEiichi SHIBUSAWA, who was third-ranking

Investigation, Section of Final
Accounts,
Bookkeeping,

SectionSection

19

of
of
17

"Sain" is a legislative organization under the Dajokan
system, which became Genroin, and then the Imperial Diet
in 1890.

Part 1

Chapter 1

Forerunners of BOA

Shusshi of the Ministry of Finance at the time,

Dajokan. The Procedures were intended for

disagreed with the opinion of the government,

obtaining accurate monthly and annual totals ofand submitted a petition appealing the risk ofrevenues

fiscal crisis upon resigning. The newspaper

distinguishing between the amount of revenues"Nisshin Shinji Shi" featured this petition as an

and the amount of expenses, and establishingarticle and sparked heated discussions in theaccount ledgers for registering the daily revenues

public and private sectors.

and expenditures. The Procedures played anandexpenditures

byclearly

At that point, the government recognized theimportant role as the first rules stipulating mattersneed to publish the approximate calculation ofincluding the formats of account ledgers and thethe annual revenue and expenditure in order tomethod of accounting, serving as the basis of

maintain people's trust in public finance. The

enactment of the Public Accounting Act later on.

governmentby

The Procedures also provided that Ministries andappointing Shigenobu OKUMA, who was Sangi,

Agencies shall estimate all of the costs that areas the Jimusosai of the Ministry of Finance in

expected to arise in the following year and send

May, and promulgating "1873 Statement of thethem to the Ministry of Finance by November 15

Estimated Amount of Revenue and Expenditure"

every year, and the Ministry of Finance is tothrough a Circular Notice of Dajokan in June.

prepare estimate sheets based on them and submit

allayedpublicconcerns

those sheets to the Dajokan.

The Statement indicated that the revenue
totaled 48.73 million yen and the expenditure

Based on a proposal by Naritaka ANDO, thetotaled 46.59 million yen, which meant that theKami of the Ryo of Audit notified government

revenue would exceed the expenditure by 2.14

offices and prefectures of format samples for the

million yen, and set forth that the amount of"Statement

national government bonds totaled 31.22 million

Expenses" through a Circular Notice of Dajokan

yen, combining those issued in and outside Japan,

inshowing the general public that the government

procedures for the preparation of the statement, a

was in good financial standing.

list of revenue items, a list of expense items,

March

of

Estimates

1875.

The

of
noticeRevenues
includedandthe

Following the promulgation of this statement

format of the statement of rough estimates of

the

and

revenues, format of the sub-statement of unpaid

expenditure, the government came to make theamounts, format of the statement of roughstatement public every year. The statement of theestimates of expenses, format of the sub-estimated amount of revenue and expenditure wasstatement of unsettled amounts, format of thea mere statement of rough estimates of the annual

detailed statement of the budget of revenues,

revenue and expenditure, and did not have aformat of the statement of revenue increases andnature to regulate spending, but it served as adecreases, and format of the detailed statement ofbasis for the annual budget of revenue andthe budget of expenses, and a sheet stating theexpenditure to be introduced later on.

deadlines forofestimatedamountofrevenuethe" Procedures

Accounting"throughafor

CircularledgerswasThis was the first time that estimates ofTreasury
Noticeaccount

attached to the notice.

Next, in December 1873, the government
establishedservingrevenues and expenses were arranged in theof18Section 2

Ryo of Audit and Audit Bureaubudget format in Japan. The Ryo of Audit

Public Accounting Act and the Rules on thegatheredOrganization of the Board of Audit in Apriltherespective

government

offices'

1881.

officers in charge to the Ministry of Finance, andinstructed the procedures of the affairs, explained
any points they were uncertain about, andexplained about documents such as statements ofaccounts and detailed statements in order toensure they were thoroughly informed on theprocedures and formats.
When conducting budget survey, the Ryo of
Audit or the Audit Bureau was to examine each

Dajokan (around 1873-1874)

item in the budget book prepared by each
2. Audit of the final accounts

auditee, submit the result to the Dajokan for
approval, and prepare and present the budget

Audit of final accounts was a process tostatements after the total amount for each auditee

audit statements of accounts of revenues andhad been decided. In fact, however, it had only

expenditures. Statements of accounts had been

followedbudgetcontinuously used since the beginning of thestatements for prefectures. For the budgets ofrestoration of imperial rule, but neither Ordering

Ministries and Agencies, the Dajokan first

Officers nor Accounting Officers (Suitokan) had

decided the total amount of budget for eachbeen assigned yet, so the head of each auditee

Ministry or Agency, and then the Ministry or

had signed and affixed his seal to the statements

Agency prepared the budget book by dividing theof accounts when submitting the statements.

amount among items.

Since the auditees had only

this

procedure

topresent

includedtheThe examination of the budget of eachapproximate amounts received in the statements

auditee, which should have been completedof accounts, the entire amounts of spending could

before budget drafting, was also extremely

only be identified by information held by the Ryodelayed in actuality, and the Kyo of the Ministryof Statistics. In December 1873, the Proceduresof Finance had presented the budget statements

foron November 25 in FY1875, on December 13 inspecifying the formats of account ledgers. Then,

FY1876, and on December 27 in FY1877, whichin March 1875, it was decided that budget

were indeed six months after the start of theinformation

fiscal year.

submission of account ledgers, including theTreasury

Accounting

shouldbewereestablished,reportedthrough

The budget survey in the era of the Ryo ofstatement of rough estimates of expenses and the

Audit and the Audit Bureau was not a substantive

statement of rough estimates of revenues whichsurvey that determined the appropriateness of thewere to be presented by item, and auditees

contents, but merely organized and aggregatedbecame required to include the entire amounts inthe data for preparing the budget statements andthe statements of accounts.
Initially,

statements of finance and accounting, and thisdocuments

such

as

writtencertificates and statements of items were used ascontinued until the time of enactment of the
19Part 1

Chapter 1

Forerunners of BOA

the documentary evidence to be attached to thein slips from January 1876, and in statements ofstatements of accounts, but from January 1874,

accounts from January 1878, so as to simplify theaggregation statements and detailed statements

handling.
History of the Board of Audit published inbecame required to be attached to statements of1896

accounts.

statesthefollowing

about

audit

of

In Japanese, statements of accounts had beenstatements of accounts: "The level of audit wascalled "Okanjo Mokuroku" or "Okanjocho" in thestill not high. They only verified the compliance

former shogunate era, but they were simplyof the statements with established rules, and if nonamed "Kanjocho" in the beginning of the Meiji

error was found, they issued a certificate ofera. They were renamed to "Kessancho" in 1880,

verification of the final accounts, and if any partand came to be called "Keisansho" from FY1890.

was unclear, they put a tag on the relevant part

The written certificates on revenue attachedand made an inquiry to the auditee, and if thestatements

documentarypart turned out to be an error, they had theevidence were payment certificates provided byauditee correct that part, and then issued apayers and documents proving the certainty ofcertificate of verification of the final accounts."

toofaccountsasrevenues, and those on expenditure were receipt

The Ryo of Audit and the Audit Bureau

certificates and documents proving the certainty

audited a total of 41,634 statements of accountsof expenditures. The statements of items included

and issued a total of 11,378 certificates ofbooks of approval stamps and books of payment

verification of the final accounts from the firstrecords, such as books of approval stamps forhalf of 1875 to FY1878. These audits ofregular small purchases, books of approvalstatements of accounts were only conductedstamps for miscellaneous commodity purchases,

internally.

books of payment records of monthly salaries,
and books of payment records of travel expenses.

Audit of the final accounts of the expenses forsuppressing the Satsuma Rebellion

They provided the proof or breakdown of

A notable incident that greatly affected theaudit of final accounts in this era was thereceipts.
At the time, diverse types of money andsettlement of the final accounts of the armaments

grain were presented in statements of accounts.

expenditures for the Satsuma Rebellion that broke

They indeed reached 65 types, including not onlyout in February 1877. The rebellion

money in yen, but also currencies of foreign

suppressed at the end of September 1877, but thecountries such as the United States and thecosts of this war amounted to over 41.56 million

United Kingdom, silver, nickel silver, large-sized

yen, and the final accounts of the costs could notgold coins, small-sized gold coins, gold bullion,

be settled by applying general rules.

wassilver bullion, rice, wheat, and miscellaneous

Because there were no rules on receipts andgrain. Also, their calculation units were mixed,

disbursements for wartime emergency situations

such as yen, dollar, kan (unit of weight), andat the time, the Ministry of Army enacted Notices

koku. Since such inconsistency made calculation

B No. 52 "General Rules on Categorization of

extremely difficult, it was decided that all

Wartime Expenses" and No. 59 "General Rules

amounts were to be stated in the unit of currency

on War Accounting Affairs" in February, and20Section 2

Ryo of Audit and Audit Bureau

following suit, the Ministry of Navy establishedexpenses, simple processes were pursued, such as

Notice C No. 68, "General Rules on Wartime

using the existing receipts so as to save the

Expenses" in June.

trouble of preparing detailed statements, and if

In order to organize the settlement of final

there were expenses which should be included inaccounts of the war expenses, the Secretariat of

the expenses of Auditee A but were actually

War Expense Management was established in the

spent by Auditee B, immediately including such

Dajokan by Circular Notice of Dajokan No. 86 in

expenses in the final accounts of Auditee B. The

November 1877. Shigenobu OKUMA, who was

Secretariat

the Kyo of the Ministry of Finance, wasdocuments submitted by the respective officials in

appointed as the head of the Secretariat, andcharge one after another, and settled the final

Naritaka ANDO, who was the Director Generalaccounts, issuing a substitute certificate for proof.

of the Audit Bureau, was to mainly process

The total amount of the final accounts turned out

affairs. The officials in charge in the respective

to be immense at over 41.56 million yen, whichgovernment offices were to visit the Secretariat,

almost matched the settled amount of the annual

bringing all documents related to the war

total of general expenditure for FY1877 of overexpenses, and were to prepare ledgers including

48.42 million yen, and its breakdown was

the statements of accounts in consultation andreported in the statement

cooperation with officials of the Ministry of

expenditure accounts approved by Dajo-daijin20

Finance.

on February 13, 1880.

completedthereview

of

of

the

revenue andOfficials from the following offices gathered

This audit was the first challenge faced byat the Secretariat: the Dajokan; Ministry of Army,

Japan's supervision of finance and accounting,

Ministry of Navy, the Hokkaido Development

but the "receipts" that were used as documentary

Agency, Police Bureau, Ministry of Foreign

evidence for proving expenditure in order to save

Affairs, Ministry of Home Affairs, Ministry of

the trouble of preparing detailed statements were

Finance, Ministry of Education, Ministry ofrecognized to be more effective than documents

Works, Ministry of Justice, and Ministry of thesuch as detailed statements and summary sheets,

Imperial

which could be rigged, provided a turning point

Household,andrelatedprefectures

including Fukuoka Prefecture, Oita Prefecture,for submission of accounts.

Kumamoto Prefecture, and Kagoshima Prefecture,
where the war was fought. These officials sat

3. Audit conducted by dispatching officials

together to organize the books and engage in the

There were three types of audits that wereaffairs of verifying the accounts. The war

conducted by dispatching officials of the Audit

expenses included not only combat expenses, but

Bureau: audits of the preclosing accounts; on-site

also recruitment expenses, security expenses,

documentary audits; and on-site audits.

sojourn(1) Audits of the preclosing accounts

expenses,

and

crime

punishment

expenses. They also included expenses such as

Audits of the preclosing accounts started todeprived money, captured money, discarded

be conducted in 1877 when it was provided ingoods, and lost money to which normal rules
could not be applied. When organizing these20

21"Dajo-daijin" is the grand minister of state.

Part 1

Chapter 1

Forerunners of BOA

Article 8 of the Rules on the Organization andand they audited the breakdown of statements of

Affairs of the Ryo of Audit, as revised in Juneaccounts. The audits started to be conducted from

1876, that "any auditee which fails to settle theJanuary 1878 based on a proposal by Naritaka

preclosing accounts of their entire expenses shallANDO, who was the Director General of thebe punished." At the time, many auditees failed

Audit Bureau.

to explain whether there were actual needs for the

While aggregation statements and detailed

fixed amount of funds received from the treasury,

statements had been required to be submitted by

and failed to carry out closing adjustment for abeing attached to statements of accounts aslong time after the end of the fiscal year until

documentary

they had completely consumed the received

auditees faced considerable trouble preparing

funds. Also, some auditees which had any

them and strongly demanded abolition of theiramount remaining unspent in their planned

submission. At the same time, an imperial decreeamount of annual expenditure at the fiscal year

for tax reduction had been issued, requiring theend kept such remaining amount in the form ofauditees to simplify their administrative work.

provisional payments, and built government

Therefore,

office buildings, or purchased unnecessary, non-introduced whereby the auditees were to keep

urgent goods. Such practice not only delayed the

documentary evidence and Audit Bureau officials

settlement of final accounts, but also caused

were to be dispatched to the auditees to audit thewasteful spending, and posed a serious problem

documentary evidence.

evidence

on-sitesince

January

documentary

1874,

auditswerein finance and accounting. Thus, audits of the

In on-site documentary audits, the Audit

preclosing accounts started to be conducted in

Bureau dispatched its officials to the auditees andorder to prevent such adverse practice.

had

them

conduct

in-office

audit

of

the

In this audit, officials of the Audit Bureau

breakdown of the statements of accounts, whichwere dispatched to auditees, and they audited theconventionally had been audited in the Audit

current remaining amounts in the ledgers of

Bureau. Accordingly, the audit was restricted byrevenues and expenditures as well as the outcome

the number of days dispatched and the abilities ofof those remaining amounts such as their use as

the officials, and only sampling audits ofprovisional payments. They investigated thefinancial information for a couple of months wereunsettled amounts and the grounds for the

conducted in actuality. The reported matters wereunsettled status, and instructed the auditees tomainly mere errors in salary calculation orsettle the accounts and to return the unused

differences between counts, and the audits had noamounts by a specified time limit. This audit waslarge effects except for having the auditees

extremely

closing

correct such errors.

adjustments. Officials were dispatched for audits(3) On-site audits

effectiveforpromoting

In on-site audits, officials of the Auditof the preclosing accounts nine times during theperiod from 1877 to 1880.

Bureau were dispatched to auditees, and they(2) On-site documentary audits

auditedtheactualreceipts,

disbursements,

In on-site documentary audits, officials of

storage, and calculation of money, grain, and

the Audit Bureau were dispatched to auditees,

goods. The audits started to be conducted from22

Section 2

January

1878,

as in

the caseof

Ryo of Audit and Audit Bureau

accounts were abolished after FY1880, but on-

on-sitesite audits made further progress, and after the

documentary audits.
Errors in bookkeeping and delays in the

Board of Audit Act (the BOA Act) came into

processing of affairs were found for all auditees

effect under the Meiji Constitution in May 1889,

as a result of audits. One example is as follows.

they were renamed to "field audits," and have

Osaka Prefecture had 320,000 yen in various

been implemented along with in-office audit.

miscellaneous revenues, including interests on

They have been continued under the current BOA

loans, interests on public bond certificates,

Act and constitute the core of BOA's audits

revenues from tax called "Myogakin," andtoday.

proceeds from sale of various goods, which had
been processed within Osaka Prefecture alone
since 1870. Since the Ministry of Finance had

4. Rules on On-Site Documentary Audits by
Auditors and the Audit Bylaw

issued notices in 1872 and 1873 instructing

Audits through dispatch of officials came to

Osaka Prefecture to pay this money to the central

be widely conducted as above, so the Rules on

government, the retention of the money was in

On-Site Documentary Audits by Auditors wereviolation of rules. Thus, the dispatched officials

enacted through Circular Notice of Dajokan No.

reported this to the Kyo of the Ministry of

2 in January 1878, and the Audit Bylaw was

Finance, and told the Chiji of Osaka Prefecture

enacted in February 1878.

that(1) Rules on On-Site Documentary Audits by
Auditorstherevenues

shouldbeappropriately

processed.

AuditsIn FY1877 and FY1878, audits through

under

the

Rules

on

On-Sitedispatch of officials were conducted 73 times. In

Documentary Audits by Auditors were, as

five times, only on-site documentary audits were

provided in the preamble of the Rules, conductedconducted, in 60 times, both on-site documentaryby dispatching officials of the Ministry ofaudits and on-site audits were conducted, and in

Finance to auditees every year in order toeight times, both of these types of audits andconduct

audits of the preclosing accounts were all

disbursements of money, grain, and goods."

conducted.

Article 1 of the Rules stipulated that "... auditorson - site

auditsofreceipts

andAs mentioned above, audits through dispatch

shall be dispatched to central government offices

of officials were highly effective in some areas,and prefectural government offices not less thanbut not so effective in other areas. In any case,twice every year in order to audit all of the actual

auditees seem to have strongly resisted thesereceipts,

audits.

money, grain, and goods including the detailed

disbursements,

andcalculationofstatements of breakdown kept at those offices."

From FY1882, on-site documentary audits
were integrated into in-office audits where

The Rules on On-Site Documentary Audits

auditees were to send documents to be audited toby Auditors have aspects that served as theBOA, except for those that require special

foundation of the field audits conducted today,

treatment, and BOA officers were to audit themsuch as advance notice of the dispatch, outline ofinternally. Meanwhile, audits of the preclosing

the personnel and audits, and submission of field
23

Part 1

Chapter 1

Forerunners of BOA

audits reports.

income before spending" as its basic fiscal policy(2) Audit Bylaw

from the early days. In order to put this into
practice,

The Audit Bylaw consisted of six titles and

it

was

necessary

toensurethe49 details, including "budget statements of

independence of the fiscal year, that is, torevenue and expenditure," "investigation andestablish a principle to spend all expenditurecalculation of statements of accounts of revenue

during the fiscal year from the revenue received

andstatements ofduring that fiscal year. Thus, in October 1874,

revenue and expenditure." It provided for thethe government established this modern fiscal

contents of audit affairs and guidelines foryear system through an Extra Circular Notice of

implementation of audits in detail, and also

Dajokan.

expenditure,"

and"finalSpecifically, one year from July 1 of aprescribed matters of finance and accounting.
The Audit Bylaw expressly provided for thecertain year until June 30 of the following year

contents of audit affairs and the policy of

was designated as one fiscal year, and revenue

implementation of audits for the first time, and it

and expenditure that arose during this period

was Japan's first audit law that was establishedwere to belong to that fiscal year. This fiscal year

130 years ago.

system was to be implemented from fiscal year
(FY) 1875.
The solar calendar system was introduced in

5. Development of public accounting law andadoption of double-entry bookkeeping

December 1872, and in line with this, the fiscal
year

In June 1873, the government promulgatedforprocessing

annualrevenueandthe statement of the estimated amount of revenue

expenditure was decided to be based on theand expenditure for 1873 through an Extra

calendar year system. However, the start and the

Circular Notice of Dajokan. The government

end of a fiscal year were changed only one year

realized that it is both convenient and effective toand nine months after this decision. This wasprocess and supervise finance and accounting bybecause, as a result of publicly releasing theusing this statement, and came to prepare andstatement of the estimated amount of revenue andpromulgate the statement annually from this year

expenditure for 1873 and 1874, the government

onward. This eventually took shape as theincreased its awareness of the one-year budget

budget, and promoted the development of public

system and the principle of independence ofaccounting law.

fiscal years for preventing confusion of revenue(1) Procedures for Treasury Accounting

and expenditure between fiscal years, and it
determined that, in order to maintain

The Procedures for Treasury Accounting

thewas a simple procedural law on receipts andindependence of fiscal years in that sense, thedisbursements of money and grain, consisting ofmost appropriate month to start a fiscal year was

11 Articles, and served as the basis for theJuly, also in consideration of the time forenactment of the Public Accounting Act.

collecting tax revenues.

(2) Establishment of the modern fiscal year
system(3) Bylaw on Operation Expenses
Since various type of state-owned enterprises
in silk-reeling, iron, mining, and other sectors had

The government had held "consider your24

Section 2

already been developing gradually, there was a

Ryo of Audit and Audit Bureau

need to establish independent economies for(5) Establishment of the closure period of
accounts for the preceding fiscal year

them. In September 1876, the government

In July 1878, the closure period of accounts

established the "Regulations on Classification,

for the preceding fiscal year was established

Receipt and Payment of Operation Expenses ofthrough Circular Notice of Dajokan No. 34, andAuditees" through a Circular Notice of Dajokan.

was promulgated to government offices and

The Regulations classified general expenses ofprefectures. Since the Ministry

auditees which are used for operations as

Accounting Bylaw enacted in September 1876

operation

the

did not have clear provisions on the deadline forthoseclosing the accounts to settle the final accounts,

operations,the revenues and expenditures for each fiscal year

including operations in the minting, currency

often remained unclosed for several years, andnotes, shipbuilding, mining, railway, telegraphic

this made the calculation extremely difficult andcommunications,caused delays in the settlement of the final

expenses,

procedures for
expenses.

andreceiving

Expensesforandestablishedandpayinggeneralvarious

manufacturing

The establishment of the deadline removed

and were not to be mixed with other ordinary

the inconvenience in finance and accounting, andexpenses.

further improved public accounting law.

The government set up accounts separate
generalFinanceaccounts.

sectors, were all classified as operation expenses,

from

of

revenueandexpenditure(6) Adoption of double-entry bookkeeping

asoperation expenses for a large number of

In July 1876, the affairs of revising thegovernment enterprises including the following:bookkeeping system were placed under thethe Printing Bureau and the Minting Bureau ofjurisdiction of the Ryo of Audit. Prior to this, thethe Ministry of Finance; the Artillery Arsenal andgovernment had enacted the Procedures for

the Senju Textile Factory of the Ministry ofTreasury Accounting through a Circular Notice ofArmy; the coal mine and ship yards of the

Dajokan in December 1873, and stipulated theMinistry of Navy; and the Telegraph Bureau, thetypes of statements of accounts of revenues andRailway Bureau, and glass factories of theexpenditures and the bookkeeping method. With

Ministry of Works.

the introduction of daily books for recording(4) Ministry of Finance Accounting Bylaw

receipts and disbursements of money and grain,

The Ministry of Finance Accounting Bylaw

the bookkeeping method changed drastically,

was enacted in September 1876. The Bylaw

with officials being required to register not only

consisted of 20 titles and 274 details. It provided

daily receipts and disbursements, but also otherfor finance and accounting in general, andtransactions such as repayments and exchanges,

covered practically everything from substantive

and to post the entries into various accountlaw to procedural law on matters ranging fromledgers according to item. Furthermore, fromrevenue and expenditure items, budget provision,

1875, the Ministry of Finance pushed forward

accounting method, supervision, treatment ofeffortsmoney and grain, to processing of ledgers.

bookkeeping system, which records transactions

todisseminate

thedouble - entry

as credits and debits, to all government offices. It
25

Part 1

Chapter 1

Forerunners of BOA

set up the Bookkeeping Method Research Section

books, ledgers, and budget books are official

in January 1876, employed a Portuguese person

account ledgers which cannot be altered withoutcalled Vincente E. BRAGA, and established thethe approval of the Kyo of the Ministry of

double-entry bookkeeping method. These affairs

Finance, subsidiary books may be used as needed

were then transferred to the Ryo of Audit in July

(Article 9).

of the same year, and were further transferred to

The

the

Audit

Bureauwhen

theBureauadoptionofthedouble - entry

bookkeeping system created a momentum towaseliminate provisional payments, which had been aestablished in January 1877.

long-standing evil practice in the finance andIn February 1878, the government notified
government offices and prefectures of the plan toaccountingofgovernment

offices,buttheintroduce the double-entry bookkeeping method

adoption of the system was by no meansby issuing Notice B No. 9 of the Ministry ofaccepted by auditees without resistance.
Later, in August 1882, Notice No. 29 of the

Finance, and held seminars on the method for

Ministry of Finance, the revised "Explanation ofthem.
double - entry

Bookkeeping Organization," was issued. The

bookkeeping method" was submitted to thegovernment abolished budget books, which had

Dajokan in August 1878, and the government

not adopted the double-entry of debit and credit,

provided that "the bookkeeping method shall be

and required government offices to enter budgetchanged to the double-entry system in July 1879,

records and cash receipt and payment in daily

but the method can be changed immediately ifbooks, ledgers, and various subsidiary books by athe officials are already familiar with the double-

double-entry

entry system" in Circular Notice of Dajokan No.

revenues

42 in September.

implementation came to be consistently recordedThe" inquiryonthemethod.
andHowever,

expenditures

becauseinallbudgetby a double-entry method, the trouble ofThen, in November 1878, the implementation
wasadministrative work, such as journalizing andprovided by Notice B No. 55 of the Ministry of

posting of entries, multiplied, and the number ofFinance "Bookkeeping Bylaw."

official ledgers swelled tremendously.

methodofdouble-entry

bookkeeping

This Bylaw consisted of 10 Articles, andThe Meiji Constitution was enacted in 1889,

explained the method in detail so as to facilitate

and the Public Accounting Act was enacted as its

the understanding of even inexperienced officials

appended law based on a completely different

in charge of accounting affairs. The provisions

viewpoint

from

the

includedAccounting

Act.

Under

the

following :thereceipt

andconventional
the

new

PublicPublicdisbursement of money should be separately

Accounting Act, most of the bookkeeping ofpresented on the left and on the right by thegovernment offices was switched from the

double-entry system, and should be presented indouble-entry method to single-entry method.

pairs under the titles of borrowing and lending

During the eight years of supervision by the(Article 2); all amounts of money should be

Ryo of Audit and the Audit Bureau, laws

described in Arabic numerals (Article 3); andincluding the Procedures for Treasury Accounting

while cash receiving and disbursing books, daily

and the Bylaw on Operation Expenses were26

Section 2

enacted. Also, the double-entry bookkeeping
system was adopted, and the finance andaccounting system was gradually improved. Yet,
the audit system was still underdeveloped, andauditees

showedundergoing

considerable

on-sitereluctance

documentary

audit,

toasmentioned earlier.
The Ryo of Audit and the Audit Bureau,
which were merely one of the Bureaus of the
Ministry of Finance at the time, were unable toimplement some audits despite being stipulated inlaw. While the Audit Bylaw provided that if any
amount in the financial statements was found to
be improper as a result of audit, the auditor
should "inform the head of the auditee, in thename of the Kyo of the Ministry of Finance, thatthe amount cannot be presented in the final
accounts due to violation of Article XX of theRegulations" (Title 3, Detail 16 of the Audit
Bylaw), but none of the auditors actually put this
into practice. History of the Board of Audit
published in 1896 states, "Does this actually
imply that there was no improper matter found?
It seems to suggest that proper implementation ofoperations was becoming even more difficult thanever before."
However, as the name of the organization
changed from the Shi of Audit, and the Ryo of
Audit, to the Audit Bureau, the contents of audits
were gradually enhanced, the audit authority was
reinforced, and implementation of audit greatly
contributed to the public finance at the time. It
can be said that the foundation of BOA wasgiven shape during this era.

27

Ryo of Audit and Audit Bureau

Part 1

Chapter 2

Establishment of BOA

Chapter 2

Establishment of BOA
Dajokan No. 18.

Background of establishment of BOA
Japan broke the long-standing feudal system

In this way, at a time when there was stilland built a centralized system through the Meiji

no Diet, BOA mandated with fiscal supervision

Restoration, and as mentioned in the previous

was established in the Dajokan as the firstchapter, the Ministry of Finance and the Ministryindependent government office, in order toof Popular Affairs engaged in fiscal supervision

integrate the extensive and complicated fiscalthat corresponds to such change.

authority into the Dajokan and to have the
Dajokan exercise the authority in a centralized

However, there were naturally limits in themanner.

fiscal supervision conducted by the Ryo of Audit
and the Audit Bureau, which were merely

Development of the audit systembureaus of the Ministry of Finance. The power of
their authority only extended to finance and

BOA, which was established in March 1880,

accounting of prefectures, and not to those of

was given the mandate to audit the final accounts

central government offices.

and also to examine the budget and to prepare

In February 1880, the government reformed

the final accounts. However, it changed its

the Dajokan system, with focus on integration of

position in the fiscal system in October 1881,

fiscal power. As one of the means of the reform,

prompted by the failed Meiji-14 coup of 1881.

it established BOA under the direct control of the

In January 1882, the Public Accounting Act

Dajokan and enhanced the fiscal supervisionand the Rules on the Organization of the Board

structure.

of Audit were revised through Circular Notice of

The person who powerfully drove the

Dajokan No. 5, and the authority to examine theestablishment of BOA, which was under thebudget and the authority to prepare statements ofdirectgiven

revenue and expenditure accounts were both

independence from the general executive branch,excluded from BOA's authority. Since then,was Shigenobu OKUMA, who was the founding

BOA's scope of authority has been restricted tofather of the Shi of Audit and who oversaw

audit of the final accounts. BOA became an

public finance at the time as a Sangi and the Kyoorgan supervising government accounting throughof the Ministry of Finance. He submitted a

auditing the final accounts, similar to supreme

proposal to the Dajo-daijin that establishment ofaudit institutions of advanced western countries.

ancontrol

independent

of

the

organ

Dajokanwasandnecessary

In December 1885, the Dajokan system,

forwhich had continued since the beginning of theeffectively conducting audits.
This

proposal

was

accepted

by

Meiji

the

government,

was abolished,

and

the

government, and on March 5, 1880, a sanction

Cabinet system was established. With this reform,

was given to "establish BOA in the Dajokan and

BOA became an organ under the direct control ofabolish the Audit Bureau in the Ministry of

the Cabinet, and in April 1886, the Ordinance on

Finance." On the same day, an announcement to

the Board of Audit (Imperial Ordinance No. 20)that effect was made through Circular Notice ofwas promulgated.
28

Section 1 Changes in BOA's Organization

established in the era when BOA was under the

The established position of BOA in national

Dajokan system.

organizations has been maintained, along with its
name, through the subsequent era under the Meiji
Constitution when it was placed under the directcontrol of the Emperor, and further to the present
day under the current Constitution.
Duringthat

courseoftime,nationalorganizations were further developed and became
more complicated, and the scale of public financeexpanded. In line with this, audit subject mattersincreased and the audit systems and audit
Sanction on the establishment of BOA"Kobunroku" (Record of Official Documents),
1880 (owned by the National Archives of Japan)

methods were improved, but the foundation of
the systems of in-office audits and field audits,which serve as the core of BOA's audits, wasSection 1 Changes in BOA's Organization
Subsection 1

Audit Bureau in the Ministry of Finance, andOffice Organization

carried out operations at the two offices until
February 1881.

1. BOA's initial structure
In March 1880, BOA's personnel structure
was stipulated as follows through Circular Notice

2. Enactment of the Rules on the Organizationof the Board of Audit

of Dajokan No. 19. BOA had a total of 88

In April 1881, the Rules on the Organization

officials at the start.
President of BOA
Kanji of BOA

Officialof the Board of Audit (Circular Notice of

appointed

by Imperial Order

Dajokan No. 35) were enacted, and together with

Fourththe provisions of the Public Accounting Act-

ranking(Circular Notice of Dajokan No. 33) which was

official
First-ranking Director

Fourth-enacted at the same time, they established BOA

rankingasofficial

an

organ

engagedinextensive

fiscalSecond-ranking Director Fifth-ranking official

supervision covering matters from budget toThird-ranking Director

settlement of the final accounts. The Rules on the

Fourth-ranking Director
Staff members

Sixth

-

ranking

official

Organization

Seventh - ranking

constituted by the "Organization of the Board of

official

Audit" which provided for BOA's employees andFirst -

to

of

the

Board

of

Audit

was

their duties and the "Rules on the Board oftenth -

Audit" which provided for BOA's objectives andranking Zoku

authority.

BOA was initially established within the

The Rules provided that the President of

Dajokan, but it established a branch in the former
29

Part 1

Chapter 2

Establishment of BOA

BOA was to take the overall control of theserve as the Kanji of BOA, and then as the

personnel affairs of BOA's officials and to take

Acting President of BOA.

the leadership in the affairs administered byFirst, ANDO, who was the Kanji, presided

BOA. The Fukucho was positioned next to theover BOA's affairs without issuance of an order

President, and respective Directors were to taketo appoint the President, but in May 1881,

charge of receipt and disbursement of public

Masuka YAMAGUCHI, who was vice-envoy ofmoney and goods, supervision of government

the Iwakura Mission (a Japanese political mission

property management methods, and affairs ofto the United States and Europe between 1871

budget and settlement of the final accounts.

and 1873) and the Kanji of the Genroin21 wasappointed as the first President of BOA, and

3. Amendment of the Rules on
Organization of the Board of Audit

ANDO was appointed as the Fukucho. President

the

YAMAGUCHI was transferred to serve as a

The Public Accounting Act and the Rules on

Gikan of the newly established Sanjiin22 in

the Organization of the Board of Audit were

October 1881, and Michitoshi IWAMURA, aamended in January 1882. With the amendment

former councilor of the Genroin, was appointedof the Rules on the Organization of the Board ofas the second President of BOA.

Audit, BOA became an organ purely for

Then, in May 1884, President IWAMURA

supervising the settlement of the final accounts.

was transferred to assume the position of a Taifu

In addition, the First-ranking to Fourth-ranking

of

Directors came to be simply referred to as

WATANABE, a Gikan of the Sanjiin, was"Directors," and they came to be engaged only inappointed as the next President of BOA.

the

MinistryofJustice,andNoboriaffairs of audits, and one of the Directors taking
charge of each Audit Bureau was to assume theposition of the Director General.
4. Promulgation of the Rules on the Board of
Audit
In April 1886, the Ordinance on the Board
of Audit (Imperial Ordinance No. 20) was
promulgated, and the position of the VicePresident of BOA was put in place.
5. Changes in the President ofimmediately after its establishment

Iwakura Mission(From left) Takayoshi KIDO,
Masuka YAMAGUCHI (the first President of BOA),
Tomomi IWAKURA, Hirobumi ITO andToshimichi OKUBO

BOA

Upon the establishment of BOA in March
1880, Naritaka ANDO, the Director General of

Subsection 2

the Expenses Adjustment Bureau of the Ministry

21

Divisions and Responsibilities"Genroin" is a legislative organization under the Dajokan
System, which is the forerunner of the Imperial Diet.
22"Sanjiin" is an organization under the Dajokan system,
which is the forerunner of the Cabinet Legislation Bureau.

of Finance who was already the Director Generalof Audit Bureau, was ordered to concurrently
30Section 1 Changes in BOA's Organization

Changesin

BOA's

divisionswhich BOA was under the direct control of theandDajokan and the Cabinet.

responsibilities from the time of its establishment
to the time of introduction of the Cabinet system
are as follows.

2. Divisions and responsibilities as designatedin June 1881
With the enactment of the Rules on the

1. Divisions and responsibilities as designatedin March 1880

Organization of the Board of Audit, in June

BOA established five divisions, namely the1881, the Audit Division was abolished, and the

Audit Divisions (the 1st to 5th Bureaus), the

1st Audit Bureau, the 2nd Audit Bureau, the 3rd

Bookkeeping

Accounts

Audit Bureau, the 4th Audit Bureau, and the 5th

and

the

Audit Bureau were established. At the same time,

Administration Division, and specified their

the Bookkeeping Division was converted into therespective works. It also designated categories ofBookkeeping Bureau and the Final Accounts

subjects to be audited by the respective Bureaus

Division into the Reporting Bureau. In addition,of the Audit Division. This was the initial

the Editing Division and the Administration

organizational structure of BOA.

Division

Division,theDivision,
Editing

the

Final

Division,

wereabolished,

and

the

ClericalDivision was established. Each Bureau was

The Audit Division was in charge offormulating finance and accounting regulations,managedbyDirectors

who

had

Assistantand auditing budget statements of revenue andDirectors, and the Clerical Division had staff

expenditure, statements of accounts of revenue

under the control of secretaries.

and expenditure, statements of receipt and issue

Audit Bureaus audited the budget and theof goods, receipt and payment of money andfinal accounts of revenue and expenditure,grain, operation expenses, and the account books

conducting on-site audits of the auditees' projects,of government offices. Each Bureau conducted

audited the receipt and issue of goods andthese operations for the auditees under their

management of government property, drafted

respective responsibilities.

disciplinary action plans for accounting officials,

The

Bookkeeping

Divisionand proposed regulations and other documents,

formulated

bookkeeping methods, recorded the revenue and

for

the

auditees

expenditure of money and grain in books, andresponsibilities.
Meanwhile,

granted certificates of verification of the final

under
the

their

respective

Bookkeeping

Bureauaccounts. The Final Accounts Division prepared

managed the recording of finance and accounting

statements of revenue and expenditure accounts,

in books and approved bookkeeping formats, andthe Editing Division edited documents, and thethe Reporting Bureau prepared annual reports andAdministration

statements of revenue and expenditure accounts.

Divisionprocessed

BOA's

The

miscellaneous affairs.

ClericalDivisionestablished

the

were

Administration Section, the Supplies Section, andappointed as necessary to investigate special

the Recording Section, and took responsibility ofmatters and draft various rules, and such method

administrative affairs within BOA. Furthermore,

had been maintained throughout the period during

the Clerical Division established the ReceptionIn

addition,committee

members

31

Part 1

Chapter 2

Establishment of BOA

Each Bureau was administered by the

Section in August 1881.

Director General, the 1st, 2nd, and 3rd Divisions
were managed by Directors, and the General

3. Divisions and responsibilities as designatedin January and February 1882

Affairs Division and the Bookkeeping Division

thewere managed by Assistant Directors. The

Organization of the Board of Audit was revised,

Clerical Division established the Administrationand the divisions and responsibilities were revised

Section, the Annual Report Section, the Section

in response to this in the same month. The Audit

of Dispatch and Acceptance of Documents, theBureaus were reorganized into three Audit

Recording Section, the Supplies Section, and the

Bureaus. At the same time, the Reporting Bureau

Statistics

and the Bookkeeping Bureau were abolished, andsecretaries manage these Sections.

In

January

1882,

the

Rules

on

Section(six

Sections)

and

had

the Annual Report Section was established in the
Clerical Division. Then in February, the Statistics

5. Divisions and responsibilities as designatedin December 1883

Section was established in the Clerical Division.
Each Audit Bureau was managed by three or

The tasks of the respective Audit Bureaus

four Directors, and they had Assistant Directors

were changed from those categorized by auditee

as in the past. One of the Directors in eachto those categorized by type of matter. The

Bureau was to serve as the Director General.

General Affairs Division was placed under the
direct control of the Director General, and theBookkeeping Division was abolished. Also, the

4. Divisions and responsibilities as designatedin August 1882 and January 1883

Clerical Division was renamed to the Clerical
Bureau.

In August 1882, the Audit Bureaus werereorganized into two bureaus, and in January
1883,

the

following

five

divisionswereestablished in each Audit Bureau: the 1st

6. Divisions and responsibilities as designatedin October 1886

Division; the 2nd Division, the 3rd Division; theIn December 1885, the Cabinet system wasGeneral Affairs Division; and the Bookkeeping

established in place of the Dajokan system. Then

Division. The 1st to 3rd Divisions conductedin April 1886, the Ordinance on the Board of

audit

Audit

affairsfortheauditees

under

their

( Imperial

Ordinance

No. 20 )wasrespective responsibilities, the General Affairs

promulgated. In line with this, BOA revised its

Division reviewed the contents, prepared drafts,

organization in October 1886, and the 1st Audit

and received and kept documents of responses to

Bureau and the 2nd Audit Bureau came to takerequests for advice from auditees and eachcharge of completely different types of matters

Division's documents submitted for approval, etc.

from each other.
The 1st Audit Bureau became responsible

and undertook the administration within the
Bureau, and the Bookkeeping Division wasforresponsible for stating the amounts and grounds

establishedof the budget and final accounts of revenue andReporting Division, headed by the Director

expenditure.

General of the Bureau or the Vice-President of32

examining
the

audit

affairs in

Review

Division

general.

It

and

the

Section 1 Changes in BOA's Organization

BOA. The 2nd Audit Bureau became responsible

based on which expenditures are to be spent, andfor conducting audit by auditee or by item. It

shall end with the settlement of the final

consisted of eight Divisions and an organ underaccounts" (Article 1). It also set forth that thethe direct control of the Director General of thebudget "shall be decided by the Cabinet after

Bureau. One of the Directors was to assume thebeing incorporated and coordinated by the

position of the Director General.

Ministry of Finance based on the notifications
submitted by government offices and examined

The above organizational framework forinby BOA" (Article 7) and that "government

responsibilities, and had been continued until theoffices shall prove their final accounts ofera of BOA under the Meiji Constitution began

revenues and expenditures to BOA, and thein May 1889.

Dajokan shall publicly announce those amounts"

audit

underwent

only

minor

changes(Article 44), stipulating the outlines of the budget
Subsection 3

and the final accounts. In addition, the Act

Authority

provided that "each government office shallcompile a statement of revenues and expenditures

1. BOA's initial authority
BOA's initial tasks were to be handledaccounts every fiscal year, and submit it to BOA

according to the "Notice of Affairs Handled bywithin five months after closing the final

BOA" which provided for nine items including

accounts" (Article 50).

"deciding on regulations on accounting andbookkeeping methods." These tasks were to be
implemented according to statutes formulated in

3. Enactment of the Rules on the Board of
Audit

the era when BOA was the Audit Bureau of the

The Rules on the Board of Audit, which set

Ministry of Finance, and any doubt that arise inforth BOA's objectives and authority, provided

implementing the tasks were to be inquired withfor BOA's broad and powerful mandate in

the Dajokan.

response to the various provisions of the Public
Accounting Act.

The Rules on the Affairs of BOA were notenacted for more than one year due to delays in

The major authorities given to BOA by thethe formulation process, but in April 1881, theRules on the Board of Audit and the Public

Rules on the Organization of the Board of Audit

Accounting Act were extremely extensive fromwere enacted along with the Public Accounting

examination of the budget to preparation ofAct.

statements of revenue and expenditure accounts
and drafting of disciplinary action plans foraccounting officials.

2. Enactment of the Public Accounting Act
In April 1881, the finance and accounting

In a constitutional government, the Diet issystems to be supervised by BOA were further

naturally the organ that has the mandate toimproved with the enactment of the Public

examine the budget. Meanwhile, the right to

Accounting Act. The Public Accounting Act was

examine the budget that was stipulated as BOA'smade up of 61 Articles, and provided that

authority completely differed in nature from the"finance and accounting shall start with a budget

right of examination that had been bestowed
33

Part 1

Chapter 2

Establishment of BOA

since the time it was still the Ryo of Audit whicha "letter discussing the wrongness of

was the right to merely aggregate and organize

disposition of sale" to the Dajokan in the name of

the government's budget statements. It was

BOA, criticizing the sale of government property

provided that the budget was to be decided byheld by the Hokkaido Development Agency and

the

and

proposing dismissal of Kiyotaka KURODA, thecoordinated by the Ministry of Finance based onleader of the head of the Satsuma clan and thetherespective

head of the Hokkaido Development Agency,

government offices and examined by BOA

from his official post. However, this scheme was(Article 7 of the Public Accounting Act).

never realized, and when OKUMA resigned from

Cabinetafter

budgetbeing

requests

incorporated

from

the

the

BOA was also given the mandate tohis public post upon the failed Meiji-14 coup of

coordinate the reports submitted by government

1881 that took place in October, ONO resigned

offices for the final accounts of revenue andfrom office along with many other officials in the

expenditure to be publicly announced by thesect.

Dajokan, and the authority to draft disciplinary

BOA's FY1880 annual report that was

action plans for accounting officials and to notify

presented to the Cabinet in May 1885 set fortha prosecutor if any accounting official was foundthat BOA could hardly examine the budgets forto be in violation of the Penal Code.

FY1880 and FY1881, which were placed under
BOA's authority by the Rules enacted in April

The Rules on the Board of Audit and the1881.

Public Accounting Act were drafted by Azusa
ONO, a Director who had understood and acted
on the intention of OKUMA who was a Sangi.
ONO studied in the United Kingdom and4. Amendment of the Rules on the Board ofAudit and the Public Accounting Act

returned to Japan in 1874. After serving as aWith the amendment of the Rules on the

Shojo of the Ministry of Justice and then a

Board of Audit and the Public Accounting Act inShoshokikan of the Dajokan, he was assigned as

January 1882, the right to examine the budget

a Third-ranking Director of BOA in April 1880.

and the right to prepare statements of revenue

When the political power was decided to be

and expenditure accounts which had been undercentralized to the Dajokan through separation of

BOA's authority were both excluded from its

Sangi and the Kyo of Ministries, ONO drafted

authority. Since then, BOA's authority has been

the Rules on the Board of Audit and the Public

limited to the scope of audit of the final accounts,

Accounting Act, based on the idea that theyand BOA became an organ purely for auditing

could

the final accounts. The outline of BOA's new

expectimplementation

of

fair

fiscalmanagement

free

from

clan

favoritism

integratingthefiscalpower

forauthority as provided in the amended Rules andby

the Public Accounting Act is as follows:budget(i) examination and judgement of the final

compilation to settlement of the final accounts
into BOA, which is under the direct control ofaccountsofrevenueandexpenditure;(ii)

the Dajokan.

examination of accounting reports submitted by
the heads of government offices; (iii) audit of

ONO, who became a First-ranking Director

account

in August 1881, schemed in September to submit
34

ledgersandthereceipts

andSection 1 Changes in BOA's Organization

disbursements of money and goods; (iv) issuanceofcertificates

of

grant

of

discharge;

1880, he became the Director General of the
Expenses Adjustment Bureau of the Ministry of
Finance, and on March 10, he was ordered toconcurrently serve as the Kanji of BOA. Then on
March 12, he was ordered to handle affairs as theActing President of BOA, and he presided over
BOA until Masuka YAMAGUCHI was newly
appointed as the President of BOA on May 28,
1881. On the day of the appointment of the
President of BOA, ANDO was appointed as the
Fukucho of BOA, and on January 10, 1886,
while he still held the post, he died from a lungdisease at the age of 57.
Among the notable achievements made at
the Ryo of Audit and the Audit Bureau, theparticularly innovative systems for supervisingaccounting, such as the development of thebudget system, the on-site documentary audits,
and audits of the preclosing accounts, were allconceived and proposed by ANDO. He also
conducted innovative audits on the enormous war
expenses spent for the Satsuma Rebellion, anddedicated most of his lifetime to advancing
systems for supervising accounting.

(v)

notification of illegal acts and violation of thePenal Code by accounting officials; (vi) review
of notices by government offices to enact oramend regulations on finance and accounting;(vii) certification of accounting reports submitted
by the head of each government office; (viii)
preparation of annual reports of audit results; (ix)statement of opinions on finance and accounting;(x) approval of Treasury bookkeeping; (xi)inspection of governmental pension statements;(xii) inspection of disposal of currency notes byincineration ;(xiii)

presentationofrecommendations on enactment and amendment
of

laws

and

regulations

onfinanceandaccounting; (xiv) on-site review of projects; and(xv) inspection of documents necessary for audit
and requesting explanations from the officials incharge.
Meanwhile, in place of the drafting of
disciplinary action plans for officials in charge ofexpenses and the notification to a prosecutor
under Article 11 of the former Rules, the newRules provided that BOA shall "notify the headof the relevant department of that effect" (Article
8).
◆Naritaka ANDO: Key figure in BOA's earlydays◆

Naritaka ANDO

Naritaka ANDO was born in Ogaki, Gifu
Prefecture, in 1830. After serving for the feudal
domain, he became an estate officer. In 1868, heentered the government service and worked for
the Accounting Secretariat. He was appointed as
the Chiji of the Shi of Audit, and then as the Sei
of Audit. In June 1873, he became the Kami of
the Ryo of Audit, and was ordered to assume thepost of the Director General of Audit Bureau as
the Daishokikan of the Ministry of Finance inJanuary 1877. When BOA was founded in March
35

Part 1

Chapter 2

Establishment of BOA

Section 2 Operation of Audit Activities
During the approximately nine years in

BOA's audits. While BOA could do no more thanwhich BOA was under the direct control of theaudit the calculations in the past, it came to

Dajokan and the Cabinet (1880-1889), newalways pay attention first to whether any item

aspects were added to BOA's audit affairs, andviolated the budget, a law or regulation, or

necessary systems were developed accordingly.

proved to be uneconomical.

Audit methods also made progress, and BOA
audit

performance

improved

1. Changes in audit methods

significantly.

The following changes were observed inSpecifically, audit came to emphasize matterssuch as whether any State revenues, expenditures,

audit methods.

property, etc. were in violation of the budget, a(i) When BOA was the Ryo of Audit and thelaw or regulation, or were proving to be

Audit Bureau, it conducted audits of the final

uneconomical.

ofaccounts based on statements of accounts

submission of accounts was developed and the

prepared for detailed items and broader item

system of in-office audit was established.

categories,In

addition,themethodandauditedmore

specific

This was because, with the amendment ofbreakdown of expenditures such as salaries,

the Rules on the Board of Audit in January 1882,

travel expenses, and expenses of goods and

BOA became "an organ responsible for auditingof building and repairs through on-site

the finance and accounting of the government

documentaryand maintaining the uniformity of finance andimpossible to audit all of the ledgers ofaccounting laws and regulations" (Article 1), andgovernment offices by dispatching a few

it was no longer required to engage in executive

audit officials during a short period. Since

matters but could concentrate on pure audits of

the officials conducted sampling audit where

the final accounts. Since BOA's operations were

they only calculated the revenues andthus simplified for the first time, BOA could

expenditures for a couple of months andbreak away from the old systems and explore

determined the appropriateness of the overall

new systems.

revenues and expenditures based on theaudits.

However,itwassample audit result, thorough audit could not
Subsection 1

necessarily be expected. Accordingly, theAudit Methods

system was revised to audit revenues andBased on the Public Accounting Act as

expenditures for the whole fiscal year by in-amended in 1882, BOA was to only conduct

office audit. In September 1883, BOA

general audits of the final accounts, and it

establishedabolished all special audits that were not

Submission of Documentary Evidence," andexpressly provided in law, such as audits of thebased on this, it required auditees to submit

preclosing accounts, after FY1880.

all payment certificates and receipts, whichhave

As the focus of operations shifted to auditstheobjective" Procedures

supportingforvalue,

theasdocumentary evidence from FY1882 onwardof the final accounts, new aspects were added to36Section 2 Operation of Audit Activities

and audited them within BOA. This practice

37 times during FY1886 and FY1887, andcan be considered as the beginning of the

discussed

audit

procedures,present system of submission of accounts.

verification,andapplication

methods
of

laws

of
and

(ii) When BOA found any obscure matters in

regulations. In this period, the meetings did notstatements of accounts, it called the person intake a specific form, and Directors often heldcharge from the auditee, inquired into themeetings after lunch at the lunch table. Since thematter, and received oral answers. However,meetings were not held systematically at the time,

this system had a drawback of not leaving

the resolutions did not have a strong effect, andrecords of the interactions, so BOA revised

they were merely taken into consideration as a

the system to issue inquiry letters and receivereference.

written replies. This was an effective meansof audit, and served as the beginning of the

2. Reform of the method
supporting evidence

inquiry issuance system.

ofproviding(iii) Also, when BOA found any improper matter

The Public Accounting Act as amended inin audit, it used to call the person in charge

January 1882 provided that the statements offrom the auditee and had the person correct

accounts shall be submitted once a year, or init, and regarded the audit to have beenother words, it required annual submission ofcompleted when the matter was corrected,

accounts. Nevertheless, a delay in the submission

but the system was changed to notify theimmediately hindered the audit. As a measure

head of the relevant department of theagainst this problem, BOA reformed the method

improper matter and have the head deal withof providing supporting evidence in May 1886

the matter.

which required auditees to prepare documentary(iv) BOA used to often conduct on-site audits toevidence and submit it together with a detailed

also carry out preparation of the final

statement of expenditure every month between

accounts or audits of the preclosing accounts,

annual submissions of accounts for expenditurebut such on-site audits later shifted to purethat have a particularly large effect on the final

field audits.

accounts. BOA started to apply this new method
for the expenditure for FY1886 and began to(v) In the past, BOA had not issued the resultsof audits to the auditees, but it revised thisaudit

practice, and specified the formats of theas-submitted

judgment document and the examination

objections to this revision, mainly for the reason

document.

that

Meanwhile, the method of holding meetings

administrative workload on them. However,was established for the first time when the BOA

Nobori WATANABE, the President of BOA who

Act was promulgated. The Detailed Regulations

was also renowned for being a great swordsman,on Budget Survey that were enacted earlier inallayed these objections, and contributed to1881 had mentioned Directors' meetings, anddramatically accelerating the conclusion of the

Directors came to hold meetings and discuss

settlement of accounts thereafter and promoting

matters from that time. Directors held meetings

progress in audit practices.
37

the

the

documentarybasis.

revision

evidence

AuditeeswouldonraisedimposeanvariousanextraPart 1

Chapter 2

Subsection 2

Establishment of BOA

amount collected, the amount of state loss, andDocumentary Evidence

the amount unpaid, coming to also present the
Since BOA concentrated its operations onamount of budget and the amount collected in theaudits of the final accounts by revising the officestatements of accounts. In addition, in May 1887,

organization in 1882, it could make successive

BOA established "Statements of Accounts for

efforts to improve the methods of providing

Miscellaneous Titles Categorized as Second-

supporting evidence, such as requiring auditees tocategory Revenue" for non-tax revenues such as

submitattachingfees and established "Statements of Accounts for

documentary evidence every month between

Postal and Telegraphic Revenues Categorized as

annual submissions of the statements of accounts.

Second-category Revenue."adetailed

statement

As a development on expenditure, BOA

In the past, receipt and payment of cash had
been

handledHowever,

the

by

the

respective

Regulationson

notified the auditees of the "Method of the Final

auditees.

Receipt

Accounts

andofExpenditure"

in

May

1886.

Payment of Revenue and Expenditure (Cabinet

Statements of accounts of major items were

Ordinance No. 3) were enacted in March 1886,

renamedproviding that such receipt and payment were to

miscellaneous titles. The format of the statements

be handled by the treasury in charge by using tax

for revenue was unchanged, maintaining thepapers and written notices of the amount of levy

conventional vertical text, but that of thefor revenues and using payment slips forstatements for expenditure was changed to

expenditures, and the Minister of Finance was tohorizontal text, and the numbers were changed to

manage all cash. As a result, the auditees came to

Arabic numerals. Matters that were categorizedfocus on proving the calculation of revenues andunder the amount of funds, the settled amount,

expenditures. Also, in the same month, theand the unsettled amount in the former statements

revenue items were revised from major items andof accounts came to be categorized under theminor items to titles, items, and objects, andamountexpenditure items were revised from major items,

expenditures, making it possible to compare themedium items, minor items, and detailed items toamount of expenditure for each item with thetitles, items, objects, and details by Cabinet

amount of budget, and a column for indicating an

Ordinance No. 4. BOA revised the statements ofincrease or decrease in the diversion of money

accounts based on these revised item categories.

among budget items was established in theAsadevelopmentonrevenue,

intoofstatements

budgetandofaccounts

theamountofofbudget column.

BOA

The

renamed the statements of accounts of tax into

methodofproviding

supporting

the statements of accounts of internal tax in May

evidence using these statements of accounts

1886. At the same time, while BOA used to(Kessancho) was used until FY1889, after which

present the amount of revenues, the amount paid,

it was replaced by statements of accounts

the amount carried forward to the following year,(Keisansho) .

The

statementsofthe amount of state loss and damage, and the(Kessancho)

wasintroduced,

revised,amount unpaid, in the statements of accounts, itabolished in line with the development andrevised the matters to be presented into therevision of finance and accounting systems
38

accounts
andSection 2 Operation of Audit Activities

audit of the final accounts of revenue andduring that course of time.

expenditure of the general account, BOA came to
Subsection 3

find many improper matters in this audit because

Implementation of Audit

it began to continuously pay attention to whether
In this period, BOA conducted audit of the

any item was incompliant with the budget or a

auditees' revenue and expenditure, the revenues

law or regulation and whether implementation ofand expenditures of treasury money, reports on

any budget was proved to be uneconomical.

the revenue and expenditure accounts, statements(1) Improper mattersof increase and decrease of national government

The following are examples ofmajor

bonds, operation expenses, separate accounts,

improper matters indicated in History of thevarious reports, and government property andBoard of Audit published in 1896.

goods. Also, it conducted not only in-office(i) In FY1882, Tokyo Prefecture allocated 190
yen, which was proceeds from the sale of a

audits, but also field audits.

riding horse, etc., to pay for a newly
purchased riding horse and harness and1. Audit of auditees' revenue and expenditureimproperly netted revenue and expenditure.

Because BOA's authority was concentrated
on audits of the final accounts in January 1882,(ii) In FY1883, Tottori and Iwate Prefecturesaudit of auditees' final accounts of revenue andmade many duplicate payments, so fromexpenditure became BOA's core audit operation.

them, an additional 758 yen was collected in

During the six years from FY1882 to FY1887,

total.

BOA audited final accounts of revenue andIn addition, the Accounting Bureau of theexpenditure of 155 million yen, examining over

Ministry of Finance paid 500 yen to the

38,500 books of documentary evidence, andSecond National Bank as a fee for theissued about 1,000 certificates of grant ofhandling of the stock exchange broker tax,

discharge

but the amount of broker tax handled by theonannualaverage.

It

found

a

bank was 80 yen.

considerable number of improper matters in the(iii) In FY1884, Hakodate Prefecture paid 243

audit, and issued as many as 500 notices of suchmatters to the heads of the relevant auditees.

yen

for

ceremonial

garments

andThese notices did not include those of impropertransportation cost, which should not bematters that were already corrected by thecovered by public expense.

auditees during the period for organizing the final(iv) In FY1885, the Hiroshima Garrison of theaccounts after receiving an inquiry from BOA,

Ministry of Army made duplicate payments

those for which the auditees found errorsof 99 yen and 70 sen for the purchase ofthemselves after submitting their statements of

24.2 koku of barley.

accounts and obtained approval for dealing with(v) In FY1886, Hyogo Prefecture was found to

those errors. Moreover, there were many similar

have employed a British individual under acases where BOA did not issue notices. While

three-year contract in February 1871, andthe audit of auditees' final accounts of revenue

after the expiration of the term, aimlessly

and expenditure was equivalent to the present

continued to employ the individual for 12
39

Part 1

Chapter 2

Establishment of BOA

years without taking a measure to renew theentertainment expenses." In the opinion, BOA

employment contract.

pointed out that the auditees' amusement andA particularly notable improper matter foundentertainment expenses were amounting to tens ofin an audit conducted during this period was a

thousands of yen every year, and that thesecase of Tokushima Prefecture in FY1885 and FY

included expenses that were reported as being

1886.

used for foreign nationals employed by auditees

The equipment expenses spent annually by

but were actually used for holding banquets

Tokushima Prefecture from FY1882 to FY1884

among the auditees' officers. Therefore, BOA

had been about 2,300 yen at maximum, but incalled for rectification of the situation, stating

FY1885, the expenses rose sharply to 6,296 yen.

that the customary abuse of budget should be

When BOA audited the documentary evidence

stamped out and wasteful spending should be

for the breakdown of the expenses, it found thatprevented

the prefecture had purchased several tens ofexpenses except for those for the Minister andbrocades and other items which were found to be

Vice-Minister of Foreign Affairs, the governors

unnecessary for a prefectural government, andof the three urban prefectures with treaty ports

had also purchased excessively luxurious and(Kyoto, Tokyo and Osaka), and the Directors-

expensive tables, etc., and a large number ofGeneral of Customs, and if any other prefecture

tables and chairs that far outnumbered theor a court located in the three urban prefectures

number of officials. It found the same types ofwith treaty ports faces an actual need for such

purchases also in FY1886.

expenses diplomatically or for rewarding thebyabolishingallentertainment

In response to these findings, the Prime

services, etc. of their officials, the actual expenses

Minister notified the governor of Tokushima

should be settled by including the amount in the

Prefecture in August 1887 that it was improper

budget or issuing the amount as an extraordinary

for the prefecture to have wasted expenses byfund.

purchasing, with nothe amount,(2) Limits of audit of revenue and expenditure

expensive goods which were found to be

BOA managed to focus its audit on the final

heed

to

prefecturalaccounts of revenue and expenditure, revise audit

government in FY1885 and FY1886, and that amethods, and make considerable achievements.

punitive wage cut of 100 yen was to be imposed.

However, at the time when there was no Diet andofficiallyunnecessary

for

a

were

the right of budget formulation was exclusively

considered to have been caused by the rapid

vested in the executive branch, and the publicwesternization and civilization trends at a timefinancewhen the government structure was about to shiftdeveloped, BOA, which was established under

to a constitutional government were observed not

the Cabinet, was able to exert the effects of audit

only in prefectures, but also frequently observed

on lower-echelon auditees such as prefecturalin central government offices in varying degrees.

governors, but could hardly exert such effects on

In BOA's report for FY1887 submitted tocentral government offices in the upper echelon.

the Cabinet in November 1888, BOA indicatedIn particular, even when an improper matter wasan "opinion about reforming the system offound in an audit, if the Kyo of the audited

Such

uneconomicalmattersthat

40

system

was

still

not

completely

Section 2 Operation of Audit Activities

Ministry pleaded against it and filed a petition

In reality, however, sometimes more than 2,000

directly with the Dajo-daijin for determination,

non-tallying figures were found in a single fiscal

BOA had to obey the Dajo-daijin's order, whichyear due to omission, duplication, or error of

had a heavy weight and had an equivalent effectfigures in the statements. In audits, BOA pointed

as a law at that time.

out errors to the auditees, and sometimes theauditees found errors by themselves and madecorrections. As a result, the amounts of revenues

2. Audit of accounting of treasury money

andThe Public Accounting Act as amended in

expenditureswerechangedandtheJanuary 1882 provided that the Director Generalstatements of accounts were corrected severalof Accounts of the Ministry of Finance musttimes. This served as one of the major causes for

prepare statements of accounts of revenues andthe delay in conclusion of the settlement ofexpenditures of treasury money for each fiscal

accounts.

year, and submit them to BOA by April 30 of thefollowing fiscal year and obtain BOA's approval

3. Audit of reports on the revenue andexpenditure accounts(Article 39). BOA conducted audit of accounting

In audit of reports on the revenue andof treasury money based on this provision.
theexpenditure accounts, BOA audits the final

statements of accounts was originally the Director

accounts of revenue and expenditure transmitted

General of Accounts, but this was changed to theby the Ministry of Finance to the Dajokan (later,

Director General of the Treasury Bureau after the

the Cabinet) based on Article 43 of the Publicestablishment of the Bureau in January 1886.

Accounting Act as amended in January 1882.

Further, it was decided in the same year that the

BOA cross-checked the reports on the revenue

statements

andand expenditure accounts with the auditees'

expenditures of Treasury Accounting Officesstatements of accounts and statements of accounts

across Japan should be submitted by the Directorof revenues and expenditures of treasury money,

General of Accounts and the statements ofand verified their correctness.

The

personof

whoaccounts

was

for

to

submitrevenues

accounts for other revenues and expenditures of

The report on the revenue and expendituretreasury money should be submitted by theaccounts was renamed from the statement of

Director General of the Treasury Bureau.

revenue and expenditure accounts of treasury

This audit was conducted in seven fiscalmoney as referred to in the Public Accounting

years from FY1881 to FY1887. It was an

Act mentioned above from FY1885 onward.

extremely simple audit in which BOA merely

There was no statutory time limit for preparing

cross-checked the statement of cash revenues andthe report, but the transmittal of the report to theexpenditures submitted by the Treasury with the

Dajokan (later, the Cabinet) was delayed every

statements of accounts submitted by the auditees.

year. From FY1881 onward, the transmittal of theSince the settled amounts should be the amounts

report for each fiscal year was delayed for

added up for the items in the statement of cash

approximately four years. This was because therevenues and expenditures, the figures in bothauditees delayed in preparing their statements ofstatements should naturally tally with each other.

accounts. Moreover, BOA found errors in audit
41

Part 1

Chapter 2

Establishment of BOA

and this delayed the public announcement of theto the Dajokan. One such example is describedfinal accounts. As a result, the significance of the

below.

report to finalize the amounts of revenues and

The statement of increase and decrease of

expenditures at an early stage and to contribute tonational government bonds for FY1881 was

the budget formulation in subsequent fiscal years

provided by the Dajokan to BOA in July 1883.

was totally lost.

When BOA dispatched its Directors to audit thetherelevant account ledgers in September, thePresident of BOA, held concerns about the delay

ledgers were not in a state of being verified forin audits of the final accounts and revised thecorrectness due to mismatch of figures and a lackway the auditees submit documentary evidence toof required account items. Therefore, BOA

BOA as mentioned earlier.

returned the statement to the Dajokan based on a

Accordingly,

NoboriWATANABE,

request for review made by the Ministry of
Finance. BOA audited the statement that wasprovided again in October 1885, and finallysubmitted a reply to the Dajokan and concluded
the audit in July 1886. Indeed, three years had
passed since BOA first received the statement.
BOA faced more or less the same situation also
for the statements for FY1882 onward.
The errors discovered by BOA included, forexample, presentation of unpaid government bondcertificates for compensation for damage as paid
certificates and entry of an amount that had been
directly repaid to the Preparation Bureau in theloans section.
Certificate of grant of discharge for the final accounts

About 125 cases of such errors worth over
55.66 million yen were found from FY1881 to

4. Audit of statements of increase and decreaseof national government bonds

FY1886.

In this audit, BOA audits statements of
5. Audit of operation expenses

increase and decrease of national government
bonds which have been transmitted by the

The Meiji government pursued a national

Ministry of Finance to the Dajokan (later, themodernization policy from the time of its

Cabinet) and provided by the Dajokan to BOA.

establishment, starting with rapid encouragementof new industry and followed by successive

Audit of statements of increase and decrease

establishment of state-owned enterprises.

of national government bonds was conductedInbased on Article 3 of the Rules on the Board ofSeptember

1876,

Regulations

on

BOA

Classification, Receipt and Payment of Operation

discovered errors in the statements throughExpenses of Auditees were enacted, and it was

examination, they caused a delay in BOA's reply

provided that finance and accounting of all

Audit

as

amended

in

1882.

When

42

Section 2 Operation of Audit Activities

operation expenses were to be administered

They were for processing funds for railways,

separately

andconsolidation of public bonds, business start-ups

expenditures. This was followed by establishment

by people in the warrior class, industry promotionof the Bylaw on Accounting of Operation

byExpenses in July 1877 and the Bylaw on

implementing projects such as establishment of

Accounting

theschools. In January 1886, they were renamed into

Hokkaido Development Agency in May 1879.

sundry revenues and expenditures. Similar toOperation expenses had already been subject tooperation expenses, separate accounts were also

audit since the time they were introduced, but

subject to audit from the time they wereafter the foundation of BOA, they were audited

introduced.

from

of

generalOperation

revenues

Expensesofprefectures,

forestry,

etc.

and

for

based on Item 6 of the Articles on the Handling

During the six years from FY1882 to FY

of Affairs that was issued in March 1880, and1887, BOA audited 7,424 statements of accounts

from April 1881 onward, they were audited basedand corrected accounts, which recorded funds

on the provisions of the Rules on the Board of

totaling over 400.8475 million yen. As a result ofAudit and the Ordinance on the Board of Audit.

audit, BOA found and gave notices on 22

In this audit, BOA audited the following six

improper matters worth over 17,100 yen, andtypes of statements of accounts on operation

issued 682 certificates of grant of discharge.

expenses: business promotion expenses, operating

Many of the improper matters were those caused

expenses, operation revenues, operation profits,

by miscalculation, etc. as in the case of operationcompensations for working capital deficits, andexpenses.
As a notable improper matter, BOA reported

working capital.
During the six years from FY1882 to FY

the following case in 1882. The Railway Bureau

1887, BOA audited 6,607 statements of accounts

sold the steamship, Kanegasaki-maru, which it

and corrected accounts, which recorded funds

had deployed in Lake Biwa and purchased a new

totaling over 203.7855 million yen. As a result of

ship, Nagahama-maru, but the Bureau sold theaudit, BOA found and gave notices on 60

new ship a year later. The proceeds from the sale

improper matters worth over 21,000 yen, issuedof the two ships were paid in yearly installments

347 certificates of grant of discharge, andwithout interest under the arbitrary decision of

dispatched officials for audit 18 times. Many of

the Director General of the Bureau. Since thisthe improper matters were those caused bymethodmiscalculation, etc.

inappropriate, and the Bureau failed to prove theofcollecting

theproceeds

wasfact of the purchase of Nagahama-maru, while
only indicating that the purchase fee was

6. Audit of separate accounts
following

provisionally paid, BOA pointed out that thisrevenues and expenses that did not belong to thepractice was no different from lending out anannual revenue and expenditure or operation

enormous amount of public money.

Separateaccounts

were

the

expenses: initial expenses, separate revenues andexpensesoftreasurymoney,

and7. Audit of various reports

separate

In this audit, BOA audited revenues andrevenues and expenditures of government offices.
43

Part 1

Chapter 2

Establishment of BOA

expenditures that were reported together with theof accounts, no certificate of grant of discharge

final accounts of expenditure or final accounts of

was issued for the reports.

otherwise

From FY1882 to FY1887, BOA gave

reported separately, in a manner similar to audit

notices of two improper matters to the head ofof annual revenue and expenditure, operation

the relevant department.

operation

expenses or

that

were

In

expenses, and separate accounts.

addition,

BOA

made

proposalson

The reports subject to this audit could besettlement of unsettled receipts and payments.

divided into three types. The first type was

Unsettled receipts and payments referred toreporting of the outcome of expenditure that wererevenues

paid as lump sum expenses. Specifically, they

unsettled as of the closing date of the fiscal year,

were reports on receipts and payments ofand these amounts were to be added to the settled

exceptional expenses (prefectures), settlement ofamount of annual revenue and expenditure to

unsettled receipts and payments (Ministries andconclude the settlement of accounts. Since these

prefectures), payments of redemption money for

amounts were practically unsettled, the auditees

principal and interest (National Government

were to report on the outcome once theBonds Bureau), and expenses for preserving old

settlement of these amounts were completed.

shrines and temples (Ministry of Internal Affairs).

When BOA audited amounts for which such

The second type was reporting of amounts

reporting was delayed in 1884, the delay was

included in the settlement of the final accounts

found to be made by one Kan, six Ministries, andwhich specially needed to be reported. They werenine prefectures, for an amount of over 1.51

reports on billing expenses (Dajokan) and themillion yen from 1872 to June 1875 and over

final settlement of working capital (former

2.38 million yen from FY1875 to FY1880,

Ministry of Works). The third type was reports

totaling over 3.9 million yen. The reporting ofon the following separately accounted revenues

these amounts was considerably delayed, withand expenses: receipts and payments of funds forsome cases being delayed for as many as 13purchasing medical opium (Ministry of Internal

years. Therefore, BOA made a proposal seeking

Affairs),

acceleration of the reporting to the Dajokan inreservefunds(PrintingBureau),andexpenditures

that

were

still

August 1884.

comparison of profits and loss on operation ofdeposits (Deposit Bureau), book capital (Ministry

8. Audit of government property and goodsof Army), expenses for supplementing weapons

The audit subject matters are divided into

(Ministry of Navy), museum expenses (Ministryof Agriculture and Commerce), collected money

government

propertyandgoods.

Audit

of(Imperial Palace Building Office), warehousegovernment property is stipulated in Article 3 ofcapital (Ministry of Works), uncollected profits

the Rules on the Board of Audit of 1881 andand unpaid losses (Deposit Bureau), etc.

Article 2 of the Ordinance on the Board of Audit

During the six years from FY1882 to FY

of 1886. However, it was not expressly provided

1887, BOA audited 283 reports, which recordedin the List of Matters on the Handling of Affairs

amounts totaling over 13.26 million yen. Since

that was publicly announced in March 1880 andreports were submitted together with statements

the Rules on the Board of Audit as amended in44Section 2 Operation of Audit Activities

the reporting of the receipt and issue of goods

1882.
The mandate to audit government property iswere abolished upon the amendment of theconsidered to have been included in BOA's

Public Accounting Act in January 1882. As aauthority throughout the whole period during

result, there was no longer a method to audit

which this audit was conducted. However, at the

goods except for field audits. Since regulations

time when the national property management

on accounting of goods still did not exist at thesystem had yet to be established, sufficient audit

time, it became practically impossible to conduct

is unlikely to have been conducted in practice. It

audit under the provisions on receipt and issue of

was not until the Regulations on the Management

goods under the Rules on the Board of Audit ofof Government Properties (Imperial Ordinance1882 and the provisions on examination and

No. 275) was established in November 1890

judgment on accounting of goods under the Rules

based on BOA's proposal that the nationalon the Board of Audit of 1886.

property

management

systemwas

In order to address such circumstances

finallyfacing the accounting of goods, in August 1887,

developed.
As for goods, the Procedures for State-

BOA cited inappropriate matters that were found

Owned Goods Management was establishedin Tokushima Prefecture and Akita Prefecture andthrough Circular Notice of Dajokan No. 85 inmade an opinion to the Cabinet requesting

September 1876 when BOA was the Ryo of

establishment of rules for accounting of goods in

Audit in the Ministry of Finance, and theits report for FY1886.
In

Procedures provided for the reporting on receipt

June

1889,

the

Regulations

onand issue of goods, but this reporting was only

Accounting of Goods Owned by the State

made for the receipt and issue of goods.

(Imperial Ordinance No. 84) was establishedbased on this opinion.

Audit of goods was to be conductedpursuant to the provisions of Item 4 of the List of

9. On-site (field) audit

Matters on the Handling of Affairs that was
publicly announced in March 1880, Article 3 of

In field audits, BOA conducted on-site

the Rules on the Board of Audit of April 1881,

review of projects, and investigated account

Article 4 of the Rules as amended in January

ledgers and accounting of money and goods. This

1882, and Article 2 of the Ordinance on themethod, which was already started in the

Board of Audit of April 1886. From March 1880

beginning of the Meiji era, became a dominant

to January 1882, BOA audited 382 statements ofaudit method that extends to assisting the auditeesreceipt and issue of goods.

in organizing the final accounts from the late
1870s onward.

The statements of receipt and issue of goods
were submitted by auditees based on the Circular

The name "field audit" was first stipulated in

Notice of Dajokan No. 85 of 1876, and after thethe BOA Act enacted in 1889. From the time ofenactment of the Public Accounting Act of 1881,

the foundation of BOA until the enactment of thebased on Article 55 of the Act, and they merely

Rules on the Board of Audit, audit was called

presented the purchase prices and the receipt and"on-site audit" according to customary practiceissue of the goods. However, the provisions onwhen BOA was still the Audit Bureau and later
45

Part 1

Chapter 2

Establishment of BOA

based on the provisions of the Rules on the

management, management of goods, management

Board of Audit.

of convertible currency notes and stamps, bankdeposits, etc. Main findings were as follows.

On-site audits were initially conducted toalso carry out audits of the final accounts or

A. Revenues

audits of the preclosing accounts. However,audits of the preclosing accounts were abolished

BOA found improper matters concerning

after FY1880, and audits of the final accounts

revenues in cases where Tokyo Prefecture, Chiba

conducted by on-site documentary audits werePrefecture and the Printing Bureau failed to pay

also abolished except in special cases in FY1882,

to the treasury the money that should be treated

so on-site audits came to be conducted solely foras annual revenues, such as the lease fees forreviewing projects on site.

government land, proceeds from sale of goods,

From the time of the foundation of BOA toand refunds of amounts paid in error, and used

the promulgation of the BOA Act in May 1889,

such money for park expenses or held such

BOA conducted 480 on-site audits.

money for a long time as special funds ortentatively received money.
B. Expenditures
BOA

reported

cases

where

MiyagiPrefecture and the Osaka Artillery Arsenal
claimed to have paid interest on bank borrowings,
but used the money for a different purpose, or
paid for construction work that had yet to becompleted.
C. Diversion of funds
BOA

found

many

cases

of

improperdiversion of funds where the Kabato Prison,
Hyogo

Prefecture,andHakodate

Prefecture

diverted treasury funds for such purposes as topay for the construction fees for private shrines,
Notice of the return of officials engaged in on-site
audits to Kyoto"Kobunroku" (Record of Official Documents),
1883 (owned by the National Archives of Japan)

which should not be covered by treasury funds,

Improper mattersgovernment.

or to pay for personnel expenses for which
permission had not been gained from theD. Loans

As a result of on-site audits, the number of

BOA found a case of improper loan where

improper matters found increased every year, andthere were many matters that could not be foundFukushima

through in-office audits. Such findings can bereclamation expenses, which should have been

categorized into improper matters on revenues,

lent to settlers, to a silk-reeling company instead.

expenditures, diversion of funds, loans, settlement

E. Settlement of accountsofaccounts,

cash

disbursements,

BOA

cash
46

Prefecture

found

many

had

lent

improper

funds

cases

for

of

Section 2 Operation of Audit Activities

settlement of accounts where Fukuoka Prefecture,

822,600 yen.

Niigata Prefecture and Fukui Prefecture had

H. Prefectures' accountancy outside the budget

prepared

settlement

books

statements

such

for

as

false

BOA came to report an increasing number

completedof improper matters as it came to conduct morecontaining
havingconstruction work that was actually incomplete.

field audits not combined with audits of the final

F. Disbursements and management of cash

accounts. A particularly notable matter was

BOA found cases of improper disbursements

prefectures' accountancy outside the budget. At

and management of cash where Yamaguchi

the time, prefectures followed the customary

Prefecture had paid over 30,000 yen from theadverse practice of accountancy outside thedeposits of the Accounting Bureau without usingbudget,the prescribed payment slip to be issued by theprovisional payments, etc., and this had hindered

Director General of Accounts, where Chiba

appropriate budget implementation. However,Prefecture had deposited miscellaneous revenues

BOA found a large number of cases of the long-of 10,000 yen, which should be included in thestanding corrupt practice through field audits, andannual revenue, with a bank off the books, andhad the prefectures rectify such practice. The item

where the Second Area of the Osaka Militarythat accounted for the largest amount wasEngineers paid for incomplete construction work

expenses for remuneration, and many auditees

to a contractor, but collected some cash from thefailed to register these expenses in official books.

contractor at that time as collateral and kept it in

These were eliminated by having 21 prefectures

its office desk. BOA also found similar matters

dispose of an amount over 171,594 yen.

for Oita Prefecture, Yamagata Prefecture, Miyagi

I. Others

holding

separate funds bymakingOther improper matters included cases where

Prefecture and the Ikuno Mine Bureau.

Tokushima Prefecture damaged new currency

G. Management of goods
BOA found cases of improper management

notes which it had kept, Aomori Prefecture hadof goods such as cases of keeping goods off the

17,000 stamps that did not tally with records, andbooks and improper organization of accounting.

Kyoto Prefecture and Chiba Prefecture had

These cases symbolize the time when the State-

destroyed accounting records by, for example,

owned goods management system was not yet

boiling and ruining related documents.

established. In a notable case found in the audit
Subsection 4

in 1885, enormous amounts of goods were held

Proposals

off the books by the Tokyo and Osaka Artillery
Arsenals, including 4.54 million kin23 of mercury,

The Rules on the Board of Audit provide foriron, steel, etc., 2.21 million kin of niter and

BOA's authority to "propose its opinions to thesulfur, 110,000 sheets of foreign paper, 5.39

Cabinet" about establishment or amendment of

million pieces of empty detonators, 80,000 pieces

laws and regulations on finance and accounting.

of iron gun barrels, and 1.92 million pieces of

Nevertheless, even in the absence of such

wooden stoppers, with a total estimated value ofprovisions, it is a natural mandate of BOA to

23

make proposals to the Dajokan or the Cabinet as"kin" is a traditional Japanese unit of weight, which isapproximately 600g.

a central government office. Thus, BOA made47

Part 1

Chapter 2

Establishment of BOA

twenty such proposals from the time of theof over 5.3 million yen, i.e. 220,000 yen, for thefoundation of BOA to the earlier mentioned

current officials every year. It proposed theamendment of the Rules on the Board of Audit,

system of retirement allowance for civil officials

and ten proposals after that till the time of thewhich was to be managed and operated based onenactment of the BOA Act.

annual collection of 4/100 of the amount ofsalary of officials and interest thereon.

Sixteen of these proposals were adopted andwere materialized through introduction of new

Masayoshi MATSUKATA, who was a Sangi

systems, etc. During this period, BOA madeand the Kyo of the Ministry of Finance,

proposals mainly on establishment of retirement

expressed a dissenting view on the proposed

allowance for civil officials, amendment of thefunding method, stating that the system was not

Regulations

on

Domestic

Expenses,of a nature of State benefits, but was close toclarification

of

the

expenses,mutual aid of officials, and that the funds for theestablishment of numeric notation, promotion of

governmental pension should be consolidated

settlement of unsettled receipts and payments,

with the funds for military pension, which wasand amendment of the Public Accounting Act.

covered by the treasury, and a system should be

Besides these, opinions were expressed in theestablished to transfer funds to the governmental

field audit reports by the President of BOA topension safe every year and increase the reserve.

revise systems, such as establishing a northern

In December 1883, Aritomo YAMAGATA,

capital in Kamikawa, Hokkaido, improving the

Hirobumi ITO and Masayoshi MATSUKATA,

accounting systems in prefectures, and promoting

who were all Sangi, submitted individual written

the efficiency of funds operations in vocational

opinions in response to the Dajokan's request foraid for people in the warrior class, etc.

advice on this proposal. While they included an

Travelbearersofinfluential dissenting view on fund procurement

Some of these cases are described below.

as above, they all recognized the need for theretirement allowance for civil officials.

1. Discussions on establishment of retirement
allowance for civil officials

Due to these developments, the Order on
Governmental

In November 1882, BOA made a proposal

Pensionfor

Officials

wasofficials,

promulgated in January 1884 through Circularsuggesting establishment of such allowance for

Notice of Dajokan No. 1. The Governmental

civil officials. The retirement gratuity system

Pension Bureau was established in the Dajokan,

existed at the time, but a unified governmental

and Michitoshi IWAMURA, the President ofpension system for civil officials had not been

BOA, was appointed to also serve as the firstestablished yet, and each government office hadhead of the Bureau.

on retirement allowance for

civil

established individual systems.
2. Proposal on Inspection of Branches

In light of such circumstances, BOA pointed
out that the retirement gratuity system merely

Soon after the foundation of BOA, in

provided a one-time Imperial gift, and that theAugust 1880, BOA made a proposal to thetreasury was compelled to perpetually bear

Dajokan about dispatch of BOA's Directors tospending worth 1/24 of the total amount of salary

auditees' branches for audit of revenues and48

Section 2 Operation of Audit Activities

sought rectification of the conventional practice

expenditures.
On-site documentary audits at auditees had

where prefectures were to bear the expenses forbeen conducted since January 1878 based on

preparing materials, etc. which they were ordered

Circular Notice of Dajokan No. 2, Rules on On-

or requested by government offices to submit assite Documentary Audits by Auditors, but sincereference information for the affairs handled by

the Rules did not have clear provisions on thethe government offices. Based on this proposal,

division of auditees' head office and branches,

Circular Notice of Dajokan No. 50 was issued in

BOA had not conducted audit of their branches,

September of the same year, requiring thebut merely had the branches submit their detailed

government offices to bear such expenses.

account ledgers to the head office and audited
those ledgers when BOA conducted on-site
office.

4. Proposal on amendment of the Regulations
on Domestic Travel Expenses

Accordingly, BOA had not thoroughly audited

In October 1882, BOA submitted a proposal

documentary

audits

at

the

head

on amendment of the Regulations on Domestic

the branches.
sometimes

Travel Expenses. BOA suggested in the proposal

constitute a large part of the auditees' revenues

that in place of the method for calculating travel

and expenditures, such as in the case of theexpenses which had been established by the

Postal Service Bureau and the Police Bureau ofRules on Travel Expenses (Circular Notice ofthe Ministry of Internal Affairs, Bureaus in

Dajokan No. 64) of June 1876, travel expensecharge of operations in the Ministry of Works

payment

and other Ministries, and military courts in thecircumstances of travels based on the subsequent

Ministry of Army and the Ministry of Justice,development of public transport systems be

BOA requested the Dajokan to give notice toestablished. Based on this, the Regulations on

government ministries and prefectures to have not

Domestic Travel Expenses (Cabinet Ordinanceonly their head offices, but also branches respondNo. 14) were established in June 1886.

However,

becausebranches

standards

that

meet

the

actualto dispatch of BOA's Directors.
5. Proposal on numeric notation

Based on this proposal, Circular Notice of
Dajokan No. 47 was issued to government offices

In September 1881, BOA made a proposal

and prefectures in September of the same year,

on numeric notation to the Dajokan. In thiswhich stated that, while BOA's audits of receipts

proposal,and disbursements of money, grain, and goods by

conventional method of putting a comma at every

auditees had conventionally been conducted atthree digits according to the Western numeric

the auditees' head offices, BOA was to sometimes

notation style into a method of putting a comma

conduct on-site documentary audits also at theirat every four digits according to the Japanesebranches, etc.

number units which are in groups of four digits.

BOA

requestedtorevisetheSince this proposal was dismissed in thesame month, BOA made the same proposal again

3. Proposal on the bearers of expenses
In August 1880, BOA made a proposal on

to the Dajokan in October 1881. However, thethe purposes of use of expenses. This proposal

Dajokan issued a decision in December that it49

Part 1

Chapter 2

Establishment of BOA

was difficult to adopt the proposal, so BOA's

the center of Hokkaido and had fertile land, heopinion was not put to practice.

proposed that a northern capital should be built
there, that a large city should be created there by

6. Discussion on establishing a northern capitalin Kamikawa, Hokkaido

promoting settlement of a large number ofFrom May 1882 to March 1887, theand that a temporary palace for the Emperor

residents, development of land, and agriculture,should also be built there.

President of BOA conducted regional inspections
three times, and submitted his opinion based on

This proposal was intended for establishingthe inspection results to the Dajokan (later, thea Settler Increase Secretariat at Kamikawa to be

Cabinet) as a field audits report after eachheaded by an Imperial family member, and forinspection.

providing relief for people of the peerage andSpecifically,the

President

reported

those

on

in

the

warriorclass

throughtheir

discussion on establishing a northern capital insettlement, thereby promoting the Hokkaido

Kamikawa, Hokkaido, after inspecting the threedevelopment. However, the plan to establish aprefectures in Hokkaido from May to August

northern

1882, reported on four matters including unifying

materialized.

capitalinKamikawa

was

never

the organizations for prefectural finance andaccounting after inspecting the seven prefectures

Subsection 5

in Kyushu and Customs in the Kansai region

Audit and Report of the Audit
Results

from July to November 1884, and reported onfour matters including vocational aid money for

1. Report on audit

people in the warrior class after inspecting(1) Emergence of annual audit reports

Niigata Prefecture and six government offices

The name "annual audit report" was firstfrom November 1886 to March 1887. As an

stipulated in law in the Constitution of theexample, the outline of the report on discussion

Empire of Japan, but BOA had prepared reports

on establishing a northern capital in Kamikawa,

on audits continuously since its foundation.

Hokkaido, submitted in October 1882 is as

Nevertheless, at the time of its foundation, BOA

follows.

was to prepare reports on the final accounts of

In Hokkaido at the time, ever since therevenue and expenditure by itself as part of its

establishment of the Hokkaido Development

duties, so it did not need to report on the audit

Agencyresults

in

July

1869,

the

Agencyofficethemselves.

Subsequently,

with

the

established in Sapporo had served as the basis foramendment of the Public Accounting Act and thethe Hokkaido development. However, Michitoshi

Rules on the Organization of the Board of Audit

IWAMURA, who was the President of BOA at

in January 1882, BOA came to certify to thethe time and who later became the first head of

Dajokan the calculation made in the reports on

the Hokkaido Agency, stated that the Hokkaido

finance and accounting submitted by the head ofdevelopment was still not making progress, andeach government office (Article 3 of the Rules onthat a long-lasting foundation of a great project

the Board of Audit), and a system was introduced

should be built. Since Kamikawa was located atwhereby BOA reported to the Dajokan, in the50Section 2 Operation of Audit Activities

form of a reply, on the statements of revenue anditem category, differences in fiscal year, violation

expenditure accounts submitted by the heads ofof salary regulations, and errors in figures.

the auditees. The annual audit reports can be
2. Report on audit results

considered to have practically emerged at this

The Rules on the Board of Audit provided

point.
In this manner, BOA's report to the Dajokanthat BOA was to prepare annual reports thatin the form of a reply had been made until thecontain audit results and BOA's opinion onreport for FY1885, and from the report on thefinance and accounting and to present them to thefinal accounts for FY1886 submitted to the

Cabinet. Based on this, BOA prepared andCabinet in October 1890 after the BOA Act camepresented from the first annual report for FY1880

into effect, the form of "annual audit reports" wasthrough the sixth annual report for FY1885.

adopted.

Since preparation of the final accounts was(2) FY1886 Annual Audit Report

extremely

time-consuming

at

the

time,

as

The FY1886 Annual Audit Report was

mentioned above, annual reports were presented

submitted to the Diet on October 24, 1890, after

three or four years after the conclusion of thethe enactment of the BOA Act. The reportfiscal year. For example, BOA presented the firstcomprised a certification of the tallying of theannual report (FY1880) to the Cabinet in May

final accounts of revenue and expenditure,

1885 and the sixth annual report (FY1885) in

improper matters, and the outline of the audit

September 1889.
In April 1886, the Ordinance on the Board

results described at the beginning.
In the outline of the audit results, BOA

of Audit was enacted. The Ordinance provided

stated that, due to development of the budget andthat the President of BOA must prepare a reportother laws and regulations, slight progress waswithin five months from the conclusion of every

observed in the final accounts for FY1886 as

fiscal year and report to the Prime Minister aboutcompared to those for FY1885 or earlier, but they

progress in audit of the finance and accounting inwere still not found to be satisfactory in audit

the previous fiscal year, and that the President

due to such reasons as the ambiguousness of themay provide an administrative opinion on therules on the budget assessment method andperformance of administrative expenses (Article

application of the appropriation, non-clarity of the8). Also, the conventional annual report was

responsibilities

andrenamed to "BOA report." The period of a fiscal

Accounting Officers, and a lack of provisions on

year was revised to April until March of thethe procedures for sale, purchase, borrowing, andfollowing year, starting in FY1886, and BOA

lending and the method of building and repair

presented the report for FY1886 in August 1887,

work.

beforeofOrdering

Officers

theprescribeddeadline.

The

audit

However, BOA endeavored to conduct theachievements stated in the report included themost accurate audit in compliance with thebackground of revision of the method oflegislation at the time, and found as many asproviding supporting evidence of the final

1,364

accounts,

impropermattersforrevenueanddetailed

results

ofaudit,

andperformance of audit affairs, while administrative

expenditure combined, including differences in51

Part 1

Chapter 2

Establishment of BOA

opinions on administrative expenses included theTravel Expenses, and an opinion on establishment

amounts of salaries actually paid to the auditees'of Regulations on Accounting of Goods Owned

personnel and an opinion thereon, performance ofby the State.

implementation of the Regulations on Domestic

First BOA report(owned by the National Archives of Japan)

Subsection 6

The review of reports on the budget andOther activities

final accounts of local tax and the preparation of
Besides the operations mentioned above,reports on the final accounts of revenue and

BOA conducted the following operations at theexpenditure were stipulated as part of BOA'stime: examination of the budget, review ofauthority by the Rules on the Board of Audit ofreports on the budget and final accounts of local

April 1881, but they were excluded from thetax, preparation of reports on the final accounts

authority with the amendment of the Rules nineof revenue and expenditure, examination ofmonths later, and were never actually conducted.

governmental pension, inspection, explanation,

In examination of governmental pension, BOA

and approval.

examined the correctness of 230 governmental

Examination of the budget was stipulated as

pension statements for army pension and police

part of BOA's authority only for a period of overpension from April 1880 to the establishment of

one year until the amendment of the Rules on

the Governmental Pension Bureau in February

BOA in January 1882, as mentioned above.

1884.

However, BOA actually never closely examined

The inspection was an operation where BOA

the appropriateness of amounts, due to delays inattended the destruction of currency notes by fire

the government's budget compilation.

and the lottery of public bond certificates by the52Section 2 Operation of Audit Activities

Ministry of Finance. It attended the destruction of
paper money 42 times and the lottery four times.
The explanation was an operation where
BOA responded to questions on accounting laws
and regulations that were asked by government
offices. It was excluded from BOA's authority
with the abovementioned amendment of theRules on BOA, but BOA processed as many as
1,580 explanation cases since its foundation in
1880.
The approval was an operation where BOA
approved bookkeeping, damages to public money,
postponement of settlement of accounts, or
unsettled status of accounts. BOA approved 188
such cases.

53

Part 2

BOA under the Constitution of the
Empire of Japan

Section 1

Chapter 1

Provisions on Settlement of Accounts under the Constitution of the Empire of Japan

Establishment of BOA under the Constitution of the Empireof JapanWith the promulgation of the Constitution ofNine years after the founding of BOA

the Empire of Japan (Meiji Constitution) in

directly under the Dajokan, the new BOA was

February 1889, Japan formed a constitutional

established under the Constitution of the Empire

government, and concurrently enacted the Act onof Japan. It engaged in the State's fiscal

the Houses of the Diet and the Public Accounting

supervision as an organ under the direct control

Act, and then the BOA Act on May 9, asof the Emperor and independent from theappended laws of the Constitution. This marked

ministers of state. It existed for the next 58 years

the establishment of a constitutional fiscal system

until the new Constitution came into force.

and a system for its supervision.

Section 1

Provisions on Settlement of Accounts under the Constitution of the Empire ofJapan

Subsection 1

greatly influenced by the survey on constitutional

Changes in Article 72 of theConstitution of the Empire ofJapansystems which Hirobumi ITO, who was a Sangi,
conducted in German states, particularly Prussia,
ahead

The Constitution of the Empire of Japan,ofenactingtheConstitution.

The

which was promulgated on February 11, 1889,

provisions on the settlement of accounts inprovided for the basics of public finance in

Article 72 were also modeled after Article 104 of

Articles 62 through 72 in Chapter VI Finance andthe Constitution of the Kingdom of Prussia (theAccounting. Final accounts were stipulated inConstitution of Prussia). Article 104 of the

Article 72 of the Constitution, which provided

Constitution of Prussia provided as follows: "Thethat "The final account of the expenditure andfinal account relating to the budget shall berevenue of the State shall be verified andverified and confirmed by the Superior Chamberconfirmed by the Board of Audit, and it shall beof Accounts. The general budget accounts ofsubmitted by the Government to the Imperial

every year, including the tabular view of theDiet, together with the report of the Board ofnational government bonds shall, together with

Audit" (paragraph (1)) and that "The organization

the report of the Superior Chamber of Accounts,

and competency of the Board of Audit shall be

be submitted to the two houses of the Diet for

determined by law" (paragraph (2)). Thesethe purpose of discharging the government ofprovisions required BOA to verify and confirm

responsibility."

the final accounts and to prepare annual audit

organization and competency of the Superior

reports, and the government to submit the final

Chamber of Accounts shall be determined by law

accounts that were thus confirmed through audit

separately." (paragraph (3)). The contents of thisto the Diet.

Article 104, paragraph (2), excluding the parts(paragraph

(2));

and

"The

"including the tabular view of the national

The Constitution of the Empire of Japan was
57

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

government bonds" and "for the purpose of

the final accounts to the Diet, as shown below,

discharging the government of responsibility,"

following the contents of Article 104 of thewere used as Article 72, paragraph (1) of theConstitution of Prussia.

Constitution of the Empire of Japan, and the

The final account of the expenditure andcontents of Article 104, paragraph (3) wererevenue shall be verified and confirmed by BOA.

directly used as Article 72, paragraph (2) of the

The government shall submit the final account toConstitution of the Empire of Japan.

the Imperial Diet along with the report of BOA.

Similar to the Constitution of Prussia, many

In constitutional meetings of the Sumitsuin24

constitutions of western countries at the timethat were held from June 1888 onward, no

stipulated "for the purpose of discharging theparticulargovernment of responsibility" or "obtain the

exclusion of the requirement for the Diet toapproval of the Parliament," explicitly stating thatsupervise the final accounts. As a result, thethebudgetpurpose for the government's submission of theapproved by the Parliament are subject tofinal accounts to the Diet was not explicitly

supervision by the Parliament. However, thestated in Article 72 of the Constitution of theConstitution of the Empire of Japan did not

Empire of Japan.

implementation

resultsofthespecify the purpose for submitting the finalquestions

were

asked

about

the

However, Kenpo Gikai (Commentaries on

accounts to the Diet.

the Constitution), which is a public article-by-

Yet, in the drafting process, there werearticle commentary on the Constitution of theopinions suggesting that such purpose should be

Empire of Japan, mentioned about the Diet's

specified in the Constitution of the Empire of

authority under Article 72 of the Constitution thatJapan.

"the Diet shall receive the government's statement

The Constitution of the Empire of Japan wasof accounts along with BOA's report, and to

first drafted by Hirobumi ITO, Kowashi INOUE,

approve its legitimacy and finalize it," similar toand others in 1886. In the subsequently madethe concept held by ROESLER and INOUE.

drafts including the "Draft of the Constitution ofThen, in May 1894, the final accounts for

the Empire of Japan" made by a German-national

FY1891 were submitted to the sixth session of

government advisor, Hermann ROESLER, andthe Imperial Diet as the first such accounts to be

Drafts A and B made by Kowashi INOUE, thesubmitted. The session became tangled over the

purpose of submitting the final accounts wasDiet's authority on the final accounts. However,

explicitly stated. However, the purpose wassince the Constitution of the Empire of Japan had

deleted in the draft of the Constitution of thesimply provided that the final accounts "shall be

Empire of Japan made at Natsushima, Kanagawa

submitted to the Imperial Diet," the final accounts

Prefecture, in August 1887. Thus, INOUE

were submitted as the government's report to therequested that the Diet's right to approve the final

House of Peers and the House of Representatives,

accounts should be explicitly stated, but thisand it became established for the two Houses toopinion was not adopted, and the only revision

treat the final accounts not as an "agenda item,"made to the draft was to explicitly state that the24

government was the entity which was to submit
58"Sumitsuin" is an advisory organization to the Emperor
under the Cabinet System.

Section 1

Provisions on Settlement of Accounts under the Constitution of the Empire of Japanbut as a "report."
Background of drafting of Article 72 of the Constitution of the Empire of Japan (focusing on changes in the purpose ofsubmission of the final accounts)
Date
January
31, 1850

Bill of the Constitution of the Empire of Japan, opinion for revision, etc.
Article 104, paragraph (2) of the Constitution of Prussia"The final account relating to the budget shall be verified and confirmed by the Superior
Chamber of Accounts. The general budget accounts of every year, including the tabular
view of the national government bonds shall, together with the report of the Superior
Chamber of Accounts, be submitted to the two houses of the Diet for the purpose ofdischarging the government of responsibility."
April
Hermann ROESLER, "Draft of the Constitution of the Empire of Japan"
1887"At an ordinary session of the Diet, the total calculation of the accounting and budget
statements and information on the present state of national government bonds shall be
submitted to the Diet along with the Board of Audit's general certificate, for the purposeof discharging the government of obligations."
May 1887 Kowashi INOUE, Drafts A and B"The final account of the expenditure and revenue shall be submitted to the two Houses
every year along with the Board of Audit's verification report, and they shall be completed
after being approved by the two Houses."
AugustDraft of the Constitution of the Empire of Japan (Natsushima Draft)
1887"The final account of the expenditure and revenue shall be verified and confirmed by the
Board of Audit, and a verification report shall be submitted to the Imperial Diet alongwith a certificate."
Kowashi INOUE proposal (1)In various countries, the purpose for submitting final accounts to the Houses of the Dietshall obtain the approval of the House or to promulgate them as settlement law. The
Natsushima Draft states "to be submitted to the Imperial Diet" and does not explicitly state
the purpose for which the Diet shall receive the final accounts. In my opinion, the final
accounts are submitted to the Diet for use as a reference for deciding on the budget. If so,such purpose should be explicitly stated so as to prevent any doubts in the future. It would
be a natural course to consider that, if the budget has already been approved by the Diet,
the final accounts must also be concluded through the approval of the Diet.
Kowashi INOUE proposal (2)This sentence gives an impression that BOA shall submit the final accounts to the Diet.
The proper procedure provided under the Prussian rules on the Superior Chamber of
Accounts and the Public Accounting Act drafted by the Japanese Ministry of Finance isthat BOA shall send its written opinion to the Minister of Finance and the government
shall submit the final accounts to the Diet along with BOA's report. Thus, the provisions
should be revised as follows, following the example of Article 104 of the Constitution ofPrussia.
The final account of the expenditure and revenue shall be verified and confirmed by BOA.
The government shall submit the final account to the Imperial Diet together with the reportof BOA.
February Article 72, paragraph (1) of the Constitution of the Empire of Japan11, 1889 "The final account of the expenditure and revenue of the State shall be verified andconfirmed by the Board of Audit, and it shall be submitted by the Government to theImperial Diet, together with the report of the Board of Audit"

April
1889

Remarks
Explicitly stating the
purpose for submitting
the final accountExplicitly stating the
purpose for submitting
the final accountExplicitly stating the
purpose for submitting
the final accountDeleting the purpose
for submitting the final
account→ Not adopted→ Adopted
Explicitly stating thatthe government was
the entity which wasto submit the final
accounts

Explicitly stating thatthe government was
the entity which wasto submit the final
account

Kenpo Gikai (Commentaries on the Constitution)"The Diet shall receive the government's statement of accounts together with the report of Supplementing that thethe Board of Audit, and approve its legitimacy and finalize it."
Diet shall approve andfinalize the contents ofthe final account59

Part 2

Chapter 1

Subsection 2

Establishment of BOA under the Constitution of the Empire of Japan

Finance, in February to March 1889 following

Explanation of Article 72 of theConstitution in Kenpo Gikai( Commentaries
ontheConstitution)

the promulgation of the Constitution, and was
published as a public commentary on theConstitution of the Empire of Japan under thetitle

In May 1888, when advice was sought from

Kenpo

Gikai

(Commentaries

on

the

Constitution) in April 1889.

the Sumitsuin about the Constitution of the
Empire of Japan, an article-by-article commentary

Article 72 of the Constitution of the Empire

drafted by INOUE was distributed to theof Japan was modeled after the Constitution of

MinistersforPrussia as mentioned above, and it provided that

deliberation. This commentary was later revised

BOA's duty was to verify and confirm the finalasaccount of the expenditure and revenue of the

Kenpo

and

advisors

Gikai

as

Kohon

reference( Manualon

Commentaries on the Constitution). It was thenState.

jointly examined by those involved in thecommentary on the Constitution of the Empire ofdrafting of the Constitution of the Empire ofJapan and Kenpo Gikai Kohon also contained

Japan and six members, namely Nobushige

statements to that effect. However, while the joint

HOZUMI,

Seiichiexamination for the publication of Kenpo Gikai

SUEOKA, who were professors of the Imperial

was conducted based on the statements in Kenpo

University, Junrokuro SHIBA and Michisaburo

Gikai Kohon, the explanation on BOA's duties

MIYAZAKI, who were councilors of the Cabinet

was changed as follows in Kenpo Gikai due toLegislation Bureau, and Yoshiro SAKATANI,

the introduction of a French-style concept of

who was a budget officer of the Ministry offiscal supervision.

MasaakiraTOMII,

andThe

Sumitsuin's

article - by - article

Changes in the interpretation of Article 72 of the Constitution of the Empire of Japan(Kenpo Gikai Kohon (Manual on Commentaries on the(Kenpo Gikai (Commentaries on the Constitution)
Constitution)
Around May 1888
April 1889
"The duties of BOA are as follows:"The duties of BOA are as follows:
the first is to supervise the accounting officials ("Kaikeikan") of the first is to audit the proof provided by the Accounting
the respective Bureaus, clarify their responsibility on any Officers of the respective Bureaus and to discharge them ofillegality, and approve the legality;
their responsibility;
the second is to supervise the dispositions made by the second is to supervise the dispositions made by
Disbursement Ordering Officers and audit any disbursements Disbursement Ordering Officers and audit any disbursements
made beyond budget, expenditures outside the budget, and made beyond budget, expenditures outside the budget, andcases in violation of laws or orders; andcases in violation of laws or Imperial Ordinances; andthe third is to audit the overall final accounts prepared by the the third is to audit the overall final accounts of the treasury or
Minister of Finance, and confirm and report them after reports on final accounts of the respective Ministries, andcomparing them with the figures of accounting of the Bureaus confirm them after comparing them with the cumulative figuresthat were reported by the respective accounting officials."of accounting of the Bureaus that were reported by therespective Accounting Officers."

Specifically, the major modification made inenacted and the term "Accounting Officer" was in

the joint examination was to revise the ones whouse, and in the draft "Original Public Accounting

were subject to audit and supervision from theBill," the definition and duties of the Accounting"accounting

Officer were provided as follows in "Chapter VII

officials"("Kaikeikan")

to

the

Accounting Officer."

French-style "Accounting Officer" ("Suitokan").
The Public Accounting Act had already been60

Section 1

Provisions on Settlement of Accounts under the Constitution of the Empire of Japan

Original Public Accounting Bill
Article 141 An Accounting Officer means an
Officer who is in charge of collection ofrevenues or payment of expenditures and who
deals with any other handling of public money.
Article 142 All Accounting Officers shall be
appointed by the Minister of Finance, areunder control of the said Minister, and are
responsible against the said Minister for thefinance and accounting under their charge, andall of them are subject to the determination by
the Board of Audit.

Accordingly, BOA's basic duty under Kenpo
Gikai became supervision on cash revenues andexpenditures, which caused inconsistency withthe basic principle of BOA's authority which was"The final account of the expenditure andrevenue of the State shall be verified andconfirmed by the Board of Audit" under Article
72 of the Constitution of the Empire of Japan andwith BOA's authority provided under the Board
of Audit Act.

61

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Section 2
Subsection 1

Background of Enactment of the BOA Act

Three Drafts of the Ordinanceon the Board of Audit

Masayoshi

MATSUKATA,

Finance,hadalreadytheMinisterproposed

a

of

Draft

Amendment of the Ordinance on the Board of
While full-fledged preparation for building a

Audit after submitting the Public Accounting Act,

constitutional nation was under way, including

and moreover, the Cabinet Legislation Bureau

the drafting of the Constitution of the Empire ofdrew up a Draft Ordinance on the Organization

Japan, BOA was alsoof the Board of Audit in January 1889.

conducting

in-depth

The characteristics and background, etc. ofinvestigation and study on an audit system under

the above three drafts are as shown below.

a constitutional system. The main materials
studied included an investigation document on
the Ordinance on the Board of Audit compiled by
Paul MAYET, an investigation report on the
Prussian Superior Chamber of Accounts made in
the process of Sangi ITO's investigation of
constitutions in Europe, and a commentary on
Prussian audit laws and regulations in "Gyoseikan
Hikkei" (Guide for Administrative Officers)
written by Hermann MEISSNER.
Then, from May 1887 to December 1888,

Passport of Nobori WATANABE, the President of
BOA, for his business trip to Western countries

four officials, namely Nobori WATANABE who
was the President of BOA, Koichi HAMA who
was a Director, Sadajiro HIRATSUKA who wasan Assistant Director, and Minoru OGASHIMA
who was a Zoku, investigated the audit systems
of western countries.
At the time, the Sumitsuin's deliberation on
the Constitution had entered the final stage, thePublic Accounting Act had already completed theSumitsuin's deliberation in September 1888 and
was finalized, and accelerated efforts were being
made to draft the BOA Act, which was a law
appended to the Constitution.
BOA started to draft the bill as soon as the
President of BOA returned to Japan, andsubmitted a Draft Ordinance on the Board of
Audit

to

the Cabinet

inDecember 1888.

However, half a year earlier, in June 1888,
62

Section 2

Background of Enactment of the BOA Act

Comparison of the three drafts of the Ordinance on the Board of Audit
Drafter
Time of draft
Structure

Ministry of Finance
BOA
Cabinet Legislation Bureau
June 1888
December 1888
January 1889
28 Articles divided in three chapters 41 Articles
30 Articles divided in three chaptersof General Provisions, Organizationof General Provisions, Organization
and Audit Determination
and Audit Determination
Model law, etc. French accounting
laws
and Prussian law on the authorization Original draft of the Ministry of
regulationsof the Superior Chamber of Finance and the original draft of BOA
Accounts
Characteristics
Introduced a system similar to the Placed BOA under the direct Based on administrative supervision
Court of Accounts
control of the Emperor, adopted
a large collegial body system,and provided life tenured status
for the council members as basic
principles, and focused onsupervising the government's
budget implementation by using
the administrative effect of
criticism based on audit results
Background, etc. In order to eliminate the adverse With an intention to establish an The draft was drawn up by theeffects of disorderly accounting and audit
systemundera Cabinet Legislation Bureau as a result
wasteful spending, etc., the Minister constitutional system, the draft of studying the "Draft Amendment ofof Finance planned to reinforce its was drawn up by referring to the the Ordinance on the Board of Audit"
accounting control, have BOA "Investigation Report on Affairs drawn up by the Ministry of Financedetermine the liability for indemnity oftheSupreme
Audit and the "Draft Ordinance on theof all accounting officials, and Institutions in European States," Board of Audit" drawn up by BOA.
rectify management of cash, goods, which compiled the results of A later Director General, Sadajiro
and real property. The Ministry's investigations
conducted
in HIRATSUKA, stated that "becausesuch intention was materialized by countries such as the United BOA formulated a Draft Ordinancethe Original Public Accounting Bill States, the United Kingdom and on the Board of Audit and submitted
drafted in 1887, but later, with the Germany.
it to the Cabinet Legislation Bureau,
requestof
BOA'sPresident
and the draft of the Cabinet
WATANABE, "Chapter VI BOA"
Legislation Bureau was completed
was deleted from the Original
through consultation between BOA
Public Accounting Bill, which
and the Bureau's persons in charge,
consisted of 201 Articles divided inthis draft can be considered as a draft
11 Chapters, and that Chapter was
jointly drawn up by the Cabinet
independently formed into a "Draft
Legislation Bureau and BOA."
Ordinance on the Board of Audit."

The Cabinet coordinated the above threedrafts, and after further coordinating them withthe corresponding provisions of the Public
Accounting Act, it submitted a Draft BOA Act
consisting of 26 Articles to the Sumitsuin in
April 1889 and sought its opinion. As a result of
deliberations at the Sumitsuin, the chapter onorganization and the chapter on authority werepartially interchanged, and the wording of someparts was modified. In the same month, thedeliberation was concluded, and the BOA Act
Official gazette announcing the promulgationof the BOA Act

was enacted as Act No. 15 on May 9, 1889, andwas promulgated on May 10 of the same year.
63Part 2

Chapter 1

Subsection 2

Establishment of BOA under the Constitution of the Empire of Japan

Deliberation Process
Draft BOA Act

ofConstitution, which could not be altered even by

thethe Emperor. If the wording "under the directcontrol of the Emperor" was used, it could

The BOA Act employed the same basic

mislead the public to believe that the Emperor

concept as the Prussian law, and required BOA to

could freely control BOA. BOA's President

be under the direct control of the Emperor, to be

WATANABE who was requested to attend the

independent from the Cabinet, to adopt a system

Sumitsuin meeting expressed an opinion thatof a large collegial body of Members who were

"BOA should be considered to carry weight on

Division Chiefs or in higher-rank positions, andthe basis that it is under the direct control of theto provide life-time status guarantee for theEmperor and has a close relationship with theMembers, for ensuring the independence of theEmperor, so if the wording is deleted now, it

organization. The Act provided that BOA's

would be equivalent to taking away the essence

authorities

administrativeof BOA." After a vote, the original draft was

authority such as verifying and confirming theapproved, and the provision that BOA was to be

final accounts of the State and presenting audit

under the direct control of the Emperor was

results and opinions, and also judicial authority

explicitly stated in Article 1.

were

to

includeThe second issue was about the wording

based on a French concept such as the right todeterminetheliability

forof"supervise" in Article 2 of the submitted draft,some issues

which read "The Board of Audit shall verify andindemnity

Accounting Officers. However,

became the focus of debate in the deliberation

confirm

theprocess of the Draft BOA Act.

expenditures

calculationofofmoney,

publicrevenues

andgovernment

The first issue was the provision that BOA

property and goods, and national government

was to be under the direct control of thebonds, and supervise public finance." A debate

Emperor, as Article 1 of the submitted draft

took

stated, "The Board of Audit shall be under the

inappropriateness of the wording and whether ordirect control of the Emperor and have a status

not BOA has the right of supervision.

independent

from

the

ministers

of

place

The

state."

atthefollowing

Sumitsuindissenting

meeting

views

on

were

Opinions to delete or modify this provision wereexpressed against the wording "supervise": (i) the

given due to reasons including the following: (i)phrase "verify and confirm" clearly encompasses

the wording "under the direct control of thethe practical meaning of supervision, so there is

Emperor" was unfavorable because it had rarely

no need to also use the word "supervise" ofbeen used in provisions of law, and it could give

which the definition is uncertain; (ii) BOA has noan impression that the Emperor needed to directly

mandate to supervise the State's finance, whichmake decisions on all matters; (ii) the wording

instead is to be supervised by the Diet, and its

was unfavorable because it could give an

mandateimpression that BOA was under the supreme

government's calculation; and (iii) if BOA is topower of the Emperor, similar to the Army andenter the executive branch and supervise their

Navy; and (iii) BOA had an independent position

appropriateness, 12 Members would in no way be

under

sufficient, so BOA obviously does not have such

law,

based

on

Article

72

of

the
64

is

to

verifyandconfirmtheSection 2

Background of Enactment of the BOA Act

need to have the right of supervision, but theauthority.
In response, BOA's President WATANABE

Japanese system is not the same as in the United

argued as follows: "the mandate of supervision isStates, so BOA's audit is more than mere audit ofindispensable for BOA; in a country like thecalculation." As a result, Article 2 of theUnited States where the Congress has the right ofsubmitted draft was adopted as it is and it

supervision, the supreme audit institution may not

became Article 12 of the BOA Act.

◆Investigation of audit systems in Western countries: Nobori WATANABE and Sadajiro HIRATSUKA◆
Nobori WATANABE, who became the third President of BOA under the Dajokan system, continued toserve as President of BOA under the constitutional system, and remained in office for 14 years and sevenmonths until he resigned on December 20, 1898.
President WATANABE was born in April 1838 as the second child of Iwao WATANABE, a feudal
retainer of Omura Domain in Bizen Province. In 1854, he came to Edo and learned Chinese classics from
Sokken YASUI, and mastered Kendo (Japanese art of swordsmanship) under Yakuro SAITO, becoming the headboy of the private school. During this while, he formed a friendship with Kogoro KATSURA (later Takayoshi
KIDO), and after returning to the Domain, endeavored to reconcile the Satsuma Domain and the Choshu
Domain, together with Ryoma SAKAMOTO. He entered the government service subsequent to the restoration ofimperial rule, and after serving posts including councilor of the Genroin and Gikan of the Sanjiin, assumed thepost of BOA's President on May 7, 1884.
From May 1887 to December 1888, President Nobori WATANABE and other officials conducted aninvestigation tour of government auditing systems in Western countries. The results of the investigation werematerialized as the Draft Ordinance on the Board of Audit after their return to Japan. This draft established thefoundation of today's government audit system, taking precedence over the concept of BOA that was similar to
the French Court of Accounts as intended by the Ministry of Finance at the time. Many other features were also
realized through President WATANABE's efforts, such as full-fledged implementation of continuous audits andacceleration of the closing adjustments.
President WATANABE took office in the early days of BOA under the constitutional system, but on March
8, 1897, he presented an address on audit of emergency armaments expenditures for the Sino-Japanese War andsubmitted a graph of progress in Audit on Emergency Armaments Expenditures and this aroused a disputewithin BOA, leading to the incident of a resolution on resignation of BOA Members in May 1897. In December
1898, this incident developed into a problem at the House of Representatives, and WATANABE resigned andleft BOA on December 20.
After resignation, Nobori WATANABE opened a kendo training hall called "Bishindo" at his residence
located in Asabu. He directly taught kendo with a bamboo sword and committed himself to the development ofkendo. Then, he became a member of the House of Peers in August 1904 and remained in office until July
1911, but died of disease two years later on November 9, 1913, at the age of 76.
Sadajiro HIRATSUKA was born in Wakayama in July 1859. He studied the German language whilestaying at the house of Izuru TSUDA, who was a cousin of his father and the Taifu of the Ministry of Army,and later entered a foreign language school, but he became a professor before graduation. After working for the
Sanjiin and the Ministry of Agriculture and Commerce, he joined BOA in April 1886, and became an Assistant
Director (Hanninkan) in October.
The academic ability of HIRATSUKA, who was proficient in German, greatly contributed to theabovementioned investigation of audit systems focused on the audit in Prussia. When he returned to Japan in
December 1888, the Minister of Finance had already proposed the "Draft Amendment of the Ordinance on the
Board of Audit" modeled after the court-style French Cour des Comptes. However, the success of reversing this
proposal mainly owed to President WATANABE's competence and HIRATSUKA's academic ability.

65

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of JapanHIRATSUKA's achievements during this period were highly valued, andhe was promoted in rank, as an exceptional treatment. Specifically, aprobationer official, who was a candidate for Kotokan,25 had to be an Imperial
University graduate or a person who passed the high civil service examination,
but with the promulgation of Imperial Ordinance No. 61, which was later
referred to as the Hiratsuka Imperial Ordinance, in July 1892, HIRATSUKA
was appointed as an Assistant Director of Soninkan. Furthermore, under
Imperial Ordinance No. 270 of June 1900, HIRATSUKA was appointed as a
Director of BOA in July 1900.
HIRATSUKA was promoted to a Director General in October 1917, andheld a position next to the President of BOA as a senior Director Generalfrom February 1918 until he retired in June 1924. Incidentally, Sadajiro
HIRATSUKA was the father of Raicho HIRATSUKA who took an active partin the women's liberation movement.

25"Kotokan" is a generic name for Chokuninkan and Soninkan.
66

Sadajiro HIRATSUKA

Section 3 Outline and Amendments of the BOA Act

Section 3

Outline and Amendments of the BOA Act

The organizations of the administrative

deliberation on the Constitution and Kenpo Gikai

branches under the Constitution of the Empire of(Commentaries on the Constitution) explained theJapan

Imperial

gist of this provision to be that "BOA has anofindependent

were

to

be

stipulatedbyOrdinances pursuant to Article 10

thestatus,positioned

betweentheConstitution of the Empire of Japan, whichgovernment and the Diet, in order to supervise

provided that "the Emperor determines thethe government's finance and accounting, so its

organization of the respective administrative

organization and authority shall be stipulated bybranches and salaries of civil and militarylaw, outside the domain of administrative orders."

officers, and appoints and dismisses civil andSubsection 1

military officers; provided, however, that if

Outline of the BOA Act

special provisions exist in this Constitution or
The contents of the BOA Act immediately

any other laws, those provisions shall apply."

after its enactment were as follows.

However, the organization of BOA was stipulated
by law based on the provisions of Article 72 of

1. Organization

the Constitution of the Empire of Japan, which
provided that "The organization and competency

The provisions of the BOA Act stipulatingof the Board of Audit shall be determined by

the organization of BOA are shown in thelaw"following table.

(paragraph

(2)).

The

article-by-article

The following part describes the details,

explanation given at the Sumitsuin at the time of
BOA Act

See the comparative table of the former and new provisions in the Appendix for amendments made after theenactment (page 642).

＊

Chapter I ORGANIZATION
OutlineArticle 1 The Board of Audit shall be under the direct control of the Emperor and [Status of BOA]
have a status independent from the ministers of state.
-Under the direct control of the Emperor
and a status independent from theministers of state
Article 2 The Board of Audit shall have in place one President, three Directors [Personnel composition of and affairs
General, and 12 Directors as its Members, and also two Secretaries, 24 Assistant administered by the President and other
Directors, and a few Staff members.
officials]
Article 3 The President of the Board of Audit shall be Chokuninkan, Directors -The number of Members (President,
General shall be Chokuninkan or Soninkan, Directors, Secretaries, and Assistant Directors General, and Directors ) ,Secretaries, Assistant Directors, and Staff
Directors shall be Soninkan, and Staff members shall be Hanninkan.
Article 4 (1) The President of the Board of Audit shall preside over the affairs of members
between
Chokuninkan,
the Board of Audit, and Directors General shall administer the affairs of Bureaus. -Distinction(2) If the President of the Board of Audit is incapacitated, a senior Director Soninkan, and Hanninkan-Affairs of the President, Directors General,
General may carry out the duties on behalf of the President.
and Directors
Article 5 Three Bureaus shall be established in the Board of Audit, and audit affairs-A three-Bureau organizational structure
in each Bureau shall be assigned among one Director General and four Directors.
Article 6 (1) A Member shall be appointed from among persons qualified under [Qualifications, requirements, and status
Imperial Ordinance.
guarantee for a Member](2) Except through criminal proceedings or proceedings for a disciplinary action, -Appointing a person qualified undera Member shall not be ordered to resign from office, to be transferred in position, Imperial Ordinanceor to take an administrative leave against the Member's will.
-Life tenured status(3) Provisions on disciplinary actions against Members shall be separately -Prohibition of a person and the person's
stipulated.
father, child, or sibling concurrently
67Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Article 7 A person and the person's father, child, or sibling may not concurrently serving as Members
serve as Members.
-Prohibition of concurrent holding of posts
Article 8 A Member may not concurrently hold another government post or
concurrently become a member of the Imperial Diet or a local assembly.
Article 9 (1) Matters of the Board of Audit shall be decided at a General Meeting or [Matters on the collegial body]a Bureau meeting. The General Meeting shall be presided over by the President -Matters to be decided at a Generaland the Bureau meeting shall be presided over by the Director General.
Meeting (presided by the President) or a(2) A matter shall be decided by a majority vote, and in the case of a tie, the Bureau meeting (presided by the Director
presiding officer shall decide on the matter.
General)-Matters
to be decided at a General
Article 10 A decision shall be made at a General Meeting in the following cases:
Meeting:(i) when presenting an address or responding to an inquiry made by the Emperor(i) when presenting an annual audit
pursuant to Article 15;
report to the Emperor;(ii) when finalizing a report pursuant to Article 14;(ii) when finalizing an annual audit report;(iii) when stating an opinion pursuant to Article 17;
statinganopinionon(iv) when deciding on or amending rules on audit affairs or the format or (iii) whenestablishment or amendment ofsubmission deadline for submission of accounts; andaccounting rules of the respective(v) in any other case when the President finds it necessary to refer a matter to
Ministries;
the General Meeting.
(iv)
when deciding on or amending rules
Article 11 All determinations on audit of calculations shall be made at a meeting,on
audit affairs or the format or
and whether to make the determination at a General Meeting or to make it at a
submission
deadline for submission of
Bureau meeting shall be decided by the President of the Board of Audit.
accounts; and(v) when the President of BOA finds it
necessary to refer a matter to theGeneral Meeting

Members.

background, etc. of major provisions listed in the

The BOA Act expressly stated in Article 1

table above.

that BOA shall be under the direct control of the(1) Status (Article 1)
When BOA was under the direct control ofEmperor and have a status independent from thethe Dajokan and the Cabinet, BOA had enhanced

ministers of state. This provision was modeled

the effect of audit through development of audit

after Article 1 of the Prussian Act on thesystems, and improved the contents of its

Organization and Mandate of the Superior

supervision of final accounts. However, since

Chamber of Accounts (the "Prussian Act"). Also,

BOA was positioned as a government-dependent

the provision on life tenured status for Membersorgan, its audit mandate did not function as

in Article 6 of the BOA Act was modeled afterstrongly as that of central government offices,

Article 5, paragraph (4) of the Prussian Act. In

similar to the era when BOA was the Audit

this manner,

Bureau of the Ministry of Finance.

independent from administrative bodies and all

BOA

was

guaranteedtobeother organs, and was provided with the basic

Under the constitutional system, it wasconditions for conducting fair audit activities.

necessary to institutionally remove conditions thathindered BOA's authority and establish BOA's

Later, the life tenured status for Members of

independence. All of the drafts of the Ordinance

BOA saw further developments. The Act onon the Organization of the Board of Audit drawn

Resignation of Members of BOA (Act No. 91 of

up by the Ministry of Finance, BOA, and the1896) provided that, when a Member "becomes

Cabinet Legislation Bureau realized that concept

incapable of performing the Member's duties due

through placing BOA under the direct control ofto physical or psychological breakdown" (Article

the Emperor and guaranteeing the status of its1), BOA may order resignation of that Member
68Section 3 Outline and Amendments of the BOA Act

based on a resolution by the Members Meeting.

the Act on Disciplinary Actions against Members

In addition, the disciplinary trial court forof BOA (Act No. 21 of 1900).

Members was established upon the enactment ofComparison between the BOA Act and the Prussian Act on the Organization and Mandate of the Superior Chamber of
Accounts
Prussian Act on the Organization and Mandate of theSuperior Chamber of Accounts
Article 1 The Board of Audit shall be under the direct control Article 1 The Superior Chamber of Accounts shall be under theof the Emperor and have a status independent from the direct control of the King and have a status independent fromministers of state.
ministers, and it shall be an organ that supervises overall
Article 12 The Board of Audit shall verify and confirm public finance by verifying and confirming the final accounts
calculations of the revenues and expenditures of public of revenues and expenditures of public money, increases andmoney, government property and goods, and national decreases of government property and goods, and national
government bonds, and supervise finance and accounting.
government bonds administration.
Article 6 (1) A Member shall be appointed from among persons Article 5 (Omitted)
qualified under Imperial Ordinance.
(4) A member of the Superior Chamber of Accounts may(2) Except through criminal proceedings or proceedings for a only be transferred against the member's will either when
disciplinary action, a Member shall not be ordered to resign transferring the member to become a judge while securingfrom office, to be transferred in position, or to take an the member's conventional status or transferring the member
administrative leave against the Member's will.
to become another high-ranking administrative official(3) Provisions on disciplinary actions against Members shall according to the member's qualifications under law.
be separately stipulated.
BOA Act(2) Organizational
through 8)

composition(Articles

stipulated that the President of BOA, who used to2

be Chokuninkan, was to be Shinninkan26 instead.

The BOA Act provided that the personnel

Further, with the Partial Amendment of the BOA

comprising the organization were to be one

Act (Act No. 31 of 1910), Assistant Director

President (Chokuninkan), three Directors General("Kensakanho" in Japanese) was renamed to(Chokuninkan or Soninkan), and 12 Directors

Assistant Director ("Fukukensakan" in Japanese),(Soninkan) as Members, and also two Secretaries

and Staff member was renamed to Clerk and(Soninkan), 24 Assistant Directors (Soninkan),

Stenographer. Also, Director General, who used

and a few Staff members (Hanninkan). It

to be Chokuninkan or Soninkan, was to be

stipulated that the organization was to consist of

Chokuninkan, and Director, who used to be

three Bureaus, and audit affairs in each Bureau

Soninkan, was to be Chokuninkan or Soninkan.

were to be assigned among one Director Generaland four Directors. Meanwhile, a person qualified(3) System of majority vote by a council(Articles 9 through 11)

as a Member under Imperial Ordinance as

Adoption of the collegial system was alreadyreferred to in Article 6 of the BOA Act was

well-established in supreme audit institutions ofspecified by the Qualifications of Members ofwestern countries such as Prussia, and all of the

BOA (Imperial Ordinance No. 80 of 1889) as a(amendment) drafts of the Ordinance on the

person aged 30 or older who has served as an

Organization of the Board of Audit drawn up by

Assistant Director or any other high-ranking

the Ministry of Finance, BOA, and the Cabinet

administrative official for five years or more.

Legislation Bureau adopted the council system.

In addition, the Treatment of the President

26

of BOA (Imperial Ordinance No. 160 of 1896)
69"Shinninkan" is an official among Chokuninkan, who isappointed in the ceremony of installation by the Emperor.

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Nobori WATANABE, the President of BOA,

presentation of an address or a written response

stated as follows about the majority vote system

to an inquiry made by the Emperor under Articleof supreme audit institutions, immediately after

15 of the BOA Act, (ii) a report under Article 14

returning to Japan from a trip to investigate theof the BOA Act, and (iii) a written opinion under

audit systems in western countries: (i) since

Article 17 of the BOA Act. At the same time, theBOA's decisions affect the security of the

Detailed Regulations specified that the matters totreasury or the profit or loss of property handled

be decided at Bureau meetings were (i) theby financial officers, Accounting Officers, etc.,

original document of a regular determination, (ii)and affect the course of action or reputation ofa draft of a regular certificate of grant of

the heads of administrative branches, BOA

discharge, and (iii) a document submitted by ashould make decisions fairly and without favor,

division chief who could not agree with the

not in a discretionary and arbitrary manner, but

Director General's opinion to change the purport

with as much prudence as possible, so theor a fact.

method of majority vote should be used; and (ii)the collegial system has been used in westerncountries such as Germany, Italy, and France
conventionally.
Meanwhile, details of the General Meeting
and Bureau meetings were prescribed by theRules on the Affairs of the Board of Audit(Imperial Ordinance No. 106 of 1889), and theDetailed Regulations on Proceedings of Meetings

Minutes of the resolution in General Meeting(BOA Internal Notice No. 8 of 1890) were

2. Authority, etc.

enacted to provide for management of themeetings, based on Article 11 of the BOA Act.

The provisions of the BOA Act stipulating

The Detailed Regulations on Proceedings ofthe authority, etc. of BOA are shown in the

Meetings specified 11 matters to be decided atfollowing table.

the General Meeting, including (i) a written
BOA Act

See the comparative table of the former and new provisions in the Appendix for amendments made after theenactment (page 642).

＊

Chapter II AUTHORITY
OutlineArticle 12 The Board of Audit shall verify and confirm calculations of the revenues [Purpose of audit]
and expenditures of public money, government property and goods, and national -Verify and confirm calculations of thegovernment bonds, and supervise finance and accounting.
revenues and expenditures of publicmoney, government property and goods,
and national government bonds, andsupervise finance and accounting

70Section 3 Outline and Amendments of the BOA Act
Article 13 The following matters require audit by the Board of Audit:[Audit subjects](i) the final accounts;-Matters that require audit by BOA:(ii) the final accounts of revenues, expenditures, and government property and (i) overall final accounts;
goods of government offices and government structures;(ii) final
accountsofrevenues,(iii) the final accounts of revenues and expenditures of bodies and public or
expenditures, and government property
private structures subsidized or specially guaranteed by the government; andand goods of government offices and(iv) the final accounts that are specially made subject to audit by the Board ofgovernment structures;
Audit by laws and Imperial Ordinance.
(iii) final accounts of revenues andexpenditures of bodies and public or
private structures subsidized or
speciallyguaranteedbythegovernment; and(iv) final accounts that are specially madesubject to audit by BOA by laws andImperial Ordinance.
Article 14 The Board of Audit shall verify and confirm the final account pursuant to [Verification and confirmation of final
Article 72 of the Constitution and at the same time prepare reports on the accounts and preparation of annual audit
following matters:
reports](i) whether the figures in the final accounts and the statements of revenue and -Matters to be presented in the annual audit
expenditure accounts of the respective Ministries tally with the figures in the report:
statements of accounts submitted by Accounting Officers;(i) whether the figures in the final(ii) whether the assessment and collection of revenue, the use of expenditure, andaccounts and the statements ofacquisition, sale, assignment, and use of government property and goods comply
revenue and expenditure accounts ofwith the rules on the budget or laws and Imperial Ordinances; andthe respective Ministries tally with the(iii) whether there are any expenditures beyond or outside the budget which havefigures in the statements of accounts
not been approved by the Diet.
submitted by Accounting Officers;(ii) whether revenue, expenditure, andacquisition, etc. of government
property and goods comply with thebudget or laws and Imperial
Ordinances; and(iii) whether there are any expenditures
beyond or outside the budget whichhave not been approved by the Diet.
Article 15 The Board of Audit shall present the annual audit report to the Emperor [Presentation of annual audit reports]
for each fiscal year, and if it finds any matter in the report which requires a legal -Presentation of the annual audit report toor administrative revision, it may also present its opinion to the Emperor.
the Emperor for each fiscal year
-Presentation of its opinion if it finds alegal or administrative revision to benecessary
Article 16 (1) The Board of Audit may commission a government office with the [Commissioning of audit and grant ofaudit and the grant of discharge for a part of the calculation of the government discharge]
office; provided, however, that the Board of Audit must have the government -Commissioning of the audit and the grant
office give it a report on the audit results.
of discharge for a part of the calculation of(2) Regardless of the commissioning referred to in the preceding paragraph, the a government office
Board of Audit may, when necessary, have a competent government office send a -Reporting of the audit results from thestatement of account to it and have the government office conduct audit.
commissioned government office to BOA(3) This Article may also apply to the final accounts of the bodies and the public
or private structures under Article 13, paragraph (iii).
Article 17 (1) The Board of Audit shall receive notice of an order issued by a [ Authorityonestablishment
andMinistry on receipt and payment of treasury money or bookkeeping, prior to its amendment of accounting regulations ofissuance, and may state its opinion, if any.
government offices](2) The Board of Audit shall receive notice of an order issued by a Ministry for -Receipt of notice prior to issuance andestablishing regulations or amending existing regulations on revenues and ability to state opinions, if any
expenditures, prior to their issuance.

71

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Article 18 The Board of Audit shall decide on the formats for statements of [Right to establish rules on submission of
accounts and submission of accounts and the deadline for their submission and accounts]
for responding to questions thereon.
- Establishment of the formats forstatements of accounts and submission of
accounts, the deadline for their submission,and the deadline for responding toinquiries thereon
Article 19 (1) The Board of Audit may have government offices submit to it books [Demand for submission of materials, etc.
and reports that are necessary for audit and a written explanation of the official in and field audits]
charge.
-Demand for submission of audit-related(2) If the President of the Board of Audit finds it necessary for audit, it may materials, reports, and written explanations
dispatch its official in charge and conduct field audit. In this case, the Board of of the official in charge
Audit shall notify the head of the relevant department in advance, and said head -Field audits
may have the department's official in charge attend the audit.
Article 20 The Board of Audit shall audit the statement of accounts and [Determination based on the audit results
documentary evidence provided by the Accounting Officer, and if the Board of and a demand for disposition]
Audit determines that they are proper, it shall issue a certificate of grant of -If BOA determines the statement, etc. todischarge to said officer and discharge the officer from his/her responsibility, and be proper, grant of discharge throughif necessary, the Board of Audit shall inquire the officer and have the officer give issuance of a certificate of grant ofan explanation or correct the error, and if the Board of Audit consequently, discharge
determines that they are not proper, it shall give notification to the head of the -If BOA determines the statement, etc. notrelevant department and have the head take action.
to be proper, a demand for taking action
Article 21 The head of the relevant department may not reduce or exempt the [Guarantee of the effect of determination on
liability of a person who has liability for indemnity based on determination by the indemnity]
Board of Audit, except through a pardon granted by the Emperor.
-Liability for indemnity not reduced or
exempted except through pardon by theEmperor
Article 22 If an Accounting Officer neglects to submit a statement of accounts or [Demand for a disciplinary action against a
documentary evidence or fails to comply with the format, the Board of Audit may failure to perform submission of accounts]
notify the head of the relevant department and demand a disciplinary action.
Article 23 Calculation of secret funds of the government shall be excluded from the [Exclusion of secret funds from audit
audit by the Board of Audit.
subjects]
Article 24 (1) Even after the Board of Audit issues a certificate of grant of [Retrial]
discharge, if the Accounting Officer requests a retrial or if the Board of Audit -A retrial conducted in the following cases:
discovers an error, omission, or overlapped entry in the statement of accounts (1) if the Accounting Officer requests a
within five years from the day of the issuance, the Board of Audit may conduct a
retrial or if BOA discovers an error,
retrial; provided, however, that if the Board of Audit discovers false documentaryetc. in the statement of accounts within
evidence, it may conduct a retrial even after five years from the day of thefive years from the day of the issuanceissuance.
of the certificate of grant of discharge;(2) An Accounting Officer may not further request a trial against a determination
andmade at a retrial by the Board of Audit.
(2) even after five years from the day of
the issuance, if BOA discovers false
documentary evidence
Chapter III SUPPLEMENTARY PROVISIONS
Article 25 Rules on the Affairs of the Board of Audit shall be stipulated separately [Rules on the Affairs of BOA]
by Imperial Ordinance.

The following part describes the details,

annual audit report: (i) whether the figures in the

background, etc. of major provisions listed in the

final accounts and the statements of revenue andtable above.

expenditure accounts of the respective Ministries(1) Annual audit report and annual audit
report to the Emperor (Kensaseisekisyo)(Articles 14 and 15)

tally with the figures in the evidence submitted

Article 14 of the BOA Act provided that the

government property and goods comply with thefollowing three matters shall be stated in thebudget and laws; and (iii) whether there are any

by Accounting Officers; (ii) whether the financeand accounting of revenues, expenditures, and72

Section 3 Outline and Amendments of the BOA Act

In addition, BOA was to present the annual

expenditures beyond or outside the budget which

audit report to the Emperor (Komuseisekisyo)

have not been approved by the Diet.
However, the wording of Article 14 seems

starting from 1891 (audit results for 1887) based

to have caused a misunderstanding among someon Article 15 (the Japanese name of the report

officials that BOA only audits compliance withwas changed to "Kensaseisekisho" in 1899).

laws and regulations, and does not audit whether(2) Commissioned audits (Article 16)

administrative

activities

areuneconomical.

Indeed,Ministryof

PostaltheCommissioned audits were a system in
which

and

commissioned

government

offices

Telecommunications presented an opinion in

conducted audits and granted discharge on behalf

1891 that it would be beyond BOA's authority toofconduct audit of even the auditees' administrative

determination, as an exception to the principle

discretionthat BOA is to verify and confirm all finance andthat

is made within

theextent

BOA

for

a

part

of

the

auditsandaccounting of the State.

permitted by laws and regulations (see page 137).
On this issue, BOA had already established

However, BOA had the mandate to havethe following provisions in Article 21 of its Draft

commissioned government offices report audit

Ordinance on the Organization of the Board ofresults every year, and mandate to conduct direct

Audit, before the enactment of the BOA Act.

audit as needed. It formulated the Procedures for
the Grant of Discharge and Annual Audit Report

Draft Ordinance on the Organization of the Board
of Audit (drafted by BOA in December 1888)
Article 21 Audit of finance and accounting shallbe conducted not only for determining whether
the revenues and expenditures are correct, butalso for the following purposes:(i) determining whether or not acquisition,use, and sale of government property andgoods and collection and use of revenue areconducted
incompliance
with
laws,
regulations, and administrative principles; and(ii) observing the performance of theadministration through audit of finance andaccounting and determining whether or not any
revision is required.

of Commissioned Audits (Notice of General
Meeting No. 62 of 1891) and the Procedures for
the Handling of Commissioned Audits (Notice ofGeneral Meeting No. 12 of 1902) and notified
the

of

these

(3) Authorityonestablishment
andamendment of accounting regulations ofgovernment offices (Article 17)
Article 17 of the BOA Act ensured that
accounting regulations to be established oramended bygovernment

offices wouldbecoordinated and made consistent. In actual
practice, however, such measure was taken

merely limited to formal review of the final

throughaccounts of revenues and expenditures, but also

priorgovernment

covered the substance of budget implementation,

consultation

office

with

made

BOA,

by

and

each
BOA's

opinions were incorporated at that stage.

and that it was within BOA's audit scope to audit
activities

offices

conducting commissioned audits.

been understood that BOA's authority was not

administrative

government

Procedures, thereby developing provisions for

As suggested by these provisions, it had

whether

relevant(4) Submission of accounts
operations (Article 18)

wereuneconomical.

and

BOA's

Submission of accounts was intended for73Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

fully securing the conditions required for the

be contained in the examination document wereverification

and

final

criticism on incompliance, warning against futureaccounts.

BOA

matters

measures, and inquiries on unclear points (Article

confirmation
stipulated

of

the

necessary

38).

including the formats for submission of accounts,
the deadline for the submission, and response to

Based on the abovementioned provisions ofinquiries on the submission, and made any

Article 33 of the Rules on the Affairs of thesubmission in violation of these stipulations

Board of Audit, BOA established the Rules on

subject to disciplinary action. The first rule on

Audit Year on October 7, 1889, and the Rules onsubmission of accounts stipulated based on

Supervision of Operation on October 9 of the

Article 18 of the BOA Act was the Method ofsame year, which served as the basis for

Evidence of Receipts and Disbursements ofconducting in-office audit.

Goods of September 1889. This was followed byvarious other rules such as the Rules on Evidence(5) Submission of materials, etc. and fieldaudits (Article 19)of Expenditures and the Rules on Evidence ofArticle 19, paragraph (1) provided forhaving government offices submit materials,

Treasury Accounting.
The Regulations on Accounting (Imperial

reports, and written explanations of the official in

Ordinance No. 60 of 1889) provided thatcharge for in-office audit under Article 18 andstatements of accounts, other than statements offor field audit under Article 19, paragraph (2).

payments

Article 19, paragraph (2) provided for fieldsubmitted

byofficials

who

had

received advanced funds, should be submitted

audits.

annually. However, this system was revised by(6) Determination against an
Officer (Articles 20 and 21)

theRegulationson

Accounting( Imperial

Accounting

Ordinance No. 112 of October 1893) which

The Ministry of Finance intended to securerequired that statements of expenditures should

fair management of treasury money against

be submitted on a monthly basis.

problems such as accountancy outside the budget

As for BOA's operations, the Rules on theand provisional payments which had lingered

Affairs of the Board of Audit initially provided

since the early days of the Meiji government, andthat "The Board of Audit shall decide the audit

realized this by establishing BOA's strict audit

year, and specify the extent of affairs to be

determination

implemented during that audit year and the

Accounting Act. Specifically, it made Accounting

matters to be undertaken by the relevant officials

Officers undertake the full responsibility for cashby the Rules on Supervision of Operation to beandestablished by the President of the Board of

circumstances, as in the following.

goods

systemunless

under

there

were

the

Publicunavoidable

Audit" (Article 33). The Rules on the Affairs of
The Public Accounting Act
Article 26 An official in charge of receipt andpayment of cash or receipt and issue of goods
that belong to the government has the full
responsibility for those cash or goods, and shallreceive the Board of Audit's audit

the Board of Audit also provided that if BOA
found any matters in audit, it was to "issue an
examination document to the official in charge,
and have the official make a response orcorrection" (Article 36), and that the matters to74

Section 3 Outline and Amendments of the BOA Act

general. Based on Article 26 of the Public

determination.
Article 27 If the official referred to in thepreceding Article loses or damages cash or
goods which the official retains due to an
incident such as flood, fire, or theft, the official
may not be released from the liability unlessthe official proves to the Board of Audit that
there were unavoidable grounds in the custodyof the cash or goods and receives the Board ofAudit's determination of the grant of discharge.

Accounting Act, officials responsible for handlinggoods also became subject to BOA' audit
determination.
Article 20 of the BOA Act provided that, if
BOA found a statement of accounts to be proper
as a result of audit, it is to issue to the
Accounting Officer a certificate of grant ofdischarge, which certified that the Accounting

The subsequently enacted BOA Act was

Officerwasdischarged

fromliability.

Abound by this stipulation, and established Articles

certificate of grant of discharge was also issued

20 and 21 in response to the abovementioned

when indemnity was completed in response to anprovisions of the Public Accounting Act.

indemnity order issued by the head of the

The term "decision" used in the Draft of therelevant

Ordinance on the Organization of the Board ofdepartment

based

on

BOA's

determination.

Audit drawn up by BOA was changed to

Meanwhile, the system of certificate of grant"determination" based on the wording used in theof

Public Accounting Act which was approved

accounting law when Article 41 of the Public

earlier. However, while determination under the

Accounting Act (Circular Notice of Dajokan No.

Public Accounting Act was judicial determination

5 of 1882) provided that "The Board of Audit

pronounced against an Accounting Officer as anshall examine and judge the final accounts ofindividual, determination on audit results undereach

the BOA Act merely had an effect of criticism

certificate of grant of discharge therefor by April

and BOA's determination was supposedly aof the fiscal year after next," and the certificate

written reason for demanding the head of thewas positioned as a certificate of confirmation of

relevant department to make a disposition, instead

the final accounts. On the other hand, theof a pronouncement that has a direct effect on thecertificate of grant of discharge issued by BOA

Accounting Officer. In this manner, the system ofunder the Dajokan system as a certificate of

the Accounting Officer's liability for indemnity

confirmation of the final accounts became abecamecertificateinconsistent

AccountingAct

between

which

was

the
for

Publicregulating

discharge

wasgovernmentof

introduced

office

grant

of

and

under

publicpronounce

discharge

for

a

the

Accounting Officer under the BOA Act.

implementation of finance and accounting and theIn addition, Article 28 of the Public

BOA Act which was for supervising such

Accounting Act provided that "those who are

implementation.

required to pay a fidelity guarantee deposit upon

Ahead of the coming into effect of thetaking charge of receipt and payment of cash or

Public Accounting Act, the Regulations onreceipt and issue of goods shall be specified by

Accounting of Goods Owned by the State came

Imperial Ordinance." The Fidelity Guarantee

into effect in October 1889, which provided for

Deposit (Imperial Ordinance No. 4 of 1890) was

an indemnity system for the State's goods inestablished in response to this, and Accounting
75

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Officers became required to pay a fidelity

not look into such matters as the purpose of use.

guarantee deposit. However, Accounting Officers(8) Retrial (Article 24)

were hardly ever required to pay such deposits in

A retrial was conducted in the following

practice, and the provisions on fidelity guarantee

cases: (i) if the Accounting Officer requested awere deleted upon the 1921 amendment of theretrial; (ii) if BOA discovered an error, etc. in the

Public Accounting Act and the Regulations onstatement of accounts within five years from the

Accounting.

day of the issuance of the certificate of grant of(7) Secret funds (Article 23)

discharge; and (iii) ex officio if BOA discovered

Article 23 provided that the State's financefalse documentary evidence, even after five years

and accounting were all subject to audit, infrom the day of the issuance of the certificate ofprinciple, but secret funds were excluded from

grant of discharge.

audit subject matters as an exception. This

Also, under the system of commissioned

principle was similarly set forth in all of theaudits, if an Accounting Officer who received aDraft Amendments of the Ordinance on thedetermination holding the officer to be liable,

Organization of the Board of Audit drawn up by

from the government office commissioned with

the Ministry of Finance, BOA, and the Cabinet

the audit, was dissatisfied with the determination,

Legislation Bureau, and Article 9, paragraph (3)the Accounting Officer was able to directlyof the Prussian Act, which served as a model forrequest BOA's determination. In this case, thethese drafts, also provided that "the only matters

retrial procedure was to be followed.

that are excluded from the subjects of audit by
Subsection 2

the Superior Chamber of Accounts are the final
accounts of the funds of the budget of the
Cabinet which are used for a political purpose

Reform of the finance andaccounting
systemandamendment of the BOA Act

The BOA Act was amended several times inand the funds of the Ministry of Internal Affairs

the Meiji era (between the late 1860s and thewhich are used for police secrets."
Secret funds were funds which were usedearly 1910s) due to changes in the organizational

"the

for

structure and the number of personnel, but in theensuring the State's security and interests andTaisho era (between the early 1910s and the mid-which should not be disclosed to the general

1920s),

public and foreign countries" (Commentary on

amended in line with reform of the finance andthe Original Public Accounting Bill of Julyaccounting system and the national property1887). Exclusion of such funds from audit

system. This Subsection outlines the amendments

subject matters seems to have been taken forof the BOA Act under the Constitution of the

granted by BOA as well as in general.

Empire of Japan, focusing on the amendment inforgovernment's

secretactivities

provisionson

authority

were

also

According to the abovementioned provisions

1921, in order to look at how the Act had beenof the BOA Act, BOA audited secret funds byamended since its enactment until it was

only confirming the recipients' names, andabolished in 1947.

checking the amount of the budget used, thebalance at the end of the fiscal year, etc., and did76Section 3 Outline and Amendments of the BOA Act

1. Reform of the finance and accounting
systemwherein the Central Bank directly takes charge of(1) Full amendment of the Public Accounting
Act

In order to improve and amend the Public

revenues and expenditures to the deposit system.
Accounting Act centering on reform of thetreasury

The Public Accounting Act had not beensystem,the

MinistryofFinancefundamentally amended after its enactment informulated a bill for fully amending the Public

1889, and any necessary measures had been taken

Accounting Act, and submitted the bill to the 42ndbysession of the Diet in February 1920. Because thestipulating

Accounting

exceptions

to

and

Regulations

Act

PubliconHouse of Representatives was dissolved during

Accounting through various other laws andthe deliberation of the bill, the bill was submitted

Imperial Ordinances such as the Act on Special

again to the 44th session of the Diet in March

Account. In the Imperial Diet at the time,

1921, and was assented by both Houses. Thus,

members

thethe Public Accounting Act was fully amended

Constitution on national finances over the Diet'swith Act No. 42 of April 1921, and then the

mandate on fiscal supervision, and also debated

Regulations on Accounting were also fullyon draft amendments of the Public Accounting

amended with Imperial Ordinance No. 1 of

Act and proposals on the finance and accounting

January 1922. The two Acts came into effect on

system about matters including limitation on

April 1 of 1922. Further, three Acts and 122

expenditures

fund

Imperial Ordinances, which had provided for(expenditures upon the responsibility of themany exceptions to the principles provided under

Cabinet), acceleration of the time for submission

the Public Accounting Act and the Regulationsof the final accounts to the Diet, and stipulationon Accounting, were abolished, and accountingof these in express provisions.

laws and regulations were streamlined anddebatedonoutsidethetheprovisions

thereserveof

Later, a policy was decided to revise theconsolidated in line with their amendments.

system for managing the treasury money of the

Key points of the amendment of the Public

Bank of Japan from the accounting system

Accounting Act were as follows.

Key points of amendment to the Public Accounting Act
Key points of amendment
Before amendment
After amendment
Reform of the system of the The accounting system wherein the The deposit system (the receipt and disbursement ofrevenues and expenditures of Central Bank directly takes charge of treasury money by the Bank of Japan are treated astreasury money
revenues and expenditures (the Bank receipt and payment of government deposit funds,of Japan takes full charge of and the Bank of Japan is able to manage treasury
retaining, receiving, and disbursing money along with other general deposits)
treasury money)(ii) Acceleration of the time for No explicit provisions (in actual The final accounts were submitted to an ordinary
submission of the final accounts practice, the final accounts were session of the Diet in the fiscal year immediately
submitted to an ordinary session of following the end of the fiscal year covered.
the Diet in the second fiscal year
following the end of the fiscal year
covered)(i)77Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan(iii) Acceleration of the time for The requests were submitted to an The requests were submitted to the first ordinary
submission of requests for ordinary session of the Diet after the session of the Diet held after the payment.
subsequent
approval
for end of the fiscal year in which thepayment from the second payment was made, in order toreserve fund (reserve funds to obtain subsequent approval of thebe spent for a new expenditures Diet.
item that is not included in thebudget)(iv) Expansion of the scope of Principle: competitive bidding(1) Principle: competitive contracts were to benegotiatedcontracts
and Exceptions: the Act listed cases inconcluded in all cases except in the cases
selective tendering contracts
which negotiated contracts were
specified by Imperial Ordinancepermissible; such cases were also
Exceptions: the cases in which selective
specified by Imperial Ordinancetendering contracts and negotiated contracts werepermissible were explicitly stipulated in theRegulations on Accounting(2) The Act provided for cases in which selective
tendering contracts and negotiated contracts
could be concluded under the responsibility ofeach Minister, whether or not specified byImperial Ordinance.
(v) Abolition of the uniform system Government claims and debts for Special provisions on prescription under the Civil
of prescription
performancein
money
were Code, Commercial Code, etc. were applied, if any,
extinguished by prescription five and the five-year extinctive prescription under theyears after the relevant fiscal year, in Public Accounting Act was only applied when there
principle.
were no such special provisions.
(vi) Introduction of provisions on No provisions
The Act introduced a system that allowed conclusion
contracts that continue into theof a contract that continued into the following fiscal
following fiscal year
year, within the scope of the amount assented by theDiet and with the approval of the Minister ofFinance, when there were unavoidable grounds suchas a disaster.
(vii) Application of the principle of An Accounting Officer had liability (1) The Accounting Officer could be released fromnegligencetoAccounting for indemnity for loss or damage ofthe liability if he/she proved that he/she had not
Officers' liability for indemnity cash or goods, except in cases where
neglected the exercise of the due care of athere were unavoidable grounds inprudent manager.
the custody of the cash or goods.
(2) The system of Accounting Officers' fidelity
guarantee deposits was abolished.

insisting that the national property management(2) Enactment of the National Property Act
The National Property Act was enacted insystem should be stipulated by an Act, since theApril 1921. The Act came into effect in 1922, thetime of enactment of the Regulations. Based onsame year as the amendment of the Public

such view, Diet members had continuously

Accounting Act, and various related laws andsubmitted bills in the House of Representatives

regulations were enacted, amended, or abolishedfrom the first through the eighth sessions of the

concurrently.

Diet.

The Regulations on the Management of

BOA also pointed out in the FY1898 annual

Government Properties (Imperial Ordinance No.

audit report to the Emperor submitted in April

275 of 1890) existed as a basic statute on1901 that the national property management

management of national property, but because thesystem "lacked consistency in management andRegulations contained many deficiencies and took

had no means of supervision in place," andthe form of an Imperial Ordinance which was notpresented an opinion that "the Ministry ofassented by the Diet, there had been a view

Finance should be given the role to achieve
78Section 3 Outline and Amendments of the BOA Act

consistency in management" and that, throughfor managing national property was made clear

enactment

Property

and a coordinating organ for the system wasManagement Act, "the inventory of government

established; (iii) the procedure for disposing ofproperty and report on its increase and decrease

national property was made more rigorous; (iv)should all be submitted to the Imperial Diet after

national property ledgers were introduced; andbeing audited by BOA." Moreover, in November(v) the system for calculation and reporting of

1903, BOA sent a written notice to the Primenational property was revised.

of

the

Government

Minister stating the same opinion about the
2. Amendment of the BOA Act

government property management system, and in
the FY1907 annual audit report to the Emperor

The BOA Act was amended in line with thesubmitted in February 1910, it stated that it

reform of the finance and accounting system andwould be favorable for public finance and thethe national property management system.

national economy to achieve effective use ofSince a bill fully amending the Public

government land managed by prefectures and to

Accounting Act was to be submitted to the Diet,appropriately dispose of land that has no room

BOA decided to also amend the BOA Act. It

for use.

drafted a bill and proposed it to the Cabinet in

Later, in 1917, a proposal was made at theJanuary 1920. The Cabinet submitted this Bill

House of Representatives in the 39th session ofPartially Amending the BOA Act to the Diet,

the Diet that "it is the demand of the times toalong with the Bill Amending the Public

sort out national property and obtain fiscal funds,

Accounting Act. The Diet approved these bills inand the government should form an advisory

March 1921. In this manner, the BOA Act wascommittee,"

and

the

proposalwaspassedpartially amended by Act No. 53 of April 1921.

unanimously.

In

June

1918,

an

Advisory

The key points of the amendment were as

Committee for Government Property, chaired byfollows: (1) the provisions were amended in line

the Minister of Finance, was formed in thewith restoration of the three-Bureau and 12-

Ministry of Finance, and the Director General of

Division organizational structure in BOA; and (2)the 1st Bureau of BOA participated in the

explicit provisions were established so thatcommittee on behalf of BOA.

BOA's audit mandate extends to accounting of

The advisory committee first shared thetreasury money and securities handled by therecognition that the National Property Act neededBank of Japan, in line with the adoption of theto be enacted as a basic statute on national

deposit system for accounting of treasury money.

property. On such basis, it drafted a bill and

The specific amendments were as describedreported it to the government. The bill of the

below.

National Property Act was approved at the 44th(i) "The final accounts of the receipts andpayment of deposits and securities handled

session of the Diet.
The key points revised in the new systemby the Bank of Japan for a government

were as follows: (i) the scope of national property

purpose" (Article 13, item (iii)) was newly

was expanded and categories of the types ofprovided as a subject that needs to be audited

national property were clarified; (ii) the system

by BOA.
79

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan(Article 20-2).

(ii) In the provision "whether the figures in the
final accounts and the statements of revenue

In addition, in the former provision thatand expenditure accounts of the respective"The Board of Audit shall receive notice of an

Ministries tally with the figures in theorder issued by a Ministry on receipt andstatements

bypayment of treasury money or bookkeeping, prior

Accounting Officers" (Article 14, item (i)),

to its issuance, and may state its opinion, if any"

which was one of the matters to be reported(Article 17, paragraph (1)), the phrase "receipt

in

term

and payment of treasury money" was amended to"Accounting Officers" was amended to "the"receipt and payment of cash and goods" so as to

Bank of Japan."cover a broader scope of subjects.

the

of

annualaccounts

audit

submitted

report,theAs(iii) When it was necessary for audit, BOA couldfor

amendmentonsubmissionofhave government offices submit to it books

accounts, the chapter on "treasury" in the Rules

and reports or a written explanation, or couldon the Submission of Accounts was fully

dispatch its official in charge and conduct

reorganized into a chapter on the "Bank offield audit, and in addition to this, Article 19

Japan." While the Treasurer had been required to

was added to allow BOA to conduct these

prepare and submit statements on receipt and

acts

than

payment of treasury money every year andgovernment offices that are subject to BOA'sdetailed statements of receipt and payment ofaudit, such as the Bank of Japan. In line withtreasury money every month, the system wasthis, the certificate for treasury audit carried

revised so that the Bank of Japan was to prepare

by BOA officials dispatched for field audits

and submit statements of accounts on the receiptof treasury was revised to a certificate forand payment of treasury money, and receipt andaudit of the Bank of Japan.

issue of securities owned or retained by the State

also

to

organizations

otherevery month, and their overall statements every(iv) With the revision of the system of therevenues

andexpenditures

of

year.

treasurymoney, the relationship of property between

Including such amendment made in 1921,

the government and the Bank of Japan camethe BOA Act under the Constitution of theto take on the nature of private law. Thus,

Empire of Japan was amended 15 times as shown

the responsibility of the Bank of Japanin the table below.

became different from the responsibility of
Accounting Officers, and it was provided
that "The Board of Audit shall audit thecalculation of the Bank of Japan and if theBoard of Audit determines that it is proper, it
shall notify this to the Minister of Finance. If
the Board of Audit determines that it is notproper, it may give notification to the
Minister of Finance and demand that the
Minister should take appropriate action"
80Section 3 Outline and Amendments of the BOA Act

Certificate carried upon audit of the Bank of Japan

Amendments of the BOA Act under the Constitution of the Empire of Japan
Date ofpromulgation(Effective date)
Act Partially Amending the Board of Audit -Revision of the number of Assistant Directors (amendment May 2, 1896＊
Act
of Article 2)(Act No. 90 of 1896)
Act Partially Amending the Board of Audit -Revision of the number of Assistant Directors (amendment April 5, 1900＊
Actof Article 2)(Act No. 81 of 1900)
Act Partially Amending the Board of Audit -Revision of the number of secretaries, etc. (amendment of March 28, 1910
Act
Article 2)(April 1, 1910)(Act No. 31 of 1910)-Revision of the mode of appointment of Directors General,
Directors, etc. (amendment of Article 3)-Amendment of the provisions on the status guarantee ofMembers (amendment of Article 6)
Act Partially Amending the Board of Audit -Revision of the number of full-time Assistant Directors March 23, 1911
Act
(amendment of Article 2)(April 1, 1911)(Act No. 23 of 1911)
Act Partially Amending the Board of Audit -Revision of the number of Directors General, Directors, and April 7, 1913
Act
full-time Assistant Directors (amendment of Article 2)(June 13, 1913)(Act No. 11 of 1913)-Revision of BOA's organization from a three-Bureau
structure to a two-Bureau structure (amendment of Article
5)
Act Partially Amending the Board of Audit -Revision of the number of full-time Assistant Directors April 4, 1916
Act
(amendment of Article 2)(April 13, 1916)(Act No. 36 of 1916)-Revision of the mode of appointment of the President of
BOA (amendment of Article 3)
Act Partially Amending the Board of Audit -Revision of the number of full-time Assistant Directors March 25, 1919
Act
(amendment of Article 2)(April 1, 1919)(Act No. 4 of 1919)
Governing Act

Contents

81

Part 2

Chapter 1

Establishment of BOA under the Constitution of the Empire of Japan

Act Partially Amending the Board of Audit -Revision of the number of Directors General, Directors, and April 9, 1921
Act
full-time Assistant Directors (amendment of Article 2)(September 1, 1921;(Act No. 53 of 1921)-Revision of BOA's organization from a two-Bureau April 1, 1922)
structure to a three-Bureau structure (amendment of Article
5)-Addition of the final accounts of the receipts and paymentsof deposits and securities handled by the Bank of Japan fora government purpose to subjects that need to be auditedby BOA (amendment of Article 13)-Sorting out the matters to be reported in the annual audit
report, addition of provisions on audit of the Bank ofJapan, etc. (amendment of Articles 14, 16, and 17; additionof Article 19, paragraph (3); and addition and amendmentof Article 20-2)
Act Partially Amending the Board of Audit -Revision of the number of full-time Assistant Directors, etc. April 1, 1925
Act(amendment of Article 2)(April 1, 1925)(Act No. 43 of 1925)-Deletion of stenographers from BOA's posts (amendment of
Article 3)
Act Partially Amending the Board of Audit -Revision of the number of full-time Assistant Directors March 31, 1927
Act
(amendment of Article 2)(April 1, 1927)(Act No. 26 of 1927)
Act Partially Amending the Board of Audit -Revision of the number of full-time secretaries (amendment March 29, 1929
Act
of Article 2)(April 1, 1929)(Act No. 22 of 1929)
Act Partially Amending the Board of Audit -Revision of the number of full-time residents (amendment March 28, 1934
Act
of Article 2)(April 1, 1934)(Act No. 19 of 1934)-Addition of residents to BOA's posts (amendment of Article
3)
Act Partially Amending the Board of Audit -Revision of the number of Directors General, Directors, and March 31, 1937
Act
full-time Assistant Directors (amendment of Article 2)(April 1, 1937)(Act No. 28 of 1937)-Revision of BOA's organization from a three-Bureau
structure to a four-Bureau structure, etc. (amendment of
Article 5)
Act Partially Amending the Board of Audit -Revision of the number of Directors and full-time Assistant March 28, 1940
Act
Directors, etc. (amendment of Articles 2 and 5)(April 1, 1940)(Act No. 20 of 1940)
Act Partially Amending the Board of Audit -Revision of the number of Directors General and Directors, March 20, 1943
Act
etc. (amendment of Article 2)(March 20, 1943)(Act No. 77 of 1943)-Stipulation to allow appointment of clerks as Soninkan by
Imperial Ordinance (amendment of Article 3)-Revision of BOA's organization from a four-Bureau
structure to a three-Bureau structure (amendment of Article
5)＊
The effective date is unknown.

3. Measures on the Regulations on Accounting(i) While a system was introduced to allow a

Due in part to deregulation of accounting

government office to conclude a contract

operations

byaccounting

system,MinisterofreformtheFinancethefinanceandoutside the budget, which continued into thematters

which

the

following fiscal year, with the approval ofrespective

the Minister of Finance when there was a

of
and

other

Ministers should notify BOA of every time adisaster,relevant case arises were stipulated in the

grounds, if the Minister of Finance had given

Regulations on Accounting as follows in order tosuch approval, the Minister was to notify

keep watch on abuse of the system, etc.

BOA to that effect, providing together a82

incident,

or

other

unavoidable

Section 3 Outline and Amendments of the BOA Act

document clarifying the amount, reason, andcalculation basis thereof. (Article 27)(ii) While it was provided that funds for otherexpenditure items may not be appropriatedfor expenditure items that were designated byImperial Ordinance without the approval of
the Minister of Finance, when the Ministerof Finance had approved such appropriation,
the Minister was to notify BOA to that
effect. (Article 39)(iii) While a provision was established to allow a
Minister to conclude a contract throughselective tendering or conclude a negotiatedcontract when the Minister finds it to be
unfavorable to conclude a contract throughcompetitive bidding, if a Minister hadconcluded a selective tendering contract or anegotiated contract based on this provision,
the Minister was to immediately notify BOA
thereof, providing the grounds therefor indetail. (Articles 112 and 119). Meanwhile,
BOA specified the matters to be stated insuch notice, and sent an Inquiry Letter to
Ministers, etc. in May 1922.
(iv) In line with the revision of Accounting
Officers'

liabilityforindemnity,

Accounting Officer lost

cash

if

an

which

it

retained or caused a loss to the government
bytheAccounting

competent

MinisterOfficer's
was

to

act,

the

notifythe

Minister of Finance and BOA to that effectwithout delay. (Article 130)83

Part 2

Chapter 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

BOA under the Former Constitution in the Meiji Era (1889〜1912)
constitutional

hand, the military expansion policy, which wasgovernment was founded through promulgation

prompted by the Triple Intervention over theof the Constitution of the Empire of Japan, andLiaotung Peninsula, caused expansion of thethe Public Accounting Act on implementation of

fiscal scale centering on military expenses, andpublic finance was enacted. Also, an audit system

the FY1896 budget doubled from the level of thethat

FY1895 budget.

In

February

responds

to

1889,

these

a

developments

wasMoreover, Japan entered into the Russo-

established, making the structure of Japan's public

Japanese War in February 1904. Fiscal demandfinance system complete.

expanded due to the war expenses and the post-

In November 1890, the first session of the
Diet

was

held.

The

House

of

war management of new territories, as well as

Representatives

wasconstituted

mostlybynationalization of railways, etc., and the budget

opposition forces which had promoted

thekept on bloating thereafter until FY1907.

Imperial

A large number of special accounts were

democratic movement. They strongly insisted onandestablished due to the expansion of the fiscal

reducing land and other taxes, and the budget

scale resulting from the two wars above and thewas restrained until FY1894.

successive creation of new projects during thiscutting

down

government

expenditures

However, in August 1894, the Sino-Japaneseperiod. Such complicated finance and accounting

War broke out as the first war on which modern

structure was all subject to BOA's audit, and also

Japan staked its fate. The conflict between thethe massive emergency armaments expenditures

government and the Diet suddenly took a turn,for the two wars and the placing of Taiwan,

and the political parties united under one slogan

Korea, Kwantung State, and Southern Sakhalin

to deal with the unprecedented national crisis.

under Japanese territory or protectorate caused a

The Sino-Japanese War ended with Japan's

substantial increase in the number of audit subject

victory, and as a result, Taiwan was ceded tomatters.

Japan and became Japan's territory. On the other

Section 1 Changes in BOA's Organizationon the Affairs of the Board of Audit, which were

1. Changes in BOA's organization
With the enactment of the BOA Act on May

enacted in September of the same year, stipulated

9, 1889, the organization of BOA was decided tothe structure of the Bureaus and Divisions, andbe a three-Bureau structure consisting of one

the duties of the officials. Based on thesePresident, three Directors General, 12 Directors,

provisions, each Bureau was to consist of the 1st

two secretaries, 24 Assistant Directors, and a few

to 4th Divisions, and each Division was toStaff members. It was provided that audit affairs

comprise a Division Chief, who was a Director,

in each Bureau shall be assigned among one

as well as Assistant Directors, and a few Staff

Director General and four Directors. The Rules

members. Next, the affairs to be managed by the84Section 1 Changes in BOA's Organization

respective Bureaus and Divisions were decided,and BOA's audit structure under the constitutional(4) Revisions in May 1899, October 1899, andJanuary 1901

system was established. Secretariat affairs were to

In May 1899, the Investigation Section was

be undertaken by the Administration Section, theestablished in the Secretariat as an organ that

Sectionofinvestigates proposals, etc. submitted by Bureaus,

Documents, the Recording Section, the Accounts

but with the enactment of the Rules on Affairs of

Section, and the Statistics Section (five Sections),

the President's Secretariat in October 1899, thefollowing the example of the former Clericalformer Secretariat, the Administration Division,

Bureau. In addition, registry officers were placed

and the Accounts Division were abolished, andin the President's Secretariat to be dispatched to

the President's Secretariat was newly established,

Bureaus and collect materials for supervising theconsisting of the Secretarial Section, the Research

Bureaus' operations. The subsequent revision andSection, the Section of Dispatch and Acceptanceabolition of BOA's structure were as follows.

of Documents, the Recording Section, and the(1) Revision in June 1890

Accounts Section (five Sections). Further, inof

DispatchandAcceptanceJanuary 1901, the Proceedings Section was

The Clerical Bureau was abolished. The

established in the President's Secretariat.

Secretariat, the Administration Division, and the
Accounts

Divisionwereestablishedtobemanaged by Secretaries, and the Section of

2. Setting up of members

Dispatch and Acceptance of Documents and the(i) For preparing the annual audit report and theRecording Section (two Sections) were establishedannual audit report to the Emperor, BOA

in the Administration Division.

appointed examiners to work under the(2) Revision in December 1896

Directors General, before the start of each

A Review Section was established in each

audit year, and permanently set up personnel.

Audit Bureau for the purpose of improving the(ii) In May 1895, BOA set up "members foraudit system, and the Section engaged in such

Audit

of

tasks as investigation of documents handed down

Expenditures."

Emergency

Armaments

by the Director General. The Review Section was(iii) In August 1910, Japan signed the Japan-

renamed to Butsuki (Division under direct control

Korea Annexation Treaty, and established theof Director General) in October 1898.

Government General of Korea in the same(3) Revisions in May 1897 and April 1900

month. In response, BOA set up "members
for Audit of the Government General of

In May 1897, one Bureau and two Divisions

Korea" in September 1910.

were newly established for auditing government
offices located in the Taiwan region, making
BOA's audit system a four-Bureau, 14-Division
structure. Then, in April 1900, the three-Bureau,

3. Developments on establishment of the Taiwan
Branch Office

12- Division system was restored by abolishing

In August 1894, the Sino-Japanese War

the posts of officials of those newly establishedbroke out, and in October of the same year, theBureaus and Divisions.

Special Account for Emergency Armaments
Expenditures was established. In April 1895, the85Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Sino-Japanese Peace Treaty was signed and the

response to this, personnel were also invited fromwar ended with Japan's victory. To audit the

BOA from June 1907 onward, and 10 HanninkanSpecial Account, 35 additional officials werefrom BOA were temporarily transferred totemporarily appointed as Staff members in May

Korea's fiscal advisory headquarters and other

1895, and then eight additional officials wereorgans.

appointed as Assistant Directors in May 1896. At
the same time, the Act on Establishment of
BOA's Branch Office in Taiwan was promulgated

5. Changes in the tasks of Audit Bureaus andDivisionsdue to the cession of Taiwan to Japan, and it was

Decision of the tasks to be assigned to thedecided to establish a branch office of BOA in

respective Bureaus and Divisions was stipulated

Taiwan.

to be the authority of the President of BOA in

The Rules on the Affairs of BOA's Taiwan

Article 11 of the Rules on the Affairs of the

Branch Office were stipulated concurrently with

Board of Audit (Imperial Ordinance No. 106 of

the enactment of the Act, but since it was

1889). In September 1889, the President decided

difficult to immediately establish a branch officeon the tasks of the Audit Bureaus and Divisions

in Taiwan due to the local circumstances, one

under the three-Bureau and 12-Division structure.

Bureau and two Divisions were additionally

Major subsequent changes in the duties of theestablished and personnel were put in place in

Audit Bureaus and Divisions are as follows.

BOA's head office in May 1897 in place of(i) With the revision of the organization in
December 1896, the audit system for the

opening the branch office.
However, the Act on Establishment ofemergency armaments expenditures of the

BOA's Branch Office in Taiwan was repealed in

Sino-Japanese War was put in place, and theApril 1900 without the branch office ever being

audit of the Army and the Navy, which had

established, and the abovementioned Bureau andeach been conducted by one Division since

Divisions that had been established in the head

April 1893 came to each be conducted by

office were abolished and the posts of thetwo Divisions.
(ii) Due to the additional establishment of one

officials who belonged thereto were all abolished.

Bureau and two Divisions in BOA's head
office in March 1897 as a step toward

4. Dispatch of officials to the Korean Empire
Immediately after the start of the Russo-

establishment of the Taiwan Branch Office,Japanese War, in February 1904, Japan signed

the tasks of the 4th Bureau, which was to

the Korea-Japan Protocol, and on signing the firstexclusively conduct audit of government

Korea-Japan Agreement in August 1904, Japan

offices located in Taiwan, were decided incame to take the initiative in the politics,

May 1897.

administration, and public finance of the Korean(iii) With the partial amendment of the Rules on

Empire. Then, after Japan signed the second

the Affairs of the Board of Audit by

Korea-Japan Agreement in November 1905, theImperial Ordinance No. 142 of May 1897,

Fiscal Supervision Agency was established in theestablishment of Divisions, which had been a

Residency-General of Korea in March 1907. In

matter effected by Imperial Ordinance, was86Section 1 Changes in BOA's Organization

placed under the authority of the President of
BOA. In April 1900, one Bureau and two
Divisions, which were established in place of
establishment of the Taiwan Branch Office,were abolished, and the three-Bureau and 12Division system was restored.
(iv) Due to the outbreak of the Russo-Japanese
War in February 1904, the Special Accountfor Emergency Armaments Expenditures wasestablished in March of the same year, butthere was no change in distribution ofactivities of the Bureaus and Divisions.
(v) From March 1905 to January 1909, the tasksof the Bureaus and Divisions were partiallychangedmainlyforthepurposeofresponding to the nationalization of railways
and establishment of the Residency-Generalin the Korean Empire. In addition, theKantototokufu (the Office of the GovernorGeneral) was established in August 1906 andthe Karafuto Territory Government wasestablished in March 1907. Due to suchincrease in the number of auditees, the tasksof the Bureaus and Divisions were revised inJuly 1910.
(vi) In August 1910, Japan signed the JapanKorea Annexation Treaty, and establishedthe Government General of Korea in thesame month. In response, BOA revised thetasks of the Bureaus and Divisions andadded the Government General of Korea tothe auditees in September 1910.

87

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Section 2 Operation of Audit Activities
Ministry, and documentary evidence, and audit

BOA, which was founded as an organ thatverifies and confirms the final accounts of thedeterminationofcalculations

submitted

byState and supervises the State's finance andAccounting Officers was to be made based on theaccounting, successively established rules onstatement of accounts and documentary evidence

submission of accounts based on the provisions

submitted by each Accounting Officer.

of the BOA Act, and developed the basic

Article 14 of the BOA Act provided that theconditions required for audit of final accounts asmatters to be reported in the annual audit reportwell as various internal systems for conducting

after the audit were whether or not the figures ofaudit, in order to respond to the audit under thethe accounts were correct and whether or not

new system.

there were any violations of the budget or a law
or regulation.

BOA conducted audit by in-office audit
based on submission of accounts and by field

Subsection 1

audit. In field audit, in particular, BOA was able
to find illegal or improper matters that could nottheimplementation,

actualso

conditions
field

of

audit

accounts

budget

1. Establishment of theSubmission of Accounts

became(1) Rules on submission of accounts

be found through in-office audit by directly
auditing

Submission of
in-office audit

Rules

and

on

the

BOA, which was newly inaugurated underindispensable for fully securing the effect of

the Constitution

in-office audit.

ofthe Empire ofJapan,

While BOA was to confirm all finance andestablished the system of submission of accounts

accounting of the State, in principle, a system

based on Article 18 of the BOA Act which

was introduced whereby government offices

provided that "The Board of Audit shall decidecommissioned by BOA conducted audit for a parton the formats for statements of accounts andof the finance and accounting, such as thesubmission of accounts and the deadline for theiraccounting of cash outside the budget and goods

submission and for responding to questions

for government offices, and reported the results

thereon." Of the rules that were developed in thisto BOA.

process,

those on

goods

were

appliedtosubmission of accounts for FY1889 onward, andArticle 34 of the Rules on the Affairs of
BOA (Imperial Ordinance No. 106 of 1889)

those

provided that audit was to be classified into

submission of accounts for FY1890 onward. In

adjudication of final accounts submitted by

January 1889, before the promulgation of theordering officers and audit determination of

BOA Act, the Examination Committee on thecalculations submitted by Accounting Officers. It

Method of Submission of Accounts headed by

was provided that adjudication of final accounts

Director General Koichi HAMA, was formed,

submitted by ordering officers was to be madeand notice of the rules on submission of accounts

based on the overall final accounts, the statement

drafted by the Committee members were issuedof revenue and expenditure accounts of eachto government offices by November 1891. These
88

on

other

matters

wereappliedtoSection 2 Operation of Audit Activities

rules on submission of accounts were established

Regulations on Accounting. In addition, a systemfor each account subject to audit, and the number

was introduced to newly require submission ofof sets of such rules reached 41, but five of theseaccounts for emergency armaments expenditures

sets

the

and funds for the state monopoly of leaf tobacco,

abovementioned period, and the number of sets

as a revision on special accounts. Including these,of rules became 36 as of the end of November

35 sets of rules were established and one set of1893.

rules was fully amended during the period from

of

rules

were

abolished

duringDecember 1893 to the end of 1898. Amongthese, the Rules on the Submission of Accountsof Emergency Armaments Expenditures wereabolished during that period. Also, out of the 36
sets of rules that existed as of the end of
November 1893, 22 sets of rules including the
Method of Evidence of Receipt and Issue ofGoods were abolished. As a result of such
establishment, amendment, and abolition of many
sets of rules, the number of sets of rules onsubmission of accounts peaked at the end of 1898
at 49.
(2) Consolidation of rules on submission of
accounts
The rules on submission of accounts werethus established for each account subject to audit,
but efforts were made to consolidate these rules
from 1899. In particular, rules on submission of
accounts of revenues, expenditures and payments,

Document seeking approval on establishmentof rules on submission of accounts

and goods which belonged to special accounts
were respectively unified with the same types ofonrules, such as those on revenues, expenditures,

Accounting were amended by Imperial Ordinanceetc., for the general account. The rules on

No. 112. It was provided that "officials who

submission of accounts were not consolidated oninvestigate and decide the revenue" were to takea full scale until the enactment of the Rules on

on a new task to submit the decided amounts of

the Submission of Accounts in July 1915, butrevenue. Amendments on expenditures included

during this period, 16 sets of rules were newly

abolition of officials in charge of expenses andestablished and three sets of rules were fully

introduction of the system of monthly submission

amended. Also, out of the 49 sets of rules thatof accounts by Disbursement Ordering Officers.

existed as of the end of 1898, 46 sets of rules

In

October

1893,

the

Regulations

Rules on submission of accounts wereother than three sets of rules including the Rules

revised in line with the amendment of theon Submission of Final Accounts of Public
89Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)theincluding the Detailed Rules on Issuance ofGovernment were abolished during this period,

Certificates of Grant of Discharge which wasand two sets of rules that were established during

subsequently stipulated in February 1891, were

this period, including the Rules on Submission of

streamlined and consolidated, and the Rules on

Accounts of

Audit Affairs were enacted in May 1900.

Works

Expenditures

Subsidized

RevenuebyCollected

under

the

Emergency Special Tax Act, were abolished. As

It was also stipulated that if matters werea result, rules on submission of accounts were

found as a result of in-office audit, BOA would

consolidated and streamlined to 20 sets by theinquire, warn, or criticize the responsible official

end of 1911 to be carried over to the Taisho era.

by an examination document, and inquire or warn
the minister of state by a document.
BOA's in-office audit between the late 1890s

2. In-office audit
The in-office audit of BOA under theto the late 1900s became voluminous andDajokan system had been established as a systemcomplicated due to the expansion of the scale ofin which BOA audited statements of accounts

public finance and a sudden increase in thethat were submitted by government offices.

number of audit subject matters prompted by the

During this period, systems such as request for

Sino-Japanese War and the Russo-Japanese War.

documentary evidence, monthly submission of

However, because the number of officials was

accounts,

not increased accordingly, there were manyandinquiriesin

introduced, and the system

writing
forwere

uncompleted

conducting

audit

cases

every

year,

and

continuous audit based on submission of accounts

instructions were often given within BOA to

was developed.

accelerate audit.

Asmentioned

above,

thesystemof
Subsection 2

submission of accounts under the BOA Act was

Field audits

established through enactment of a large numberof sets of rules on submission of accounts

The finance and accounting of a State isincluding the Method of Evidence of Receipt andeither audited by a method whereby an audit

Issue of Goods of September 1889.

official audits documents submitted by an auditee
in-officein the office building of the organ to which theaudit based on such system of submission of

official belongs and visits the auditee as required

accounts was stipulated by the Rules on theto conduct audit, or by a method whereby an

Affairs

toaudit official is stationed at the auditee to conduct

November of 1889, BOA successively enacted

audit. BOA of Japan has traditionally adopted thethe Rules onformer method throughout its 130 years of

Meanwhile,of

implementation

BOA.

Then,

Audit

of

from

Year,

the

OctoberRulesonhistory.

Supervision of Operation, the Rules on Request
for Auditing, and the Procedure for HandlingAs with many other countries, BOA of

Documents, and established the specific key

Japan has conducted in-office audit of statements

pointsof accounts and documentary evidence that areforconducting

in-officeaudit.

The

in-office audit system was developed in thissubmitted

manner, and this large number of sets of rules,

submission of accounts at BOA's office, in
90

byauditees

based

on

rules

on

Section 2 Operation of Audit Activities

principle, and conducted field audits by visiting

requirements of the audit method, such as

the auditees as necessary.

requirements for the tallying between the actual
goods and the account books, requirements forthe appropriateness of management of the goods

Establishment of field audits
The system whereby an audit official visitsprocured including whether there were any

the site where finance and accounting areunnecessary, non-urgent or luxurious goods or

implemented and directly audits the relevant facts

whether there were any goods off the books, andwas established in the era when BOA was the Shi

requirements for operation of special funds in theof Audit, and in 1878 when BOA was the Audit

treasury, etc. and management of government

Bureau, it came to be implemented as on-site

property, etc. It also provided that construction

auditsOn - site

matters which should be audited included theDocumentary Audits by Auditors. The on-site

contract procedure for contracted construction

audits were renamed into field audits with theworks,

enactment of the BOA Act, and have beenamounts, the status of construction works inoperatedforcomparison with the contract documents andsupervising accounting, along with in-officedesign drawings and documents, and advantages

audit, based on the provision that if the President

and disadvantages of the methods of purchasingof BOA "finds it necessary for audit, it may

materials and hiring workers for directly managed

dispatch its official in charge and conduct field

construction works. The focus of the field audits

audit" (the first sentence of Article 19, paragraph

was to be placed on the substance of accounting(2)).

processing

based

as

on

a

the

systemRulesonindispensable

the appropriatenessincludingofthe effects

the

of

contractbudgetimplementation.

In February 1891, the Directions on Field
Audits and the Requirements for Field Audits

In addition to specifying locations where

were established through BOA's internal notice as

field audits needed to be implemented, thisguidelines for conducting field audits. This

internal notice set forth that field audits of organs

internal notice covered a broad range of matters

located in Tokyo were to be conducted asincluding the purpose, the scope of subjects, thenecessary by the Divisions in charge and fieldaudit method, and subsequent processing of fieldaudits of organs located in other areas were to beaudits, and set forth that the purpose of field

conducted by dividing the nation into threeaudits was to audit actual articles and projects. In

districts and having Bureaus take charge of theother words, it placed emphasis on the substancerespective districts. The dispatched officials wereof finance and accounting under the concept thatto be composed of one Director, one Assistant

substantive audit is important and audit of

Director or probationer official, and two Staff

account ledgers and other formality mattersmembers.

should be omitted as much as possible, and listed

Field audits were to be conducted by making

the Ministries, Agencies, and other government

prior notice, as a rule, based on the second

offices as locations where field audits need to besentence of Article 19, paragraph (2) of the BOA

implemented.

Act providing that "the Board of Audit shallnotify the head of the relevant department in

The internal notice also indicated specific91Part 2

Chapter 2

advance,and

BOA under the Former Constitution in the Meiji Era (1889〜1912)

said

head

may

have

found

the

to

be

non-compliant

with

laws

or

department's official in charge attend the audit."

regulations or improper were referred to Bureau

However, it was decided based on consultation

meetings, and Inquiry Letters were issued to thebetween BOA and the Minister of Finance in

responsible officials,

October 1898 that the vaults located in themeasures were taken based on the replies

respective areas may be audited without priorreceived from those officials. In this manner,

notice, provided that the dispatched officials carrynon-compliant and improper matters that coulda certificate for treasury audit.

not be found in in-office audits were found, and

after

which

prescribed

The number of organs subject to field audits

were reported in annual audit reports as a large

increased every year, and after the Sino-Japanese

number and variety of Improper/Unreasonable

War, audit locations expanded to Taiwan, Korea,

Matters.

and Qing, and further to Sakhalin and theIt was thus provided that field audits were to

Kwantung State due to acquisition of new

be conducted with focus on the substance of

territories and so on.

budget implementation, but at the time when
BOA

The results of a field audit were reported to

under

the

constitutional

systemwasthe President of BOA first by a field audits

established, a dispute occurred between BOA andreport, which was originally called "fukumeisho"some auditees about the target fiscal year of field

and later called "shinposho." Matters that wereaudits, as mentioned later (page 137).

Inquiry Letter

92Section 2 Operation of Audit Activities◆Effects of field audits◆
The relationship between in-office audits and field audits in audit is that, in-office audits are supposed to be
the core and field audits are supposed to supplement in-office audits. This has not changed over the 130-year
history of BOA since its foundation.
However, since the time of the on-site audits that were conducted in BOA's early days to the present when
the name has changed to field audits with the enactment of the BOA Act, field audits have been tremendously
used and produced enormous effects in Japan's audit.
Japan's audit system under the constitutional system was modeled after Prussia's system as mentioned
earlier, but the field audit was Japan's original system, which originated from the Rules on the organization of
Kan of finance and accounting established in May 1869, 10 years earlier than the foundation of BOA.
When the President of BOA finds it necessary in audit, a field audit is conducted by dispatching officials incharge. The method of field audit to notify the head of the relevant department in advance and have thedepartment's official in charge attend the audit had not changed for the 60 years during which BOA was under
the Constitution of the Empire of Japan. During this period, Japan's fiscal scale expanded remarkably, but there
was no substantial increase in the number of BOA's officials and budget. Therefore, the scale of field audits
expanded due to a slight increase in the number of officials, but their contents had not changed so much overthe 60 years. Rather, BOA is believed to have supplemented the shortage of personnel and budget that could notcatch up with the expansion of the fiscal scale, by its effort to improve the field audit methodologies andtechniques.

Subsection 3

be issued to the Accounting Officer and theCommissioned audits

deadline and format of the annual report oncommissioned audits to be submitted to BOA,

Implementation of commissioned audits

and sent the amended Procedures to the relevant

In a commissioned audit, the commissioned

government offices.

government office conducted audit and issued a

Commissioned audits were conducted for the

grant of discharge to the Accounting Officer,
beenfinance and accounting of almost all government

commissioned by BOA, and reported the results

offices, and the main audit subject matters wereto BOA. BOA formulated the "Procedures for the

goods

Grant of Discharge and Annual Audit Report ofCommissioned audits conducted by government

Commissioned

Generaloffices that operated business, such as the

Meeting No. 62 of April 1891) and notified theMinistry of Postal and Telecommunications,

government offices thereof, and commissioned

involved a large number of audit subject matters,

audits were conducted based on these Procedures.

and the Ministry of Army also conducted

Furthermore, in February 1902, BOA amended

commissioned audit of fixed-amount expenditures

these Procedures by formulating the "Procedures

including expenditures for food, clothing, etc. andfor the Handling of Commissioned Audits"

salaries that were subject to commissioned(Notice of General Meeting No. 12 of 1902). It

accounting.

while

clearly

indicating

Audits"that(Notice

it

has

of

and

cash

outsidethebudget.

conducting

Commissioned audits were conducted oncommissioned audits, such as specifying thecommission by BOA based on Article 16 of theformat of the certificate of grant of discharge to

BOA Act which provided that "The Board of

establishedprovisions

for

93

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Commissioned

Audit may commission a government office withgovernment

offices

the audit and the grant of discharge for a part of

conducted commissioned audits strictly, withthe calculation of the government office." Then,some of them establishing a division in charge,the "Commissioned Accounting of Salaries of theand issued certificates of grant of discharge in an

Army" (Act No. 27 of March 1890) was

enormous number. In June 1904, the number of

established, and it provided in Article 5 thatcertificates of grant of discharge reached overcommissioned accounting of the Army shall be

6,000 in one year, and the Ministry of Postal andaudited through commissioned audit by operation

Telecommunications submitted an Inquiry Letterof law, based on this Act. However, thisto BOA, requesting that certificates of grant ofprovision conflicted with Article 16 of the BOA

discharge be deemed to have been issued byAct

publishing them in the official gazette of thewhichprovided

that

" BOA

may

commission." Therefore, on April 5, 1890, BOA

Ministryof

PostalandTelecommunicationscommissioned the Minister of Army with audit

because the heavy burden of office work often

affairs by applying Article 16 of the BOA Act

lead to increased expenses. BOA replied that it

just as in the case of a general commissioned

had no objection to it.
Under the commissioned audit system, a

audit, based on a resolution by the Generalcommissioned government office was to submit

Meeting.
onthe annual audit report on the commissioned

Accounting of Goods Owned by the State came

audit of calculation and discharge of liability,

into effect in October 1889, submission ofwithin 15 days from the issuance of theaccounts of goods became extremely complicated,certificate of grant of discharge. However, thebut since receipt, issue, and storage of goods

issuance of the certificate of grant of discharge

were rectified, the documentary evidence thatwas normally delayed, so the submission of theneeded to be submitted was simplified from FY

report was also delayed accordingly. Thus, in

1895

of

June 1898, BOA specified the deadline forstill

concluding the affairs of commissioned audit, andconsiderably burdensome for government offices,

issued a notification instructing commissioned

so BOA commissioned government offices withgovernment offices to complete the affairs within

audit of goods other than "those that serve as

one year from the end of the relevant fiscal year

capital for production or a basis for revenues orand to submit the report by the deadline specified

other important goods," based on a resolution by

by the Procedures for the Grant of Discharge and

the General Meeting in May 1899.

Annual Audit Report of Commissioned Audits.

Meanwhile,onward.

accounts

of

after

the

Nevertheless,
goods

in

Regulations

submission

generalwas94Section 2 Operation of Audit Activities◆Commissioned audit system◆
One of the systems that was used by BOA under the Constitution of the Empire of Japan but not adopted at
all today is commissioned audit. The commissioned audit system was modeled after a system of the PrussianSuperior Chamber of Accounts, similar to BOA's other audit systems. It was introduced in order to prevent BOA
from having to audit finance and accounting of a small fiscal scale at the smallest units of the State's organs,etc., although BOA is to audit the State's revenues, expenditures, and all other acts of finance and accounting, inprinciple.
The difference with internal audit that is conducted today by many auditees is that, while internal audit isconducted as a process necessary for the management and operation of the relevant organ, commissioned audit isconducted by commissioning a part of BOA's mandate to the relevant auditee.
Although the audit was commissioned, BOA retained the mandate to have the commissioned government
office report the audit results every year and the mandate to conduct direct audit if necessary. Also, rules on
implementation of commissioned audit were to be established by BOA.
Such practice to commission audit to auditees appears strange today, but this system improved theconvenience for both BOA and auditees. The commissioned government offices audited the commissioned
matters very strictly, by using a considerably large number of officials and developing the organization for such
purpose, with some government offices establishing a division in charge of commissioned audit.
Because BOA under the Constitution of the Empire of Japan constantly had a small number of officials of
approximately 300 people for 60 years since its foundation, the provisions on commissioned audit had been
helpful for BOA in supervising finance and accounting, but they were abolished after World War II upon theenactment of the New BOA Act.
Reference: Commissioning of audit in 1933 (classified by BOA's bureau/division at the time)
BureauDivision

1st Bureau
1stDivision

2nd
Division

2nd Bureau

3rdDivision

4th
Division

1st
Division

2nd
Division

3rd
Division

3rd Bureau
4th
Division

1st
Division

2nd
Division

3rd
Division

4th
Division(1)
Ministry of Ministry of Ministry of Ministry of Ministry of (1)Ministry of (1)(1) Tax(1)
Jurisdiction (1)Ministry of Internal
Army
Navy
Railways Education Ministry of Postal and Governme Governme
Ministry of (2)Telecomm nt General nt General
Justice
Expenses Agriculture Affairs
Financeof Taiwan
unications of Korea
and
(2)
(2)
for
(2)
(2)
Ministry of
National
collecting Forestry
Foreign
Kwantung Karafuto
governmen internal tax (2)Territory
Affairs
Agencyt bonds(3)
Ministry of(3)(3) South Governme(3)
Customs
Commerce
Manchuria nt
Accounting
andMinistry ofRailway(3) South
Industry
Colonialof the Bank
AffairsCo., Ltd. Pacificof Japan
Mandate(4) Toyo
TakushokuCo., Ltd.
Number of
entrustedministries
and agencies
Entrustedmatters

7
Goods

13

2

1

1

1

1

(1) Goods (1) Goods (1) Goods (1) Cash
(1) Goods Goods
and goods (2) Cash
(2) Cash(2) Cash(2) Cashoutside the outside the outside the subject to outside thebudgetbudgetbudgetcommissio budget
nedaccount(2) Callups
expensesconcerningadvanced
fund(3) Goods(4) Cashoutside thebudget

95

113

3

1

2

3

(1) Cash(1) Goods (1) Goods (1) Cash
(1) Cashand goods (2) Cash
(2) Cashoutside the outside thesubject to outside the outside the budget
budgetcommissio budget
budget(2) Caah of (2) Goodsned(3) Cash at Telecomm (3)account
theunications Diversion(2) Cashgovernmen officesof funds
outside thet office of (3)budgetcommunica Revenues(3) Goodstionandexpenditures(4) Cashrevenues(5) Goods

Part 2

Chapter 2

Subsection 4

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Changesaffairs

in

rules

on

General Meeting consisting of BOA's Members.

audit

As for operation of the General Meeting, theDetailed Regulations on Proceedings of Meetings

After the promulgation of the Constitution ofwere established in July 1890.

the Empire of Japan in 1889, BOA came to
exercise extensive authority based on the BOA

In addition, BOA established the Rules on

Act, which was enacted pursuant to Article 72 ofRequest for Auditing in November 1889 to

the Constitution. For this purpose, the Rules onprovide for the method of conducting audit andthe Affairs of the Board of Audit (Imperial

the processing of the audit results. In the Rules,

Ordinance No. 106) was enacted in the same

BOA stipulated specific methods for issuance ofyear. In addition, various rules on BOA's internalan examination document on matters found in theadministrative

audit,

procedures

were

establisheddetermination

againstan

Accounting

through issuance of notices, and a framework was

Officer, demand for disposition to be made to thedeveloped within BOA for dealing with thehead of the relevant department, notice of

expansion of operations.

determination to the Minister of Finance, andhandling of notification of adjudication which
was criticism against the Ordering Officer.
In February 1891, BOA established the"Directions on Field Audits," the "Requirements
for Field Audits," and the "Detailed RegulationsonIssuance

Discharge."

ofCertificates

Then

in

of

October

Grant

1895,

of

BOA

established the Rules on Procedures for Balancing
Internal notices (chronological compilations of
BOA's internal rules)

the Accounts of Auditees, stipulated the reporting
system of field audits and the peer review

Changes in rules on audit affairs

system, and formulated guidelines such as those(1) Changes during 1889 to 1899

on the handling of confidential documents forresponding to audit of emergency armaments

Article 33 of the Rules on the Affairs of theexpenditures.

Board of Audit enacted in 1889 provided that
BOA was to decide the audit year, and conduct

As mentioned above, the general framework

audit affairs based on the Rules on Supervisionof the audit system was established throughof Operation to be established by the President ofdevelopment of the various rules on submission

BOA. Based on this, BOA created a system forof accounts and related internal rules. As forcarrying out audit operations by establishing themeasures to judge the appropriateness of audit

following in October 1889: (i) the Rules on the

results,

Audit Year; (ii) the Rules on Supervision of

Adjudication and Determination in July 1892 andOperation; (iii) the Rules on Statistics; and (iv)the Rules on Retrial in March 1897. Further,

the Document Handling Procedures.

BOA established the Rules on Preparation ofBOA

established

the

Rules

on

All of these provisions were decided,

Annual Audit Reports and Annual Audit Reports

pursuant to Article 10 of the BOA Act, at theto the Emperor (Komuseisekisho) in February
96Section 2 Operation of Audit Activities

offinal accounts. Later, the Rules on Audit Affairs

Statements of Revenue and Expenditure Accountsof 1900 were amended in 1901, 1902, and 1909,

in March of the same year.

but these were all minor amendments.

1892

and

the

Rules

on

Adjudication

Meanwhile, the Rules on the Affairs of theSubsection 5

Board of Audit were fully amended by Imperial
Ordinance No. 457 in December 1899, andDetermination
Accounting Officers

against

1. System of determination against Accounting
Officers

BOA's authority was partially revised, etc., but nosubstantial change was made to the audit system.
(2) Changes during 1900 to 1909

(1) The Public Accounting Act of the Meiji era
and liability for indemnity

Among the abovementioned rules, the Ruleson

The Public Accounting Act (Act No. 4 of

Adjudication and Determination, the Rules on1889) enacted in 1889 used the term "Accounting

Retrial, the Rules on Procedures for Balancing

Officer" for the first time, and provided for thethe

Detailed

system of their liability for indemnity along with

Regulations on Issuance of Certificates of Grant

the system of their fidelity guarantee deposit. The

of Discharge, and the Rules on Adjudication of

Act had the following provisions on the liability

Statements of Revenue and Expenditure Accounts

for indemnity of Accounting Officers: an official

were abolished and integrated into the newly

in charge of receipt and payment of cash or

established Rules on Audit Affairs (Notice No. 7

receipt and issue of goods that belong to theof May 1900) in May 1900. Since then, the Rules

government has the full responsibility for thoseon Audit Affairs played an important function as

cash or goods, and shall receive BOA's audit

general procedural rules for operations of BOA

determination (Article 26 of the Act); and if theunder the Constitution of the Empire of Japan,

official referred to in the preceding Article loses

along with the Rules on Examination for Annual

or damages cash or goods which the official

Audit Report and Annual Audit Report to theretains due to an incident such as flood, fire, orEmperor (Notice No. 5 of May 1898).

theft, the official may not be released from theon

RequestAccounts

forof

Auditing,

Auditees,

the

the

Rules

The Rules on Audit Affairs of 1900

liability unless the official proves to BOA thatconsisted of 20 Articles, mainly stipulating thethere were unavoidable grounds in the custody offollowing contents: (i) procedures to be followedthewhen having completed examination or audit ofdetermination of the grant of discharge (Article

statements of accounts;

27 of the Act).

(ii)

procedures for

cash

or

goods

and

receives

BOA's

determination on liability for indemnity ofIn this way, the scope of liability for

Accounting Officers, retrials, and issuance ofindemnity under the Public Accounting Act wascertificates of grant of discharge; (iii) procedures

limited to loss and damage of cash or goods byfor comparing statements of revenue collecting

Accounting Officers. The liability for indemnityand final statements of expenditures with thearose automatically irrespective of the reason as

figures of accounts of treasury money; and (iv)long as there was the fact of loss or damage, andprocedures for examination of statements of

the Accounting Officer was released from theaccounts and verification and confirmation of theliability only if the Accounting Officer could
97Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

prove to BOA that it was unavoidable.

and documentary evidence submitted by the(2) Contents of the provisions of the BOA Act

respective Accounting Officers (Article 34), and

A. The BOA Act

for matters which were found as a result of theBased on the system of the liability foraudit and which required a reply from theindemnity of Accounting Officers establishedAccounting Officer, BOA was to issue an

under the Public Accounting Act, the Board of

examination document to the Accounting Officer,

Audit Act provided as follows: "The Board ofand have the Accounting Officer make a response

Audit shall audit the statement of accounts andor correction (Article 36). The matters to be

documentarythecontained in the examination document were (i)Accounting Officer, and if the Board of Audit

criticism on non-compliance, (ii) warning against

determines that they are proper, it shall issue a

future measures, and (iii) inquiries on unclear

certificate of grant of discharge to said officer

points (Article 38), and if BOA found the reply

and

or

evidence

discharge

theprovided

officerbyfromhis / hercorrection

made

in

responsetotheresponsibility, and if necessary, the Board of

examination document to be insufficient, it was

Audit shall inquire the officer and have theto issue another examination document (Article

officer give an explanation or correct the error,

39, paragraph (1)). Also, the Rules provided thatand if the Board of Audit,

consequently,

BOA could not issue an examination document todetermines that they are not proper, it shall givea minister of state, but that it could inquire or

notification to the head of the relevant department

warn a minister of state by a document (Article

and have the head take action" (Article 20).

37).
In this manner, if BOA found that theB. The Rules on the Affairs of the Board of
Audit

calculation was not proper as a result of audit, it

Detailed procedures for audit were stipulated

was to notify the head of the relevant departmentin the Rules on the Affairs of the Board of Audit

as an Ordering Officer, and issue a written

enacted in September 1889. The Rules set forth

determination against an Accounting Officer

that audit of finance and accounting was to be(Article 39, paragraph (2)). Also, if BOA issued a

conducted

categories :certificate of grant of discharge or a written

adjudication of the final accounts submitted bydetermination to an Accounting Officer, it was toOrdering Officers; and audit determination of thenotify the Minister of Finance by sending astatements of accounts submitted by Accounting

transcript thereof (Article 40). In addition, if

Officers. The adjudication of the final accounts

BOA issued a written determination, it was tosubmitted by Ordering Officers was to be carried

promptlyout based on the overall final accounts and thedepartment and request the head to take action

statements of revenue and expenditure accounts(Article 41), and if BOA found that the action

and documentary evidence submitted by thewhich the head of the relevant department took in

respective government offices. Meanwhile, theresponse to the request was inappropriate, it was

audit determination of the statements of accounts

to present an address to that effect by publishingsubmitted by Accounting Officers was to besuch fact in the annual audit report to thecarried out based on the statements of accounts

Emperor (Article 42).

for

the

following98

notifythe headoftherelevant

Section 2 Operation of Audit Activities

Finance.

Meanwhile, if BOA received a request for a

Thenretrial from an Accounting Officer based on

in

July

1892,

the

Rules

on

Article 24 of the BOA Act, it was to have a

Adjudication and Determination were enacted. It

Bureau that was not in charge of the audit inwasquestion examine the case (Article 44).

determination were to be made based on theseprovided

that

all

adjudication

andSubsequently, with the amendment of theRules, and the Rules came into effect in FY1890.

Rules on the Affairs of the Board of Audit by

The Rules, which consisted of 18 Articles,

Imperial Ordinance No. 457 of December 1899,

provided

the wording "issue a written determination

adjudication or a written determination was to beagainst an Accounting Officer" in Article 39 andissued"notify the head of the relevant department andstatement of revenue and expenditure accounts orrequest the head to take action" in Article 41 of

the relevant type of statement of accounts had

the former Rules on the Affairs were deleted, andbeen completed. They provided for the matters

Article 28 was amended to provide that "if thefor which a written notification of adjudication or

Board of Audit determines that the calculation isa written determination was to be issued, thenot proper, it shall issue a written request forrequirements for the contents thereof, the time fortaking action to the head of the relevant

issuing a certificate of grant of discharge, anddepartment, "BOA

treatment of a determination made as a result of adetermined an Accounting Officer to be liable, itcommissioned audit, among other matters. Article

was to request the head

the relevant

4 of the Rules provided that the matters for

department to take action in all cases. Also,

which a written determination was to be issued

Article 29 provided that if there was any matter

were as follows: (i) erroneous payment, excessive

for which a private action was filed incidental topayment, or payment shortfall; (ii) revenues

a public action filed against an Accounting

shortfall or excessive revenues; (iii) loss orOfficer, BOA was to make audit determination

damage of cash or goods; and (iv) besides (i)on such matter based on the results of execution

through (iii), violation of the budget or a law orof the judgment rendered by an ordinary ororder, or any other matter for which thespecial court.

Accounting Officer is to be held liable.

which

meant

that
of

if

that
when

a

writtenexamination

notification
of

the

of

relevant

In March 1897, the Rules on Retrial were

C. Establishment of individual rules and theirconsolidation by the Rules on Audit Affairs

enacted.

The

Rules

establishedtheretrialIn November 1889, BOA established theprocedure, providing that a retrial was to be

Rules on Request for Auditing, which provided

conducted by another Bureau or Division than the

for

one

the

formatandhandlingofwrittenthat

originallyconducted

theaudit.

determinations, etc. The Rules stipulated aSpecifically, the President of BOA was to"written determination" to be issued to thedesignate a Bureau in charge of the retrial andAccounting Officer, "a written request for taking

have the Bureau examine the case, immediately if

action on determination" to be issued to the headan Accounting Officer requested a retrial, andof the relevant department, and a "written noticeafter referring the matter to the General Meetingof determination" to be issued to the Minister of

if BOA found a matter for which a retrial should99Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

be conducted.
However, since these rules were stipulated
for individual matters, there was a strong call for
preparation of rules that have combined all ofthese. Therefore, examiners of internal rules wereappointed, and the Rules on Audit Affairs (NoticeNo. 7) were enacted in May 1900. The
abovementioned Rules on Request for Auditing,Rules on Adjudication and Determination, andRules on Retrial were abolished and they were allincorporated into the Rules on Audit Affairs.
(3) Operation of and changes in the system ofcertificate of grant of discharge
If BOA audited the statement of accounts
A certificate of grant of discharge for releasingan Accounting Officer from liability

and documentary evidence submitted by an
Accounting Officer and found them to be proper,
it was to issue a certificate of grant of discharge
fromA. Introduction of the system of certificate of
grant of discharge

liability, based on Article 20 of the BOA Act.

The system of certificate of grant of

The number of certificates issued exceededdischarge was introduced to Japan's accounting

20,000 in some years. The certificate of grant oflaws and regulations in January 1882, based ondischarge was also issued when an Accounting

Article 41 of the Public Accounting Act (Circular

Officer obeyed the indemnity order issued by the

Notice of Dajokan No. 5), which provided thathead of the relevant department and completed

BOA was to examine and judge the final

the indemnity.

accounts

forreleasingthe

Accounting

Officerofeachgovernment

officeand

The nature of the certificate of grant ofpronounce a certificate of grant of discharge

discharge as a document certifying the discharge

therefor by April of the fiscal year after next.

from liability had not changed during the 60

Meanwhile, Article 2 of the Rules on BOA,

years while BOA was under the Constitution ofwhich were established at the same time,the Empire of Japan, but its format, etc. wasprovided that BOA was to examine and judge thesimplified a few times.

final accounts of revenue and expenditure andpronounce a certificate of grant of discharge tothe person who submitted the final accounts.
However, this certificate of grant of discharge
was modeled after the system of issuance of acertificate of verification of the final accounts ofrevenue and expenditure that were provided by
the Notice on Affairs Handled by BOA (Circular
Notice of Dajokan No. 18) in March 1880, and100Section 2 Operation of Audit Activities

unlike the nature of the certificate in later years,

determination to an Accounting Officer, it shallit was merely a certificate of confirmation of thenotify the Minister of Finance by sending a

final accounts.

transcript thereof. However, BOA had establishedIn April 1886, Article 7 of the Ordinance on

separate systems on the specific operation of thethe Organization of the Board of Audit (Imperial

certificate of grant of discharge, such as its

Ordinance No. 20) stipulated that if the President

format and issuing procedure, and the format, etc.

of BOA judged that the finance and accounting

subsequently underwent several changes.

were proper, the President was to provide a

Article 11 of the Rules on the Affairs of thecertificate of grant of discharge to the official in

Board of Audit provided that establishment ofcharge.

detailed regulations on issuance of certificates of

The system of liability without fault ofgrant of discharge was under the authority of the

Accounting Officers was established by the

President of BOA. BOA decided through aabovementioned

Publicresolution by the General Meeting in December

Accounting Act, and an Accounting Officer came1889 that the draft of a written determination or ato bear the full liability for the cash and goods

certificate of grant of discharge was to be voted

under the Accounting Officer's jurisdiction. An

on at a Bureau meeting, except when it was an

Accounting Officer was not to be released fromimportant or extraordinary case.

this liability unless BOA issued a certificate of

Detailed Regulations on Proceedings of Meetings

grant of discharge based on the results of audit

were established in July 1890, and provided that

determination.

the draft of a certificate of grant of discharge inprovisions

of

the

Then,

the

The BOA Act was enacted in May 1889,

an important or extraordinary case was to be

and provided that, if BOA audited the statement

voted on at the General Meeting, and that theof accounts and documentary evidence submitted

draft of a certificate of grant of discharge in an

by an Accounting Officer and determined them toordinary case was to be voted on at a Bureau

be proper, BOA was to issue a certificate of grantmeeting.

of discharge for releasing the Accounting Officer

In December 1889, the Form of Certificate

from liability, in response to the abovementionedof Grant of Discharge for Receipt and Issue ofprovisions of the Public Accounting Act. The

Goods was stipulated as the first provisions on

certificate of grant of discharge, which had been

the format of the certificate of grant of discharge.
Then

issued as a certificate of confirmation of the final

inFebruary

1891,

the

Detailed

accounts, was stipulated for the first time as aRegulations on Issue and Form of Certificate ofcertificate for releasing an Accounting Officer

Grant of Discharge were established as provisions

from liability.

on issuance of the certificate of grant of

B. Various provisions on the system
certificate of grant of discharge

discharge. The Detailed Regulations specified

offorms for the following three types of certificatesof grant of discharge (Article 3): those issued for

Article 40 of the Rules on the Affairs of theBoard of Audit (Imperial Ordinance No. 106 ofa case where all

September 1889) provided that, if BOA issued adetermined to be proper (type 1); those issued for

certificate of grant of discharge or a writtena case where an examination document was
101ofthe calculationwasPart 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

issued and the matter was clarified by an

separated and moved those matters to the

explanation given in response or the error was

introductory part, and by lithographing thecorrected (type 2); and those issued for a caseremaining part of the text that does not change, it

where a written determination was issued, and thesaved the trouble of writing the entire certificate

action therefor was completed (type 3). Thesewith a writing brush. Next, in April 1893, BOA

certificates of grant of discharge were issued byabolished the forms for type 2 and type 3

the name of the President of BOA after beingcertificates of grant of discharge, which were

decided at a Bureau meeting based on a report

both issued after the calculation was madefrom an Assistant Director, and they were allproper. It consolidated those forms with the form

written with a writing brush. It was also provided

for type 1 certificates of grant of discharge andthat a certificate of grant of discharge was to be

simplified them, only leaving the text "BOA has

issued via the head of the relevant department

conducted audit of the abovementioned accounts(Article 4).

and hereby releases the official from liability" to

C. Simplification of the work of preparing
certificates of grant of discharge

remain.
With the amendment of the Rules on the

As mentioned above, all certificates of grantAffairs of the Board of Audit by Imperialof discharge were written with a writing brush at

Ordinance No. 457 of December 1899, it was

the Secretariat based on a resolution by theprovided that a certificate of grant of discharge

General Meeting or a Bureau meeting. The

was to be issued via the head of the relevant

number of certificates issued was only about

department (Article 28), and the abovementioned

1,000 to 1,300 per fiscal year from FY1882 toprovisions

FY1887 when BOA was under the Dajokan

Regulations on issue and form of certificate ofsystem, but later increased dramatically. As of

grant of discharge were enshrined into law. Then,

January 1893, the number of certificates issued

with the establishment of the Rules on Audit

for FY1890 was 13,800 and the number of those

Affairs in May 1900, BOA's various internal

issued for FY1891 came to 22,500. Including

rules on audit were abolished and consolidated.

those issued for receipt and issue of goods, theThe handling of certificates of grant of discharge

number of certificates of grant of discharge that

was also to be stipulated in the abovementioned

needed to be issued by October 1893 reached

Rules on Audit Affairs, but the formats and theabout 40,000.

issuing procedures of certificates of grant ofof

Article

4

of

the

Detailed

As a result of such increase, it became andischarge still followed the conventional systems,

urgent task to streamline the work of issuingand this practice continued until the amendment

certificates of grant of discharge. In Februaryof the Rules on Audit Affairs in May 1922.

1893, BOA revised the forms in order to simplify

Meanwhile, audit and grant of discharge tothe work of preparing certificates of grant of

the Accounting Officer for part of the calculation

discharge. Matters such as the post and the nameofof the relevant official and the account titles forcommissioned to the respective Ministers or

the fiscal year used to be written within the text

prefectural governors, etc. based on Article 16 ofof a certificate of grant of discharge, but BOA

the BOA Act. In this case, the certificates of102

the respective government

officeswereSection 2 Operation of Audit Activities

grant of discharge were issued by the names ofreceipt and payment of cash or receipt and issue

the

of

heads

of

the

respective

commissioned

goods

shall

be

specifiedbyImperial

government offices by using the form specified

Ordinance" (Article 28 of the Public Accounting

by BOA.

Act), and Imperial Ordinance No. 4 of 1890

(4) Introduction of the system of fidelity
guarantee deposit

specified cases in which a fidelity guarantee

The system of fidelity guarantee deposit wasdifficult to implement this system, which imposed

introduced as a system that guaranteed thespecial economic burden only on Accounting

abovementioned liability for indemnity based on

Officers, so BOA hardly ever had an Accounting

the Public Accounting Act. Specifically, it was

Officer pay the fidelity guarantee deposit inprovided that "those who are required to pay apractice.

deposit was to be collected. However, it was

fidelity guarantee deposit upon taking charge ofSystem of audit determination of calculations submitted by Accounting Officers (at the time of establishment of the system)
If all of the calculation isdetermined to be proper

Conduct audit based on the statement of accounts anddocumentary evidence submitted by each Accounting Officer

If a reply or correction by the
Accounting Officer is required
for any matter foundIf the matter has been clarified by
the reply or has been corrected
Issue an examination document to the Accounting
Officer and have the officer make a reply or correction

Issue a certificate of grantof discharge (type 1)

Issue a certificate of grantof discharge (type 2)

If the calculation isfound not to be proper
Issue a written determination to the Accounting
Officer

Promptly notify the head of the relevant department
and request the head to take action

If the action has been completed

Issue a certificate of grantof discharge (type 3)

If the action taken by the head of therelevant department in response to therequest is found not to be appropriate
Present the annual audit report to the Emperor
reporting that case

Rules on the Affairs of the Board of Audit (Imperial Ordinance No. 106 of 1889)
Chapter IV Audit
Article 34 Audit of finance and accounting shall be conducted for the following categories:(i) adjudication of the final accounts submitted by Ordering Officers; and(ii) audit determination of the statements of accounts submitted by Accounting Officers.
(Omitted)
The audit determination of the statements of accounts submitted by Accounting Officers shall be carried out
based on the statements of accounts and documentary evidence submitted by the respective Accounting
Officers
103

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)(Omitted)
Article 36 If the Board of Audit finds any matter as a result of the audit, it shall issue an examination document
to the Accounting Officer, and have the Accounting Officer make a response or correction.
Article 37 The Board of Audit may inquire or warn a minister of state by a document, but may not issue an
examination document to a minister of state.
Article 38 An examination document shall contain the following matters:(i) criticism on non-compliance;(ii) warning against future measures; and(iii) inquiries on unclear points.
Article 39 If the Board of Audit finds the reply or correction made in response to the first examination
document to be insufficient, it shall issue another examination document.
If the Board of Audit finds that the calculation is not proper as a result of audit, it shall notify the head of therelevant department as an Ordering Officer, and issue a written determination against an Accounting Officer.
Article 40 If the Board of Audit issues a certificate of grant of discharge or a written determination to an
Accounting Officer, it shall notify the Minister of Finance by sending a transcript thereof.
Article 41 If the Board of Audit issues a written determination, it shall promptly notify the head of the relevant
department and request the head to take action.
Article 42 If the Board of Audit finds that the action which the head of the relevant department took in responseto the request by the Board of Audit was inappropriate, it shall present an address to that effect by publishingsuch fact in the annual audit report to the Emperor.
Detailed Regulations on Issuance of Certificates of Grant of Discharge (enacted in February 1891)
Article 3 Certificates of grant of discharge shall be categorized into the following three types:
type 1: those issued for a case where all of the calculation was determined to be proper;
type 2: those issued for a case where an examination document was issued and the matter was clarified by an
explanation given in response or the error was corrected; andtype 3: those issued for a case where a written determination was issued, and the action therefor wascompleted.
Article 4 A certificate of grant of discharge shall be issued via the head of the relevant department.

2. Comparison between the Japanese andFrench systems of liability for indemnity

Accounting Officers originated in France. In

Under the Constitution of the Empire offor any amount of shortage that arose, as a result

Japan, the Public Accounting Act was modeledof calculation, in managing the public money

after the French system, and the BOA Act waswhich

modeled after the Prussian systems. Accordingly,

irrespective of the intention or negligence aboutsome inconsistencies arose in operating thesethe fact of such shortage. The supreme audit

laws on the State's finance and accounting. The

institution performed the duty of determining

inconsistencies were the most notable for thesuch amount of shortage.

France, an Accounting Officer was to compensate

theAccounting

Officerhandled,system of determination on the liability for

In France, Accounting Officers, who wereindemnity of Accounting Officers. BOA officials

appointed from among regional influential people

took pains for a long time over rationallyand who had strong independence, appointed

operating the system.

assistants by their own discretion, and exercised(1) Principle of no-fault compensation

powerfulmandate,suchasexamining

disbursement orders issued by Disbursement

The system of liability for indemnity of104

Section 2 Operation of Audit Activities

Ordering Officers. Therefore, in order to regulate

principle of non-negligence to liability

forthe receipt and payment of public money thatindemnity under the Public Accounting Act,

were prone to be mismanaged, the system ofwhich has the same nature as compensation for

liability for indemnity of Accounting Officers

damage under the Civil Code, would cause a

was established as a system in which the supremeconsiderable imbalance between the two became

audit institution determined the liability forprevalent within BOA.

indemnity of the officers. For this purpose, theThus, ten-odd years after the establishment

principle of no-fault compensation was applied toof the system of determination on the liability forthe liability of Accounting Officers, and theindemnity of Accounting Officers, operation ofsystemthe system was corrected substantially while theoffidelity

guarantee

depositwasstatutory provisions remained unchanged. In

established for guaranteeing this liability.
The Public Accounting Act in the Meiji era

making the actual determination, BOA came todirectly imported this French system to Japan.

determine that an Accounting Officer was liableThus, the liability for indemnity based on thefor indemnity only if intention or negligence wasprinciple of no-fault compensation was imposed

found on the part of the Accounting Officer. In

on Japanese Accounting Officers whose main

this case, BOA did not passively release an

duty was computational operations, which were

Accounting

to receive, pay, and retain public money, but

indemnity, which had arisen automatically based

whose mandate andwereon the fact of loss or damage of cash or goods,

extremely low compared to French Accounting

based on the determination, but instead, it

Officers. However, law supposed that the Public

actively judged the presence or absence of

Accounting Act, modeled after the French

intention or negligence on the part of thesystem,a

Accounting Officer as a judging organ, andpronouncement against an Accounting Officer as

decided the liability for indemnity of the

an individual, while the BOA Act positioned

Accounting Officer based on the determination

determination not as a pronouncement that has athereon.

direct effect on an Accounting Officer, but as
having the nature of a written reason for(2) Procedure of determination on liability forindemnity

requesting the head of the government office to

BOA under the Constitution of the Empire

which the Accounting Officer belongs to takeof Japan had made determination, which wasaction.

similar to that made by judicial courts, on thepositioned

economic

statusdeterminationas

Officerfromtheliabilityfor

In this manner, Japan established the systemliability for indemnity of Accounting Officers. Inof determination on the liability for indemnity offact, BOA's system of determination on the

Accounting Officers based on the principle of no-liability for indemnity of Accounting Officers had

fault compensation. However, the Civil Codealreadyenacted in 1896 and the Commercial Code

Accounting Act, which had introduced systems ofenactedLatin countries such as France, before the

in

1899

appliedtheprinciple

of

been

established

under

the

Publicenactment of the BOA Act.

negligence to all liability for compensation.

In

Because of this, a view holding that applying the105

France,

there

was

an

adversary

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

proceeding where a general advocate and athe liability for indemnity of Accounting Officers

reporter in charge confronted each other, which is

had a characteristic of a judicial review where anan essential system for litigation proceedings, in

Accounting Officer could appeal to the Cour deorder to make determination carefully, andCassation, which corresponded to the Supreme

determination was made by a small collegial

Court, if dissatisfied with the trial decisionbody established for each Bureau.

rendered by the supreme audit institution. The
determination

In contrast, BOA was organized as a pure

made

by

BOA

under

the

administrative organ with a Prussian-style large

Constitution of the Empire of Japan was the firstcollegial body system and had no system orandfunction as a judicial organ. The operations of

unchangeable.

drafting the determination and submitting it to the

conducted, it was not reconsideration of the same

meeting were conducted by the respective Audit

case, but a retrial of only new facts that were not

Divisions whose main

examined

duty

was

to

audit

final

instance,

and

its

effect

was

Even

when

a

retrial

was

in

the

first

trial.

However,anadministrative illegality or impropriety. The

Accounting Officer who was dissatisfied with

Division in charge drafted a grant of discharge if

determination on the result of a commissioned

no incident was found to have been caused byaudit had no reason to lose the right to receive

the Accounting Officer as a result of the audit,

BOA's determination that was recognized underand drafted a proposal finding liability for a

the Public Accounting Act, so such Accounting

crime committed by the Accounting Officer

Officer

was

able

to

seek

BOA's

directhimself/herself. Either draft was submitted to a

determination.

In

this

case,

BOA

made

Bureau meeting as an ordinary proposal. If

determination through this retrial procedure.

liability was found or non-liability was found to

The retrial is classified into a "requested

be doubtful due to a cause other than a crime

retrial" that is requested by an Accounting

committed by the Accounting Officer himself/

Officer and a "sua sponte retrial" that BOA

herself, the Audit Division in charge drafted a

conducts by its own authority. As for requested

proposal of liability or non-liability and directly

retrials, the cases in which requests were to besubmitted it to the General Meeting. The liability

accepted were originally listed restrictively under

for indemnity of the Accounting Officer was

the Rules on the Affairs of the Board of Audit,

decided by a vote at the General Meeting as thebut since there were also requests for retrials infirst and final instance, and if the Accounting

cases other than those listed, they were deleted in

Officer was held liable, the amount of indemnity

1899. The retrial procedure was carried out

was also decided. In this manner, the procedure

initially based on the Rules on Retrial, and fromfrom the drafting to decision of determination on

May 1900 onward, based on the Rules on Audit

liability for indemnity in Japan was extremely

Affairs which were enacted by incorporated all ofsimple and lax compared to that in France.

the provisions of the Rules on Retrial. The most(3) Retrial

frequently observed retrial cases were cases
where the Accounting

BOA had a system to conduct a retrial of

Officer's crime was

audit determination made against an Accounting

revealed after BOA had issued a certificate of

Officer. The French system of determination on

grant of discharge.
106Section 2 Operation of Audit Activities(4) Audit determination against
responsible for handling goods

toofficials

supervisecompliance.

After

the

PublicAccounting Act came into effect, its provisions

The system of determination on the liability

were to obviously take precedence, but there

for indemnity of officials responsible for handlingseemed to be a slight gap in their ideas, and it

goods was introduced with the enactment of thecan be considered that such gap was narrowed by

Public Accounting Act in 1889, similar to thethe amendment of the Public Accounting Act insystem for cash. Such system of liability for

1921.

indemnity for the State's goods in general was

Audit determination on receipt, issue andunique to Japan, and could not be found even instorage of goods had all been made throughFrance where the system of determination oncommissioned audits, except for determination on

liability for indemnity originated.

important goods such as those for businessThis liability for indemnity basically adopted

purposes. A matter on determination that became

the principle of no-fault compensation, just as ina problem was how the amount of indemnity of

the case of officials in charge of receipt andtobacco and stamps should be calculated. BOA

payment of cash. The Regulations on Accounting

hadof Goods Owned by the State, which came into

indemnity based on the manufacturing cost if theeffect in October 1889, half a year before theloss or damage had occurred before the goods

Public Accounting Act, and which remained

were put in commercial distribution, and toeffective for about 70 years until the State-Owned

calculate the amount based on the selling price ofGoods Management Act came into effect inall of the lost or damaged goods if the loss orJanuary

official

damage had occurred after the goods were put in

responsible for handling goods was held liable

commercial distribution, irrespective of whether

when there was intention or negligence or failure

they had actually been sold.

1957,

provided

that

the

resolvedtocalculatetheamountofComparison between the Japanese and French systems of liability for indemnity of Accounting Officers
Japan
FrancePrinciple of no-fault compensation (subsequently decided Principle of no-fault compensation
based on intention/negligence in practice)＊
Articles 26 and 27 of the Public Accounting Act

Standard for
deciding theliability forindemnity
Existence of the Existed (abolished in 1921 due to losing substance;Existsystem of fidelity discussed later [see page 155])
guarantee deposit ＊Article 28 of the Public Accounting Act
Characteristic of Written reason for requesting the head of the government Pronouncement against an Accounting Officer as
the determination office to which the Accounting Officer belongs to take an individual
action＊Article 20 of the BOA Act
Procedure of
Liability for indemnity decided by a vote at the General Having an adversary proceeding where a generaldetermination
Meeting, and having no system or function as a judicial advocate and a reporter in charge confronted eachorgan
other, and liability for indemnity decided by asmall collegial body established for each Bureau
Characteristic of Since determination was the first and final instance, and Having a characteristic of a judicial review where
the retrial system its effect was unchangeable, a retrial conducted not as an Accounting Officer could appeal to the Cour
reconsideration of the same case, but as a retrial of only de Cassation, which corresponded to the Supreme
Court, if dissatisfied with the trial decision
new facts that were not examined in the first trial＊
Article 24 of the BOA Act
rendered by the supreme audit institution

107Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Existence of the Exists
Does not exist＊
Article 26 of the Public Accounting Act and Article 7 ofsystem of audit
the Regulations on Accounting of Goods Owned by thedetermination ofState
officials
responsible forhandling goods

3. Number of cases and examples
determination on liability for indemnity

Officer―48 cases; official who received advancedoffunds―45 cases; official responsible for handling(1) Number of cases of determination on
liability for indemnity

goods―32 cases; Treasurer―11 cases; Accounting

If BOA audited the statements of accounts

cases; Accounting Officer Handling Diversion ofand documentary evidence submitted by anFunds―eight cases; and official in charge of

Accounting

expenses―one

Officer

and

found

all

of

Officer in charge of cash outside the budget―nine

the

case.

In

particular,

cases

of

calculation to be proper, it made a determination

Revenues Officers and officials who receivedof a grant of discharge and issued a certificate ofadvanced funds made up a majority.

grant of discharge. However, if it found any

Most of the matters for which Revenues

incident such as a loss of cash, it deliberated on

Officers were held liable were crimes committed

whether or not the Accounting Officer was liableby themselves or by their assistants, and otherfor indemnity at the General Meeting, a summary

matters included their having been defrauded or

General Meeting, or a Bureau meeting, according

having lost money due to carelessness. By

to the details of the case, and issued a certificate

department, Tax Administration Bureaus and tax

of grant of discharge only if it determined theoffices accounted for a large number of the cases.

Accounting Officer to be not liable, or if it

Meanwhile, most of the matters for which

determinedtheAccounting

Officertobeofficials who received advanced funds were held

exemptedfromobligation

pursuant

totheliable were those including consumption or

Imperial Ordinance on Exemption of Accounting

defrauding of retained money by themselves orOfficers from Obligations under Liability forby their assistants, and other matters included

Indemnity.

their having lost or having been defrauded

Among the 231 cases of determination

retained money, with a majority of the cases

against Accounting Officers resolved at a Generalhaving occurred in the Army.

Meeting or a summary General Meeting during(2) Actual examples of
liability for indemnity

the Meiji era, the Accounting Officers were
determined to be liable in 154 cases, starting withdetermination

The following are some examples of suchthe determination made in July 1891 which held

determination, by their type, etc.

an(i) Example

Accounting

Officer

who

had

on

received

advanced funds for military ship Tenryu to beofdetermination

againstan

Accounting Officer

liable for losing the retained money.

The first case of determination made against

The following is the breakdown of cases inan Accounting Officer was the following: at awhich Accounting Officers were determined to be

General Meeting on July 24, 1891, the acting

liable, by type of Accounting Officer: Revenues

chief paymaster of military ship Tenryu was108Section 2 Operation of Audit Activities

resolved to be liable for an incident of having

Constitution

of

the

EmpireofJapan,

lost 1,350 yen while keeping the cash received asdetermination was made in retrials in a total ofadvance funds in a safe, due to being careless in

83 cases, with 62 cases in which the Accounting

storing the key to the safe, etc.

Officer was held liable through a retrial, three(ii) Example of determination against an official

cases in which the Accounting Officer was

responsible for handling goods

exempted from the obligation of indemnity under

The first case of determination made on

an Imperial Ordinance, and 18 cases in which thegoods was as follows: at a summary General

Accounting Officer was held not to be liable. The

Meeting on August 22, 1892, the official

first such determination was resolved at a General

responsible for handling goods of the First

Meeting on June 27, 1899. Specifically, BOA

Division was resolved to be not liable for an

had already completed audit of payment ofincident where two pieces of clocks for signal

emergency armaments expenditures by a naval

guns (cost: 50 yen) that were placed in the sentry

staff paymaster of the marine corps of thebox for signal guns in the Imperial Palace were

Yokosuka Naval Base and had issued a certificate

stolen, because the incident was caused by a thiefof grant of discharge based on determination that

who climbed over the surrounding fence andthe calculation was proper. However, it later

broke the lock of the sentry box, and "there wasbecame clear that municipal staff had issued ano error or omission in the storing of the goods."

false receipt for an allowance of 36 yen which(iii) Example of determination through a retrial

was to be paid to a sailor while being called to

As mentioned earlier, even where BOA's

the Sino-Japanese War and which the Accounting

audit had been completed and a certificate of

Officer remitted on consignment to the municipal

grant

on

office of the sailor's place of residence, so BOA

determination that the calculation was proper, if acarried out a retrial procedure. BOA resolved thatnew fact that was not examined in the first trial

the Accounting Officer was not liable, holding

was found on a later date, it was allowed for athat there was no error or omission in the

retrial to be conducted by BOA. Over the 60

remittance procedure and confirmation of theyears

receipt carried out by the Accounting Officer.

ofdischarge

during

which

was

BOA

issued

was

based

under

the

109

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Document seeking approval on determination in retrial Minutes of the resolution in General Meeting, Vol. 23

Document seeking approval on an inquiry letter on determination

andetermination on liability for indemnity over the

Accounting Officer liable with the highest

60 years during which BOA was under theamount of indemnity

Constitution of the Empire of Japan. Also, given(iv) Exampleofdetermination

holding

whichthat this was a case at the end of the Meiji era, it

Accounting Officers were held liable varied

can be practically considered as the highest everconsiderably, but the following example is a caseamount of liability for indemnity in history.

The amounts ofindemnityforThis was a case on cash consumption by awhere the highest amount was specified in
110Section 2 Operation of Audit Activities

naval staff paymaster, who was the paymaster forthe cash to the conspirators or using it as his

ship construction and ordnance fabrication, during

gambling and entertainment expenses.

his official trip to London. From June 1902 to

The naval staff paymaster fled on sensing

November 1904, the naval staff paymaster,that his consumption of public money came toconspiring, etc. with other naval accounting

light, but the determination set forth a strong

officers, issued withdrawal tickets (corresponding

ruling, stating that the officer "should naturally

to the present checks) for which he or abe held liable for indemnity for said consumed

conspirator was the creditor. He withdrew cash

money," using the word "naturally" which waswith these tickets at the London Branch of the

not observed in usual determinations holding an

Yokohama Specie Bank, Limited, and consumed

Accounting Officer liable.

over 335,512 yen of advanced funds by remitting

Document seeking approval on determination (determination for the highest amount of indemnity)
Minutes of the resolution in General Meeting, Vol. 41

Subsection 6presented addresses to the Emperor. Unlike

Annual audit report and annual
audit report to the Emperorannual audit reports, annual audit reports to theEmperor were not made public, but they were
nonetheless important as results of BOA's audit

BOA under the Constitution of the Empire

activities.

of Japan not only had "annual audit reports"
which it prepared based on the provisions of theConstitution and submitted to the Imperial Diet

1. Annual audit report

via the Cabinet, but also "annual audit reports tocalled(1) Introduction of the system of annual audit
report"Komuseisekisho" in Japanese ["Kensaseisekisho"

A system to report the audit results of thefrom 1899 onward]) through which BOA directlyState's final accounts was introduced in January

theEmperor"(whichwere111

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

1882 as a system of reply given for the final
accounts of government offices which were

(2) Matters to be reported in the annual audit
reportpassed on to BOA by Dajokan, in line with

Article 14 of the BOA Act provided that theestablishment of BOA under the Dajokan systemfollowing three matters were to be reported in an

as an organ for supervising the settlement of theannual audit report: (i) whether the figures in the

final accounts. Then the Constitution of the

final accounts and the statements of revenue andEmpire of Japan was enacted in 1889, and BOA

expenditure accounts of the respective Ministries

was obligated to prepare annual audit reports

tally with the figures in the statements ofbased on the provisions that "The final account ofaccounts submitted by Accounting Officers; (ii)the expenditure and revenue of the State shall bewhether revenue, expenditure, and accounting ofverified and confirmed by the Board of Audit,

property and goods comply with the budget or

and it shall be submitted by the Government tolaws and regulations; and (iii) whether there are

the Imperial Diet, together with the report of the

any expenditures beyond or outside the budget

Board of Audit" (Article 72, paragraph (1)).

which have not been approved by the Diet.

The audit results were reported by the reply

Among these, matters on non-compliance withsystem up to the final accounts for FY1885, butlaws, regulations, or budget and impropriety

the final account for FY1886 were reported as an

became priority matters in annual audit reports asannual audit report to the Cabinet in Octoberaccumulation

1890, and an annual audit report has been

implementation of financial management.

ofspecific

criticisms

againstprepared every year since then.

First annual audit report, "Kobun Ruishu" (File of Official Documents), Series 14, Vol. 46 on Finance(owned by the National Archives of Japan)

2. Preparation of annual audit reports
The

final

accounts

for

FY1891along with the annual audit report thereon. BOA
wereestablished the Rules on Preparation of Annual

submitted to the Imperial Diet for the first time

Audit Report and Annual Audit Report to the112Section 2 Operation of Audit Activities

Emperor in February 1892 and applied them

was to have the proposal of the matters to be

starting with the final accounts for FY1890.

reported in the annual audit report passed by theThen, it set up the Rules on Adjudication ofCommittee.

Statements of Revenue and Expenditure Accounts

Examination for Annual Audit Report andin March 1892 and developed the system for

Annual Audit Report to the Emperor werepreparing annual audit reports.

established in May 1898, and when the Rules

Meanwhile,

the

Rules

on

Preparation

were amended in May 1900, the deadline forprovided for the setting up of the examiners ofsubmission of the proposal to a General Meeting

Annual Audit Report and Annual Audit Report toand other relevant matters were revised.

Specifically,

the

Rules

on

the Emperor and detailed procedures, including

At a General Meeting, a Director and three

the drafting and submission of a proposal of the

Deputy Directors were separately appointed as amatters to be reported in the annual audit report,

peer reviewer every year. After hearing a reportand annual audit reports were to be preparedby this peer reviewer and having the Director inbased on these Rules.

charge give an explanation and answer questions

If an audit division of BOA identified any

from members, the General Meeting took a votematters that were found to be illegal or improperon the proposal. Since the General Meetingas a result of in-office audit or field audit, it

ensured a careful decision by holding sessions up

issued an examination document or an Inquiry

to the third deliberation stage, a considerable

Letter by the name of the Director General of thenumber of matters reported in the annual audit

Bureau, and requested the auditee to give anreport were overlooked at the General Meeting

explanation. Then, if the audit division found thatevery year. Of the matters proposed to thethere were matters to be reported in the annual

Bureau meeting, those that managed to be passed

audit report or the annual audit report to theby the Committee and approved by the General

Emperor, it was to draft a proposal thereof andMeeting were only about 10% of the total on

submit it to a General Meeting after deliberation

average, excluding those concerning crimes andat a Bureau meeting.

tax.

A proposal approved at the Bureau meeting

The respective Director verified the final

was carefully investigated by the Examinationaccounts according to the Rules on Adjudication

Committee on Annual Audit Report and Annualof Statements of Revenue and Expenditure

Audit Report to the Emperor, which consisted of

Accounts, and submitted the results to the

one Director and a few Assistant Directors fromPresident of BOA in the form of adjudication

1890 to May 1922 and consisted of one Director

reports.

General, three Directors, and four Assistant

BOA sent the annual audit report approved

Directors after that, and a proposal to beby the General Meeting to the government,

submitted to a General Meeting was prepared andattaching it to the final accounts. Then, thesubmitted by the end of the audit year in Octobergovernment submitted the report to the Imperial

every year. The biggest hurdle for the proposers

Diet together with the final accounts.

113

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Deliberation procedure
Submission of the annual audit report to theImperial Diet and presentation of the annual
audit report to the Emperor

General Meeting

Examination Committee on
Annual Audit Report and Annual
Audit Report to the Emperor

Bureau meeting
Issuance of an examination
document or an Inquiry Letter
Auditing Bureau

Auditee
Explanation

were being

3. Period for submission of the annual audit
reportsent

inaroundNovemberorDecember of the fiscal year after next. Thus, theConstitution

government had submitted the final accounts thatprovides that the final accounts shall be submitted

had been passed on by BOA to the Diet along

to the Diet "during the fiscal year immediately

with BOA's annual audit report after two years

following the period covered." Accordingly,

had passed, or more than two and half years had

BOA's annual audit report attached to the final

passed in some cases, after the end of the fiscal

accounts is also to be submitted to the Diet via

year covered, at the earliest.

Article 90 of the current

the Cabinet during the fiscal year immediately
following the period covered. At present, BOA

4. Annual audit report to the Emperor

sends the annual audit report to the Cabinet in(1) Annual report and BOA report

early November. The final accounts for each

A system to report BOA's audit results every

fiscal year are submitted to the Diet aroundfiscal year was introduced by the Rules on theNovember 20 if an extraordinary session of the

Affairs of the Board of Audit in April 1881.

Diet is being held.

Under this system, the audit results for FY1880

In contrast, the Constitution of the Empire of

were submitted to the Dajokan as the first annual

Japan and the Public Accounting Act enacted inreport in May 1885. Six annual reports were1889 had no provisions on the periods for

submitted in total up to the report for FY1885.

preparing the final accounts, sending them toThen, audit results for FY1886 onward came to

BOA, and submitting them to the Diet.

be submitted to the Prime Minister as BOA

Therefore, until around FY1907, the final

reports according to the provisions of theaccounts were being sent to BOA in around July

Ordinance on the Organization of the Board ofor August of the fiscal year after next, andAudit that was enacted in April 1886.

between the late 1900s and the late 1910s, they114

Section 2 Operation of Audit Activities(2) Introduction of the annual audit report to
the Emperor

to the examiners. In this way, the draft annual

With the establishment of the constitutionalby the examiners by the end of the audit year

system, BOA became an organ under the direct

was submitted to a General Meeting. The

control of the Emperor. On such basis, Article 15

deadline for the submission to a General Meetingof the BOA Act provided that "The Board of

had not been stipulated at first, but it was

Audit shall present the annual audit report to thespecified as February of the fiscal year after next

Emperor for each fiscal year, and if it finds any

when the abovementioned Rules on Preparation

matter in the report which requires a legal orwere amended in May 1898.

audit report to the Emperor which was compiled

administrative revision, it may also present its

The annual audit report to the Emperor was

opinion to the Emperor," stipulating that BOA

prepared through the same procedure as that for

shall present the audit results for each fiscal year

the annual audit report, but with special care dueto the Emperor. The name of the document to be

to being a means for presenting an address to thepresented was stipulated as the "annual audit

Emperor. All text including the detailed statisticalreport to the Emperor (Komuseisekisho)" in thetables of the annual audit report to the Emperor

Rules on the Affairs of the BOA enacted inof each fiscal year, which was prepared throughSeptember 1889, but the name was revised to thein-depth"annualEmperorresolved at a General Meeting, were written out(Kensaseisekisho)" with the amendment of thewith a writing brush by BOA's official skilled in

Rules in December 1899.

writing, as a compilation of the audit conductedaudit

reporttotheinvestigation

anddeliberation

andby BOA under the direct control of the Emperor.

The first report presented to the Emperor in

BOA attached colored graphs of cumulative

July 1891 on the audit results for FY1887.

annual statistical data including revenue andIn addition, the FY1888 Annual Auditin

expenditure accounts, public bonds, and national

September 1893, and that for FY1889 wasproperty attached to the annual audit report to thepresented in October 1894 at the Imperial

Emperor that was prepared in this manner. It

General Headquarters in Hiroshima. In February

prepared

1892, the Rules on Preparation of Annual Audit

duplicate―of the document, and the President ofReport and Annual Audit Report to the Emperor

BOA brought it to the Imperial Palace andwere enacted, and annual audit reports to the

independently presented it to the Emperor.

ReporttotheEmperorwaspresented

two

copies―theoriginal

andaEmperor for FY1890 onward were prepared

The "annual audit report to the Emperor

according to these Rules. The preparation process(Komuseisekisho)" was renamed to the "annual

was the same as in the case of the alreadyaudit report to the Emperor (Kensaseisekisho)"mentioned annual audit report. Matters that werestarting from the report for FY1897, with thefound necessary to be presented to the Emperor

amendment of the Rules on the Affairs of BOA,

in the audit process were immediately reported byas mentioned above. The report for each fiscal

the Director, and the proposal of matters drafted

year was roughly composed on the status ofby the Diretor was submitted to the President ofannual revenue and expenditure, the status of

BOA via the Director General, and then delivered

special matters, non-compliance and inappropriate
115

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

matters, results of field audits, and opinion forpresented in only one case with the FY1918

legal or administrative revisions, etc.

Annual Audit Report to the Emperor, and no
more opinions have been presented since then.
5. Issue of attendance of Members at the Diet
As discussed later (page 141), BOA rarely
conflicted with the government over the mattersreported in annual audit reports, and had notattendedtheCommittee

on

Audit.

The

deliberations had been made solely based on
explanations given by the government. Therefore,
whether or not the Committee may request theattendance of BOA's Members and hear theiropinions on examination of the final accounts
became an issue.
The first annual audit report to the Emperor

Subsection 7(3) Opinion forrevisions

legal

or

Restrictions on audit

administrative

BOA had already expressed opinions on theSpecial law that restricted audit of armaments
expenditures

creation or amendment of laws, regulations, andSince the establishment of BOA under thesystems through a large number of proposals

constitutional system in 1889, the largest audit

since the time it was the Shi of Audit. However,subject matter had been armaments expenditures,with the establishment of BOA under theparticularly expenditures of the Army. The

constitutional system, it was provided in Article

armaments expenditures increased notably not

15 of the BOA Act that opinions for legal or

only as general account expenditures but also as

administrative revisions that are found to be

expenditures under the Special Account fornecessary were to be presented along with theEmergency Armaments Expenditures during theannual audit report to the Emperor for each fiscal

Sino-Japanese War and the Russo-Japanese War.

year. Opinions for revisions based on this wereThus, armaments expenditures came to havepresented for 16 matters during the Meiji era

a large weight as audit subject matters. However,since the time of presentation of the audit results

since there were legal provisions that excluded

for FY1887 in July 1891. The presented opinions

goods prepared in advance for dispatch of troops

covered a wide range of topics includingfrom audit subject matters and there was also theamendment or abolition of laws or regulations,

Military Secret Protection Act, audit of the Army

the budgetofand the Navy was under severe restrictions (forsupplementary construction works (see later

the audit results, see later discussion (page 121)).

discussion (page 131)).

(1) Exclusion of goods prepared in advance fordispatch of troops from audit

system,andimplementation

After this, an opinion for revision was
116Section 2 Operation of Audit Activities

Around that time, the Regulations on

In August 1890 when the BOA Act wasenacted, the Act No. 70 provided that goods

Accounting

prepared in advance for dispatch of troops of the(Imperial Ordinance No. 64) were established inArmy and the Navy were to be put under the

March 1890 and the Regulations on Accounting

responsibility of the Minister of the Army andofthe Minister of the Navy, and not to be subjected

Ordinance No. 22) were established in March

to application of the BOA Act. For the purpose

1891, but there was a large difference betweenof preventing leakage of military secrets, goods

the Army and the Navy in the scope andprepared in advance for dispatch of troops weretreatment of military equipment.

Army

of

Naval

Personnel

Personnel

Equipment

Equipment( Imperial

excluded from BOA's audit subject matters.

As for the Navy, the abovementioned

However, a large gap occurred between the Army

Regulations stipulated 10 categories of military

and the Navy in operating this system. The Armyequipment, including weapons, and provided that

gradually expanded the scope of goods that were

their accounting was subject to application of the

excluded from audit subject matters, based on

Regulations on Accounting of Goods Owned bythis law.

the State, similar to general goods of the

Audit was thus substantially restricted due togovernment, but among the military equipment,

exclusion of goods prepared in advance forweapons, confidential books, military educational

dispatch of troops from audit. However, thebooks, and hydrographic charts and publications

Genroin, which had received the bill of this law(four item categories) were to be only describedbased on a request for deliberation made by thein prices in the submission of accounts to BOA,

Minister of the Army and the Minister of theand evidence of their quantities was to be

Navy in July 8, 1890, before its enactment,

provided by means of written guarantee by

opposed the bill, stating that the establishment ofinspectors. In other words, the Navy had beena special law like it would undermine the spirit ofgiven a privilege by law to exclude goods

enactment of the BOA Act, because such goods

prepared in advance for dispatch of troops fromwould also include those that would be used in

audit, but it did not exclude those goods innormal times in the future and this could cause

practice.

the BOA Act to eventually lose its effect on the

However, the Regulations on Accounting of

entire Army and Navy, and presented an address

Army Personnel Equipment classified military

to that effect to the Emperor on July 23.

equipment into goods prepared in advance for

Nevertheless, on August 14, the Cabinet

dispatch of troops and conventional munitions,presented an address against the Genroin's

and stipulated 10 categories of conventional

opposition to the bill, stating that it is natural tomunitions, including weapons, ammunitions, andrequire special handling of goods prepared intheir materials, horses, supplies for clerical work

advancein the field, and food and clothes for war. The

for

dispatchoftroopsfromtheviewpoint of military strategy, and it should not

Regulations

be discussed based on general rules, and thisconventional munitions was subject to application

promptedof the Regulations on Accounting of Goods

thepromulgation

of

the

providedthat

accountingof

Owned by the State, but the items and quantities

abovementioned Act.
117

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)of goods prepared in advance for dispatch ofin 1894, measures to prevent leakage of military

troops were to be decided by the Minister of thesecrets were strengthened. Both the Army and the

Army after consultation with the Chief of Army

Navy issued ministerial orders and expanded theGeneral Staff Office and gaining an Imperial

scope of matters that were prohibited from being

decision, and the methods, etc. of storage, receipt,

publishedissue, and audit were to be decided by theOrdinance (Imperial Ordinance No. 75 of 1887)

Minister of the Army.

to cover military matters. Then, in July 1899, theinarticles under

the Newspaper

The Regulations alone suggest a large

Military Secret Protection Act was enacted, anddifference between the Army and the Navy.

audit of armaments expenditures was placed

Looking at their actual practice, the Army was

under various restrictions.

required to receive an Imperial decision on the
Subsection 8

items and quantities of goods prepared inadvance for dispatch of troops, but it failed to do

Audit of emergency armaments
expenditures

so. Moreover, the Ministry of the Army and

Audit of emergency armaments expenditures

some other officials established the Regulations
on the Handling of Munitions in February 1911.

(1) Emergency armaments expenditures of the
Sino-Japanese War

In the Regulations, they included most of the

When emergency armaments expenditures ofmajor goods in the goods prepared in advance for

the Sino-Japanese War began to be spent, BOA

dispatch of troops, stating that they are for war

specially put in place members for audit ofuse, and excluded those goods from BOA's audit

emergency armaments expenditures pursuant tosubject matters.

Article 2 of the Rules on the Affairs of BOA, in

Subsequently, BOA resolved "Revision oforder to audit the final accounts of those

the Method of Treatment of Goods Prepared in

expenditures. As personnel to audit emergency

Advance for Dispatch of Troops" at a Generalarmaments expenditures, 35 Staff members were

Meeting in July 1925, and sent an Inquiry Letter

additionally appointed on a temporary basis based

to the Prime Minister. The gist of the letter was

on Imperial Ordinance No. 59 of May 1895, andthat

necessarily

a framework of one Director General, two

incompatible with securing military secrets, if the

Directors, three Assistant Directors, 35 Staff

audit method was appropriately considered, andmembers, and 10 non-regular officials was set upthat the law of 1890 which excluded goods

to engage in the audit.

BOA's

audit

was

not

prepared in advance for dispatch of troops from

Examination of the statements of accounts

the audit should be abolished and the measureand documentary evidence, and drafting ofshould merely be to establish exceptions to how

examination documents and Inquiry Letters, etc.

theirquantities

documentary

shouldevidencebepresented

inwere carried out according to the generalandstatementsofprocedures

forhandling

affairs,but

theaccounts, or similar. However, no reply could be

examination documents, Inquiry Letters, etc. toobtained from the Prime Minister.

be sent externally all had a seal of confidentiality(2) Military Secret Protection Act

applied, and were handled as confidential letters.
This measure was taken in response to an

Ahead of the start of the Sino-Japanese War
118

Section 2 Operation of Audit Activities

indication from the Army and Navy authorities

When auditing the emergency armamentsthat "the final accounts concerning this case need

expenditures, BOA devoted every effort toto be audited by keeping all matters, such as thesupervising wartime accounting which was prone

wartime formation, military operation plans, andto wasteful spending and mismanagement andlocationsstrictlywhich could easily become fraudulent andconfidential." After consultation with the Army

improper by, for example, making requests forand the Navy, BOA audited matters that needed

improvements to the authorities as promptly as

to be kept as military secrets in strict confidence,possible for any matters that were found to be

and also treated the documents dispatched andfrauds (for the audit results, see later discussion

accepted as confidential. In addition, since the(page 129)).

final

of

attackaccounts

andofdefense,emergency

armaments◆BOA under the
Inajiro TAJIRI◆

expenditures were to be confirmed when the war
had ended, the annual audit reports and annual
auditreports

totheEmperoron

these

the final accounts were finalized, and to bereferred to a General Meeting when the war had
ended (for the audit results see later discussion(page 128)).
(2) Emergency armaments expenditures of the
Russo-Japanese War
finalaccountsoftheemergency

armaments expenditures of the Russo-Japanese
War amounted to annual revenue of over
1,721.21 million yen and annual expenditure ofover 1,508.47 million yen, reaching more than
seven

times

the

emergency

system:On June 5, 1901, Inajiro TAJIRI, theDirector-General of the Ministry of Finance, wasappointed as the President of BOA.
President TAJIRI was a former feudal
retainer of the Satsuma Domain, born in June
1850. He stayed in the United States for eight
years. He returned to Japan after studying
economics and finance at Yale University. He
was appointed as Shoshokikan of the Ministry of
Finance in January 1880, and subsequently served
the posts of the Directors General of various
Bureaus of the Ministry. In December 1890, he
was selected as a member of the House of Peers
by Imperial nomination, and assumed the posts of
the Vice-Minister of Finance and the DirectorGeneral of the Ministry of Finance. During thisperiod, he also strove to educate personnel byparticipating in the foundation of Senshu College(later Senshu University), and also giving lectureson economics and finance at the Imperial
University continuously from 1881.
TAJIRI held the office of the President of
BOA for a very long period of 16 years and eightmonths, assuming great responsibility under the
fiscal conditions that went through dramaticchanges due to the multiple wars, until he retiredin February 1918. While he was in office, heenhanced the implementation of field audits andpromoted further rationalization of in-officeaudits by streamlining and consolidating rules on
the submission of accounts, as President of BOA.
In addition, he left many anecdotes while inexpenditures were to be stored in the vault until

The

constitutionalarmaments

expenditures of the Sino-Japanese War. Morethan 7,700 books of statements of accounts andmore than 9.23 million copies of documentary
evidence were submitted to BOA. To cater for
the increased audit work, 30 Staff members wereadditionally appointed on a temporary basis under
Imperial Ordinance No. 61 of March 1907, andsome non-regular officials were also hired on atemporary basis, but it was not easy to implement
audits. Moreover, BOA was to conduct fieldaudits of emergency armaments expenditures inand outside Japan from November 1904 onward.
119

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

office, and on his retirement, officials who had
admired TAJIRI's personality asked sculptor
Fumio ASAKURA to make a statue of TAJIRI,
and presented it to TAJIRI.

Bust of Inajiro TAJIRI (restored in 1980)120

Section 3 Overview of Audit Results

Section 3 Overview of Audit Results
Subsection 1

Telecommunications in line with the development

Audit cases reported in theannual audit reportof railway and communication projects. Also, it
reported

1. Outline

many

cases

of

crimes,such

as

The following table shows the numbers ofembezzlement of public money, by accounting

cases of violation of the budget, laws, andofficials and the problems of fictitious payments

Imperial Ordinances reported in the annual audit

and excess or deficiency in collected tax every

reports from FY1891 to FY1911.

year as permanent issues.

Number of audit cases reported in the annual audit
report(unit: number of cases)

2. Audit of armaments expenditures

FY

Revenues

Expenditures

National
government
bonds

Public money

Government
property and
goods

Total

1891
1892
1893
1894
1895
1896
1897
1898
1899
1900
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
1911

16
19
5
7
9
5
4
3
2
14
14
13
11
23
7
21
32
25
14
9
8

62
20
30
31
19
62
91
99
151
139
103
62
55
40
23
26
76
72
37
72
68

―
―
―
―
―
―
―
―
―
―
―
―
―
2
1
―
―
―
―
―
―

―
―
―
―
―
1
―
―
―
1
―
―
1
―
―
2
―
―
―
―
―

―
―
1
―
―
―
―
―
1
2
―
―
―
―
5
3
2
6
―
1
1

78
39
36
38
28
68
95
102
154
156
117
75
67
65
36
52
110
103
51
82
77

Audit of the military was considerably
restricted by the law for excluding goods
prepared in advance for dispatch of troops fromaudit subject matters, which was enacted inAugust 1890, and the Military Secret Protection
Act (Act No. 104), which was enacted in July
1899. However, BOA focused a large proportionof its audit resources on dealing with the swollen
armaments expenditures, and as a result, it
reported a large number of audit cases on the
military. The matters reported in annual audit
reports are discussed below separately for the
Army and the Navy.
(1) Ministry of the Army
The settled amount of General Accountexpenditures

under

the

jurisdiction

of

the

Ministry of Army was about 14 million yen
every year from FY1891 to FY1893. In FY1894

BOA reported matters in violation of theand FY1895, the amount was about 10 million

budget, laws, and Imperial Ordinances in the

yen because the Special Account for Emergency

annualArmaments Expenditures of the Sino-Japanese

audit

reports

after

makingcarefulexamination in each audit phase. Throughout theWarentire Meiji era, BOA reported a large number of

implementation of military expansion projects,

cases on the military, particularly the Army,

the amount became 53.24 million yen in FY1896,

every fiscal year. Further, BOA began to reportfurther increasing to 60.14 million yen in FY

many

1897 and then marking 53.89 million yen in FY

improprietiesforprojects

under

the

1898.

jurisdiction of the Ministry of Postal and
121

was

established.

However,duetoPart 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

which was applicable only to cases where there

Major military expansion projects were

were transportation difficulties.

building and repairs required for setting up
ofHowever, the location of the construction

goods, building of gun batteries, manufacture of

was close to Asahikawa City. Also, a dedicatedweapons, and expansion of artillery arsenals.

railway directly connected to a government-

BOA audited these projects a combination of in-operated railway had already been installed, andoffice audits and field audits. As a result, it foundthe contractor was allowed to use it for the

many cases of violations of laws and regulations

construction free of charge.

additional

Divisions,

initialprocurement

and improprieties. Matters under jurisdiction of

Based on these actual circumstances, BOA

the Ministry of Army took up a large share of thecriticized the Supervisory Bureau's measure tomatters reported in the annual audit report every

have concluded a negotiated contract on thefiscal year.

grounds of

Many

of

such

matters

reportedtransportationdifficulties,

asaviolation of Article 24 of the Public Accounting

were

Act.

criticisms against construction contracts, such ascases where contracts which should have been

(FY1900; 1.914 million yen)

put to competition were actually concluded
through negotiated contract, cases where the

Implementation of construction in violation of
the purpose of the budget

budget was used for an unintended purpose, cases

The Accounting Bureau of the Ministry ofof non-compliance with the intended design, andArmy implemented construction to prepare andcases ofalso

expand the Army's military land by using thereported many cases on purchase of goods.

budget for the Boxer Uprising, but the Boxer

Notable cases were where the Army concluded a

Uprising had already ended before starting thenegotiated contract for purchasing ordinary goods

construction. The Accounting Bureau explainedby treating them as special goods.

that "although the incident appears to have

Conclusion of a negotiated contract for
construction which should have been put tocompetition

calmed down for now, the future course of the

The Supervisory Bureau of the Imperial

criticized this construction, which started after the

Guard Division concluded a negotiated contract

end of the incident and was to complete in 1902,

worth a total of over 1.91 million yen foras being improper expenditures in violation of theconstruction including the building of barracks

purpose of the budget.

defective construction.

BOA

incident

is

still

unknown,"

and

so

"the

expenditures were not improper." However, BOA

and site preparation, in order to set up a facility(FY1901; 336,000 yen)of the Seventh Division in Takasu Village,
City. The Supervisory Bureau explained that it

Purchase of goods, which should be put tocompetitive bidding, through conclusion ofnegotiated contracts

concluded a negotiated contract by applying the

The Main Clothing Depot of the Army andKamikawa County, Hokkaido, near Asahikawa

negotiated contract clause of the "Negotiatedthecontracts for Army-managed construction inpurchased over 70,000 yen of cotton thread for

Hokkaido" (Imperial Ordinance No. 38 of 1898),

sewing, both through conclusion of negotiated
122

Osaka

BranchDepot

hadrespectively

Section 3 Overview of Audit Results

such measures.

contracts. The Depots explained that they could

Expenditures by the Navy were major audit

not obtain cotton thread of the prescribed strength
thesubject matters, similar to expenditures by the

cotton thread they actually purchased was the

Army. The amount reported per case is smaller

same as general commercial thread, so thethan that of the same type of case of the Army,

Depots' measure to have purchased it as special

but the contents of the matters criticized were notgoods through negotiated contracts was not foundso different from those of the Army. Major

to be appropriate. BOA stated that it "could not

matters were as follows.

find a fact that made them unable to put the case

Improper use of budget

throughcompetitive

contract.

However,the

In FY1900, Kure Naval District diverted

measure as a violation of Article 24 of the Public

over 1.35 million yen of funds for weapons of

Accounting Act.

warships and weapons of torpedo boats, to be

to competitive bidding," andcriticized(FY1907; 75,000 yen)used for purchasing machinery for weapon

Expenditures for defective construction in
violation of the design

manufacturing plants. The machinery installed

The Accounting Bureau of the 1st Division

manufacturing cannons, etc., and the planned

implemented construction including the newamount of diversion was over 3.6 million yen in

construction of arsenals and other facilities of thetotal.

through the diversion was to be used forTokyo Army Branch Ordnance Depot. However,

The abovementioned weapon manufacturing

the construction outcome differed from theplant had already completed installation of

intended design, and inferior materials were usedpredetermined manufacturing facilities with afor the buildings, roof trusses, etc. with thebudget of over 400,000 yen, based on the naval

concrete and brick joint mortar hardly being

expansion plan. However, the Navy expanded thehardened. BOA criticized the Accounting Bureau

facilities to a scale ten times larger than the scale

for having spent the construction cost in spite ofunder the naval expansion plan by diverting thesuch substantially defective construction.

budget.
BOA criticized this matter, stating that "even(FY1909; 1.309 million yen)

if it was called diversion, it is actually no(2) Ministry of Navydifferent from setting up a specified project, so

The settled amount of General Accountexpenditures

under

the

jurisdictionofthis case is unreasonable."the

Ministry of Navy was 50.39 million yen in FY

Meanwhile, Kure Naval District diverted

1897, increasing sharply from over 20 million

funds by the same method as above also in FY

yen in FY1896. Then, the amount further

1901,

increased to 58.52 million yen in FY1898 and to

manufacturing

over 61.66 million yen in FY1899. The Navy's

manufacturing plant, and BOA once again

military

criticized the use as being unreasonable.

expansion

centeredonwarship

to

be

used

for

machinery

installing

weaponofweaponthe(FY1900 and FY1901; 3.11 million yen)construction under a ten-year plan which started
in FY1896. Along with this, the Navy also

3. Gifu earthquake disaster recovery projects

promoted establishment of land facilities used for123Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

obtaining money by fraud.

On October 28, 1891, a great earthquake hit
mainly Gifu and Aichi Prefectures, causing over

(FY1891; Ministry of Internal Affairs; 10,000

140,000yen)

completely

destroyedorburnt-out(ii) Expenditures for construction of new dikes

houses, and 7,200 deaths.

downstream

BOA reported a total of 22 cases on Gifu

from

Aza - Shikkebashi,

earthquake recovery projects in the FY1891

Dannoshima Village, Atsumi County, wereAnnual Audit Report. Seven matters caused byspent for a fictitious design. Since the terms

fiction were all cases where public and privateof contract for the construction were changed,

bodies conspired to overstate the volume of

the amount of construction should have been

construction. These included cases like thedecreased, but the initial amount was spent

following

swindled

without decreasing it. When BOA inquired

construction funds by creating a fictitious design

about this, the governor of Gifu Prefecture

and

the

"recognized that the expenditures were spent

construction as designed despite that the projectfor parts that were already successfully

was not implemented at all.

completed and did not require a repair at all,"Expenditures on fictitious facts

and filed an accusation with a public

where

pretendingorganizations
to

have

completeddikes

prosecutor of the Gifu District Court against

implemented at Kasamatsu Town, Haguri

the official in charge of construction of theCounty, were spend for a fictitious design.

section for forgery of official documents andWhen BOA conducted field audits of thisfor obtaining money by fraud, and against theconstruction, BOA found that the construction

contractor and other few people for obtaining

was a complete fiction, since the site wasmoney by fraud.

adjoined to houses and there was no room to(FY1891; Ministry of Internal Affairs; 2,000

implement the construction, and the berm wasyen)part of a site of construction that had alreadyThe government stated that it "does notbeen undertaken and completed by anotherintend to explain about criticism made against aorganization and did not need any further

local government accounting for which treasury

construction to be done. BOA stated that "thispayment has already been completed" with regard

construction had not been planned to be

to all of BOA's criticisms against Gifu earthquake

implemented from the first place, but had

recovery projects including the two cases above.

undoubtedly been intended for gaining easy

Meanwhile, when BOA audited regional

money illicitly in its disguise," and inquired

projects subsidizing civil engineering expenses

the reason therefor. Then, the governor ofthat were conducted for the Gifu earthquake andGifu Prefecture also found that the design was

other disasters that occurred each year, it foundfictitious, and filed an accusation with a public

cases

prosecutor of the Gifu District Court against

improvement works that were not recovery

the official in charge of construction of theworks. Thus, it presented an opinion on revisionsection for forgery of official documents, andin the FY1894 Annual Audit Report to theagainst the contractor and other few people for

Emperor (see page 135).

(i) Theexpendituresfor

repair

of

124

of

implementationofnon - urgent

Section 3 Overview of Audit Results

4. Diverse Improper/Unreasonable Matters of
the Imperial Railway

as well as the Joto Line and the Joban Line and

The Imperial Railway became one of the

Shibata, Saeki, Miyazaki, Hamada, and Tairalargest Auditees along with the Army and theLines. BOA criticized that it was unreasonable

Navy since the nationalization of major railways

for the Imperial Railway to have laid ballast thatnationwide which started in 1906. Also, BOA

was excessively wide for a narrow-gauge line,

reported

Improper /constructed huge tunnels and bridges, and madeUnreasonable Matters of the Imperial Railway inpreparations for a broad-gauge type by using theannual audit reports. Major matters were as

budgetfollows. First, the Imperial Railway overstated theimprovement work for the current gauge type.

diverseandnumerous

construction work of the Ganetsu, Shinjo, Boso,

for

implementing

construction

andamounts paid to the private railway companies

Shinpei GOTO, who was the President offor acquisition in line with the nationalization of

the Railway Board at the time, envisaged a needrailways. In the FY1908 Annual Audit Report,

for Japanese railways to adopt a broad-gauge

BOA criticized overstatement of 1.218 million

systemyen for Kansai Railway, 415,000 yen for Japan

improvement of the section between Tokyo

Railway, 7.601 million yen for Kyushu Railway,

Station and Shimonoseki Station, and requested aand 1.047 million yen for Sobu Railway.

total budget of 230 million yen at the 27th

in

the

future.

He

firstplannedNext, BOA criticized that the construction

session of the Imperial Diet. The planned project,

expenditures of 256,000 yen for newly building

which was to last for 13 fiscal years from 1911,

Manseibashi Station from FY1909 to FY1911

failed to be assented by the Diet.

were spent for "non-urgent construction which

However, during the budget deliberation, in

was beyond the practical level." At the time, theFebruary 1911, the Railway Board changed the

Chuo Line started at Iidabashi Station, and thedesign of the lines for which it had alreadysection between Kanda Station and Ueno Station

started construction to the broad-gauge system,of the Yamanote Line had not yet opened. Thus,and decided to conduct all major permanent

there was a scheme to newly build Tokyo station

construction

as a central station, and make it the starting

subsequently based on broad-gauge standards.

station of the Chuo Line. BOA criticized that it

The same policy was continued to be followed in

was unreasonable for the Imperial Railway tothe projects commenced in FY1912, and the area

conduct excessive construction based on anof construction was also expanded from theassumption that Manseibashi Station would be

improvement work in the section between Tokyo

the starting station of the Chuo Line, despite that

Station and Shimonoseki Station, which was theManseibashi Station was going to be a mere non-planstop station if this scheme above was put toimprovement and construction work of thepractice.

abovementioned respective lines.

initially

works

to

submitted

betocommenced

the

Diet,

to

In the FY1911 Annual Audit Report, BOA

BOA found that the outcome of thereported a case on the broad/narrow issue of therespective construction works had considerably

gauge in improvement work of the section

larger structures than those of the current gauge

between Tokyo Station and Shimonoseki Station

type and that they coincided with the broad125

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

gauge standards which the Railway Bureau had

was caused to the treasury. BOA reported thissubmitted to the Committee for Preparation formatter as follows in the annual audit report.

Conversion to Broad-Gauge Railways. Therefore,"When delivering a large amount of salt for

BOA stated that "the changes were not needed

sprinkling, it may be unavoidable to specify thefor the current gauge, so we inevitably have topercentage of volume decrease in advance by anrecognizeforappropriate method and omit the weighing

conversion to broad gauge; also, the authorities

process, but the percentage must be a value thatconcerned

improvement

best reflects the actual conditions. However, theworks were preparation for conversion to broad

Salt Bureau failed to conduct any investigation

gauge."

on it, and in addition, in July 1907, it cancelled

them

as

works

recognized

that

to
the

prepareits former order issued to Mr. OGURI and then
only ordered him to transport transferred salt.

5. Criticism of state monopoly on salt
In 1905, the Act on State Monopoly on Salt

Looking at the results of the weighing carried out(Act No. 11 of 1905) was promulgated, and thefrom then until June 1908, the depletion rate wassystem of state monopoly on salt came into

had been only slightly over 10%, so the depletion

effect. Salt was mainly transferred or imported

rate of over 16% is obviously too large.

from Taiwan and Kwantung State. There was a(Omitted) In short, BOA finds this case to becase on sale of transferred salt where BOA

unreasonable due to causing a no small loss tocriticized that the authorities concerned overstated

the treasury by trading Taiwan salt based on athe percentage

percentage of volume decrease that differs fromofvolumedecreaseduringthe actual percentage."transportation of the transferred salt, and caused a

However, in spite of such criticism, theloss to the State.
In the FY1906 Annual Audit Report, BOA

Kobe State Monopoly Branch Office repeated thereported that, upon sale of 30.5457 million kin ofsale of salt by the same method as the criticizedTaiwan salt for sprinkling by the Kobe Salt

method. Accordingly, BOA continued to criticize

Bureau, the Bureau overestimated the percentage

similar cases in the annual audit reports for FYof1907 and FY1908.

volumedecreasethat

occursduring

BOA also reported cases on sale of imported

transportation, and brought disadvantage to the

Kwantung salt, where the Kobe Branch of thetreasury.
Specifically, the Government General of

Osaka Storage Facility applied a percentage of

Taiwan that was the transferring organ had

volume decrease that failed to reflect the actual

estimated the depletion rate of salt duringconditions, and caused a loss to the treasury, intransportation to be 16%, and delivered 120 kin

the annual audit reports for FY1907 and FY1908.

of salt to supplement the depletion, while theFirst, in the import of Kwantung salt, thevolume indicated in the shipping certificate wasdepletion rate during transportation was set at 5%100 kin. Although the actual depletion rate wasin FY1905, and the salt had been delivered after

only about 10%, the Salt Bureau sold the salt

deductingbased on the volume indicated in the shipping

described in the invoice, but the depletion ratecertificate. As a result, a loss of over 50,000 yen

had been revised to over 16% in FY1906 to
126

such

volumefromthevolumeSection 3 Overview of Audit Results

government offices, and during the three days

match the rate for Taiwan salt.
Since the same type of criticisms were madeimmediately before the price rise, the volume ofagainst the Monopoly Bureau for several years,

tobacco sold by the selling government offices tothe House of Representatives issued the following

wholesale dealers considerably increased, withwarning to the government in the deliberation of

the sales amount reaching over 2.86 million yen,

the State's final accounts in FY1908: "Theat 34 locations including the Tokyo Sales Officepredetermined percentage of volume decreaseof the Monopoly Bureau. In particular, the Osakaapplied to Kwantung State salt and Taiwan salt

Sales Office and the Karasuyama Branch Plant ofcaused an enormous loss to the treasury, andthealso, considering the increase in the amount ofvolumes reaching 50% to 90% of the volumes

transferred salt as a result of streamlining saltannually sold to some dealers, and caused a loss

farms, the loss reaches an astonishingly enormous

to the treasury as a result. BOA indicated as

amount.

follows concerning this case in the annual audit

Therefore,thegovernment

shouldUtsunomiya

Manufacturing

Plant

sold

report.

promptly revise the system so that the salt is"Some sellingtraded based on the actual amount, and thereby

government

officessold

ensure a profit increase in the sound income of

tobacco even if the dealers lacked collateral, andstate-owned enterprises."

after the price rise, allowed the dealers to
supplement

thecollateral ;somespecially

6. State's loss caused by state monopoly on
tobaccoextended the treasury handling hours for allowing

With the promulgation of the Act on Statesold tobacco in an amount too large to be a sell

Monopoly of Tobacco (Act No. 14 of 1904), theoff of remaining products after receiving the

manufactureweretelegram of the preannouncement of the pricemonopolized by the State. Subsequently, staterise; and some sold tobacco to a single dealer

monopoly on tobacco came to command an

several times during a day based on collateral orimportant position in public finance. In the FY

cash procured. As extreme cases, some offices

1907 Annual Audit Report, BOA reported a casesold tobacco after the price rise by applying thewhere the authorities concerned sold a volume offormer price, pretending they were sold on the

manufactured tobacco thatexceeds the

day before the price rise; and some offices, after

appropriate supply and demand level to dealers

receiving the unofficial report of the price rise,

immediately before the tobacco price was revised,

met with wholesale dealers at the office during

and caused a loss to the State as a result.

nighttime or immediately sent a telegraph to

and

sale

of

tobaccofar

dealers to provide collateral or pay cash; someSpecifically, on December 25, 1907, thedealers informing that the office should sell

Monopoly Bureau preannounced revision of thetobacco to them, and encouraged dealers to buy

priceselling

tobacco (omitted). BOA finds this case to be

government offices, and revised the price threeunreasonable in selling tobacco far beyond thedays later on December 28. However, theappropriate supply and demand level upon theinformal decision of the price rise was disclosed

price rise, and causing a no small loss to theto wholesale dealers by officials of the sellingtreasury."ofmanufactured

tobaccoto127Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

the

BOA criticized this matter, stating that "thisgovernment explained that "there are in fact somecase is unreasonable in that excise tax on articles

offices that sold a somewhat excessive amount of

which should be taxed based on the actuallytobacco, being unable to refuse such request bytradedwholesale dealers." However, the House of Peers

estimation and applying a standard rate that does

resolved that "it was an unreasonable measure

not conform to the actual conditions." The

whereby offices sold an excessive amount ofauthorities concerned explained that it was not an

tobacco upon its price rise and caused no small"unreasonable treatment," arguing that it was

loss to the treasury."

impossible

In

response

to

BOA's

criticism,

volumetowascollected

distinguish

the

by

way

of

manufactured

volume of each category of raw sugar usage.
However, the House of Representatives made a

7. Audit of sugar excise tax

resolution of warning against the government.

The Sugar Excise Tax Act (Act No. 13 of
1901) was promulgated in 1901. However, BOA

The sugar excise tax should be taxed based

reported in the FY1910 Annual Audit Report thaton the actual volume of sugar received by

the taxation method of sugar excise tax was

category of sugar at the point of receiving sugar

inappropriate, and it caused disadvantage to thefrom the manufacturing plant, based on theState. It reported a similar matter also in the FY

abovementioned provisions of the Sugar Excise

1911 Annual Audit Report.

Tax Act. Thus, the taxation method which
Kokura,estimated the manufactured sugar volume based

Kanagawa, and Kobe Tax Office collected sugaron the volume of raw sugar used and ignored theexcise tax of over 6.24 million yen from Dai-actualNippon Sugar Manufacturing Co., Ltd. and otherunreasonable measure in violation of laws andtwo companies in FY1910. At the time, sugar

regulations. Not only that, the application of

excise tax was collected based on Article 4 of theuniform manufactured sugar standard rate to

Sugar Excise Tax Act which provided "Excise

manufacturing plants caused imbalance in the tax

tax shall be collected when receiving sugar,

burden, given that the product yield rate differs

molasses, or sugar solution from a manufacturing

by product category, and ran against the purport

plant, customs, or bonded warehouse." However,of product taxation.

The

Kameido,Tamatsukuri,

volumeoftaxable

sugar

was

an

the tax offices above had calculated the volumeof taxable sugar not based on the actually tradedvolume, but based on the volume obtained by

8. Emergency armaments expenditures of the
Sino-Japanese War

multiplying the volume of raw sugar used at the

The Sino-Japanese War, which started in

manufacturing plant by a specific standard rate.

July 1894, was a great war on which modern

Also, a separate standard rate was applied toJapan staked its fate. The war expenditures were

exported sugar. As a result, the amount of tax

separated from the general account and werecollected was more than 430,000 yen less thantreated under the Special Account for Emergency

the proper tax amount calculated based on the

Armaments Expenditures which regarded thesugar manufacture results of the abovementioned

period until the end of the war as one fiscal year,

manufacturers, and caused a loss to the State.

established by Act No. 24 of October 23, 1894.
128

Section 3 Overview of Audit Results

Emergency

purpose which had no direct relationship to theArmaments Expenditures of the Sino-JapaneseSino-Japanese War, and that they violated Article

War was closed on March 31, 1896 based on the

12

Act on the Special Account for Emergency

government explained that the construction was

Armaments Expenditures (Act No. 10 of 1896).

implemented in light that a peace agreement

The settled amounts reached over 225.23 million

between Japan and Qing had yet to be put into

yen in revenues and 200.47 million yen in

effect at the time, and therefore the expenditures

expenditures. The expenditures that were still

were directly related to the Sino-Japanese War.

unsettled at the time of the account was closed

However, the House of Representatives resolved

were to be accounted by transferring the budgetthat the expenditures were "in violation of Article

to the general account. BOA referred the final

12 of the Public Accounting Act."

The

Special

Account

for

of

the

PublicAccounting

Act.

The

(Ministry of Army; 10,000 yen)audit report on the final accounts to the Cabineton November 13, 1897. It reported ten matters ofcriticism in the audit report, all of which were

9. Emergency armaments expenditures of the
Russo-Japanese War

matters of the Ministry of Army as follows.

In February 1904, the Russo-Japanese War

Sale of goods at a considerably low priceOne casebroke

1,374 yen

Emergency

Inappropriate use of the budget
Two casestheSpecialArmaments

Account

Expenditures

for
was

measure, expenditures needed for the war were to
be accounted by regarding the period until the155,799 yen

end of the war as one fiscal year, similar to the

Expenditures on fictitious facts
Two cases

andestablished by Act No. 2 of March 1904. By this

17,881 yen

Use of the budget for an unintended purpose
Five cases

out,case of the Sino-Japanese War.

565 yen

Dominant matters were criticisms against use

The settled amounts of the emergencyof the budget for an unintended purpose. The

armaments expenditures of the Russo-Japanese

Ministry of Army explained that the cases where

War came to over 1,721.21 million yen in"not unreasonable" or "not in violation," but therevenues and over 1,508.47 million yen in

House of Representatives made resolutions such

expenditures, reaching seven times the amounts

as "a violation of Article 12 of the Publicof the emergency armaments expenditures of the

Accounting Act." The following is one example.

Sino-Japanese War. The Special Account for

Inappropriate use of the budget

Emergency

Armaments Expenditures oftheThe construction for installing a water

Russo-Japanese War was closed on March 31,

supply system for military use, which was1907 based on the Act on Closing of the Special

conducted in Hiroshima upon the end of the war,Accounts for Extraordinary Incidents of the Army

was a huge construction project that needed

andseveral years to complete, and its progress was

expenditures that remained unpaid by March 31

only 1/60 of what was planned. Thus, BOA

were treated by transferring the amount of budget

criticized

expenditures

for the unsettled expenditures to the general

constituted a use of budget for an unintended

account. BOA sent the final audit report on the

that

the

construction

129

Navy

(Act

No.

52

of

1906).

Any

Part 2

Chapter 2

emergency

BOA under the Former Constitution in the Meiji Era (1889〜1912)

armaments

expenditures

to

the

Failure to provide trustworthy specifications
and improper calculation of material prices in
implementing construction

Cabinet on March 2, 1908. It reported thefollowing matters in the audit report:

The Department of Financial Management

Prompt use of revenues for unintended spending

Supervision of the Army paid expenditures ofor for private consumption
146 yenover 290,000 yen for newly building facilities

Spending of the budget for an unintended

including a gun manufacturing plant of the Tokyo

purposeArtillery Arsenal and constructing an electricThree cases

Eight cases 491,057 yen

railway line between Itabashi Station and Oji

Failure to provide trustworthy specifications andStation. When BOA, in a field audit, compared

improperthe actually used quantities and the quantities

calculationofmaterial

pricesinindicated in the specifications for the construction

implementing construction
291,103 yen

expenditures of the main materials―bricks andLoss caused to the treasury through formation of

concrete―for the construction of a rolling plantan embankment unnecessary for implementationand other facilities, the quantities indicated in theconstruction

specifications were larger than the quantities

One case

16,118 yen

actually used; specifically, more than 168,000

Payment of the contract amount for defective

units larger for bricks and more than about 630

construction

m3 larger for concrete. Also, the quantity of stone

One case

One case

21,430 yen

materials for both wings of bridge abutments

construction

indicated in the specifications was larger by anwhich rendered the construction expenditures

amount corresponding to an area of 228 m2 thanuseless

the quantity actually used. The prices of stone

Inappropriate

implementationofTwo cases

34,796 yenmaterials for bridges and tunnels, etc. estimatedDisadvantage caused to the treasury throughin the specifications were also considerablypurchase of inappropriate buildings, etc.

higherTwo cases

22,090 yen

the prices

of

stone

materials

purchased by other government offices. In the

Expenditures on fictitious facts
33 casesthanannual audit report, BOA criticized that "in this
92,611 yencase, the authorities concerned failed to provide

Loss caused to the treasury by theft of antrustworthy

enormous amount of public money due toconstruction and made improper calculation of

inappropriate supervision on accounting

the material prices, so the expenditures were

One case

303,675 yen

inimplementing

unreasonable."

Other unreasonable matters
Three cases

specificationsIn

response

to

BOA's

indication,

the34,601 yen

government explained that this was because the

BOA reported 46 cases on the Ministry of

construction "needed to be implemented mostArmy and nine cases on the Ministry of Navy.

urgently during war" so "the expenditures were

The main matters were as follows.

not unreasonable." However, the House of Peers
resolved that "the explanation given by the130Section 3 Overview of Audit Results

government is not proper," and the House of

1. Opinion for legal or administrative revisions

Representatives resolved that the expenditures

Article 15 of the BOA Act provided that
BOA was to present an opinion for any legal orwere "unreasonable."(Ministry of Army; 291,000 yen)administrative revisions that were found to be

Loss caused to the treasury by theft of anenormous amount of public money due toinappropriate supervision on accounting

required together with the annual audit report to

In expenditures by the Accounting Bureau offor FY1887 on July 11, 1891, BOA had

the Ministry of Navy, a naval staff paymaster

presented opinions for revisions on 16 matters

who was a paymaster for ship construction andduring the Meiji era and on one matter during theordnance fabrication dispatched to the United

Taisho era based on this provision.

Kingdom illicitly acquired "cash he withdrew byDeadline for closing adjustments
revenue and expenditure accounts

the Emperor for each fiscal year. Since thepresentation of the audit results to the Emperor

issuing withdrawal tickets for which he was the

of

the

creditor or by withdrawal tickets for which theDuring the 12 fiscal years from FY1875 toLondon Branch of The Yokohama Specie Bank,FY1886, preparation of revenue and expenditure

Limited was the creditor, or cash he kept byaccounts were delayed each fiscal year, taking

himself." BOA criticized that this practice wasfour years in average after the end of the relevant"inappropriate because supervision on accounting

fiscal year to be announced to the public. The

was inappropriate, and an enormous amount of

delay

public money was stolen and privately consumed

expenditure accounts has been caused by theover three consecutive fiscal years, causing adelay in settlement of accounts by the respective

considerably loss to the treasury."

Ministries. However, the system was revised toofpreparation

of

the

revenueandsubmit the revenue and expenditure accounts for(Ministry of Navy; 303,000 yen)

FY1891 onward to the Imperial Diet in the fiscal
Annual audit report to theEmperoryear after next. Thus, the Ministry of Finance and

BOA became an organ under the direct

adjustments of the revenue and expenditurecontrol of the Emperor with the establishment ofaccounts for FY1887 onward by the prescribed

the constitutional system, and Article 15 of thedeadline.

Subsection 2other Ministries need to complete the closing(FY1887)

BOA Act provided that BOA is to present theannual audit report to the Emperor for each fiscal

Official residences

year. The name of the document to be presented

Ministries

spend

huge

amountsofwas stipulated as the "annual audit report to theexpenditures for building official residences every

Emperor (Komuseisekisho)" in the Rules on thefiscal year. However, a lack of uniform building

Affairs of the BOA enacted in September 1889,

standards for official residences and carelessness

but the name was revised to the "annual auditof responsible officials have caused considerable

report to the Emperor (Kensaseisekisho)" with theimbalance in the building expenditures among

amendment of the Rules in December 1899.

Ministries. The same also applies to official
residences131ofprefectural

governments.

InPart 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

addition, there is a need to revise the current

the company's gross income was less than 8%,

system wherein the expenditures for repairing

the amount of shortfall was supplemented. The

official residences, etc. are paid as administrative

Regulations on Accounting of Japan Railway

expenditures. Accordingly, it is necessary toCompany that went into effect in November 1892

amend the Regulations on Renting Out Official

defined operating expenses as various expenses ofResidences enacted in 1876, and strictly regulate

operation and expenses required for maintaining

the amounts of expenditures on official residence

and preserving railway property. However, withstructures, consumable goods, etc. based on thethe amendment of the Regulations in November

required moderateness, as well as setting up

1895,

official residence expenditures in the budget andrecovery and expenses for railway improvement

separate the repair expenditures, etc. from thewere also included in operating expenses, and thegeneral administrative expenditures.

amount of profit supplementation was increased

extraordinary

expensesfor

disaster(FY1887)

as a result. However, the Regulations need to be

Opinion on managing ship construction
projects and arsenals of the Navy under
special accounts

amended so as to exclude expenses for disaster

Ship construction projects of the Navy face

(FY1895)

inconvenience in accounting because, under the
Ship

Opinion on revision of preparation of budget
for project expenses

Construction Materials at Naval Bases (Act No.

Project expenses of Ministries are mostly

19 of 1890), only the capital for storing materials

included in the budget for continued expenses,

is to be managed under a special account andand the remained amount of budget of each fiscal

construction projects are to be managed under theyear may be carried forward and used in thegeneral account. Meanwhile, artillery arsenals offollowing fiscal year. However, the amount of

the Army, which are projects of the same nature,budget for project expenses that was carried

are to be managed under a special account, which

forward came to 57% of the total budget in FY

is reasonable for effectively managing property.

1896 and 43% in FY1897. This was attributable

The projects of ship construction and arsenals of

to inappropriate budget preparation. In budget

the Navy should also be managed under special

preparation, the government need to investigate

accounts.

the

Act

on

Accounting

of

Funds

for

recovery and expenses for improvement from theoperating expenses.

project's

work

volume

that

can

be

(FY1888)

implemented within the fiscal year or take other

Opinion on revision of subsidies for regional
civil engineering expenditures (see page 135)

measures to eliminate excessive budget requests
from Ministries and prevent adverse effects on
public finance.

(FY1894)(FY1896)

Opinion on amendment of the Regulations on
Accounting of Japan Railway Co., Ltd.

Opinion on revision of budget items

Profit supplementation to Japan Railway

The current budget items have overly broadCo., Ltd. was a system wherein if the net profit

title and item categories, for example including

calculated by deducting operating expenses fromexpenditures of different administrative work or132

Section 3 Overview of Audit ResultsThe

different types of expenditures under a single

Special

Account

forMonetary

item, and this has caused inconveniences inConsolidation Funds was established in 1897 inadministration and fiscal supervision. Therefore,

order to convert and consolidate one yen silver

it is necessary to make revisions including thecoins with the amendment of the Coinage Act.

following to the budget items: unifying the

The Special Account held funds of over 1.38

contents of items common to government offices;million yen as of the end of 1900, and the funds

separating items for expenditures having thewere further increased by transferring profits

nature of salaries and expenditures of goods;

gained through operations of the Mint Bureau.

categorizing different types of administrative

However, disposal of yen silver coins has alreadywork expenditures by title; setting up separate

completed, and there is found to be no need totitles for armaments expenditures of the Armykeep an enormous amount of funds as a special

and Navy by organization; dividing expenditures

account. Accordingly, the special account aboveof different nature or expenditures that cover aneeds to be abolished and its funds need to be

wide range of subjects under a single item into

included in the treasury.

several items; setting up items for expenditures of(FY1899)

projects for new construction by project location;
project

Consolidation of revenues stamps and postal
stampsexpenses and administrative expenses; setting up

The abolition of the respective stamps forseparating

project

expenditures

into

titles for a wide-area project by area section; andsecurities,

separating

medicines, and official registrations and theirworking

expenses

into

operatingtobacco,lawsuits,

over-the-counterconsolidation into revenues stamps in July 1898

expenses and capital under different items.
(FY1897)

brought great benefits to both the public andOpinion on enactment of the Government
Property Management Act

private sectors. However, postal stamps also need

In 1890, the Regulations on the Management

single kind of stamps in order to increase

to be consolidated with revenues stamps into a
convenience in administration and sales affairs.

of Government Properties were established by(FY1899)

Imperial Ordinance, but the Regulations are
extremely

deficient,lacking

uniformity

inEstablishment of a central building
repairs bureau

property management and having no provisions

andon the method of supervision. The current

New construction of buildings has increased

Regulations do not provide for an organ thatin line with an increase in national affairs.

collectively manages government property either.

However, since each Ministry is conducting such

The government needs to promptly complete

construction individually, there is imbalancenecessary investigations and make full use ofamong Ministries; some are conducting non-legislative procedures to achieve order in theurgentState's finance and accounting.

facilities are incomplete, and some have adopted
different(FY1898)

construction
structures

while
for

the

urgentlysameneededtype

ofbuildings. Also, each Ministry has its own

Abolition of the Act on the Special Accountfor Monetary Consolidation Funds

technical officials, and this is expanding costs.
133

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Thus, it is necessary to establish a central

ensure that the budget preparation reflects thebuilding and repairs bureau, and unify theactual conditions by referring to the final

construction facilities and building management

accounts of past fiscal years as a standard andwork, thereby saving costs.

also establishing estimation standards by Imperial
Ordinance.

(FY1899)(FY1900)

Revision of budget preparation for continued
expenses
The budget for continued expenses is to be

Opinion on amendment of the Regulations on
Official Residences

prepared by planning their total amount, term,

The rents for official residences are collected

and annual amount for each fiscal year, andbased on the Regulations on Lease of Official

seeking the consent of the Imperial Diet.

Residences (established in 1876), but they are

However, today when economic circumstances

often calculated inappropriately and set at low

change rapidly, it is difficult to decide the annual

rates. Also, after establishing internal regulations

amounts for several to more than ten years, andon lease of official residences in 1888, theimplement the project according to the initial

number of rent-free official residences increased

plan. In addition, while continued expenses aresubstantially, but theylargely financed by national government bonds,

handled. Since such detriment has been caused bytheir annual amounts for several years are clearlya lack of relevant legislations, it is necessary toindicated in the budget, and this represents the

stipulate the Regulations on Official Residences

amount of bonds to be offered in the future, so it

by Imperial Ordinance, limit the lease of official

could cause a fiscal disadvantage. Thus, theresidences to cases where the lease is necessary

future budget for continued expenses needs to be

for the officials to perform their duties, and unify

revised so as to only decide the total amount andthe operation of official residences.

are not

consistently(FY1903)

term initially and to decide the annual amounts as

Disposal of unnecessary government land

appropriate by the budget of each fiscal year

Government

according to the fiscal conditions.

land

that

is

managedbyprefectures exceeds 200,000 parcels and more

(FY1899)

than 200 million tsubo (more than about 660

Opinion on budget preparation
Budget should be calculated based on an

million m2), and management of such land has

accurate basis and should not differ substantiallybecome extremely difficult. Therefore, it isfrom the final accounts. However, looking at thenecessary to remove trouble in management, cut

final accounts of each fiscal year by item, morecosts, and promote effective use of land by, forthan 30% of the budget are unused, and more

example, selling government land that is notthan 50% of the budget are carried forward. The

currently put to official use or is not likely to becauses are that government offices have followed

required for official use in the future.

the budget of the previous fiscal year without(FY1907)

looking back on the past final accounts inEstablishment, revision,
special accounts

preparing the budget, or that their budget
adjustments lack consistency. It is necessary toandabolitionofThe special account for the Tokyo and134Section 3 Overview of Audit Results

Osaka Artillery Arsenals of the Army excludes

purpose of subsidizing regional civil engineering

personnel expenses and administrative expenses

expenditures is to provide subsidy only if a local

from its calculation of profits and losses, treating

publicthem as payments under the general account.

engineering works by its own funds. Therefore,

However, this treatment runs contrary to thethe government must not grant excessive amounts

purpose of establishing the special account, andof subsidies and thereby allow the affected areas

all expenditures should be covered by the special

to take advantage of the subsidies and conduct

account. As for arsenals of the Navy, only funds

non-urgent works to enjoy unfair profits." Onfor materials are managed under the special

such basis, it presented an opinion on revision,account. It is necessary to abolish the Act onsuggesting

Accounting of Funds for Naval Arsenals anddesigned accurately, (ii) subsidies should beestablish a special account for work at ship

granted for individual fiscal years over which theconstruction and ordnance fabrication arsenals.

construction work is implemented, and (iii)

entitysupervision(FY1907)encouraged.
2. Opinion on revision of subsidies for regional
civil engineering expenditures
Projects

subsidizing

civil

engineering

expenses were conducted for the earthquake that
hit mainly Gifu and Aichi Prefectures in 1891
and other disasters that occurred each year. As in
the case of the earlier-mentioned case of Gifu
earthquake recovery projects reported in theannual audit report, various problems were
presented about implementation of constructions.
In disaster recovery constructions at thetime,

improvement

works

were

conducted

successively by taking advantage of subsidized
projects, and defective construction and fictitious
construction were also found endlessly.
The actual conditions of such projects weredifficult to find though in-office audit based on
documents, but BOA presented an address
requesting

improvement

of

the

projectmanagement based on the results of field audits
conducted for disaster recovery works that had
been conducted since the Gifu earthquake.
In the FY1894 Annual Audit Report to theEmperor, BOA stated that "The fundamental
135

is

that

on

unable(i)tofinanceconstruction

construction

shouldshould

civil

be

be

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

Section 4
Subsection 1

Discussions on BOA's Authority

Problems in Application
Article 14 of the BOA Act

The wording "verification and confirmation"ofunder the Constitution and the BOA Act wasused, following the example of the Constitution

The Public Accounting Act enacted in 1889

of Prussia as discussed earlier. However, thewas applied for the first time to the final accounts

article-by-article commentary made during thefor FY1890. The final accounts for that fiscal

deliberation on the Constitution at the Sumitsuin

year were passed on from the Cabinet to BOA on

defined verification and confirmation as a process

May 16, 1893, but final accounts and annual

whereby BOA is to "audit the statement ofaudit reports began to be submitted to theoverall final accounts sent by the Minister ofImperial Diet starting from those for FY1891.

Finance, compare the cumulative figures of the

BOA was to exercise its authority under the newstatement of final accounts and the figures ofsystem, but before the Public Accounting Act

individual

came into effect, it became clear that there were

expenditures that were reported by the respective

problems in application of some authority clauses

accounting officials and approved by BOA, andof the BOA Act.

determine and attest their correctness."accountingofrevenuesandAs a result of considering the meaning of
1. Verification and confirmation of the final
accounts

verification and confirmation, BOA established

Based on Article 72 of the Constitution of

Revenue and Expenditure Accounts in March

the Empire of Japan, which provided that "The1892, defined the administrative processing of

final account of the expenditure and revenue ofverification and confirmation as "adjudication of

the State shall be verified and confirmed by thethe amounts in the statements of revenue and

Board of Audit, and it shall be submitted by the

expenditure accounts," and formulated guidelines

Government to the Imperial Diet, together withon the administrative processing thereof. In thisthe report of the Board of Audit", it wasmanner, BOA came to confirm whether the

stipulated in Article 14 of the BOA Act thatfigures of the overall final accounts sent by the

BOA shall "verify and confirm the final account"Cabinet,and set down the results in the annual audit

expenditure accounts of the respective Ministries,

report to be prepared at the same time.

and the statements of final accounts of thethe Regulations on Adjudication of Statements of

thestatementsofrevenueandAccordingly, BOA indicated in the annual

respective special accounts tally with the figuresaudit report for each fiscal year that it "verifiedof the respective statements of accounts submitted

and confirmed" the final accounts. In Japan, theby Accounting Officers and audited by BOA

final accounts became fixed ("kakutei") when athrough cross-checking them.

Cabinet decision was made, and "confirmation"("kakutei") under the Constitution and the BOA

2. Scope of violations of laws and regulations
to be reported in annual audit reports

Act was a process to confirm such fixed final

Article 14 of the BOA Act stipulated theaccounts.
136

Section 4 Discussions on BOA's Authority

scope of matters to be reported as improper/

regulations for enforcement of laws or Imperial

unreasonable

Ordinances."

matterstobe"whethertheassessment and collection of revenue, the use of

In other words, the matters in violation of

expenditure, and acquisition, sale, assignment,laws and regulations to be reported in annual

and use of government property and goods

audit reports were limited to cases where thecomply with the rules on the budget or laws andmatter conflicts with express provisions of a law

Imperial Ordinances" (item (ii)), providing thator Imperial Ordinance. The reason was thatthe matters to be reported in annual audit reports

Cabinet Ordinances, Ministerial Ordinances, etc.

to be those in violation of the budget, laws, orwere all administrative detailed regulations that

Imperial Ordinances.

were stipulated within the scope of laws andImperial

In Japan, however, rules on execution of

Ordinances

throughdelegationofadministration were usually stipulated by Imperial

authority, and it was considered to be improper toOrdinances, and matters on specific operation ofreport matters in violation of such detailed

administration were often provided by Cabinet

regulations in annual audit reports and madeOrdinances andthem subject to deliberation under the Diet's right

Ministerial

Ordinances,etc.

of fiscal supervision.

established by the executive branch. The same
appliedtooperationofthefinanceandSubsection 2

accounting system. Facing such manner of system
operation, BOA needed to decide the scope ofviolations to be reported in annual audit report.

Argument with the Ministry of
Postal and Telecommunications
over audit mandate

BOA made in-depth consideration on whether the

BOA that was newly established under thescope of "laws and Imperial Ordinances" referredconstitutional system successively set up various

to in Article 14 of the BOA Act should be

systems for exercising its authority. For field

limitedexpress

audits, it established Directions on Field Audits

provisions in law or Imperial Ordinance orand the Requirements for Field Audits inwhether it should also cover Cabinet Ordinances

February 1891, and conducted a field audit of theand Ministerial Ordinances that are established by

Ministry of Postal and Telecommunications based

the executive branch through delegation by lawson the new system in April 1891.

to

cases

where

there

are

and Imperial Ordinances. As a result of the

As a result of this audit, improprieties ofconsideration, it decided at the General Meeting

goods procurement were reported in the annual

on July 28, 1893 that "The laws and Imperial

audit

Ordinances referred to in Article 14, paragraphSpecifically, in executing the budget for FY1890,(2) of the BOA Act shall be limited to provisions

the Ministry had set upper and lower limits to thethat are expressly stipulated in a legislation that is

estimated values of contracts, and had divided

clearly categorized as a law or an Imperial

goods of an amount that should be purchased by

Ordinance in formality. Therefore, provisions

a competitive contract into smaller amounts andstipulated by Cabinet Ordinances, Ministerialpurchased them by negotiated contracts. The

Ordinances, etc. are not included in laws andMinistry

Imperial Ordinances, even if they were detailed

processing also in FY1891.
137

reports

hadfor

FY 1890

conducted

andsimilar

FY 1891.

accountingPart 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

roughly as follows.

The matters that particularly presented aproblem were the Ministry's practice to set upper

BOA has a duty under law to supervise theand lower limit prices of bidding for thegovernment's finance and accounting, and if there

estimated value of the contract in competitiveis any matter that would cause a disadvantage tobidding, and BOA's audit mandate over thisthe State, it must promptly audit the matter,matter. BOA indicated that the method of also

remove its cause, and ensure implementation ofsetting the lower limit price of bidding inappropriate finance and accounting. It is notconducting bidding is intherelevant whether the cause of such disadvantage

Regulations on Accounting, but in response, theis a violation of a law or regulation or the fact

Ministry

Telecommunications

that the measure taken by the authority concerned

explained that such practice was a matter ofis economically inappropriate. In addition, if

administrative discretion, and it was a measure

BOA's mandate is not effective on a fiscal year

for preventing poor-quality construction andthat has not ended yet, there would be no

goods. Furthermore, the Ministry argued that itmeaning in conducting in-office audits based on

was beyond BOA's authority to conduct audit ofmonthly submission of accounts. Also, BOA

administration, that BOA's audit mandate wasconducts field audits when the President of BOA

limited to confirmation of whether any violation

finds the audit to be necessary, as provided inof laws and regulations exists and it had no right

Article 19 of the BOA Act, and the timing of theto judge whether a matter implemented by theaudit is not specified.

ofPostalandviolationof

BOA compiled its opinion based on thediscretion of the government office within theTheabove reasoning against the argument made by

Ministry also insisted that BOA had no mandate

the Ministry of Postal and Telecommunications

over the finance and accounting in the current

insisting that BOA's reporting on the Ministry's

fiscal year for which settlement of accounts haspractice to set upper and lower limit prices of

not completed. On such basis, the Ministrybidding for estimated values of contracts andrefused to undergo the audit and attacked BOA in

BOA's audit of the finance and accounting in thenewspapers and other media stating that BOA's

current fiscal year were beyond BOA's authority.

measure was beyond its authority.

BOA's opinion was handed by President of BOA

scope

of

legislation

was

economical.

Nobori

Such arguments by the Ministry of Postal

WATANABE

to

Prime

Minister

Masayoshi MATSUKATA.

and Telecommunications were publicized bynewspapers, and the Minister of Postal and

BOA reported on the Ministry's practice toTelecommunications drafted a petition accusing

set upper and lower limit prices of bidding for

BOA and submitted it to the Cabinet. In BOA,

estimated values of contracts, which served as asome Directors, etc. drafted their opinion against

cause of the dispute on audit mandate, in one

the argument made by the Ministry of Postal andcase in the FY1890 Annual Audit Report, six

Telecommunications,variouscases in the FY1891 Annual Audit Report, andcountermeasures including presentation of an

two cases in the FY1892 Annual Audit Report.

address to the Emperor. BOA did not present an

In particular, BOA made a detailed report as anaddress to the Emperor, but its opinion was

improper/unreasonable matter on communication

andconsidered138Section 4 Discussions on BOA's Authority

project expenditures in the FY1891 Annual Auditat high prices in spite of such circumstances

Report. Specifically, BOA stated that the Ministry

should be regarded as tremendously improper.

of Postal and Telecommunications set upper andLooking at how the upper and lower limit

lower limit prices of bidding for the estimatedprices of bidding have been set for the estimatedvalue of the contract in conducting competitive

values of contracts, the gap between the upperbidding for purchasing nine items, including 875

and lower limit prices is extremely small, so itkan (unit of weight) of No. 12 steel wire, and did

would not be possible to naturally target a bid

not adopt a bidding that did not fall within theprice within that range."

price range, even if there was a low-price

BOA also reported similar matters in the FY

bidding, and that this method was in violation of1892 Annual Audit Report as discussed above.

the Regulations on Accounting. The purport of

The House of Peers made a resolution strongly

the annual audit report was as follows.

criticizing the government that the practice of"The fundamental reason for using thesetting upper and lower limit prices of bidding

method of competitive bidding for construction

for estimated values of contracts in conducting

contracts or for purchasing goods is to restrain acompetitive bidding was an improper measure

surge in the successful bid price and to keepthat violated the spirit of accounting laws andfairness among bid participants. Based on thisregulations, and supported BOA's view. The

objective, the Public Accounting Act has already

Ministry

stipulated

abolished this practice in FY1893 and thetheprinciples

for

conductingof

PostalandTelecommunications

argument over audit mandate was settled.

competitive bidding, while the Regulations on
Accounting have also established a system fordetermining the estimated value of the contract,

Subsection 3

and there is no room to doubt in legislativeinterpretation that the estimated value of thecontract should be the only standard value andDispute over presentation of thegraph of progress in Audit on
Emergency
Armaments
Expenditures of the Sino Japanese War to the Emperor

the single restriction to be applied.
The

Also, it is not permissible to prevent poor-

Special

Account

forEmergency

quality construction and goods by introducing a

Armaments Expenditures of the Sino-Japaneseconvenient method, because Articles 69, 70, andWar was closed in March 1896, and on March 8,

80 of the Regulations on Accounting already

1897, President of BOA Nobori WATANABE

provide for requirements including operation

presented the graph of progress in audit on

certificates and guarantee deposits, etc. foremergency armaments expenditures as of the end

ensuring the qualifications and responsibilities ofof December 1896 to the Emperor. However, abidders for the purpose of preventing suchdisputeadverse effects.

presentation, and this case even developed into an

occurred

within

BOA

over

this

issue of resolution on retirement of Director

Furthermore, auctions by government offices
tend to face the detriment of cooperation among

Generaltraders and generally involve a surge in prices.

Directors,

An act of voluntarily choosing to purchase goods

MOCHIDA, and Muneyoshi SEKI
139

Shigenari
IchijuroYASUKAWAYOSHIDA,

and

three

NaozumiPart 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

The graph of progress in audit had beenpresent the annual audit report to the Emperor for

prepared every month since December 1895 foreach fiscal year, and if it finds any matter in thethe purpose of supervising the operation of audit

report which requires a legal or administrativeofIt

revision, it may also present its opinion to theclassified the amount of expenditures approved

Emperor," and therefore it is not a violation of

by imperial decision into the amount for which

Article 10 of the BOA Act for the President ofgovernment offices have submitted evidence, theBOA to present a graph of progress in audit toaudited amount, and the unaudited amount, andthe Emperor without referring them to theshowed the processing results of the audited

General Meeting, rejecting the opposing opinion

amount, such as adjudication reported or apresented by Director General YASUKAWA andcertificate of grant of discharge issued, in thefourform of a graph.

MOCHIDA, and SEKI.

emergency

On

March

armaments

11,

three

expenditures.

days

after

Directors

KAWABATA,YOSHIDA,At the time, the Detailed Regulations onthepresentation of the graph of progress in audit,

Proceedings of

Directoreight

members were to sign the minutes of the

Directors submitted a document to the President

resolution for matters resolved at the Generalof BOA, stating that it was in violation of

Meeting so that internal views on the resolution

Articles 11 and 15 of the BOA Act to havecan be unified. However, Director General

presented audit results without the resolution of

YASUKAWA and three Directors refused to sign

the General Meeting. In response, the President

this resolution, so unification of views could notof BOA issued a reply on March 23, indicating

be achieved. On May 5, President of BOA

that it was not presentation of audit results, but

WATANABE filed a request with the Members

only presentation of a graph of progress in audit,

Meeting for resolution on retirement of Director

which was the result of supervision of BOA's

General YASUKAWA and the three Directors

operations and was under the authority of thebased on Articles 1 and 5 of the Act on

President of BOA, and that such practice had

Retirement of Members of BOA (Act No. 91 ofalready existed. The President of BOA also stated1896), and the request was approved on the same

that

legal

day. On that day, the resolution on retirement

interpretation, so it shall be referred to thewas immediately presented to the Emperor via

General Meeting so as to unify the interpretation

the Prime Minister, and the retirement wasby its resolution.

ordered on May 25.

theGeneralmatterYASUKAWA

was

an

issue

and

of

Meetings provided

that

all

On April 7, Director General Koichi HAMAAct on Retirement of Members of the Board of
Audit
Article 1 If a Member becomes incapable ofperforming the Member's duties due to physicalor psychological breakdown, the Board ofAudit may order retirement of that Member.
Article 2 The retirement shall be decided basedon a resolution by the Members Meeting.

submitted a proposal "requirement of a resolution
in presenting a graph of progress in audit to theEmperor" to the General Meeting, and on April
10, the General Meeting made a resolution that
audit achievements are not the annual audit reportto the Emperor as provided in Article 15 of the
BOA Act which reads "The Board of Audit shall140

Section 4 Discussions on BOA's Authority

Actions against BOA Members (Act No. 21 of

Article 3 (1) The Members Meeting shall bechaired by the President of the Board of Audit,
and if a request for retirement is filed against
the President of the Board of Audit, a Director
General of the Board of Audit in a senior
position shall chair the Audit Commission.
(2) If the Chair is unable to perform the
Chair's duties, a Director General of the Board
of Audit in a senior position shall perform theduties on behalf of the Chair.
Article 4 (1) The Members Meeting may not
adopt a resolution unless at least two-thirds of
its members are present.
(2) A resolution by the Members Meeting shallbe adopted by a majority vote, and in the caseof a tie, the chair shall decide on the matter.
Article 5 A request for retirement against a
Director General or Director of the Board ofAudit shall be filed by the President of theBoard of Audit, and such request against the
President of the Board of Audit shall be madeby Directors General after consultation witheach other.
Article 6 If a Member has been ordered to retire
pursuant to Article 1, the Member shall be
regarded as a person who falls under the
category of the matter set forth in Article 2 of
the Act on Governmental Pension for Officials
pursuant under said Act.

1900) was enacted.
Subsection 4

Issue of attendance of Members
at the Diet

In both Houses under the Constitution of the
Empire of Japan, the Committee on Audit
adopted a resolution of "improper, "no objection,"
etc. for a government measure after reading
BOA'sannualaudit

reportandwrittenexplanations submitted by respective Ministries
against the matters reported therein, hearing the
explanation by government delegates, and making
deliberations. BOA was not supposed to attend
the Committee on Audit. Although some written
explanations conflicted

with

BOA's

reports,

stating that the reported matters "were not
improper at all," BOA had not attended theCommittee on Audit, and the deliberation had
been made based on unilateral explanation givenby the government's side.
In light of such situation, Diet member
Masutaro TAKAGI and another Diet member

Retired Shigenari YASUKAWA was chosen

submitted a Bill Partially Amending the Act on

as a member of the House of Representatives atthe Houses of the Diet including a provision thatthe general election in August 1898, and he"Each House may request the attendance ofpresented

theBOA's Members and hear their opinions on

government in the House of Representatives at

examination of the final accounts of revenue andthe 13th session of the Imperial Diet, which

expenditure of the State" in February 1911. This

opened in December. Also, there were reports onamendment bill had been submitted by those

signs

for

members in March of the previous year but it had

impeachment of the President of BOA in thefallen through. Its contents were that the Houses

House of Representatives, and on December 20,

could request the attendance of BOA's Members

1898, President of BOA WATANABE retired

and hear their opinions on examination of thefrom office. On January 18, 1899, a "Bill on

final accounts, and the reason for submitting theDisciplinary Actions against the President andbill was as follows: "when opinions on the final

Members of BOA" was submitted in the Houseaccounts differ between the government andof Representatives, and the Act on Disciplinary

BOA, the government's side reply its ideas freely,ofan"Inquirysubmission

on

of

BOA"

a

to

proposal

141

Part 2

Chapter 2

BOA under the Former Constitution in the Meiji Era (1889〜1912)

but BOA's Members merely submit the document

negative view on attendance of BOA's Membersof the statement of revenue and expenditure

to the Diet based on the following points: (i) the

accounts. While some of BOA's Members visit

final accounts, which BOA with an independent

Diet members' houses to give an explanation, it isstatus has verified and confirmed from a fair andinsufficient to allow one side to explain orally,neutral standpoint, have been given the final

while the other side can only make reports

decision, and it is not appropriate to consider thethrough documents. It is necessary to hear the

propriety of their confirmation once again; (ii)explanations and opinions of both sides and make

BOA submits an annual audit report to theappropriate determination." One of the reasons

government, while the government submits thethat Diet member TAKAGI made such proposal

annual audit report and the final accounts to thewas, according to his explanation on the reason

Diet, and BOA has no direct relationship with thefor submission, the issue ofthe sale ofDiet; (iii) since an annual audit report is not an

undeveloped national land in Hokkaido, which

agenda item, the Diet only needs to deliberate on

was reported in the annual audit reports for FY

the final accounts while using the annual audit

1906 and FY1907.

report as a reference, so it is not necessary to

The Act on Use of Undeveloped National

dispatch BOA's officials to give an explanation;

Land in Hokkaido (Act No. 57 of 1908) providedand (iv) since BOA is a collegial organ, anthat the government would designate a specificopinion given by an individual Member of BOA

area of undeveloped national land and lease theis not recognized as an opinion of BOA. The

land free of charge to a person who intends toproposal was referred to nine committee members

cultivate the land independently, and give thedesignated by the Speaker of the House ofland to the person after succeeding in the

Representatives, but it ended up being shelved

cultivation. The relevant dispositions, such as theagain.

sale and lease, were to be made by the governorsof subprefectures or the governor of Hokkaido
Prefecture, according to the land size. However,as a result of audit, BOA found not few frauds
and improprieties, and reported them in theannual audit report. However, the explanation
given by the government at the Diet was far
beyond the scope of reply to BOA's inquiry, andeven the Committee on Audit of the House ofPeers resolved that the government's explanation
was unreasonable.
Accordingly, the proposal was made on theneed to hear BOA's opinion. On February 21,
1911, BOA submitted its opinion on this issue toPrime Minister Taro KATSURA by the name of
President of BOA Inajiro TAJIRI. It set forth a142Section 1 Changes in BOA's Organization

Chapter 3

BOA in the Taisho Era (1912〜1926)

The Japanese economy showed temporarydifficulties. Owing in part to such circumstances,

growth after the Russo-Japanese War, but soon

the rice riot that occurred in Uozu Town, Toyama

plunged into depression, and then slipped into

Prefecture, in July 1918 instantly spread to all

chronic recession. As a result of financing mostpartsof military expenditures for the Russo-Japanese

campaigns by the crowd, such as attacking of rice

War by war loan bonds, the amount of

stores and wealthy people.

of

Japan

and

developed

intostreetoutstanding national government bonds, which

During World War I, in 1917, the Russian

stood at over 500 million yen before the Russo-

Revolution occurred. As a result, Russia left theJapanese War, reached over 2.6 billion yen by

front line and the Eastern Front collapsed, so the

FY1909, swelling to an enormous amount. The

Allies requested Japan to participate in Siberian

government faced a fiscal deadlock, and struggled

Intervention. Since the United States decided to

to

grew

dispatch troops, Japan also declared to participate

sluggishly, but fiscal demand, such as thein the Siberian Intervention in August 1918, andexpenses for the repayment of principal anddispatched troops to Vladivostok. Subsequently,interest of the enormous amount of national

when the intervention had almost completed, thegovernment bonds issued to finance the military

Allies gradually withdrew their troops, but Japan

expenditures of the Russo-Japanese War, thealone stayed on to deploy a total of over 70,000

expenditures for managing new territories, andtroops and spent war expenses of nearly 1 billion

military expansion expenditures, swelled. Foreign

yen until 1922. Japan's action was not only

currency

condemned by the domestic public, but also

consolidate

thereserves

government

bonds.

also

experienced

ran

Revenueout,

seriousandthearoused a great mistrust of other nations.

financialdifficulties. The second Cabinet of Kinmochi

When World War I broke out, the Allies

SAIONJI established in 1911 intended to carrycalled to wipe out the German militarism, andout serious administrative reform for achieving aemphasized democracy to counter militarism.

fiscal turnaround.

Since Japan took the Allies' side and declared

The incident that saved Japan from thiswar against Germany, it inevitably had to endorse

economic crisis was World War I which broke

the idea of democracy. In this manner, the Taisho

out in July 1914. During the war, Japan enjoyed

Democracy burgeoned in Japan as a part ofanpolitical discussions and subsequently spread tounprecedented

economic

boom

without

economic and social issues.

suffering war damage. The war economy brought

On September 1, 1923, the Great Kanto

by thriving of industries peaked around 1918
when the war ended. However, while there were

Earthquake occurred andpeople who gained huge amounts of money

damage to the Metropolitan and surrounding

duringshipping

areas, with more than 100,000 people dead or

millionaires, an abnormal soar of prices pushed

missing and more than 440,000 houses totally

down the substantial income level of middle- andburnt. This earthquake inflicted heavy damage onlower class people and caused them financial

the Japanese economy. The economy, which was

war,

as

represented

by

143

causeddestructive

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

already in a recession, plunged into further

it moved into a barrack office building built at

chronic depression without being able to recover

the burned-out site. BOA lost its government

completely. BOA's office building was also

office as well as many important documents byburned down, so after using a temporary facility,

fire in this earthquake disaster.

Section 1 Changes in BOA's Organization
The fixed number of officials was also

1. Changes in BOA's organization

changed. The number of Directors General was(1) Downsizing of BOA's structure throughadministrative reform in 1913

reduced from three to two persons, Directors

substantiallyfrom 12 to eight persons, Assistant Directors

downsized through administrative reform in 1913.

from 18 to 16 persons, and Clerks from 189 to

As the recession continued after the Russo-

170 persons. One Director General and three

Japanese War, fiscal restraints, and further,

Directors were given administrative leave; 20

financial reform came to be regarded as policy

Clerkschallenges, and the second Cabinet of Kinmochitranscribers retired as well. Meanwhile, theSAIONJI established in August 1911 worked on

Members were guaranteed of their status underadministrativeThe

the BOA Act, so they were offered exceptions toadministrative and financial reform planned byadministrative leave and were provided partial

thesalary.

BOA'sorganization

and

was

financial

Cabinetof

Kinmochi

implemented

by

the

reform.
SAIONJI

was

and

11

non-regular

officials

andGonbeeFurthermore, the fixed number of Clerks was

YAMAMOTO that was established in February

reduced by five persons in November 1914, and1913. A personnel cutback of more than 10,000

the fixed number of Assistant Directors was

persons,

officials

reduced by two persons in April 1916. As a

combined, and financial reform for saving

result, the total fixed number of BOA officials

approximately 70 million yen were planned. In

became 191 persons, the smallest personnel

June 1913, BOA downsized the three-Bureau, 12-

structure for BOA under the Meiji Constitution.

Division structure, which it had maintained(2) Increase of personnel after administrativereformalmostregularandunchanged

Cabinetofnon - regular

since

the

structural

enactment

of

the

Meiji

After that, the volume of administrative

Constitution to a two-Bureau, eight-Division

work increased notably with the expansion of thestructure, and abolished the 3rd Bureau. Alongfiscalwith this downsizing, the affairs under theincreasing its personnel; as a result, in April

jurisdiction

and1919, BOA was allowed to increase AssistantDivisions also changed dramatically. In the

Directors by three persons and Clerks andPresident's Secretariat as well, the Section of

stenographers by 20 persons.

Dispatch and Acceptance of Documents and theRecording Section were abolished, and the(3) Return to the three-Bureau, 12-Division
structure

Document Section was established in their place.

The BOA Act was amended in April 1921,

organization

upon

of

the

respective

Bureaus144

scale.

Thus,

BOA

workedtowardSection 1 Changes in BOA's Organizationand in September 1921, the two-Bureau, eight-

person, Assistant Directors by seven persons, andDivision structure, which lasted for over eight

Clerks by 48 persons. However, because theyears, was ended, and BOA returned to the three-volume of administrative work increased due to

Bureau, 12-Division structure. This return was

expansion of annual revenue and expenditure,

made due to a need to shorten the audit period as

and because there was a need to verify anda result of amendment of the Public Accounting

confirm the final accounts for two fiscal years in

Act, which stipulated the time for submission of

FY1925 due to acceleration of the time forthe final accounts to the Diet one year earlier

submission to the Diet, BOA only reduced thethan the conventional practice. The fixed number

fixed number of Assistant Directors by fourof personnel was also changed so as to respondpersons, and Clerks by 27 persons in April 1925.

to the three-Bureau structure. The number ofFrom then until the start of the Showa era, BOA's

Directors General was increased by one person,

total fixed number of personnel was 250 persons.

Directors by four persons, Assistant Directors by
2. Setting up of technical advisors

eight persons, and Clerks and stenographers by
60 persons, making the total fixed number of

In September 1915, the Rules on the Affairs

BOA personnel 287 persons. In response to thisof BOA were amended, and it became possible toincrease in the fixed number of personnel, theset up technical advisors if necessary. The role ofactual number of Kotokan increased in net terms

a technical advisor was to investigate technicalby seven persons and Hanninkan by 32 persons

matters and give his/her views.

in 1921 and Kotokan increased in net terms by

From an early stage, BOA had already taken

five persons and Hanninkan by 24 persons ina stance to actively conduct audit not only on

1922.

matters in violation of the budget, laws, and(4) Administrative reform after World War I

regulations, but also uneconomical matters, in

Amidst a chronic recession after World War

order to achieve the objective of supervision ofI, another administrative and financial reform wasfinance and accounting. But in the Taisho era, it

decided to be implemented, and in April 1923,

placed even more emphasis on this stance. As

the fixed number of Assistant Directors was

Japan's

reduced by three persons, and Clerks by six

expenses for civil engineering and construction

persons. Then, the enormous amount of recovery

works

and

expensesformanufacturing

andpurchasingmachinery,

etc.

grew.

reconstruction

expenditureswasspent,

industry

andeconomydeveloped,orTechnical

following the Great Kanto Earthquake, and theknowledge came to be required in order tofiscal conditions further worsened. In July 1924,

determine

the government decided to promote a large-scale

However, BOA had no technical officials who

administrative

andhad specialized knowledge, so a system wasconducted a personnel cutback of more thanintroduced to commission technical experts to

40,000 persons, regular and non-regular officials

serve as advisors. In May 1918, three technicalcombined, during three years starting in FY1925.

experts who respectively specialized in civil

BOA was requested by the government toengineering, machinery, and construction, were

cut the fixed number of secretaries by one

commissioned to serve as technical advisors.

andfinancialreform,

145

their

economic

appropriateness.

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Moreover, metallurgical and electric experts werewascustomarycommissioned in 1921, making the total number

distribute any remainder of their salary budget toof technical advisors five persons. After World

their

War II, BOA became able to allocate technicalgovernment offices openly conducted accounting

officials, so this system was abolished.

that was in violation of the purpose of theofficials

budget,asgovernment
bonus.

misappropriating

administrative

3. Treatment of officials

forexpenses

offices

However,

the
and

to

many

funds
even

for

project

expenses as financial sources for paying bonus.

The positions of some categories of officials
were raised in rank in the early Taisho era.

At BOA, the amount of bonus paid to its officials(i) With the amendment of the Order on Salaries

was smaller than that of other governmentof Kotokan, etc. in March 1915, the position

offices, but in order to scrape up the necessaryof the Assistant Director was revised frombudgetKotokan of fifth- or lower-ranking officials to

considerable number of positions vacant.

forpayingbonuses,

BOA

left

Kotokan of fourth- or lower-ranking officials,◆Agreement on the retirement age◆and the salary of the Assistant Director was
also revised from the salary under Table No.

The life tenured status system for all
members of BOA's General Meeting (Members)
had been introduced in order to maintain BOA's
independence from the executive branch and toensure fair execution of their duties. However,this system, which seemed to be ideal at first,
gradually began to present problems in its
operation as time passed. Due to this system,
many positions of Directors and higher-ranking
positions were occupied by elderly officials withlong years of service, and personnel promotion
within BOA became stagnant.
Since many high-paid officials always filled
the positions in this manner, the budget for
personnel expenses, which was already lower inlevel than that of other Ministries, was largely
spent for salaries of personnel in the positions of
Directors and higher-ranking positions who wereappointed for life. Other general officials could
not even be appointed sufficiently to totally fill
their fixed number; also, they received a smaller
amount of bonus and were promoted at a slower
pace than officials of other general government
offices. This brought down the morale of entire
BOA.
In the Taisho era, a revision had alreadybeen made so that the Chief Justice of the former
Supreme Court and the Prosecutor General wereto retire on reaching 65 years of age, and other3 to that under Table No. 2.
(ii) With the amendment of the BOA Act inApril 1916, the position of the President of
BOA was revised from Chokuninkan (treatedas Shinninkan) to Shinninkan, which was
equivalent to the position of Ministers.
Meanwhile, the positions of the fixed
number of clerks were not totally filled. In July
1917, there were 11 vacant positions, but after
the Great Kanto Earthquake, about 20% of thepositions became vacant. This was due to thesalary budget and the bonus system at the time.
The salary budget at the time was estimatedby multiplying the average amount of salary by
the fixed number of personnel. However, unlike
other administrative government offices, BOA
had many high-paid officials with tenured status
who were appointed for life. Accordingly, there
was a concern that the salary budget would be inshort of the amount of salary paid, unless BOA
constantly left a considerable number of positionsof general officials vacant.
Also, as for the bonus system at the time, it146aSection 1 Changes in BOA's Organization

justices and public prosecutors were to retire onreaching 63 years of age. Accordingly, opinions
were also made within BOA to review the life
tenured status system, and in October 1931, an"agreement on the retirement age" was madeamong Directors General of Bureaus andDirectors, who were appointed for life.
Although some officials opposed to thisagreement, almost all Members consented to andaffixed their seals to the agreement to "retire onreaching 63 years of age," and it was decided that
newly appointed Members were to affix theirseals to the agreement in advance. The agreement
stayed in effect until the current system wasestablished in 1947.
This agreement on the retirement age
restrained the life tenured status system forMembers, which had caused many adverse
effects, and enabled BOA to encourage retirement
also to officials in the position of Assistant
Directors or lower-ranking positions on reaching
about 60 years of age.

Agreement on the retirement age

147

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Section 2 Operation of Audit Activities
Since the enactment of the BOA Act inCabinet, and audit-related documents that were

1889, BOA established many sets of rules on thenecessary for preparing the annual audit report.

submission of accounts for different contents of

BOA also needed to decide on special treatments

accounting. In July 1915, BOA streamlined andfor audit of the final accounts and determination

consolidated these rules into single Rules on theon the liability for indemnity of Accounting

Submission of Accounts, and simplified the

Officers, etc. of government offices that had lost

method of evidence for regular expenditures andaccounting materials in the earthquake.

minor

matters.

Meanwhile,

BOA

further
Subsection 1

recognized the effectiveness of field audits, andtended to work on enhancing field audits.
The fully amended Public Accounting Act

Submission of accounts and inoffice audits

Consolidation of rules on the submission of
accounts

and the newly enacted National Property Act,
which were promulgated in April 1921, broughtsome important changes relating to BOA. The(1) Rules on the Submission of Accounts of1915

specific changes included the following: BOA

The Rules on the Submission of Accounts

faced the need to audit the final accounts at anwere established by Circular Notice of BOA No.

earlier timing due to acceleration of the time for

1 of July 1915, and were applied starting fromtheir submission; the provisions on liability forsubmission

indemnity of Accounting Officers were amended;

Conventionally, individual sets of rules on theand BOA was authorized to additionally audit

submission of accounts for different contents ofstatements of the changes in the total value ofaccounting had been established, amended, andnational properties and statements of the total

abolished as required since 1889. They werevalue of national properties. On that occasion,

subsequently streamlined, but still 20 sets of rules

necessary amendments were also made to theexisted concurrently in the beginning of the

BOA Act and the Rules on the Affairs of BOA.

Taisho era. When BOA's organization was

In addition, internal rules including the Rules on

downsized

the Submission of Accounts and the Rules on

structure through administrative reform in June

Audit Affairs were fully amended.

1913,

a

of

to
need

accountsafor

two-Bureau,
arose

to

FY1916.

eight-Division

furtherpromote

BOA's office building was burned down inrationalization of the work of in-office audits, etc.

the Great Kanto Earthquake that occurred in

Therefore, in the same month, BOA appointed

September 1923, so after using a temporary

members of Amendment of Rules on thefacility, it moved into a barrack office building

Submission of Accounts in place of conventionalbuilt at the burnt-out site. BOA lostits

examiners of Rules on the Submission of

government office as well as many importantAccounts, and had them consider and propose

documents by the fire, but for the time being, it

amendment of the rules on the submission ofneeded to recover the statements of accounts foraccounts.
As mentioned earlier, the new Rules on the

FY1921, which had been sent to BOA by the148Section 2 Operation of Audit Activities

andNext, for expenditure, BOA drastically revised

consolidated the many conventional rules on thethe method of describing detailed statements ofsubmission of accounts that had been establishedcompletion so that the description better meetsfor different contents of accounting, and compiled

the actual conditions, such as advancement ofthem into a single set of rules consisting of aconstruction methods, and required auditees tototal of nine Chapters with 116 Articles and 30

submit statements of project achievement forForms.

necessary

directly operated manufacturing projects in orderamendments on parts that no longer matched theto understand the actual conditions of the work.

actual conditions as a result of amendment and

BOA also established provisions on mattersabolition of laws and regulations, etc., andincluding submission of integrated accounts for

simplified the documents to be submitted. The

transfer of revenue and expenditure within thecomposition of the Rules was as follows. Chapter

treasury.

SubmissionofInAccounts

addition,streamlined

BOA

made

Furthermore,

1 was general provisions, providing for matters

newly

submissionofestablishedthat applied to submission of accounts in general,provisions

such as the method of correcting statements ofcalculations on operation of deposits and theaccounts

andrequirement

documentarythat

original

on

BOA

Debt

accounts

Consolidation

Fund

for

evidence,the

National

anddocumentsofcalculations on government property, in order todocumentary evidence must be submitted toensure thorough audit.

BOA, and the method of processing documentary(2) Full amendment of the Rules on the
Submission of Accounts in 1922

evidence in a foreign language and revenues andSeven

BOA partially amended the Rules on the

Chapters from Chapter 2 respectively provided

Submission of Accounts of 1915 twice after thefor revenue, expenditure, treasury, cash receipt

enactment. Then it fully amended the Rules by

and payment, management of deposits andCircular Notice of the Board of Audit No. 1 of

National Debt Consolidation Fund, receipt andMarch 1922, and applied the Rules starting fromissue

the submission of accounts for FY1922. This

expendituresofingoods,

foreignandcurrencies.

government

property,

according to the contents of accounting. Chapter

amendment

was

made

in

line

with

the

9 provided for revenues and expenditures ofamendment of the Public Accounting Act andbodies and public or private structures.

enactment of the National Property Act, and it
was considered and proposed by the examiners ofMain revisions of contents were as follows.
tax

Rules on the Submission of Accounts and Inner

revenues, BOA abolished detailed statements ofRules of BOA that were appointed in Marchthe excess amount of investigated and determined

1921, along with the amendment of internal rules

annual revenue, etc. and consolidated detailed

such as the Rules on Audit Affairs.

First,

withreference torevenues,

for

The

statements of the amount of revenues yet to be

main

revisions

were

those

for

collected, etc. For nontax revenue, BOA provided

responding to the reorganization of the financethat detailed statements of investigated andand accounting system. Specifically, since thedetermined annual revenue might be attached insystem of the revenues and expenditures oflieu of submission of documentary evidence.

treasury money was shifted from the treasury
149Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

system to the deposit system, BOA madeand it established provisions on documentary

necessary amendments accordingly, such as fully

evidence for submission of accounts on national

amending the chapter on the treasury to a chapter

property.

on the Bank of Japan. In addition, since the audit

The Rules on the Submission of Accounts ofof the final accounts was to be accelerated by one

1922 were partially amended several times

year, BOA changed the system of submission ofthereafter, but these were minor amendments, andaccounts of revenue from annual submission of

the Rules remained in effect until 1947.

accounts to monthly submission of accounts, inprinciple. Also, in line with the establishment of(3) Increase in the number of documents
received and a delay in the submission

the system of diversion of funds, BOA newly

The number of statements of accounts andestablished provisions on cash revenues anddocumentary evidence received increased sharply

expenditures made through diversion of funds inin proportion to expansion of Japan's public

place of the provisions on submission of accounts

finance. Therefore, the audit procedure was

for

of

drastically streamlined with the amendments ofgovernment offices engaged in projects on

the Rules on the Submission of Accounts in 1915

railway and postal, telegraph, and telephoneand 1922, such as omitting the audit of regularservices. Furthermore, in response to the abolition

expenditures and minor matters. However, theof the pre-audit system in auditees, that is, thenumbersystem whereby the auditee was to receive audit

documentary evidence received counted 69,164

from a higher government office, etc. before

books and 23,415,540 sheets, respectively insubmitting statements of accounts to BOA, BOA

1926, both increasing to about 1.5 times theamended the provisions on receipt and payment

number in 1912. In 1921, when the number ofof cash and receipt and issue of goods, which had

documents received peaked, the documentary

required the auditee to submit the statements ofevidence showed an increase of 2.5 times theaccounts together with the pre-audit statement bylevel in 1912. Although the fixed number of

the

cash

revenues

andexpendituresofstatementsofaccounts

and

etc.

Other

clerks was increased substantially in 1921, thefollowing:

BOA

annual audit volume per clerk tended to growstipulated the treatment for allowing auditees toconsiderably, being unable to catch up with theomitincrease in the documents received.

higheramendments

government
including

submissionofoffice,thedocumentary

evidence

according to the actual conditions based on

In addition, there was a considerable delay

BOA's designation or approval in Chapter 2 andin the submission of documents by government

subsequent

andoffices. Even for the statements of expenditures,consolidated the provisions on documentary

which should have been submitted relatively

evidence for statements of tax revenue collecting

early, the statements for FY1917 that reachedthat had been stipulated by type of tax; it newly

BOA in and after December 1918 amounted toestablished a Chapter on national government

more than 100 million yen. Such trend continued

bonds and provided for submission of thethereafter until the amendment of the Publicstatements of the changes in the value of national

Accounting Act in 1921.

Chapters ;itstreamlined

government bonds and documentary evidence;150Section 2 Operation of Audit Activities

Subsection 2

conducted in other parts of Japan, totaling 1,808

Field audits

days. It was a rate of conducting an audit once inan average of 4.6 years per location where field

Establishment and development of field audits

audits were needed.

The Instruction for Dispatched Officials ofbasic

The locations of field audits expanded toprinciples on the number of days of the travel,

Taiwan, Sakhalin, Korea, and Kwantung Statethe travel route, and the travel expenses ofwith the expansion of Japan's territory throughdispatched officials.

several wars. With the outbreak of World War I,

March

1913

stipulatedtheinternal

In Japan, field audits have been establishedthe locations further expanded to South Pacificand developed as an effective method of financial

Mandate, and to Manchuria and North China

management to a level beyond comparison to that

where Japan's Army units and local agencies

of Prussia and other countries which Japan had

were stationed. It was not rare for officials to bemodeled its financial management system after.

dispatched for a single field audit for two months

From the Meiji era, field audits came to bewhen the audit was conducted in a remote area.

recognized as an influential method comparable

As for the specific methods of audit, in theto in-office audits, instead of as a procedurecase of civil engineering works, the dispatchedsupplementary to in-office audits, in practice.

officials dug the land at the site in order to

The scale of implementation of field audits

investigate how the part buried underground had

also tended to be enhanced gradually. Looking at

been constructed, and, in the case of construction

the implementation of field audits from FY1916

works, they removed a part of the attic,

through FY1918 when BOA had a two-Bureau,

underfloor structure, or the like. They also

eight-Division structure, it was customary to

conducted tests to confirm the quality of thedispatch one Director or Assistant Director andconstruction materials, etc. when necessary.

two clerks as a team. Each Division dispatched
Subsection 3

three to six teams every year, and the annual
number of days of dispatch was 1,200 to 1,300

Changes in the rules on audit
affairs

1. Changes in rules

days in total. The number of locations where
field audits were needed in 1919 was about 7,000

The Rules on Audit Affairs of 1900 werelocations, out of which over 3,000 locations had

fully amended with the amendment of the Public

been audited several times in the past, about

Accounting Act and enactment of the National

2,000 locations had not been audited since FY

Property Act in 1921. This amendment was

1912, and the remaining 2,000 or so locations

considered by the examiners of Rules on the

had never been audited.

Submission of Accounts and Inner Rules of BOA

According to an investigation conductedthat were appointed in March 1921, along withupon requesting a budget for increasing thethe amendment of the Rules on the Submission

number of Assistant Directors in 1926, the annualof Accounts. The main revisions were as follows.

number of days on which audit was conducted(i) Amendment of the Rules on Audit Affairs

during FY1926 was 132 days for audit conducted- Since the time for preparation of the annual

within Tokyo City, and 1,676 days for audit

audit report was accelerated by one year, BOA
151

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Proceedings of Meetings

accelerated the time for submission of various
reports, etc. within BOA.

- BOA abolished the distinction between the- Since various matters which the Minister ofordinary weekly sessions and extraordinary

Finance or other Ministers should notify BOA

sessions of the General Meeting and provided

of were stipulated, BOA established proceduresthat the President of BOA was to convene thefor processing those matters.

sessions when necessary.

- BOA newly established audit procedures for- BOA newly stipulated express provisions on thestatements of the changes in the value ofsummary General Meeting where resolutions arenational government bonds, statements of the

adopted by the way of round robin, which hadchanges in the value of national properties, andbeen conducted from the past.

statements of treasury money management.

(vi) BOA abolished the treatment to issue a- BOA amended the form of the certificate ofcertificate of grant of discharge for the

grant of discharge.

submission of accounts of revenues and(ii) Amendment of the Rules on Examination for

expenditures of organizations, etc. that have

Annual Audit Report and Annual Audit

been granted subsidies or special guarantee

Report to the Emperor

by the government, and revised the system- BOA changed the time limit for submitting to

so as to send a notification document to thethe Committee a draft annual audit report from

Minister who has jurisdiction over the

September 20 of the fiscal year after next toorganization in such case.

November 10 of the following fiscal year.

After this amendment, BOA made an- BOA changed the time limit for submitting toamendment to simplify the certificate of grant of

the Committee a draft annual audit report to thedischarge in 1941, and an amendment to newly

Emperor from November 30 of the fiscal year

establish an audit procedure for statements ofafter next to December 15 of the following

inheritance tax payment in kind in 1942, but

fiscal year.

neither of them was a major amendment.

(iii) BOA abolished the Rules on Audit Year, andApart from the Rules on Audit Affairs, BOA

revised the audit year from the conventional

established the Rules on Affairs of Audit ofperiod starting on July 1 of each year andEmergency Armaments Expenditures and theending on June 30 of the following year, to a

Rules on Examination for Audit Report ofnew period starting on November 1 of each

Emergency Armaments Expenditures and Annual

year and ending on October 30 of the

Audit Report to the Emperor in April 1938.

following year, under the newly established

These Rules were established for putting in place

Rules on Supervision of Operation.

an audit system for the Special Account for(iv) BOA deleted "the report of the dispatched

Emergency Armaments Expenditures that was set

officials of the field audit" from matters to

up upon the outbreak of the Second Sino-be resolved at Bureau meetings, and added

Japanese War in 1937.

"the written notice of each Ministry under
2. Procedures of audit affairs

Article 17 of the BOA Act" to those matters.

An overview of the procedures of BOA's(v) Amendment of the Detailed Regulations on
152Section 2 Operation of Audit Activities

audit affairs under the Meiji Constitution isrevenues and expenditures to verification andprovided below based on the Rules on Audit

confirmation of the final accounts can be divided

Affairs as amended in 1922.

into the following four phases: (i) audit of the

The Rules on Audit Affairs were composed

statement of accounts (Articles 1 to 4); (ii)of a total of 31 Articles which were divided into

comparison with the statement of accounts

the following Chapters: Chapter

Generalsubmitted by the Bank of Japan and preparation

Provisions; Chapter II Statement of Revenue andof the detailed statement of the revenue andExpenditure and Final Accounts; Chapter III

expenditures accounts (Articles 5 and 6); (iii) the

National Government Bonds, National Property,

tallying of the figures of items of the final

and Statements of Treasury Money Management;

accounts with the figures in the statement of

Chapter IV Statements of Cash Handling, Receipt

accounts (Articles 8 and 9); and (iv) adjudication

and Payment of Cash, and Revenues andand confirmation of the final accounts (Articles

Expenditures; and Chapter V Miscellaneous

10 to 12).

I

Provisions. Chapter I General Provisions provided

When having completed the audit for one

for the following as audit affairs common to thefiscal year, the Director prepares an annual audit

various types of statements of accounts: (i) eachcompletion report, and submits it to the Director

Director shall review the statement of accounts

General of the Bureau. If any audit remains

and submit a reviewing report (Article 1); (ii) if

incomplete by September 30 of the following

the Director finds any matter to be reported in thefiscal year, the Director settles the audit as

annual audit report or the annual audit report touncompleted (Article 4).

the Emperor in the course of audit, the Director

The comparison of the statement of accounts

shall draft a proposal on such matter each time

submitted by the Bank of Japan with theand submit it to the Bureau meeting or thestatement of aggregated expenditures and with the

General Meeting (Article 2); and (iii) the Director

final statement of revenue collected was intended

shall send statistic materials, matters to be

for confirming the figures for each item ofreported in the annual audit report, and matters torevenue and expenditure by comparing the cash

be reported in the annual audit report to therevenues and expenditures of treasury money

Emperor to the members of the Examination

with the figures in the statements of accounts

Committee on Annual Audit Report and Annual

submitted by the respective Ministries. This

Audit Report to the Emperor by their respective

process also guaranteed the correctness of thedeadlines for submission (Article 3).

detailed statement of the revenue and expenditureaccounts that

Then, Chapters II to IV provided for thewas prepared

based

on

the

audit procedures for the respective types ofstatements of accounts that had undergone thestatements of accounts. The procedures for thecomparison process (Articles 5 and 6).

major types of statements, the statement of

Next, BOA examines the statements ofrevenue and expenditure and the statement ofaccounts that were submitted by the government,

receipt and payment of cash, are described below.

based on the final statement and the detailed(1) Statement of revenue and expenditurestatementofaccounts

prepared

The affairs from audit of a statement of
153

the

revenuebyandexpenditure

membersofthePart 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Examination Committee on Annual Audit Reportissued by the head of the relevant department, theand Annual Audit Report to the Emperor. This

Director submits a determination report stating

examination guarantees the correctness of thethat a certificate of grant of discharge needs to beitems and figures of the final accounts (Articles 8

issued for one management term or one fiscal

and 9).

year. If a disposition on liability for indemnity(2) Statement of receipt and payment

has completed after a determination holding the

In the case of a statement of receipt andAccounting Officer to be liable, the Director

payment, the document that corresponds to the

prepares a report on issuing certificate of grant ofannual audit completion report for the statement

discharge by a form equivalent to that of aof revenue and expenditure is the determination

determination report, and submits it to thereport.

President of BOA via the Director General of the
Bureau (Article 20).

The Director prepares a determination reportand submits it to the Bureau meetings or the

Article 24 of the BOA Act provides that a

General Meeting in any of the following cases:

retrial may be conducted against a determination(i) if the Director has completed the audit of theon liability for indemnity of an Accounting

statements of receipt and payment submitted by

Officer in the following cases: (i) if the

Accounting Officers for one management term or

Accounting Officer requests a retrial within five

one fiscal year; (ii) if the Director finds it to be

years from the day of issuance of a certificate ofnecessary even if the Director has not completed

grant of discharge; (ii) if BOA discovers an error,

the audit of all of the statements of accounts; oromission, or duplicate entry in the statement of(iii) if any statement of receipt and payment has

accounts within five years from the day of the

been specially submitted pursuant to Article 36 of

issuance of the certificate of grant of discharge;

the Public Accounting Act (Article 17).

or (iii) even after five years from the day of theIf, in determining the liability for indemnity

issuance, if BOA discovers fraudulent evidence.

of an Accounting Officer, the Accounting Officer

Based on this, the Rules on Audit Affairs provide

is held liable, the Director prepares a draft of afor the retrial procedure.

written request for paying the indemnity, and if

In other words, if there is a matter subject to

the Accounting Officer is held not to be liable,

a retrial, the Director prepares a report clarifying

the Director prepares a notification document

the reason for conducting or not conducting a

only if any statement of receipt and payment has

retrial, and submits it to the Bureau meeting or

been specially submitted pursuant to Article 36 of

the General Meeting, and if a request for a retrial

the Public Accounting Act, and attaches suchhas been filed by the Accounting Officer and thedraft

Director finds that the request should not beornotification

documenttotheaccepted, the Director attaches a draft notification

determination report (Article 18).

document to the report (Article 21, paragraph

Then, if the Director determines that thean(1)). If a decision to conduct a retrial has been

Accounting Officer is entirely proper, or if themade at the Bureau meeting or the General

Accounting Officer has completed the indemnity

Meeting, the President of BOA designates thevoluntarily or by obeying the order for indemnity

Bureau in charge, and the Director General of thestatementofaccounts

submittedby154Section 2 Operation of Audit Activities

BureaudesignatestheamendmentofthePublicchargeArticle ) .

When

Accounting Act in 1921, the principle of liability

commencing a retrial, the Director in charge

without fault was abolished, and the principle ofprepares a draft notification document for theobjective slight negligence was adopted. Under

head

the

the former Act, a determination of a grant of

Accounting Officer, and submits it to thedischarge could be obtained only if there was an

President of BOA (Article 22). If the Accounting

unavoidable circumstance such as flood, fire, or

Officer is held to be liable, the determination ontheft, and if the Accounting Officer proved suchthe retrial is processed in a manner equivalent tofact to BOA. However, the amended Act

the case where the Accounting Officer was held

stipulated that such determination could be

liable in the first trial, and if the Accounting

obtained if the Accounting Officer proved to

Officer is held not to be liable, the Director sends

BOA that the Accounting Officer "had not

a notification

reasonneglected the due care of a prudent manager."therefor, and also issues a certificate of grant of

Nevertheless, what was supposed by the amended

discharge (Article 23).

provisions had not changed from before the

of

(2)

the

of

DivisionWithin( paragraph

the

said

relevant

document

department

statingortheBesides the procedures of audit affairs foramendment, and an Accounting Officer was held

the respective types of statements of accounts asliable for indemnity consequently based on a fact

described above, the Rules on Audit Affairsof loss or damage of cash or goods. Therefore,

provided for the following matters in Chapter V:

BOA continued its rational operation of thethe procedure for processing notices which BOA

determination system differing from the legal

receives under laws and regulations (Articles 26

provisions until the reform made upon the end of

to 28); the procedure for processing the annual

the Pacific War.

audit reports to the Emperor submitted by the

During World War II, the burden of proof

government offices commissioned with the audit

for this principle of slight negligence was(Article 29); the procedure for reporting on field

dramatically reduced if the incident occurred in a

audits (Article 30); and establishment of detailed

special case, i.e. at the battlefield or on the route

regulations on audit affairs and statistical ledgers

to or from the battlefield.

by each Division (Article 31). The Rules on(2) Abolition of theguarantee deposit

Audit Affairs played a significant role as generalsystemoffidelity

The provisions on fidelity guarantee deposits

procedural rules for audit of various statements of
andunder the Public Accounting Act were modeledconfirmation of the final accounts, etc. which had

after the French system of fidelity guarantee

a large weight in BOA's operations.

deposit for ensuring the liability for indemnity ofaccounts

anddocumentary

evidence

Accounting
Subsection 4

Officer.

However,

Accounting

Officers in Japan had very different duties,

Determination on Accounting
Officers

economic positions, etc. from those in France, so

1. Changes in the system

the system lost substance while being ineffective(1) Adoption of the principle of objective slight
negligenceand hardly applied. This system of fidelity
guarantee deposit was completely abolished upon
155

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

the amendment of the Public Accounting Act in

not held liable at BOA's General Meeting or

1921.

summary General Meeting included 15 cases ofofficials who received advanced funds, four cases

2. Status of determination on the liability forindemnity of Accounting Officersof Treasurers, and three cases of Accounting

In the Taisho era, the number of cases in

15 cases of officials who received advanced

which an Accounting Officer was held liable byfunds, 13 cases were determined collectively for

resolution of the General Meeting or a summary

emergency armaments expenditures in April

General Meeting decreased considerably from

1922.

Officers who handled diversion of funds. Of thethat in the former Meiji era. There were only one

Furthermore, with the amendment of theor a few such cases every year from FY1912 toRules on Audit Affairs in May 1922, the form of

FY1920. The number notably increased to eightthe certificate of grant of discharge was revised

cases in FY1921 when the Act Amending thefrom the style of putting down the name of the

Public Accounting Act was promulgated, and to

President of BOA to a style of affixing the

13 cases in FY1922, but only one case wasofficial seal of BOA, and the form of theobserved in FY1923, and no cases were observed

determination was revised to the same style as ain FY1924 and subsequent fiscal years. The total

judicial determination wherein the "main text" of

number of cases observed during the Taisho era

the determination was indicated first, followed by

was 37. By type of Accounting Officer, Revenues

the "reason" thereof.

Officers accounted for the largest number of

In addition to statements of accounts thatcases, followed by Accounting Officers who

were directly audited and determined by BOA,

handled diversion of funds, and officials whomany statements of accounts were made subject

received advanced funds. Meanwhile, five suchto commissioned audits, and were audited andcases were observed for Treasurers during thedetermined

period until the system was abolished bycommissioned with the audits.

by

the

government

officesAccording to the FY1925 Annual Audit

amendment of the Public Accounting Act, andthe last determination holding an Accounting

ReporttotheEmperor,thenumberof

Officer to be liable was made in FY1923.

Accounting Officers who submitted statements ofaccounts in FY1925 exceeded 10,500 persons.

The most frequent mode of loss or damageof cash or goods was embezzlement by an
Accounting Officer or an assistant thereof, and

3. Exemption from the liability for indemnity
through a pardon

other modes included defrauding or loss.
By jurisdiction, there were notably large 11

Article 21 of the BOA Act provided for thecases of embezzlement by a Revenues Officer or

reduction of or exemption from obligations

an assistant thereof observed in tax offices,arising from a determination on the liability forfollowed by six cases observed in the Armyindemnity of an Accounting Officer as follows:

including embezzlement of funds for emergency"The head of the relevant department may notarmaments expenditures.

reduce or exempt the liability of a person who
has liability for indemnity based on determination

Cases in which Accounting Officers were156

Section 2 Operation of Audit Activities

by the Board of Audit, except through a pardon

promulgated in 1915, 1924, 1927, 1928, 1940,

granted by the Emperor." In other words, theand 1945, and similar pardons were granted forobligations could not be reduced or exempted

obligations under liabilities for indemnity. BOA

unless a pardon was granted by the Emperor.

processed the cases in the same way every time,forbased on the handling method above that wasindemnity by a pardon was implemented for thedecided in FY1912, but from 1914, when BOA

first time with the promulgation of the "Matters

issued a certificate of grant of discharge on

on Exemption of Accounting Officers fromfinding that the Accounting Officer was eligible

Liability for Indemnity" (Imperial Ordinance No.

to be exempted from liability by a pardon as a41) in November 1912. It was provided that theresult of audit determination, it attached aliability may be exempted if the following

document stating to that effect.

The

exemption

from

the

liability

requirements were satisfied: (i) the liability arose
based on grounds that occurred on or before July
30, 1912; (ii) the cause for liability was not a

Example of determination on exemption basedon Imperial Ordinancecrime committed by the Accounting Officer

The Imperial Ordinance on Exemption ofhimself/herself; and (iii) the obligation continues

Accounting Officers from Obligations under

to exist and the reimbursement has not been

Liability for Indemnity was promulgated ninecompleted yet. In the same month, BOA decided

times during the 60 years when BOA was under

on

for

the Constitution of the Empire of Japan, with theimplementing the exemption from liability forfirst being the Imperial Ordinance promulgated inindemnity based on this Imperial Ordinance at a

November 1912 upon the demise of Emperor

council of the summary General Meeting. The

Meiji and with the last being the Imperial

decided matters included the following: if an

Ordinance promulgated in October 1945 upon the

Accounting

anend of World War II. The first determination on

obligation as a result of a determination wasa case in which an Accounting Officer was

exempted from the obligation based on thisexempted from obligation based on such Imperial

Imperial Ordinance, a certificate of grant ofOrdinance was the case of a Partially Delegateddischargesuch

Revenues Officer of a coal-mining laboratory of

Accounting Officer; and if an Accounting Officer

the Karafuto Territory Government. At thewas found eligible to be exempted from his/hersummary General Meeting on January 21, 1913,

obligation based on this Imperial Ordinance in

BOA determined that, the Partially Delegatedfuture audit determination, a certificate of grant

Revenues Officer could not escape the liability ofof discharge should be issued to such Accounting

indemnity for having freely lent revenue the

Officer,the

Officer retained to the head of miners to be spent

determination report. In the same month, BOA

for travel expenses for recruiting miners, but "asentMinisters

certificate of grant of discharge is hereby issued

requesting them to apply the same handling tosince the Officer is to be exempted from thesuch exemption in commissioned audits.

obligation" based on the Imperial Ordinance."

theahandling

methodOfficershouldwhile

notstating

notification

Subsequently,

who

be

necessaryalready

issuedsuch

document

Imperial

fact
to

had

to

in

Ordinances

were
157

Part 2

Chapter 3

4. Consideration
system

BOA in the Taisho Era (1912〜1926)

of

the

unswornof lawsuits, and it would rather be appropriate towitness

examine unsworn witnesses or have relevant

There was a time when BOA attempted topersons make a report as in the case of

introduce a system similar to that of witnesses

infringement of a fisheries right or railway

and experts of the Court of Administrative

disaster. Thus, BOA prepared the draft of Bill on

Litigation. In the beginning of the Taisho era,the Examination of Unsworn Witnesses in BOA

when the Siemens Scandal drew public attention,

in December 1915. However, the draft of bill

introduction of such system was considered along

failed to see progress after that.

with introduction of the system of technical
Subsection 5

advisors.
When BOA was to make adjudication or
determination, the basic method to find out or

1. Acceleration of the time for preparation of
the annual audit report

prove facts was to have the person in charge ofaccounting

submitaccounts

documentary

evidencebyAnnual audit report and annual
audit report to the Emperor

The time for submission of the final

providingandaccounts to the Diet was accelerated by one year

accounting, and to examine and inquire such

starting from FY1922, which meant that, after the

person and request such person to give an

end of the relevant fiscal year, the final accounts

explanation. However, even if any submitted

were to be submitted to the ordinary session of

document contained false information, it was

the Diet to be held in the following year. In line

extremely difficult to produce counter-evidence.

with this change, it became necessary for BOA toThus, there was a view that, by introducing aprepare the annual audit report one year earlier

system of witnesses and experts similar to that ofthan before.

of

the

financethe Court of Administrative Litigation, it would

BOA had already considered that the time of

be possible to ensure a careful audit procedure

submission of the final accounts to the Diet wasand to prevent a situation where BOA finds

important for ensuring effectiveness of the system

doubt in finance and accounting, but beingof final accounts and the audit system, and had

unable to gain conclusive evidence, it inevitablypresented an address in the FY1887 Annual

had to overlook the issue or hold the person in

Audit Report to the Emperor that the time forcharge of accounting to be not liable.

preparation of the final accounts, which was

BOA prepared a related draft of bill andextremely delayed at the time, should be

negotiated with the Cabinet Legislation Bureau.

accelerated. After that, it became customary to

The draft of bill contained a clause providing that

submit the final accounts to the Diet in the fiscal

BOA might commission the hearing of witnesses

year after next. In the plenary session of theand experts to the court. When the Cabinet

House of Representatives at the 37th Diet session

Legislation Bureau inquired the Ministry of

in 1916, the Chairman of the Committee on

Justice about this point, the Ministry replied that,

Audit commented on the FY1913 Annual Audit

judging from the procedure of auditing, it would

Report that more emphasis should be placed on

not be sound for BOA to examine witnesses andthe final accounts so as to reflect the results toexperts by requiring them to swear, as in the casebudget deliberation, and in order to revise the158Section 2 Operation of Audit Activities

year, and has continued this practice to date.

insufficient deliberation on the final accounts, thereport on the final accounts should be made on

The presentation of the annual audit report

not the final accounts for the fiscal year before

to the Emperor was likewise accelerated by one

last but the final accounts for the previous fiscal

year.

year,

shorteningthereportingperiod.

A
2. Audit report on national property

resolution to the effect that the government
desired to have this practice implemented starting

The BOA Act had stipulated "government

from the following fiscal year was submitted toproperty and goods" as audit subject matters, but

and adopted by the Diet.

had not provided for the audit method and

BOA prepared the internal system ahead ofprocedure for national property, so national

the acceleration of the submission of the final

property had not been audited sufficiently. The

accounts by one year, and in May 1923, it sent

appropriateness of the purchase, sale, etc. of

notification to the Ministers and the Government

national

General of Korea to expeditiously submit the

documentary evidence as audit of the final

statements of accounts and documentary evidence

accounts of revenues and expenditures, but BOA

for FY1921 and FY1922 and promptly give

had no opportunity to audit transactions of

explanations or replies to BOA's Inquiry Lettersnational

on examination. However, the Great Kanto

expenditures were not recorded in the final

Earthquake and subsequent fire occurred on

accounts, such as exchange or transfer without

September 1, 1923, so acceleration of preparation

charge.

property

property

were

for

judged

which

based

revenuesonand

BOA took some measures such as presenting

and submission of the final accounts and theannual audit reports for FY1922 and FY1923 wasanaddress on

inevitably postponed. In January 1925, BOA sent

Government Property Management Act in the

notification of the same contents as above to theannual audit report to the Emperor. However,

Ministers again about the final accounts for FY

there was an incident in the 31st session of the1923 and FY1924, and the President of BOA

Diet in March 1914 where a Bill Partiallygave notice to the Directors General of Bureaus

Amending the BOA Act was submitted by Diet

and Directors to accelerate the audit affairs so as

members, providing such matters as that the list

to verify and confirm the final accounts for theof government property and the report on thetwo fiscal years by the end of 1925. As a result

increase, decrease, and transfer of governmentof advancing work in this manner, BOA managed

property

to submit to the Cabinet the FY1923 Annual

government to the Diet should be included in the

Audit Report in December 1925 and the FY1924

audit subject matters, but its deliberation was

Annual Audit Report in January 1926 together

shelved.
Later,

with the final accounts. BOA achieved the long-

which

BOA

the needweretoestablish

submitted

establishedbya Chapter

the

the

on

standing objective to submit the final accounts"government property" in the Rules on theand the annual audit report to the ordinary

Submission of Accounts (Circular Notice of BOA

session of the Diet held in the year following theNo. 1 of July 1915), and provided that theyear containing the end of the relevant fiscal

officials who manage government property (the159Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

respective Ministries) shall prepare the present

documentary

evidence,

andstipulated

therecord of government property and the record of

documentary evidence in detail. BOA audited theincrease and decrease of the said property, andstatements submitted by each Ministry, and whensubmit them by December of the relevant year, as

it received the statement of the changes in thea measure to thoroughly audit and supervise thetotal value of national properties and thestatus of management of government property.

statement of the total value of national properties

In the National Property Act enacted infrom the government together with a report by1921, expressed provisions on the audit systemeach Ministry, BOA compared them with thefor national property were stipulated, and thestatements submitted by each Ministry, preparedlong-standing concern was resolved. Specifically,an audit report, and returned the statement of thethe Act provided as follows: the government shallchanges in the total value of national properties,

prepare the statement of the changes in the total

etc. to the government together with this audit

value of national properties between each fiscal

report.

year and the statement of the total value of

The audit report on national property merely

national properties as of March 31 every fiveindicated whether or not the figures tallied, andyears, and report them to the Imperial Diet after

illegal or improper matters of national property

undergoing audit by BOA (Article 26, paragraphwere reported as matters on government property(1)); and the report on the changes in the value

and goods in the category of matters in violationof national properties of each Ministry shall beof laws and Imperial Ordinances in the annual

attached to the statement of the changes in theaudit report as before. While the annual audit

total value of national properties, and the reportreport was stipulated under Article 72 of theon the current value of national properties ofConstitution and Article 14 of the BOA Act as aeach Ministry shall be attached to the statement

one and only indivisible report prepared to coverofproperties

all audit results, there were no such provisions on(paragraph (2) of said Article). At the same time,

the audit report on national property, and they

the procedures for preparation, submission, etc. ofwere prepared as a means for showing that BOA

the statements and reports were provided in the

had

Order for Enforcement of the National Property

appropriateness.

the

total

value

of

national

conducted

audit

and

judgedtheAct. In addition, it was provided that each
Subsection 6

Ministry should separately prepare a statement of

Othersthe changes in the value of national properties
and send it together with documentary evidence

1. Auditofemergency
expenditures for World War I

to BOA as proof (Article 35).

armaments

theWith the outbreak of World War I, a Special

Submission of Accounts upon enactment of the

Account for Emergency Armaments Expenditures

National Property Act, BOA provided that each

was set up during the period from 1914 to 1925.

Minister, etc. should prepare statement of the

BOAchanges in the value of national properties every

expenditures with the same fixed number ofthree months, and submit it to BOA together withpersonnel as the peacetime. The Army managed

Whenamending

the

Rules

on

160

auditedtheemergency

armaments

Section 2 Operation of Audit Activities

the accounting of the emergency armaments

dispatched for 34 days from June 1921, andexpenditures by setting the tentative fiscal year,

conducted field inspections of Army units and

so BOA also conducted audit of the expenditures

local agencies, whereas from June 1922, aby setting such fiscal year. BOA received a large

Director and two other officials conducted anamount of documents for the audit from January

accounting inspection, etc. of Army and Navy

1915 to June 1921; it received 8,334 books ofunits stationed in Saghalien for 58 days (for thestatements of accounts (Ministry of Army: 303

audit results, see later discussion (page 175)).

books; and Ministry of Navy: 8,031 books), and2,388,887

sheets(Ministryofof

documentary

2. Great Kanto Earthquake and BOA

evidenceandOn September 1, 1923, a great earthquake

Ministry of Navy: 430,911 sheets). BOA audited

hit the Kanto region. At BOA's office building inthese documents and dispatched officials to

2 Otemachi, Kojimachi-ku, Tokyo, some officeoverseas when necessary.

rooms and many document storerooms collapsed

Army:1,957,976

sheets;and one official died on duty at the gatehouse.

The cases in which officials were dispatched

Fire broke out in the Forest Management Bureau

to overseas included the following.
In Shandong Province, China, a teamof the Imperial Household at Wadakura-mon

consisting of the Director in charge and two otherGate, and from around 2:00 p.m., the fire spread

officials conducted a field inspection on "theto the Ministry of Internal Affairs and the

Army unit stationed in Shandong Province near

Ministry of Finance, and then to the Printing

Qingdao" in November 1914, soon after Japan

Bureau. BOA was surrounded by fierce fire on

took over Qingdao, and another such teamthree sides. At 9:40 p.m., the fire leaped to the

conducted a field inspection on "the Navy units

roof of the office room of the Accounting

and ships, etc. in Qingdao and its vicinity" in

Section, and spread. Over 8,448 m2 of the

December of the same year. Also, the Director

building, excluding the official residences, were

General and two other officials were dispatchedcompletely burned down in little over one hour.

for 40 days from June 1918 and a Director andAmong the large amount of important documents

two other officials were dispatched for 51 days

kept by BOA, only such documents as documentsfrom May 1920 to conduct field audits of local

onagencies and troops stationed in Shandong

resolutions in the General Meeting were carried

Province. On South Pacific Mandate, a Director

out, and the remaining documents, including

and two other officials conducted a fielddocuments relating to the final accounts for FY

inspection for 63 days from February 1915 on the

1921 and an enormous amount of statements ofExtraordinary South Sea Islands Defense Corps.

accounts and documentary evidence were all

Furthermore, a Director and two other officials

destroyed by the fire.

personnel

affairsandminutesoftheconducted a field audit for 116 days from April

The damage incurred by all 334 BOA

1920 on the South Sea Islands. In Siberia andofficials at the time was one death, four deaths ofNorth Manchuria, a Director and other official

family members, one seriously injured, 80

were dispatched for 67 days from May 1919 andresidences burned down, and six residencesa Director General and two other officials werecollapsed.
161

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

On September 15, the President of BOA

accounts by fire to the Prime Minister and thesubmitted a report on damage caused to the office

Ministry of Finance. BOA discussed the measurebuilding, etc. to the Prime Minister, describing

to be taken with the Ministry of Finance, but thesuch a situation.

Minister of Finance also had lost its office

Earlier, on September 10, BOA moved thebuilding by fire, and was unable to send its

Secretariat and the Divisions of the 1st Bureau tostatements of accounts to BOA again, so BOA

a temporary office set up within the premises of

was to prepare, for convenience, the statements ofthe House of Peers, and the Divisions of the 2nd

accounts based on various materials.

Bureau and the 3rd Bureau to a branch set up

BOA requested various government offices

within the Japan Prison Association of theto submit relevant documents, and in late

Ministry of Justice. When the railway was

October,

restored, BOA dispatched officials from the end

government offices in an effort to collectof September to investigate the situation ofmaterials.

damage incurred by the government offices of the

reproduction of the statements of accounts in therespective Ministries located in Yokohama andbeginning of November, except for a smallother areas. However, no field audit was

number of items, etc. that remained unknown.

conducted for as long as three months from the

BOA gained the approval of the General Meeting

earthquake.

on November 5, and sent them to the Ministry of

dispatchedAsaofficials
result,BOA

toregional
completed

Finance together with some original copies thatsurvived the fire on November 6. The Ministry of
Finance heard the opinions of the respective
Ministries, and on December 19, returned thestatements of accounts to BOA, indicating that it
had no objection to them. Accordingly, BOA
submitted the statements of accounts to the
Cabinet, and on December 27, the Cabinet sent

Barrack office building after the earthquake (1924)

them back to BOA.
BOA sent the FY1921 Annual Audit Report(1) Recovery of the documents destroyed byfire

to the Cabinet in January 1924 together with the

BOA first needed to restore the revenue andfinal accounts. However, BOA stated that, "of theexpenditure accounts, the statements of revenue

final accounts for the special accounts this fiscal

and expenditure accounts of the respective

year, the following are not described according toMinistries, etc. for FY1921. BOA received these

the prescribed form," and reported figures of

documents from the Cabinet on August 2, andwhich item, etc. remained unknown. Also, for thewhile BOA was deliberating on the annual audit

figures for which comparison could not be madereport, it lost most of the documents by the fire

between the amounts of the final accounts andthat had spread to its office building. On

the amounts submitted by the Bank of Japan,

September 15, BOA reported the status of

BOA reported a statement to that effect. In Julydestruction of the documents related to final

1924, at the 49th session of the Diet to which the162Section 2 Operation of Audit Activities

final accounts for FY1921 were submitted, thedocumentary evidence as prescribed by the Rules"Act on Special Provisions Concerning theon the Submission of Accounts.

Settlement of Revenue and Expenditure from FY

In June 1924, BOA resolved a uniform

1921 to FY1923" was passed in response tohandling method for dealing with such a situation

being unable to conduct the regular work forat the General Meeting. It established handlingsettlingAct

guidelines consisting of 11 items, and had theprovided that special forms might be used for theaudit divisions deal with the matter based on an

final accounts, and that the time for submissionagreement they concluded with the auditees.

of the final accounts for FY1922 and FY1923 toSpecifically, the guidelines provided for matters

the Diet might be extended by one year, among

including the following: when calculation ofother matters.

revenues,

expenditures,

andunknown,theresponsible

revenue andexpenditure.

The

Meanwhile, BOA exerted efforts to recoverpersonaccounting

was

for

the

the large number of audit materials that were

submission of accounts was to submit a report

destroyed by fire, and increased the number ofclarifying the grounds therefor, the title and item

temporary staff members by 22 persons inof the revenue or expenditure or the type of cash

August 1924. The expenses required for suchor goods, the management period, etc. in lieu ofincrease of staff were included in the budget forthe statement of accounts; and if the statement of

FY1924 and FY1925.

accounts can be submitted, but documentary
evidence has been totally lost by fire, backup
copies or billing records that remain could besubmitted in lieu of the documentary evidence.
There were many Accounting Officers who
were unable to submit statements of revenues andexpenditures due to having lost all accountledgers and documentary evidence by fire in the
Great Kanto Earthquake. In June 1924, three
Directors were appointed as members of the
Examination

Committee

BOA officials working in the office building after theGreat Kanto Earthquake

Determination

and(2) Special measures on submission of accounts
and determination

was decided at the General Meeting in September

Many central government offices lost theirClerks of the Ministry of Railways was to be

office buildings by fire in the Great Kanto

deferred since they were unable to submit the

Earthquake, and branches of government offices,

accounts due to an event of force majeure. Then,etc. in the area from Tokyo to Yokohama also

in the same month, draft notification to Ministers

incurred enormous damage from the earthquake.

on the deferment of determination was decided at

As such, many government offices were unablea council of the General Meeting, and thetonotification was set to the Minister in October.

submitthestatementofaccounts

onconsidered

Emergency
thehandling

method from various perspectives. As a result, itof that year that determination for 21 Accounting

and
163

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

It was decided that the Division in charge

statement of expenditures in FY1922, and five

was to prepare an audit and determination

parts of said statement in FY1923. There weredeferment report on the Accounting Officers

also a considerable number of parts which were

subject to this treatment, and submit it to afound likely to be non-auditable and parts for

Bureau meeting. The number of Accounting

which audit was started but no conclusive

Officers for whom audit and determination were

decision was made.
Meanwhile, BOA repeatedly deliberated ondeferred in this way reached 91 persons in FY
1922 and 83 persons in FY1923.

how non-auditable figures should be reported in(3) Verification and confirmation of the final
accounts

the annual audit report, and decided to include all

As mentioned earlier, BOA establishedfinal accounts and to add a special explanation

special measures on submission of accounts andthereon in the annual audit reports for FY1922

determination, and at a council of the Generaland FY1923.

of such figures in the confirmed amounts of the

Meeting in June 1924, it decided on a uniform

In the FY1923 Annual Audit Report, BOA

method to verify and confirm the final accounts

wrote as follows after description on confirmation

for cases in which account ledgers, documentaryof the final accounts.

evidence, etc. on revenue and expenditure were
In the confirmed amounts of final accounts,
the contents of the following parts were unclear
because the relevant documents were lost by firein the great earthquake that occurred in
September 1923. However, BOA completed theaudit of these parts by taking into consideration
the revenues and expenditures in the previous
fiscal year or monthly revenues and expenditures
as well as other various conditions.
yen
General account revenue
30,641,877.735
General account expenditureyen
Under the jurisdiction of the Ministry ofInternal Affairs
196,335.805
Under the jurisdiction of the Ministry of
Finance
2,661,051.280
Under the jurisdiction of the Ministry of Army
1,023,929.490
Under the jurisdiction of the Ministry ofJustice
7,410.330
Under the jurisdiction of the Ministry ofAgriculture and Commerce
2,038,971.204
Under the jurisdiction of the Ministry of Postal
and Telecommunications
17,423,570.626
Special accounts[Omitted]
Of the overall final accounts and the final
accounts for the special accounts this fiscal year,
the following are not described according to thelost by fire in the Great Kanto Earthquake andthe statement of accounts could not be submitted.
Specifically, BOA decided to have the authorities
concerned submit a certificate stating the title anditem of revenue or expenditure for whichevidence could not be submitted, the amount ofsuch revenue or expenditure, the grounds for not
being able to submit evidence, etc. It also decided
that, if account ledgers remained, BOA would
use them as materials for the verification andconfirmation, and if account ledgers were lost by
fire, the revenue and expenditure for whichevidence could not be submitted were to begrouped by item and by amount, and the grounds
therefor were to be described in detail in theremarks column.
According to an investigation conducted by
BOA in May 1924, the parts which were foundto be non-auditable before starting the audit
included 28 parts of the statement of revenue
collecting in FY1922, and eight parts of said
statement in FY1923, as well as four parts of the164Section 2 Operation of Audit Activities

Through emergency Imperial Ordinances, theprescribed form pursuant to Article 1 of the Act
No. 1 of July 1924:
General account[Omitted]

government promulgated martial law (emergency
imperial edict) on September 2, the Order for
Maintenance of the Public Order, the Order for

The Bank of Japan was also affected by fire

Excessive Profit Control, and the Order forthat followed the Great Kanto Earthquake, so the

Disbursement Deferral on September 7, andfollowing was specially described about thecontinued to implement emergency measurescomparison between the amounts of the final

successively.

accounts and the amounts submitted by the Bank

measures by the time of the extraordinary sessionof Japan.

of the Diet in December reached more than 132

Theamount

spent

for

these

million yen with the second reserve fund and the"When comparing the amounts of the statementsof expenditure accounts of the respective
Ministries and the amounts submitted by the
Bank of Japan, there were differences as shownin the table below [omitted]. The above was dueto the fact that the Bank of Japan submitted theamount for which both jurisdiction and item
became unknown due to the Great Kanto
Earthquake,yen
2,736,198.270
as an amount unprocessed due to disaster."expenditures outside the reserve fund combined.
Next, since the time limit for disbursement
deferral under the Order for Disbursement
Deferralwasarriving,

the

Order

for

Compensation for Loss of Negotiable Instrument
Discounts by the Bank of Japan was promulgatedby emergency Imperial Ordinance on September
27. Under this Order, if a debtor became unable
to pay a negotiable instrument due to incurring
damage from the earthquake, and the negotiable(4) Remedial measures and audit following theearthquake

instrument was discounted by a bank on or

A. Recovery and reconstruction projects

rediscount the negotiable instrument, set a two-

before September 1, the Bank of Japan would
year grace period for the debt collection, and the

The Great Kanto Earthquake that occurred in
prefectures

government would provide compensation of up to

centering on Tokyo and Kanagawa Prefectures.

100 million yen for the loss incurred by the BankThe earthquake brought great damage to theseof Japan. The amount of such rediscount reachedareas, with 3.4 million people affected, more thana huge amount of 430 million yen by the

100,000 people dead or missing, more thandeadline date in March 1924.

September

447,000

1923

housesaffected

totallysevenburned,

more

In

than

September

1923,

the

government

120,000 houses completely destroyed, and moreestablished the Department of Imperial Capitalthan 120,000 houses partially destroyed. The

Reconstruction for handling reconstruction affairs

State also suffered huge damage directly. Damageof the Metropolitan area and other areas affected

to buildings of the central government offices,by the Great Kanto Earthquake. It formulated abranch offices, schools, and other facilities totaled

reconstruction

2

more than 2,904,000 m , worth more than 50

Yokohama, compiled the Draft Budget for

million yen, and the amount of damage toImperial Capital Reconstruction Project, which

structures reached more than 50 million yen.

was continued expenses for the six years starting
165

urban

plan

for

Tokyo

and

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

in FY1923, and submitted it to the 47th

additional temporary staff members in August(extraordinary) session of the Diet in December.

1924, soon after the budget of the continued

Furthermore, in July 1924, additional budget was

expenses passed the Diet. Expenses of 58,210

approved at the 49th (special) session of the Diet,yen (settled amount: 38,792 yen) for audit ofand the total amount of the Expenses for Imperial

post-earthquake remedial measures, etc. wereCapital Reconstruction Project was decided atincluded in the FY1924 budget. These temporary

over 573 million yen.

expenses were included in the budget every year
until FY1936 when the recovery project ended,

In October 1923, the Emergency Bureau of

although the amount gradually declined.

Building and Repairs was established under the

The following measures were taken on

jurisdiction of the Ministry of Finance to handle
recovery of the affected office buildings, factorysubmission of accounts.

buildings and equipment, etc. managed by the(i) As an exception to the Rules on therespective Ministries. The budget for such

Submission of Accounts, BOA decided inrecovery expenditures, etc. was approved at theNovember 1923 to have the Bank of Japanabovementioned 49th session of the Diet. The

submit the statement of accounts of discounts

amount of the budget for this as 10-year

on negotiable instruments under Imperial

continued project starting in FY1924 totaled overOrdinance No. 424 of 1923 every month,

705 million yen.

attaching such documents as the breakdownof the balance of negotiable instruments
categorized by bank. Since the government
provided compensation of up to 100 million
yen for the loss incurred by the Bank ofJapan from discounts on earthquake bills,
BOA designated these amounts to be madesubject to submission of accounts. However,
because this was a temporary system, it took
the style of an Inquiry Letter to the Ministerof Finance.
(ii) Based on the Rules on the Submission ofHighway Route 8 construction work of thereconstruction project (Horibata, Eirakucho, Kojimachiku, Tokyo City)

Accounts, BOA designated that a construction

B. Audit of the recovery and reconstruction
expenses

completion

reportbe submittedprescribed

form

for

construction

by

the

works

directly conducted by the Reconstruction

As mentioned above, huge funds totaling

Bureau and subsidized construction works

over 1.279 billion yen were to be spent for

conducted by Tokyo and Yokohama Cities

recovery and reconstruction from the Great Kanto

under the Imperial Capital Reconstruction

Earthquake. In order to audit this enormous

Project.

amount of expenses for the recovery andsubmission of documentary evidence forreconstruction

street repair expenses, land readjustment

project,

BOA

appointed

20
166

Also,

BOA

newly

requiredSection 2 Operation of Audit Activities

expenses, and park expenses of Tokyo and

BOA faced the need to decide on the handlingYokohama Cities (for the audit results, seepolicy as to whether or not these aids andlater discussion (page 170)).

subsidies should be audited. In September 1926,
BOA decided on the following standards for the

3. Audit of subsidized or specially guaranteed
entities, etc.

scope of entities, etc. to be audited based on

As a part of audit of entities subsidized or(i) entities, etc. for which subsidies or grants are

specially guaranteed by the government, etc.

expressly stipulated in law or contract fall

(Article 13, item (iv) of the BOA Act), BOA had

under the scope of audit;

Article 13, item (iv) of the BOA Act:

Taiwan Power Plant Co., Ltd., which the(ii) entities, etc. for which subsidies or grants

Government General of Taiwan had establishedhave a clear meaning in the budget fall underby providing a public electric project, etc. as

the scope of audit;

contribution in kind, submit accounts of revenues(iii) entities, etc. which are not required toand expenditures because government-held sharesprovide dividends of surplus or profit for thewere deferred shares, based on resolution by agovernment-contributed portion of the capital

Bureau meeting in January 1921. In addition, by

are regarded as entities, etc. and fall under

making notification to the Minister of Agriculture

the scope of audit; andand Commerce based on a resolution by the(iv) entities, etc. for which subsidies or grants are

summary General Meeting in December 1923,

not stipulated in law, regulations, contract, or

BOA had prefectures that provided subsidies forbudget, but which receive funds that canfishing port repair expenses submit statements ofpractically be regarded as subsidies or grants

accounts of revenues and expenditures and also

fall under the scope of audit.

conducted

subsidies.

Conventionally, if BOA completed audit ofFurthermore, in August 1925, BOA resolved at

a subsidized or specially guaranteed entity, etc.,

the

field

auditsofsuchGeneralMeetingthatbecausetheand found the accounts to be proper, BOA issued

Co - operative

Societies

CentralBank

wasa certificate of grant of discharge, and if it foundexempted from providing dividends of surplus forthe accounts to be improper, BOA sent a

the government-contributed portion of the capital

notification document to the competent Minister.

for 15 years from its foundation, the bank shall

However, with the amendment of the Rules on

be made subject to audit during those 15 years.

Audit Affairs in May 1922, the system of issuing

At first, BOA had no unified handlinga certificate of grant of discharge to these entities,

policy on whether or not audit should be

etc. was abolished. Under the revised system,

conducted for special public institutions, etc.

BOA sent a notification document to the

However,thecompetent Minister also when it found thegovernment came to frequently provide various

accounts to be proper, and when it found theaids and subsidies to special public institutions,accounts to be improper, it sent either aetc. The amount of such aids and subsidies grew

notification document or a document demanding

considerably,

disposition to the competent Minister (for thethroughout

roughlythe

Taishoquadrupling

era,

over

the

audit results, see later discussion (page 177)).

Taisho era (Imperial Final Account Statistics), so
167

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Section 3 Overview of Audit Results
Subsection 1

As for expenditure, BOA reported many

Audit cases reported in theannual audit report

matters on construction work and purchase ofgoods; specifically from the end of the Taisho era

1. Outline
The following table shows the numbers ofto the beginning of the Showa era, BOA foundcases of violation of the budget, laws, andmany cases where the budget was not used

Imperial Ordinances reported in the annual audit

properly in paying bonus, etc.
Audit findings on management of national

reports during the Taisho era.

property included cases where land and buildings

Number of audit cases reported in the annual audit
report(unit: number of cases)

were exchanged and the State received a

National
government
bonds

Public money

Government
property and
goods

Total

2
―
3
1
1
2
3
2
3
2
6
1
3
2

67
59
56
34
27
62
92
125
102
85
103
90
66
126

exchange, and cases where land and buildingsonrevenue,audit

Telecommunications also increased. For special

findings on tax revenues increased notably bothaccounts, cases of the Imperial Railway werein number of cases and amount in FY1918 andlarge both in number and amount; notable cases

FY1919. This was because excess and deficiency

were those where the budget was not used in thein

improperproper fiscal year, and those where the plan ormeasures on decision of tax bases, etc. were

design was improper. BOA also found purchases

newly added to the audit subject matters. Theof high-price articles by steel plants, the Tokyo

wartime profit tax was levied on profits gained

Artillery Arsenal, and the Monopoly Bureau, anddue to the economic boom brought by Worldin FY1920, it reported a case where the National

War I, as an extraordinary financial source for

Debt

military expenses of the war. Audit findings on

government bonds at an inappropriate timing, andnon-tax revenues also increased from the middle

the issuance conditions became disadvantageousof the Taisho era due to inappropriate supervision

for the State.

Expenditure

―
1
―
1
―
2
1
2
2
―
2
2
1
―

Revenue

―
―
―
―
―
―
―
―
―
1
―
―
―
―

FY

1912
1913
1914
1915
1916
1917
1918
1919
1920
1921
1922
1923
1924
1925

19
8
11
11
12
19
39
47
27
21
28
27
13
32

46
50
42
21
14
39
49
74
70
61
67
60
49
92

In

matters reported

collected

wartimeprofittax,

considerable disadvantage, cases of the so-called"exchange of new buildings" where buildings
were built outside the budget in the name of an
were leased free of charge. As for audit findings
on management of goods, there was a case in FY
1919 where post office workers misappropriatedand consumed stamps on a number of occasions,
and

the

Ministry

TelecommunicationsoffailedPostaltoandappropriately

manage receipt, issue and storage of the stamps.
For the general account, many cases of the
Ministry of Army and the Ministry of Navy werereported, and cases of the Ministry of Postal andConsolidation

Fund

issuednational

For the Special Accounts for Overseas

on revenue collection and other reasons.
168

Section 3 Overview of Audit Results

Territories, BOA reported the following cases:

were use of the budget for an unintended purpose

cases of the Government General of Taiwan

or abuse of negotiated contracts in purchasing

where many structures were abandoned in an

goods or in concluding construction contracts.

uncompleted state in the Erren River irrigation
works due to improper design and construction

Carrying forward the budget by forging
facts and purchasing non-urgent goods,
thereby causing a loss to the treasury

from FY1914 to FY1917 and where state

In a contract for purchasing electrolyticmonopoly goods were purchased at high prices incopper concluded in FY1919, the TokyoFY1923 and FY1924; and cases of the Karafuto

Artillery Arsenal pretended that the actual

Territory Government where proceeds from sale

goods had been delivered and carried forwardof timber cut down and transported by thethe budget for the payments that had not been

government remained uncollected in FY1924 andcompleted within the fiscal year to thewhere improper discounts were made similarly on

following fiscal year. In fact, however, thetimberTokyo Artillery Arsenal had concluded theworks and the Tulongwan power generation

cut

down

and

transported

by

the

purchase contract on April 1920, and the actual

government in FY1925.
Also, various large-scale bribery scandals

goods had been delivered by June, so thedrew public attention in the Taisho era. BOA

amount of the payment should have beenreported frauds of these scandals in the annual

included in the amount of unused budgeted

audit reports, including the case of the Navy infunds in the previous fiscal year. Also, thethe Siemens-Vickers-Mitsui scandal, the case ofpurchase volume was extremely larger as

the incident of the state-run company Yahata

compared to the use plan and the volume

Steel Works, and the case of an opium-trafficking

actually used.

incident in the Kwantung State.

(FY1920; Ministry of Army; 1.976 million yen)

2. Audit of armaments expenditures

Payment in violation of the purpose of thebudget

BOA's largest Auditees remained to be the

The Accounting Bureau of the Ministry ofArmy and the Navy even in the relatively calm

Navy planned to use funds for warship

Taisho era. After the end of the Russo-Japanesebuilding expenses to purchase three steering

War, both the Army and the Navy planned

gears, etc. to be used for newly building

military expansion, and from FY1907 to FY1923

submarines, but it changed the plan, deciding

when the Great Kanto Earthquake struck, theto use the funds for remodeling submarines,

armaments expenditures almost constantly took

and corrected the budget item. However, it

up more than 30% of the general accounts

changed the plan again to use the funds for

expenditure, with the proportion growing to 40 to

newly building submarines, which was the

50% especially from FY1919 to FY1922. During

purpose under the original expenditure item,

FY1918 and FY1922, the cases of the Army andwithout re-correcting the item; as a result, thethe Navy reported by BOA increased in both

payment was in violation of the purpose of thenumber of amount, compared to the first fivebudget.

years of Taisho era. Many of the reported cases(FY1920; Ministry of Navy; 3.46 million yen)
169

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

held such land unused.

3. Audit of the recovery and reconstruction
expenses(FY1924; Ministry of Internal Affairs; 11.539
million yen)

As a result of audit of recovery andreconstruction project expenses for the Great
Kanto Earthquake, BOA reported cases of

Inappropriate measure in acquisition of landleasehold rights

violation of the budget, laws, and Imperial(i) In acquiring land leasehold rights for

Ordinances in the annual audit reports from FY

residential land located in Tsukimicho,

1923 to FY1933. BOA reported many cases in

Shiba-ku, Tokyo City, etc., the Ministry

the annual audit reports, including cases where

paid overvalued acquisition prices, andacquisition of land or land leasehold rights was

failed to conduct sufficient investigation on

unnecessary or high-priced, cases of unnecessary,the contents of the land leasehold rights, so

non-urgent expenditures or expenditures that

it erroneously paid the prices for landshould have been categorized under other items,leasehold rights and land rents in amounts

and cases where measures for granting subsidies

higher than those for the actual land area.

forreconstruction

projects

or

loans

(FY1925; Ministry of Internal Affairs; 593,000

were

yen)

inappropriate. Major matters were as follows.

(ii) In acquiring land leasehold rights for land

Inappropriate measure in land acquisition(i) In buying back the site of Tokyo Higher

used as a stockyard, the Ministry failed toTechnical School located in Asakusa-

conduct sufficient investigation on rights,

kuramaethree

so it paid the price for the land leasehold

months earlier, the Ministry acquired therights to a person who was not thesite at a value 30% higher than thelegitimate right holder.

which

was

exchanged

appraisal value at the time of the exchange,(FY1925; Ministry of Internal Affairs; 326,000

although there was no change in the landyen)prices in areas around that site.

Inappropriate use of the budget(i) In granting a subsidy for land consolidation(FY1923; Ministry of Internal Affairs; 1.4

expenses, etc. to Tokyo City, the Ministry

million yen)thefailed to conduct sufficient investigation on

Ministry of Internal Affairs is to provide

the contents of the application, so it paid acompensation if there was more than asubsidy that is twice the amount of thecertain percentage of land that could not be

required amount.

(ii) In

conducting

landreadjustment,

used, under the current system. However,(FY1925; Ministry of Internal Affairs; 9.205

the Ministry failed to apply this system. It

million yen)acquired land for land exchange, and(ii) In granting a loan for land readjustment

allotted such land to land that could not be

expenses,

etc.

to

Yokohama City,

itused. In addition, it hastily purchased land

provided a large amount of loan in a lump-at high prices at various locations whensum payment, without giving considerationnecessary before the area of the land thatto the progress of the project.
(FY1925; Ministry of Internal Affairs; 1.3

could not be used was determined, and170

Section 3 Overview of Audit Results

Ministry paid the price in spite that themillion yen)
Inappropriate
contract
construction work

methodseller had not implemented these steps, andforbore the expenses required for such steps.
(FY1927; Ministry of Internal Affairs; 149,000

In conducting construction of roads andbridges,theMinistry

conducted

yen)

selective

part

of

the

The Reconstruction Bureau of the Ministryanegotiatedof Internal Affairs, which conducted the Imperial

contract for the remaining part, which was

Capital Reconstruction Project, was subjected to amost part of the construction, with the same

string of suspicions over acquisition of land andcontractor that had undertaken construction

land leasehold rights. In the FY1923 Annual

work previously.

Audit Report, BOA reported a case where the(FY1925; Ministry of Internal Affairs; 249,000

Bureau had provided the site of Tokyo Higher

yen)Technical School to Denentoshi Company for

Improper purchase of articles

exchange but bought the site back from thecompetitive

bidding

construction,

but

for

a

concluded

telephonecompany at a high price. In 1926, it was revealed

switchboard devices, the Ministry limited thethat there was bribery between officials including

switching system to a specific system without

the Director-General of the Land Leveling Bureau

giving room for competition, and concluded aof the Reconstruction Bureau and the company.

contract with the single company that had

Also, in FY1925 Annual Audit Report, BOA

handled that system, so the procurement pricereferred to cases such as the case where thewas overvalued.

acquisition price of land leasehold rights for(FY1925 an FY1926; Ministry of Postal andresidential land located in Tsukimicho, Shiba-ku,

Telecommunications; 8.278 million yen)

Tokyo City was overvalued, and stated that "it is

Other unreasonable mattersregrettable that intermediary agent Mr. TAKAGI(i) The Ministry paid special service bonus,

involved in this acquisition and raised a briberyInprocuring

automatic

scandal between the authorities concerned."

etc. to officials working for the Ministry ofInternal

Affairs

headquarters

andMeanwhile,

the

BOA

reportedillegalor

Reconstruction Bureau, etc. although they

unreasonable matters including the following

had engaged in affairs that were naturally

concerning the Great Kanto Earthquake, which

expected in their duties.

are not categorized as Expenses for Imperial(FY1926; Ministry of Internal Affairs; 219,000

Capital Reconstruction Project: the Ministry ofyen)

Army and the Ministry of Railways paid special(ii) In acquiring residential land located inservice bonus or extra allowance to officials in

Shin-Sakamoto Honcho, Shitaya-ku, Tokyo

areas affected by the earthquake; and the Ministry

City, the Ministry concluded a contract toof Railways purchased official residences andacquire the land after having the seller

land and buildings for training schools to a level

cancel the land lease rights, transfer the

beyond necessity, while facilities for recovery

property built on the land, and make theand reconstruction from the earthquake wereland into a vacant site. However, theurgently needed.
171

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

the order for the shipbuilding, and offered a large

4. Siemens-Vickers-Mitsui scandal

amountIn January 1914, the media reported anofmonetary

gift

to

Mr.

FUJII.

allegation that German company Siemens AG

Expenditures arising from these facts inevitably

was offering bribes to high-ranking officials ofaffected

the Japanese Navy, and heated discussion tookagreement on the contract price in this case wasplace in the 31st session of the Diet. Then,

improper."thecontract

However,amidst pursuing the Siemens case, bribery by UK

theprice.

Therefore,

government

gave

the

an

shipbuilding company Vickers Limited to high-explanation at the Diet that the Navy concluded aranking officials of the Japanese navy came tocontract with Vickers after conducting in-depth

light. This was a case where Navy officials had

investigation on the plan and price offered by Sir

received a large amount of money in placing an

W. G. Armstrong Whitworth and Co and byorder for building battle cruiser "Kongo" toVickers, and that a commission provided by aVickers in 1910. In April 1910, the Cabinet ofmerchant did not necessarily affect the contract

Gonbee YAMAMOTO collapsed, and in May of

price, and therefore the contract price wasthat year, lieutenant general MATSUMOTO andconsidered to be reasonable and not improper. In

engineering major general FUJII were sentenced

response, the House of Peers resolved that theto imprisonment at the general court-martial of

Navy should be "warned for the future," and thethe Navy. In July of that year, Mitsui & Co.

House of Representatives resolved that theexecutives, etc. were convicted by the Tokyo

contract price was "improper."District Court.
In the FY1912 Annual Audit Report, BOA
stated that the Director General of the Imperial
Japanese Navy Technical Department had an
extremely

grave

responsibility

for

the

shipbuilding plan and price investigation for thecontract with Vickers, and criticized as follows:"While making

a proposal

toprovideanBattle cruiser "Kongo"

enormous amount of money for building this
5. Yahata Steel Works caseship, it is considerably improper to regard theprice offered by the company to be reasonable

In order to meet the increased demand forand immediately conclude a contract with thesteel associated with military expansion, etc., thecompany, so the agreement on the contract pricestate-run Yahata Steel Works, which underwent

is unreasonable. In addition, the contractor

the first-stage expansion after the Russo-Japaneseregarded that intermediation by Mr. FUJII, who

War, continued to be expanded, undergoing thewas previously ordered to conduct preliminary

second-stage expansion in 1911 and the third-

investigation on the shipbuilding during his visit

stage expansion in 1916, but bribery had been

to the United Kingdom as a shipbuilding

committed in machinery purchases, etc. for thesupervisor and who was an engineer captain at

Works.
BOA investigated illegal acts and frauds

the time, had an influence on Vickers receiving
172

Section 3 Overview of Audit Results

through field audit, and criticized as follows inin the Kwantung State's local expense revenues

the FY1917 Annual Audit Report about the "roll"as royalties. However, the head of the Daliansteam engine and other machinery purchased

Civil Office, in conspiracy with a few persons,from Okura & Co., Ltd. for newly building apurchased a large amount of opium in the nameplate mill at the Works as the second-stageof a designated retailer, trafficked the opium, andconstruction for facility expansion and addition.

distributed the profits during the period from
June 1919 to December 1920.

BOA stated that "In purchasing the articles
above, Mr. HAGIWARA, an engineer at theIn FY1920 Annual Audit Report, BOA

Works who was a member of an ad hoc

criticized that the selling price set for selling thecommittee

andopium confiscated by the Kwantung State tosubmitted, in conspiracy with Mr. MIYAMOYO,

Hung Chi Shan Tang was unreasonably low, anda salesperson of the supplier above, an estimate

also did not issue a certificate of grant of

to which 10% company profit and 1% reserve todischarge for the revenues and expenditures

be offered to Mr. HAGIWARA and other people

account statements of Kwantung State for FY

as bribes were added. In response, the Works

1919 and FY1920. In December 1924, BOA sent

concluded a contract based on this estimate ina notification document to the Prime Minister

December 1915, and paid the abovementioned

stating that "Hung Chi Shan Tang located inprice.

other

Dalian City was ordered to continue to sell

officials of the Works received

bribes inopium at a low price, and this caused theconnection

goods

for

criminal incident of the former head of the Dalianconstruction works and expansion projects in and

Civil Office (omitted) and few other persons.

after 1912." It criticized that the Works purchasedThis was found to be improper management ofarticles at high prices that included the bribery

local expenses."on(Omitted)
withconstruction,

prepared

Furthermore,purchases

of

many

amounts and caused a loss to the treasury. BOA
7. Audit of public money

continued to report this case in subsequent fiscal
years, and the government more or less admitted

In the Taisho era, BOA came to report cases

the facts indicated by BOA in its explanation

on management, etc. of public money in thegiven at the Diet.

annual audit report every year, and this continued
until the beginning of the Showa era.
The most frequently reported cases were

6. Opium-trafficking incident
The Kwantung Agency had establishedcases on bailout loans provided by the Deposit

opium dealer Hung Chi Shan Tang in Dalian City

Bureau of Ministry of Finance, etc. to special

and had the dealer sell opium to designatedbanks and other institutions. Other cases included

retailers based on a reason to help opium addicts

cases where the authorities concerned separately

in the Kwantung State. Meanwhile, the head ofissued high-interest-rate Treasury Financing Bills

the Dalian Civil Office had the right to approvein spite that there were ample surplus funds ofthe selling quantity, price, and other conditions,the treasury, cases where the interest rates on

and a part of Hung Chi Shan Tang's revenues

loans of surplus funds of the treasury to the Bank

was paid to the Kwantung State and was includedof Japan were set low in light of the market
173

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

conditions, and cases where the accountingHouse

procedure

supplementary resolution that "The governmentfortreasury

money

was

not

of

Representatives

adoptedashould have the Industrial Bank of Japan return

appropriate.

the 5,854,833.254 yen that was lent. If this is not

The case on bailout of the Industrial Bank ofJapan, Limited reported in FY1913 Annual Audit

possible

due

to

some

circumstances,theReport was the first case on bailout loans togovernment should gain the consent of thespecial banks and other institutions which BOA

Imperial Diet for the loan in the form of areported in the item of public money in annual

budget, and revise the interest rate to a

audit reports.

reasonable rate. As a matter of course, it should(1) Bailout loan to the Industrial Bank ofJapanhave the bank achieve the effect of the
management reform as soon as possible andshorten the repayment period."

In 1913, the Industrial Bank of Japan faced
the need to conduct management reform due toIn spite of the report by BOA and adoption

factors such as default of a loan extended toof the supplementary resolution by the House of

Hasami Gold Mine Co, Ltd. (currently Kyoritsu

Representatives, this loan was continued. In

Co., Ltd.) based on an informal order given by

September 1916, the loan was assumed by thethe government which intended to increase

Deposit Bureau of Ministry of Finance by way of

production of gold and silver. On receiving aunderwriting industrial bank debentures, andconfidential request for bailout from the bank, theended up being non-performing loans of the

Ministry

Deposit Bureau.

ofFinanceextended

a

loan

of

(2) Fund investment by the Deposit Bureau

government-held 600,000 UK pounds sterling(over 5.85 million yen) at an annual interest rate

The funds of the Deposit Bureau steadilyof 2% to the bank via the Bank of Japan, andincreased throughout the Meiji and Taisho era,

had the Industrial Bank of Japan compensate forgrowing from approximately 300 million yen in

the deficit by using the profit margin gained

1912 to nearly 1.8 billion yen by 1926. Aboutthrough investment of the loaned money.

70% of the funds were sourced from postal
savings.

BOA indicated that, because this bailout
loan was a long-term loan, it belonged to the

The target of fund investment was initiallyState's expenditure, so it should gain the consent

limited to national government bonds, but afterof the Imperial Diet in the form of a budget. It

the Russo-Japanese War, funds became actively

stated that "In extending a bailout loan to theinvested in loans to the State's finance andbank, the Ministry used treasury money andaccounting, supply of low-interest funds to local

provided a long-term loan at a remarkably low

governments, and loans of funds for domestic andinterest rate, and spent an enormous amount ofoverseas projects. In the beginning of the Taisho

money without including this in the budget andera, investment in overseas projects, such as loans

final accounts of expenditure, so this case wasto China, increased, but after World War I, large

found to be improper."amounts of bailout loans were extended to special

At the Diet, both Houses resolved that thebanks and private companies which faced amatter in this case was an improper measure. The

business slump as a result of expanding their174

Section 3 Overview of Audit Results

business during the war. The default of large-

surplus of the treasury as expenses for World

amount investments in overseas projects and

War I to pay for the expenditures of the Ministry

bailout loans to companies, among other factors,of Army and the Ministry of Navy. An

brought a huge number of non-performing loans

extraordinary Diet session was convened in

into existence.

September 1914, and the consent of the Diet was

In the FY1922 Annual Audit Report, BOA

obtained for the budget of emergency armaments

cited a specific example of a bailout loan by the

expenditures and the Act Establishing a Special

Deposit Bureau, and stated that "Although someAccount for the Extraordinary Incident in 1914.

types of projects need special protection from theThis special account remained in existence forpolicy perspective, this type of project is a typeover 10 years until Japanese troops withdrewof which implementation should be ensured by afrom Siberia and Northern Sakhalin, it was closed

different method. The method of extendingin April 1925, and its receipt and payment were

special protection by providing funds at acompleted in July of that year. During thisspecially low interest rate by means of investingcourse, the budget of the Special Account for

funds of this account runs against the purport ofEmergency Armaments Expenditures was added

the Act on Special Account, and also it is not a

11 times, and the expenses for World War I

method for ensuring fairness." BOA criticizedtransferred from the general account and thethat the provision of a huge amount of bailout

excess expenditures amount over budget outside

funds for the purpose of protection and relief was

the reserve fund totaled over 919.8 million yen.

nothing but an unreasonable measure.

The settled amount was over 881.66 million yen,

Meanwhile, in the FY1924 Annual Auditof which little more than 70% was under theReport, BOA reported the same kind of audit

jurisdiction of the Ministry of Army and little

finding as that in the FY1922 Annual Audit

less than 30% was under the jurisdiction of theReport for loans extended to the Bank of Korea

Ministry of Navy.
BOA received the final accounts of theand the Bank of Taiwan.
Furthermore, as advisory organs on fundSpecial Account for Emergency Armaments

investment, the Investment Advisory Committee

Expenditures from the Cabinet in January 1927,

on Deposit Bureau Funds was formed in May

and sent the final audit report together with the1925 and the Investment Advisory Committee on

final accounts to the Cabinet in February. It

the Fund of Postal Life Insurance was formed inreported the following matters in the final audit

July 1926. BOA's Directors General joined thesereport:Spending of the budget for an unintended

committees as members.

purpose8. Auditofemergency
expenditures for World War I

Eight cases

armaments

26.156 million yen

Inappropriate measures in purchase of articles
Three cases

In July 1914, World War I broke out andJapan also declared war against Germany inConclusion

August. In joining the war against Germany, thepurchase of articles which should have been

government used the second reserve fund andput to competitive bidding
175

of

a

3.187 million yen

negotiatedcontractforPart 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

Four cases

for regular storage, while claiming to

1.667 million yen

newly

Other unreasonable matters
Four cases

build

workshops

330,000 yen

explosive - processingforhandling

returnedammunition in line with the withdrawal of

BOA reported 18 cases on the Ministry oftroops from Siberia.

Army and one case on the Ministry of Navy. The
main matters reported in the final audit report(Ministry of Army; 173,000 yen)were as follows. BOA reported cases of a loss(v) Taking advantage of the fact that there

caused to the treasury by an illegal act of an

was some room in the budget when

official, etc. for eight units of the Army and theclosingNavy, totaling 22,879 yen in amount.

Emergency Armaments Expenditures, thetheSpecial

AccountforSpending of the budget for an unintended
purposeMinistry conducted construction to newly(i)

The Ministry transported foreign rice

wireless telegraph stations for securing

purchased for expeditionary forces togeneral communication.

build off-grid power generation plants ofJapan, and transferred to the Ministry of(Ministry of Army; 142,000 yen)

Agriculture and Commerce, but the price(vi) The Ministry had planned to acquire land

and the transportation fee were treated asadjacent to Tokorozawa airfield in thepayments

following fiscal year by using fundsofexpenditures

emergency
without

armaments

correcting

budgeted

the

for

the

military

unit

expense items in the closing adjustments.

reorganization expenses of the general(Ministry of Army; 16.907 million yen)account, but it rented the land to prepare(ii) The Ministry purchased 41 automobiles

for the acquisition and paid the rent, etc.

for patients and other articles to be

out

of

supplied to the battlefield, but without

expenditures.

emergency

armaments

sending them to the battlefield, it lent

(Ministry of Army; 107,000 yen)them to peacetime forces, or build new(vii) Assuming that the use of liquid fuelwould increase, the Ministry newly set up

sheds and kept them there.
(Ministry of Army; 1.25 million yen)a refinery and ancillary facilities by using(iii) The Ministry not only newly set up fixed

funds for heavy oil cover purchaseexpenses.

sheds, repair plants, etc. to maintain andkeep light railway equipment that became(Ministry of Army; 6.971 million yen)

no longer needed due to changes in thephase of war, but also continued to spend

Inappropriate measures in purchase ofarticlesexpenses for repair, etc. from emergency

The Ministry made a one-time purchase ofarmaments

expenditureseven

100 airframes, 151 engines, and other parts forafter

aircraft to be used by troops dispatched tochanging to the peacetime storage status.
(Ministry of Army; 474,000 yen)

Vladivostok, before their product performance(iv) The Ministry newly set up cool powder

became clear, but it subsequently became clear
thatmagazines and dry powder magazines, etc.
176

their

performancecannotstandtheSection 3 Overview of Audit Results

1. Opinion
forlaw
administrative revision

intended use, so the Ministry transferred mostof them to the Civil Aviation Bureau and otheramendmentor

As opinions for legal or administrative

bureaus as decommissioned weapons.
(Ministry of Army; 3.092 million yen)revisions that were found to be necessary based

Conclusion of a negotiated contract forpurchase of articles which should have been
put to competitive biddingon Article 15 of the BOA Act, BOA made an

The Ministry purchased over 71,000 tons

Taisho era, and made no more opinions thereafter

opinion only for one case on standardization of
the budget for salaries of officials during the(for audit of improper bonuses, see page 216).

of coal as marine fuel by concluding anegotiated contract although the coal should

Opinion on standardization of the budget
for salaries

have been put to competitive bidding, so the

The bonus provided to officials was

price was overvalued.

mostly paid from the remainder of the salary(Ministry of Army; 1.602 million yen)budget, so there was an imbalance among

Other unreasonable matters
The Ministry had acquired leasehold

government offices depending on the existencerights for as long as 36 years for land andof extraordinary expenditures and the number

houses in Vladivostok to be used by militaryof vacant positions. It was necessary to achieve

officials dispatched to Vladivostok.

a balance by estimating the budget for bonus
based on fixed standards according to the(Ministry of Army; 149,000 yen)characteristics of the officials' work.

In deliberations on the final accounts of(FY1918)

emergency armaments expenditures and the final
audit report, the House of Representatives'
Committee on Audit adopted a resolution desiring
an action as follows: "In light of the result of

2. Audit findings on subsidized or speciallyguaranteed entities, etc.

examining the final accounts of emergency

BOA reported a large number of audit

armaments expenditures, the Committee desires

findings on payment of government subsidies inthat the government should conduct investigation

annual audit reports, but apart from these, if

and research on the method by which BOA or

BOA found any problem in management ofother organ can appropriately audit and supervise

specialsuch types of receipt and payment"

government

publicgrantedguarantees for

Also, in April 1913, the final audit report toinstitutions
such

to

which

the

subsidiesor

specialpurposesasindustrialfordevelopment or colonial management, it sent

wasnotification documents to government offices

presented together with the FY1925 Annual

supervising such institutions in order to call for

Audit Report to the Emperor.

their attention.

the Emperor for the Special
Emergency

Armaments

Account

Expenditures

In November 1924, BOA sent a notification
Subsection 2

document to the Minister of Finance on fundAnnual audit report to theEmperorinvestment by the Industrial Bank of Japan. Thiswas because management of the bank was
177Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

deteriorating as a result of default of enormous
amounts of loans extended to China based on thegovernment's informal order or recommendation
and uncertain financing the bank had madeduring the recession that followed World War I.
In addition, in September 1925, BOA sent a
notification document to the Government Generalof Taiwan on the revenues and expenditures
account statements from July 1920 to December
1923 of Taiwan Power Co., Ltd., calling for theGovernment General's attention on the projectplan and financing concerning the failure of thehydroelectric construction at Riyuetan Lake,
which had been the purpose of establishing
Taiwan Power Co., Ltd. Then in January 1927,
BOA sent a notification document to the Prime
Minister on the revenues and expenditures
account statements for FY1923, FY1924 and FY
1925

of

Oriental

Development

Co.,

Ltd.,

indicating the company's delay in adjusting its
reckless investments and loans and its improper
dividend distribution. Furthermore, in October
1927, BOA sent a notification document to theGovernment General of Korea and the GovernorGeneral of the Kwantung Bureau on the revenues
and expenditures account statement for FY1925
of Towa-Kangyo Co., Ltd., indicating the poor
condition of the company's investments and loans
and the need to reform and improve thecompany's management.
In March 1925, BOA specially set up achapter on "subsidized or specially guaranteed
entities" in the FY1922 Annual Audit Report to
the Emperor to report such audit results, andpresented

mattersonmanagement

Industrial

Bank

of

Japan,

of

Japan

the
Dye

Manufacturing Co., Ltd., South Manchurian
Railway Co., Ltd., Oriental Development Co.,
Ltd., and Taiwan Power Co., Ltd.
178

Section 4 Discussions on BOA's Authority

Section 4

Discussions on BOA's Authority

From the middle of the Taisho era, due tosuggested to the government that the pre-the effects of chronic recession and the Great

supervision system needs to be introduced in

Kanto Earthquake, a belt-tightening policy andorder to prevent diversion of the budget,

administrative and financial reform also became

expenditures beyond the budget, and purchase ofpolicy challenges for the State's public finance,

non - urgent

goods.

At

the

and

MIZUMACHI

setup

members

readjustment. Under such circumstances, moves

Examination

Committee

to expand BOA's authority developed inside andAmendment within BOA in July 1924 in order tooutside BOA, and discussions arose, from the end

investigate whether the Act needed to beof the Taisho era to the beginning of the Showa

amended in adopting the pre-supervision system.

era.

Director General of the 2nd Bureau Kesao OKA

there

were

strongcalls

forfinancial

on

the

same

time,

of

the

BOA

Act

BOA's

was appointed as the chair and four Directors

authority was discussed, a conflict between BOA,

were appointed as members of the Committee,

whichand they also engaged in negotiations with the

However,while

positively

expansioninterpreted

of

BOA's

audit

Cabinet and the Cabinet Legislation Bureau.

authority, and the Ministry of Finance, which
took a negative stance, occurred when BOA

Meanwhile, in the government as well, theconducted audit of the Co-operative Societies

Advisory Committee on Pre-supervision Body ofCentral Bank, and the matter was brought up for

Expenditure was formed within the Ministry of

discussion at the Cabinet, as discussed later.

Finance based on a Cabinet decision in December
1924, and 10 members were appointed from

Subsection 1

Ministry of Finance (Vice Minister), BOA

Concept of the pre-supervisionsystem(Director General of the 2nd Bureau OKA,
Director Bunichi KAWAMOTO, and DirectorofZennosuke NAGAYAMA (a total of three

execution

officials)), and the Cabinet Legislation Bureau.

(henceforth "pre-supervision system") since the

The Committee was to investigate and consider

time of foundation of the Italian supreme audit

such matters as the necessity, the feasibility, theinstitution, Corte dei Conti, in 1862, and France

implementing organ, the method, and the scope

had strengthened pre-supervision by, for example,of pre-supervision of expenditure. The Committee

putting financial controllers under the supervision

held its first general meeting in January 1925,

of the finance minister, after World War I. In

and BOA submitted a reference proposal andJapan, on the other hand, the Ministry of Financegave an explanation. Two panels―the institutional

considered introduction of the pre-supervisionpanel (mainly handling theoretical issues such assystem in the Meiji era, but the system failed to

the relationship between the pre-audit system andbe introduced. However, Kesaroku MIZUMACHI

the Constitution) and the implementation panel

who assumed the office of the President of BOA(mainly handling implementation issues such as

in March 1924 raised this issue, and ardently

the implementing organ, method, and effects of

Italy
supervision

had

adoptedbeforethea strictbudgetsystem179

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

pre-supervision)―were established in the general

Advisory Committee on Pre-supervising Body ofmeeting, and a policy was adopted to prepare a

Expenditure was abolished.
During this period, Director KAWAMOTO

bill and propose it to the Diet if a favorable
theof BOA as to make a business trip to various

investigation. BOA also prepared a draft proposal

countries from April 1925 to April 1926 in orderin which BOA served as the implementing organ

toofachievements of western pre-supervision systems.

outcomeisobtainedpre - supervision,

as

a

and

resultofprepareddraft

investigate

theactualThe Director

includinginvestigation results from various countries. His

BOA

Act

and

the

Publicreportedonandamendments of related laws and regulations
thesuccessively

examplesthereport on the pre-supervision system of Latin

Accounting Act as well.
thecountries made in February 1926 concluded asCommittee, a lot of arguments arose on matters

follows on the status of implementation of the

including what happens if a case that wassystem: (i) conventional discussions and academic

approved in pre-audit is disapproved in post-

theories on the pre-supervision system wereaudit, whether the implementing organ should be

mostly abstract or deductive; (ii) the current

BOA, the Ministry of Finance, or a newly

systems of France and Belgium started to beestablished organ, the merits and demerits of each

implemented only recently, so it was difficult tosuch case, the extent of delay that would occur injudge

administrative

countermeasures

implementation results, but both system were

therefor, coordination with the executive powers,

making considerable achievements; (iii) in orderand the time of implementation of the pre-audit.

to adopt the pre-supervision system, it was

The implementation panel submitted a progress

necessary to thoroughly revise the fundamental

report on specific matters, scope, method, etc. offramework

implementation of the system to the Committee,

accounting at the same time; and (iv) in order tobut the progress report of the institutional panel

adopt

contained two conflicting opinions that existed

necessary to work on it with an adequate

within the panel on whether or not giving BOA

framework.

However,

at

the

work

two

and

panels

of

the

the

meritsofandsupervisionpre-supervision

demeritsofoffinancesystem,

it

their

and
was

the mandate to conduct pre-audit is inappropriate

The Commission on Administrative Reformin light of BOA's nature and its mandate as

took up this issue at its general meeting in Julyprovided under the Constitution. Without being

1926, but the Commission was abolished in Juneable to draw up a definite plan, the Committee

1927 without reaching any conclusion. The

submitted a report to the Minister of Finance inCouncil on Administrative System Deliberation

December 1925, stating that, because there was a

was newly formed, and it took over this issue,

need to learn the opinions of the respective

but the Council, too, was abolished in July 1929

Ministries on the pre-supervision system forwithout seeing any progress on the matter. As a

expenditure in advance, it would be appropriate

result, the pre-supervision system was neverto deliberate the matter in the Commission on

realized.

Administrative Reform that was newly formed in
the Cabinet in May 1925. After that, the180Section 4 Discussions on BOA's Authority

Subsection 2

session of the Diet. Of these two bills, the former

Submission of a Bill Partially
Amending the BOA Act by Diet
members

was intended to provide compensation of up to
100 million yen for the loss which the Bank ofJapan

In February 1926, the "Bill Concerning Debt

was

to

incur

throughdiscountsofWorkout of Lending to China of the Industrial

earthquake bills, by issuing public bonds, and the

Bank of Japan, Limited and Two Other Banks"

latter was intended for the government to lend

was

of

public bonds to banks holding earthquake bills

Representatives at the 51st session of the Diet.

based on a contract for redemption by annual

From 1917 to 1918, the Cabinet of Masatake

installments of up to ten years so as to cover the

TERAUCHI extended a loan totaling 140 million

remaining amount of the loss. They were aimed

yen to the warlord administration in China

at bailing out the debtor of earthquake bills andwithout secure collateral, through the Industrialbanks holding earthquake bills.

being

deliberated

in

the

House

Bank of Japan, the Bank of Taiwan, and theSince major holders of earthquake bills wereBank of Korea, based on preliminary negotiations

special banks such as the Bank of Taiwan, Dietby private individual Kamezo NISHIHARA. It

member Saburo CHIBA and one other member

had become unlikely to be able to collect bothof the Business Comrade Party submitted a Billthe principal and interest of this so-called

Partially Amending the BOA Act with the same

NISHIHARA loan. This bill was intended to bailcontents as the previously submitted amendment

out the three banks above, which were facing

bill to the 52nd session of the Diet. This

managerial difficulties, by issuing public bonds.

amendment bill consisted of two points: (i) have

Because such bill was submitted, a Bill

BOA audit the final accounts of revenues andPartially Amending the BOA Act was submitted

expenditures of bodies to which the government

to the Diet by Diet member Sanji MUTO andwas obligated to contribute; and (ii) have BOA

one other member of the Business Comrade

audit revenues and expenditures of special banks

Party. This bill was intended to expand BOA's

and special companies of which executives wereauthority, make bodies to which the government

appointed by the government. The bill was

was obligated to make contribution and specialreferred to the Committee on the Accountant Billbanks and special companies of which executives

and was deliberated, but the government's reply

were appointed by the government subject towas

BOA's audit, and require the correctness of theirreplied that the purpose of auditing the final

final accounts to be reported in the annual audit

accounts of bodies, etc. other than Ministries andreport.

Agencies was to ensure that BOA's main work tonegative.

Specifically,

thegovernment

However, since the term of the session ofsupervise the State's finance and accounting was

the Diet was pressing, this amendment bill was

carried out thoroughly, and considering this fact,referred to the Committee but was shelved.

the following could be said. As for (i), theIn January 1927, the "Bill on Public Bonds

government had the power to protect property

for Compensation for Loss from Earthquakerights of the entity, etc. as a contributor thereto,

Bills" and the "Bill on Remedial Measures forbut because the bodies, etc. had no direct

Earthquake Bills" were submitted to the 52nd

relationship
181

with

the

State'sfinanceandPart 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

accounting, and because various provisions on

the 56th session of the Diet in February 1929,

their supervision were stipulated in law andDiet member CHIBA submitted a Bill Partiallyadministrative supervision was exercised by

Amending the BOA Act of the same contents torequiring government permission or approval for

the House of Representatives, for the third time.

important matters, there was no need for BOA to

At this time, another Bill Partially Amending theaudit the bodies, etc. in particular. Then,

BOA Act for increasing the number of secretaries

regarding (ii), the government appointed theby one person was submitted by the government,

executives of the bodies, etc. based on the idea

so the two bills were deliberated concurrently bythat special banks, etc. had a special status in the

the Committee on the Bill to Partially Amend thefinancial world or the economy and society and it

Board of Audit Act. During the deliberation, Diet

would be better for the State to appoint themember Masutaro TAKAGI of the Party of

executives who

Democratic

were

responsible

for

their

Constitutionalism

submitted

themanagement, and not because they were related

following amendment for the bill submitted byto the State's finance and accounting, so it wasDiet members.

not appropriate for BOA to audit and supervise
Bill Partially Amending the BOA Act
The Board of Audit Act shall be partiallyamended as follows.
The following item shall be added after Article
13, item (iv), and item (v) shall be revised toitem (vi):(v) the final accounts of revenues andexpenditures ofbanks,
companies,
andpartnerships for which executives are appointed
by the government;
Article 20 - 2 (1) The Board of Audit shall notify
the competent Minister of the results of theaudit set forth in Article 13, items (iii) through(vi), and if it finds any matter to be improper,
it may give notification to the competent
Minister and request that a reasonable measure
be taken.
(2) The Board of Audit may report the contentsof the notification under the preceding
paragraph in the annual audit report.

the special banks, etc. in light of BOA's primary
duty.
At the Committee, there was a case where
members demanded the government to request
attendance of the President of BOA, but it wasnever realized. Meanwhile, as the crisis facing thebanks holding the earthquake bills became
publicly known through the deliberation onearthquake bills at the Diet, a financial panic
started in March, and the bill was shelved.
Furthermore, another Bill Partially Amending the
BOA Act for increasing the number of BOA's
Assistant Directors by two persons was also
referred to the Committee, and this bill submitted
by the government passed the two Houses.
The financial panic further intensified as the
Bank of Taiwan suspended its operation in April

The government was negative about the bill

1927. In May, an extraordinary session of thesubmitted by Diet members, stating that there

Diet was convened, and the Act on the Special

was a credibility problem in having special banks

Lending Operations of Bank of Japan andand special companies undergo BOA's audit, butCompensation for Loss (Act No. 55 of 1927) andthis amendment and the bill submitted by thethe Act on the Lending of Funds to Financial

government were approved by the Committee

Institutions in Taiwan (Act No. 56 of 1927) wereunanimously, and also passed the plenary session

established. As a result, a crisis was avoided. At
182

Section 4 Discussions on BOA's Authorityof the House of Representatives on February 28.

to have BOA's Members stationed in regions was

Furthermore, as for the bill submitted by the

not immediately necessary.

of

When the bills were set from the House of

secretaries by one person, the House found that

Representatives to the House of Peers in thisthe organizational expansion was insufficient, andsession,adopted a supplementary resolution indicating

governmentthat "because it is most necessary to ensure

secretaries by one person passed the House, andthorough audit by BOA in light of the current

the bill submitted by Diet members for expanding

circumstances inside and outside Japan, theBOA's authority was shelved.

government

for

increasingthenumber

only

the

for

bill

submitted

increasing

the

by

the

numberofgovernment should prepare and submit the final

Due to an increase in the number of State-plan on expansion for the budget of the next

owned bodies, etc., BOA was also considering

fiscal year."ways to audit such bodies from around 1925.

Also, at the Committee, questions were

Therefore, the passage of the Act Partiallyasked not only on the contents of the bills, but

Amending the BOA Audit submitted by Diet

also on BOA's authority, etc. in a concentrated

members at the House of Representatives and themanner. The questions were on issues including

resolution

the following: (i) adoption of the pre-supervision

expansion had large impact on BOA. In June

system; (ii) conducting audit of secret funds; (iii)

1929, members of the Examination Committee on

attendance of BOA's Members at the Diet; (iv)the BOA Act Amendment compiled the "Matters

BOA's audit of local expenses of local public

on Fundamental Policy on Budget Request" based

bodies (particularly the six major cities); and (v)on an order by the President of BOA. It

introduction of a system to allocate BOA's

estimated a total of 319,590 yen as necessary

correspondents.

theexpenses and a personnel increase of 157 persons

government gave the following answers: (i) since

based on the following policy: (i) appropriating

the pre-audit system had much to do with thein the budget only the expenses necessary forgovernment, it was under careful deliberation; (ii)enhancing BOA's audit capability which areaudit as to how secret funds were spent would

urgent, in order to make BOA's inherent mandate

undermine the significance of secret funds, so it

effective; and (ii) appropriating in the budget thewas not appropriate; (iii) it was not necessary for

expenses

BOA's Members to attend the Diet; the Dietauthority which are found to be necessary fromshould make a determination by comparing thethe national viewpoint in light of the present

wording of BOA's annual audit report and theconditions.

To

these

questions,

of

the

necessary

House

for

on

organizational

expandingBOA'sgovernment's explanation, in principle, and theAlso, around this time, Directors jointly

government's fair explanation would be sufficient

presented to the President of BOA a demand on

for responding to Diet members' questions; (iv)organizational expansion and officials' treatment

the government agreed to the intention to audit

consisting on seven items, stating "it is necessary

and supervise the finance of local public bodies,to take into consideration the following matters in

but this should be conducted not by BOA, but by

light of the trend of the times and BOA's current

the Ministry of Internal Affairs; and (v) a system

audit capability."
183

Part 2

Chapter 3

However,

BOA in the Taisho Era (1912〜1926)

theCabinetofeffect.

Osachi

HAMAGUCHI adopted a belt-tightening policy

Nevertheless, in June 8, 1926, the Ministry

and mentioned that the budget "shall not beof Finance requested temporary postponement ofrequest for any new matters" in the Cabinet

audit, indicating doubt on the above interpretation

decision on the FY1930 budget compilationof the provision. This involved the issue of apolicy. Accordingly, BOA refrained from making

dividend cut by the Bank of Korea. At the time,

this budget request, and in the same month,

the reform of the long-ailing Bank of Korea

notified the Minister of Finance of only the

became a challenge and its dividend yield was

expenses for enhancing BOA's audit capability, as

declined to no more than 5%. Thus, the bank was

a reference for the FY1930 budget compilation.

exempted from distributing dividends for thegovernment-held shares pursuant to Article 36 of

Subsection 3

theDispute on audit of the
Co-operative Societies Central
Bank

Bank

of

Korea

Act.

If

the

above

interpretation was to be applied, BOA's audit also
had to be conducted for the Bank of Korea. The

Article 13 of the BOA Act listed matters

Ministry of Finance seemed to have a concern

subject to audit by BOA, and one of them wasthat if BOA audited the Bank of Korea, its

themanaging conditions would come to light and

"the

final

accountsofrevenues

andhinder the reform.

expenditures of bodies and public or private
structures subsidized or specially guaranteed by

At BOA, Director General of the 1st Bureau

the government" set forth in item (iv). In August

KAWANO answered that (i) the interpretation of

1925, the General Meeting resolved that thelaw and the scope of mandate could not be

Co-operative Societies Central Bank fell underchanged because they were resolved by thethis provision and should be audited. The bank

General Meeting, (ii) audit of the Bank of Korea

was founded in December 1923 based on the Act

would not hinder the progress of its reform, and aon the Co-operative Societies Central Bank, andproper method could be taken by taking various

it was a special public institution aimed at rural

circumstancesfinance for which half of the capital of 30 million

postponement of audit also could not be accepted

yen was contributed by the government. Since thebecause the prearranged dates have already beenbank was exempted from distributing dividends

specified by issuing an order.

into

consideration,

and

(iii)

for the government-contributed portion of theThen on June 11, Vice-Minister of Financecapital to the State for 15 years, this was

Akira DEN visited President of BOA Kesaroku

interpreted by the General Meeting to correspond

MIZUMACHI, and made a similar request undertoas

an informal order form Minster of Financeprovided under the BOA Act. In deciding on the

Osachi HAMAGUCHI, but the President of BOA

form for the submission of accounts, BOA

continued explaining its stance. Furthermore, on

decided to conduct a field audit from June 14,

June1926 in order to understand the bank's details,

TSUKAMOTO

visitedand notified the Minister of Agriculture and

MIZUMACHI,

andForestry and the Minister of Finance to that

confidential opinion of Prime Minister Reijiro"subsidizedor

speciallyguaranteed"

184

12,

Chief

CabinetSecretary

President

conveyed

of

Seiji
BOA

the followingSection 4 Discussions on BOA's Authority

WAKATSUKI: "It is regrettable that a doubt

provided the following explanations on thesearose on the audit mandate provided under the

points, noting that they were his personal

BOA Act. Since there is no material that can

opinions: (i) not only low-interest funds, but also

clear the doubt in this case and the opinions ofinterest-free loans of grants extended to insurance

the Ministry

Cabinetcompanies after the Great Kanto Earthquake, andLegislation Bureau have not matured yet, weordinary grants and incentives fall outside thedesire to sufficiently study and consider thisscope of the provision; (ii) the Co-operative

matter. Therefore, we request that BOA would

Societies Central Bank is construed to be

postpone the audit for a while." On receiving

categorized as a specially guaranteed body; (iii)such request from the government again, thethe audit of the bank is based on not a change in

President of BOA replied that the resolution of

BOA's resolution,

the General Meeting could not be changed, but

resolutions around 1900 or 1903 had decided on

BOA

the

a policy to conduct audit of matters that have

Co-operative Societies Central Bank for a while,

subsidy or grant included in their purposes ofand notified the bank that it would postpone theestablishment for a while due to the need to unify

field audit, which was originally planned to be

the audit policy, but subsequently, audit issues

conducted from 9:00 a.m. of June 14.

have been gradually added when necessary, and

would

of

Financepostpone

and

the

the

audit

of

but

an

addition

thereto;Meanwhile, in the afternoon of June 14,

the Co-operative Societies Central Bank is one of

Director General of the Budget Bureau Isaosuch additions; and (iv) it is likely to be difficult

KAWADA of the Ministry of Finance visited

to have all subsidized and specially guaranteed

Director General of the 1st Bureau KAWANO,

bodies submit accounts, and to audit them by theand requested that he wished to directly discuss

same method with a small number of personnel,

the issue of the Co-operative Societies Central

and there are cases where the accounts ofBank and make consideration, because there were

subsidized bodies can be audited based on thesome misunderstandings on the grounds forState's documentary evidence of revenue anddiscussion and details of the issue. The following

expenditure

four questions were raised: (i) whether loans ofaccounts, depending on the nature of the

low-interest funds were similarly included in thesubsidies.

On

scope of Article 13, item (iv) of the BOA Act;KAWADAstated(ii) whether the Co-operative Societies Central

understanding on the points in question, and left.

Bank was categorized as a subsidized body or a

After that, nothing was heard of from thespecially guaranteed body; (iii) whether the audit

Cabinet Legislation Bureau and the Ministry ofof the bank was to be conducted based on a

Finance, so on October 13, Director Generalchange in the conventional interpretation of the

KAWANOBOA Act or an addition to the interpretation; andTSUKAMOTO, and told him that BOA may(iv) if BOA's interpretation based on a resolution

inevitably have to conduct audit if it could not

is fixed, whether there is no room for discretion

receive an answer within the next one or two

in applying the interpretation to the same type ofweeks. TSUKAMOTO replied that they would

bodies. The Director General of the 1st Bureau

take a measure as soon as possible. After
185

without

havinghearingthatvisited

them

this
he

explanation,

could

Chief

submitgain

anSecretary

Part 2

Chapter 3

BOA in the Taisho Era (1912〜1926)

demanding the answer some more times and also

February 25 and 26 and March 2, 1927, theurging the Ministry of Finance, President of BOA

Director in charge and four other officials

MIZUMACHI

received

dated

conducted a field audit of the Bank. Then in

January

1927

Secretary

October of that year, the statement of revenues

13,

a

from

document
Chiefand expenditures and documents to be attached

TSUKAMOTO, stating as follows.

thereto of the Bank were newly stipulated
1. There is still some doubt as to whether the
Co-operative Societies Central Bank iscategorized as the body set forth in Article 13,
item (iv) of the BOA Act, so the governmentis currently studying and considering thematter, but the government has no objection to
BOA interpreting as such and conducting audit
at this time.
2. The government wishes to discuss with BOA
in advance that, when BOA specificallyconsiders whether it should treat a special
body, etc. like the Co-operative Societies
Central Bank, which has a close relationshipwith the government, as an body subject toapplication of Article 13, item (iv) of the BOA
Act, BOA would hold confidential talks withthe government, and send the decision and anotice of audit after such talks.

throughamendment

of

the

Rules

on

the

Submission of Accounts, and such documents
came to be submitted starting with those for FY
1927.

By this measure, the pending question was
solved for the time being. However, since there
also was a risk that the latter part of thisdocument could cause a misunderstanding that
BOA agreed to the contents unconditionally, theDirector General meeting decided that BOA
should hand over to the Chief Secretary amemorandum stating that interpretation of the
BOA Act should be based on BOA's original
interpretation. On February 26, Director General
KAWANO carried the memorandum and visited
the Chief Secretary at the Diet, and explained tothat effect. However, he received an answer that
this point was obvious, so he brought back the
memorandum.
In this manner, the dispute between BOA
and the government over audit of State-owned
bodies saw an end. For a period of three days on
186Section 1 Changes in BOA's Organization

Chapter 4

BOA under the Former Constitution in the Showa Era(1926〜1947)

Even in the early Showa era, Japan still

Due to the expansion of the Manchurian

suffered from the economic recession that had

Incident and the associated budget inflation, thecontinued since the end of the Taisho era. The

organizational framework of almost all state

Japanese economy received great damage fromorgans was reinforced, and such organs as thethe financial crisis in 1927 and the great global

Manchurian Affairs Bureau and the Japanese

depression that originated in the United States in

Embassy in Manchuria were newly established.

1929, and social anxiety grew.

In addition, companies such as South Manchuria
Railway

Amid such social and economic situation,

Co.,

Ltd.

and

Manchuria

Electric

the military expansion of the Showa era, which

Telegram and Telephone Co., Ltd., which were

led to foundation of Manchukuo, Second Sino-

subject to audit as bodies subsidized or speciallyJapanese War, and other incidents, began inguaranteed by the government at the time, were

Manchuria. The Manchurian Incident that broke

expanding their projects, funneling an enormous

out in September 1931 had a large influence onamountJapan's public finance thereafter, and the budget

framework was insufficient to enhance substantial

inflated rapidly. The main cause of such budget

audit

inflationorganizational

was

an

increaseinarmamentsofinfunds.

responseThe
toconventional
suchexpansion

to

audit

situation,

and

meet

the

expenditures associated with expansion of thestrengthening of the war preparedness became a

Manchurian Incident and expenses for militarypressing issue.

enhancement from FY1932 onward. Meanwhile,

In December 1941, the Imperial Army andthe Army and the Navy steadily reinforced andNavy attacked the Pearl Harbor in Hawaii, andenhanced military forces from FY1932 onward

plunged into the Pacific War. Japan was in aon the grounds of expansion of the Manchurian

superior position in the beginning of the war, but

Incident.

this did not last long, and in 1944 when Saipan

In this way, the proportion of armaments

fell, air raids on Japan's mainland started. At first,

expenditures in the total budget increased every

facilities such as military plants became theyear, and the armaments expenditures in thebombing targets, but from around February 1945,

broad sense, which cover the expenses of theindiscriminate nighttime firebombing in cities

Army and the Navy plus the governmental

began.

pension for military personnel, etc., alreadyIn March 1935, the main building of theexceeded half of the total expenditure by FY

former BOA office building was newly built, and1935.

BOA moved in from a temporary office building

Besidesarmaments

expenditures,

anincrease in relevant expenses and subsidies for

in

local

rural

Munitions was established in November 1943, it

communities from the fatigue from the financialdelivered the office building up to that Ministrypanic in the beginning of the Showa era wereand moved to the former office building of thealso part of the cause for the budget inflation.

Ministry of Education. The former office building

financeexpensesforsaving187

Otemachi.

Then

after

the

MinistryofPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

underwent

into two groups, and each group took a day off

bombproofing work by using reinforced concreteon every other Sunday. Then in May 1945, theas an air defense measure, and a defense teamroof of BOA's office building and vacant lots in

was formed within BOA and the team conducted

the neighborhood were attacked by numerous

air defense training, but in 1944 when air raids

firebombs. A wooden two-storied warehousebecamewaswhich stood at the back of the Ministry of

reorganized and reinforced into an organization

Finance was totally burned down, and largeof all officials, headed by the Senior Director

amounts of documentary evidence on emergency

General. Around that time, entire BOA becamearmaments expenditures which had been kept inready for war, such as adopting a constantly

the warehouse were lost in fire.

of

the

Ministry

inevitable,

of

the

Education

defenseteam

working system where all officials were divided

Section 1 Changes in BOA's Organization
Looking at changes in BOA's organizationthat continued to increase. For example, in theand the fixed number of officials over the twenty

audit of military expenses for Manchukuo, one

years of the early Showa era up to the end ofteam of dispatched officials conducted field

World War II, there had been no change in theaudits of only a few locations due to budget andorganizational structure until March 1937 everpersonnel restrictions, and it was impossible tosince the two-Bureau structure was returned toeffectively audit the facilities of Army units andthe three-Bureau structure with the amendment of

the Ministry of Foreign Affairs, etc. which were

the Public Accounting Act in 1921. Although thescattered over a vast area.

number of some Kotokan was increased, theTherefore, efforts were made to enhance thefixed number of BOA's officials decreased

work efficiency, such as expanding commissioned

overall. Specifically, in order to deal with theaudits and omitting statements of accounts andincreasing complexity of the auditees' work anddocumentary

to conduct field audits effectively, the fixed

temporary stopgap measures, and expansion of

number of Assistant Directors was increased by

the organizational structure was urgently needed

two persons in April 1927, the number ofmore than anything.

evidence,

but

they

were

all

secretaries by one person in April 1929, and four
However, while the number of these Kotokan

1. Expansion of organization into a fourBureau structure

was increased, the fixed number of clerks was

In light of the circumstances above, thedecreased, so the number of clerks in 1935

BOA Act was amended and expansion of thebecame more than 30 persons less than that inorganizational structure was finally realized in

1921. Accordingly, the total number of officials

April 1937, before the outbreak of the Second

substantially decreased.

Sino-Japanese War. Specifically, one Bureau andresidents were newly put in place in April 1934.

This organizational structure was insufficienttwo Divisions were added, and the conventional

for effectively dealing with the affairs of audit

three-Bureau structure was revised to a four188

Section 1 Changes in BOA's Organization

Bureau Structure; in addition, one Director

one Director General and four to five Directors

General, two Directors, and four Assistantwere to take charge of affairs of audit.

Directors

wereresponsetothisadditionallyappointed.

organizationalIn
2. Downsizing of BOA's structure

expansion,

In December 1941, Japan plunged into the

distribution of activities were also revised.
However, the scale of annual revenue andPacific War, and the war expanded at once into

expenditure kept on growing year after year

an all-out war. The government established anfollowing the organizational expansion, and thisobjective

trend was particularly notable for the Special

administration in order to adapt to the situation,

Account for Emergency Armaments Expenditures

and to dispatch surplus personnel as staff

that was established in 1937. The emergency

members of Japanese Military Administration inarmaments

2.034

Southeast Asia. For this objective, it decided on

billion yen in FY1937, increased to 4.795 billion

implementation guidelines for simplification of

yen in FY1939, and to 9.487 billion yen in FY

administration at the Cabinet in June 1942, and1941, growing in leaps and bounds as the war

instructed government offices to consider andexpanded. In line with this, the statements ofpropose specific plans for cutting personnel byaccounts and documentary evidence and their

30% at central government offices, by 20% atattached documents submitted for audit of thelocal government offices, and by 10% at

Army and the Navy reached an enormous

operational agencies.

expenditures,

which

were

to

simplify

andfortify

thevolume, and the locations of field audits became

At the time, although BOA had additionallywidespread over a vast area. Thus, in April 1938,

established two Divisions in 1940, the regular

30 clerks were additionally appointed on a

fixed number of Hanninkan had rather decreased

temporary basis for the audit of the Special

from the number in 1938, and while the volume

Accountof affairs of audit continued to swell, it wasfor

Emergency

Armaments

obvious that conducting administrative reform

Expenditures.
Furthermore, in April 1940, the BOA Act

would make implementation of the affairs of

was amended again in order to enhance BOA's

audit more difficult. Nevertheless, BOA preparedaudit capability. One Division each was added toa specific plan according to the cause of

the 2nd Bureau and the 3rd Bureau, making

accomplishing

BOA's organization a four-Bureau, 16-Division

downsized its structure as follows based on the

structure.

plan in March 1943.

Armaments

expenditures

were

the

aims

of

the

war,

and

conventionally audited by three Divisions in the(i) The four-Bureau, 16-Division structure was

2nd Bureau, but under the new framework, they

revised to the three-Bureau, 14-Divisionwere to be audited by five Divisions. Two

structure. In line with this, one Director

Directors and four Assistant Directors were

General and two Directors were reduced.

additionally appointed in line with this revision.

(ii) Among the Kotokan of which fixed number

As a result, the fixed number of Directors

had been provided by law, the fixed numbers

became 16 persons, and the number of Assistantof

Directors became 28 persons. In each Bureau,

residents were to be provided by Imperial189

secretaries,

Assistant

Directors,

andPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

from 28 persons to 18 persons. Also on the same

Ordinance.

occasion, the temporary appointment of additional(iii) Special measures were taken for Members
who were excluded from the fixed number ofclerks,officials due to the structural downsizing,

abolished. In order to newly audit the Special

and measures were taken to be able to keep

Account

the Directors, etc. who were dispatched as

Expenditures, three Assistant Directors and 58

the staff members of Japanese Military

clerksAdministration

in

and

temporary basis. The tasks assigned to theofficials

theUnitedrespective Audit Divisions were also revisedofSoutheast

Asia

Mengjiang

which

was

for
were

decidedin

Emergency

additionally

1938,

was

Armaments

appointed

onaaccording to this structural downsizing.

Autonomous Government under posts outsideThe

the fixed number of officials when they

three - Bureau,

14 - Division

audit

returned to Japan.

structure was continued until the amendment of

The reason for deciding to provide for thethe BOA Act in 1947 after World War II,

fixed number of Kotokan other than the Members

although there were slight changes in the fixedby Imperial Ordinance was that, unlike thenumber of officials.

Members, secretaries and lower-ranking officials
3. Dispatch of officials overseas

had no life tenured status, and their number
needed to be increased or decreased depending

The Pacific War, which was pursued throughon the volume of affairs of audit of the final

the national mobilization regime, also had a great

accounts to be processed, so amending the law

influence on BOA's work.

more

In September 1938, the Ministry of Armycomplicated and hence it would be morerequested BOA to select and dispatch one

appropriate to provide for them by Imperial

Soninkan and two Hanninkan to engage in the

Ordinance. With this amendment, the fixed

Finance Bureau review and evaluation work of

number of officials other than the Members came

Mengjiang United Council (corresponding toto be decided by the Cabinet, similar to the caseaffairs of audit). The Mengjiang United Councilof other general government offices, in spite thatwas established in Inner Mongolia in November

BOA was independent from the Cabinet as an1937, and became the Autonomous Governmentorgan under the direct control of the Emperor.

of Inner Mongolia in 1939. In response to this

each

time

would

make

the

work

request,The Bill Amending the BOA Act for thus
simplifying the organizational

BOA

Novemberstructure wasdispatched

1938.

When

three officials intheAutonomous

submitted to the 81st session of the Diet at theGovernment of Inner Mongolia was established,

end of 1942, and was promulgated in March

the dispatched officials established and developed

1943. At the same time, Imperial Ordinance No.

audit laws and regulations, such as the Former

143, which provided for the fixed numbers ofMongolia Board of Audit Act, the Regulations ofsecretaries and lower ranking officials, wasFormer Mongolia Board of Audit, the Rules on

promulgated. The fixed numbers of secretaries,

the Submission of Accounts, and the Standard ofresidents, and clerks were unchanged, but theFormer Mongolia Board of Audit, for establishingnumber of Assistant Directors was decreased

the system for supervision of finance and190Section 1 Changes in BOA's Organization

officials.

accounting as staff members of the Board ofAudit of former Mongolia. They also participated

The dispatch destinations were Southernin the enactment of laws and regulations,

General Army (Singapore), the Fourteenth Army

includingthe(the Philippines), the Fifteenth Army (Burma),

Regulations on Accounting, and the Rules on

the Sixteenth Army (Java), the Twenty-Fifth

AdministrationinArmy (Malay), and the Seventeenth Army (being

cooperation with the budget authorities, andorganized at the time). The dispatched officials

exerted efforts to establish the finance andwere Chokuninkan attached to the General Army,accounting system. By the end of the war, BOA

who was planned to assume the position of thedispatched a total of nine officials, including

chief civil administrator, and 17 other officials. In

Kotokan such as Assistant Directors.

addition, a small number of officials from thethe

PublicofAccounting

Disbursing

Act,
Officer

In addition, in April 1942, the Ministry of

Ministry of Finance and the Ministry of Internal

Army requested dispatch of BOA officials as

Affairs were also to be allocated as staff

staff members of the Department of Military

members for financial management supervision.

Administration

Management

Director HIGASHITANI and another Director,

Supervision to be newly established in the

two Assistant Directors, one resident, and 12

military headquarters in Southern Asia.

clerks were recommended by BOA, and orders

Financial

The military administration of occupied

were issued for them to serve as civilians

territories in Southeast Asia was implemented in

employed in Japanese army, from the end of May

areas such as Malay and Sumatra based on theto"Implementation Guidelines on Administration of

HIGASHITANI was planned to serve as the chief

Occupied Territories in Southeast Asia" which

civil administrator of the General Army, but hewas decided in November 1941. In June 1942,

was first appointed as an Investigator of East

the

was

Asia Development Board appointed by Imperial

established in the Southern Expeditionary Army

Order, and then appointed as the chief civilGroup, and positions such as the chief civil

administrator. Other officials were dispatched toadministrator and civil administrators were put inthe respective duty stations as civil administratorsplace.

or civilians employed in Japanese army.

Military

Administration

OfficeAsia,administrative

offices

beginning

of

June.

Director

In order to achieve goods results in the

For this Japanese Military Administration inSoutheastthemilitary

wereadministration

financialmanagement

requested to dispatch a considerably large number

supervision, the dispatched officials prepared theof officials as staff members for military

Rules on Audit Affairs, the Rules on theadministration, and staff members other than

Submission of Accounts, and the Audit Policy for

those for supervising accounting were alreadymilitary administration financial management inbeing dispatched in large numbers by various

theMinistries. BOA was also to respond to thisengagedrequest, and in May 1942, it concluded anadministration financial management.

occupiedinterritories,
affairsofandsubsequently

audit

of

military

agreement with the Army on the status and

The total number of officials dispatched tosalaries of and the cost burden for dispatchedSoutheast Asia reached 25 persons, including
191Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

later-dispatched officials, but only few of themweakening, and its audit capability continued to

could return to Japan in two years as had been

decline.

agreed with the Army. For most of them, the war

In order to deal with the shortage of young

ended while their service in Southeast Asia had

officials such as clerks, a large number of non-

been

as

regular officials were appointed. From the end ofdeterioration in the war situation and difficulty of1943 to 1944, BOA recruited students anddispatching staff members for replacement from

graduates of girls' schools such as Futaba Girls'

BOA, and they could finally return to Japan inHigh School and Junshin Girls' High School as1946 after being captured as prisoners.

members of volunteer corps, and assigned themprolongedduetoreasonssuch

to the respective Divisions.
4. Decrease of officials
Due to the prolongation of the Second SinoJapanese War, munitions factories were expanded
and newly constructed frequently, and many
public employees changed their jobs. This trend
became particularly noticeable after the outbreakof the Pacific War, and many BOA officials also
resigned. In addition, some BOA officials weresuccessively enrolled on the active list or
received emergency call-ups. As a result, thenumber of BOA officials gradually decreased,
except for elderly officials who were in such
positions as Directors.
Toward the end of the war in 1944 and1945, an increasing number of BOA officials
were called up, and the number of BOA officials
decreased dramatically. There were some vacant
positions even among Kotokan, and only elderly
Directors General and Directors were filling thepositions. For example, the 3rd Division of the 2nd Bureau was in charge of auditing the Ministryof Munitions, which had become the largest
auditee since 1943, among other auditees. This
Division only had a Director and two clerks toaudit a vast range of audit subject matters,
including the Ministry of Munitions as well as
the Army's aviation-related maintenance andconstruction works, all air force units, and part ofinland units. In this way, entire BOA was192

Section 2 Operation of Audit Activities

Section 2 Operation of Audit Activities
scope

The period from the beginning of the Showaofcommissioned

auditswas

alsodramatically expanded in 1944.

era until the outbreak of the Manchurian Incident
can be considered as an extension of the Taisho

Subsection 1

era both politically and economically. There wasno substantial change in the system of financeand accounting and its operation either, and there

The finance andsystem during war

accounting

1. Changes in the systems of budget and final
accounts

was no major institutional or operational changeThein audit.

budgetcentering

expenditures continued

However, the period of 14 years from the

of

the

to

on

armaments

inflatethe

Incidentinoutbreak of the Manchurian Incident until the end

outbreakof World War II was a process through which theSeptember 1931 until the Second Sino-Japanese

entire nation became embroiled in war as the

War in 1937, but there were hardly any

wartime regime strengthened after the Second

institutional changes in finance and accounting.

Sino-Japanese War. The functions of various

However, after the February 26 Incident in 1936,

national mechanisms were also consolidated into

when the government started to aim at "quasi-

the single aim to wage war, and operations ofwartime finance," which put the defense budget

such mechanisms were also affected in various

at the center of public finance, in place of "soundways. BOA also was no exception.

finance,"publicManchurian

after

financebegan

toinflateAs discussed later, the accounting laws andremarkably, and qualitative changes were brought

regulations were simplified during war, and such

about to the conventional fiscal system. The firstunderlying circumstances inevitably had a large

cause for such change was the demand for

influence on the audit system, and affairs of audit

prompt and flexible use of the budget in order towere compelled to be drastically simplified. Thisrun the war economy. The second cause was thesimplification was first made in the form of

rapid abridgement of the mandate of the Dietomitting statements of accounts and documentary

under the slogan "to renovate all aspects of theevidence, etc. or substituting other documents forgovernment" of the Cabinet established by Koki

such statements of accounts and documentary

HIROTA at the time. The process of the change

evidence based on designation or approval, or

can be divided into two phases. Specifically, in

expanding the scope of commissioned audits.

the first

However, after the enactment of the Wartime

management of finance and accounting was

Exceptional Public Accounting Act in 1942,changed, and in the second phase, legislative

submission of accounts for expenses related tochanges were made, starting with the enactment

the Army and the Navy was simplified throughof the Wartime Exceptional Public Accounting

stipulation, instead of designation or approval. As

Act in 1942, soon after the start of the Pacificthe wartime regime progressed, this simplifiedWar.

system was spread to cover also the general(1) First phase

phase,

notthesystem,but

theThe first phase was characterized by the fact

expenses of other government offices, and the193Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

that public finance was managed by using special

subsequent critical war situation and disordered

provisions on the principles of constitutionalwarfinance, such as the reserve fund and national

Simplification of the Budget" was decided by thetreasury imposition contracts out of the budget.

Cabinet in October 1943. The document stated,

The Special Account for Emergency Armaments"in order to adapt administrative management toExpenditures, established immediately after thethe decisive battle, affairs of the budget andoutbreak of the Second Sino-Japanese War, hadsettlement of accounts shall be thoroughly

many characteristics that could not be found insimplified according the guidelines below as another fiscal systems, such as treating the period

extraordinary wartime measure, and necessary

until the end of the war as one fiscal year. In

preparations shall be made to respond to

managing the special account, no annual financial

emergency situations," and the set forth thestatements were prepared, so there was nofollowing six items:

economy,"Matterson

Thoroughopportunity to conduct a detailed review of the(i) To simplify the forms of the budget

accounting(ii) Toofrevenues

andexpenditures

enable

quick

and

easy

budgetcompilation

conducted by a large number of Accounting(iii) To enable prompt and flexible budget

Officers who were scattered across the vast East

implementation

Asia, and it could not be helped that the(iv) To simplify the affairs of settlement ofaccounting became imprecise.

accounts(2) Second phase
The second phase was from FY1941 to the(v) To amend accounting laws and regulations

end of the war. When the wartime finance(vi) To take necessary measures also for local

became full-fledged, the need to strengthen

budget, based on the purport of thisprompt and flexible budget grew further, and it

document.

became insufficient to merely deal with it fromAs specific measures for one of the items

the management aspect as before. In July 1941,

above―to simplify the affairs of settlement of

the "Guideline on the Basic Fiscal and Monetaryaccounts―, the document set forth that the affairs

Measures" was decided by the Cabinet. The

of national property should be simplified andguideline was intended for rationalizing fiscal

submission of the statements of the changes inmanagement, reforming the accounting system

the value of national properties, etc. should be

and the budget compilation method, and securingsuspended

prompt and flexible budget management, thereby

commissioned audits should be expanded, and thequickly responding to the conditions of the times.

procedure of submission of accounts should be

Based on the guideline, first, the Wartime

simplified by reducing the documentary evidence

Exceptional Public Accounting Act was enacted

required to be submitted, etc.

during

the

war,

the

scope

of

in February 1942 and the Wartime Exceptional

The government office that most strongly

Regulations on Accounting in April 1942. As ademanded such reform of the systems of budget

result, the accounting system was reorganized so

and final accounts was the Ministry of Army. In

as to quickly respond to the wartime regime.

particular, the Army's proposals were said to beMoreover, in order to further respond to thedirectly adopted for (iii) and (iv) above.
194

Section 2 Operation of Audit Activities

2. Expansion of exceptions to the Public
Accounting Act

finance and economy became even more focused

Exceptions to the provisions of the Publicalso to be reorganized into a wartime system, andAccounting Act on such matters as advanced

the Wartime Exceptional Public Accounting Act

funds, payments in advance, and payments by

was enacted in February 1942 and the Wartime

rough estimate, etc. were allowed under the

Exceptional Regulations on Accounting were

Regulations on Accounting mainly for military-

enacted in April of the same year. Their major

related accounting, based on a compromisecontents are as follows.

on military demand. The accounting system was

between the demand of the Army and the Navy(i) The scope of cases in which contracts forto make expenditures more flexible and theadvanced funds, payments in advance, andposition of the fiscal authorities to uphold thepayments by rough estimate may be

principles of the Public Accounting Act. The

concluded was broadened even further

scope of munitions became extremely wide withthan before.

the strengthening of the wartime regime, and(ii) The system of guarantee of bills wasthere was a need to further expand the scope of

introduced in order to promote munitions

such exceptional expenditures. Soon after thefinance.

outbreak of the Second Sino-Japanese War,(iii) The procedure for submission of evidence"Matters on Cases in Which Advanced Funds,

that was required for establishing non-Payments in Advance, Payments by Roughliability as provided in Article 36 of theEstimate, or Negotiated Contracts Are Allowed

Public Accounting Act was simplified forfor the Time Being" (Imperial Ordinance No. 584

the case where an Accounting Officer hadof October 1937) was promulgated, and thislost or damaged retained cash, etc.

Imperial Ordinance expanded the scope of(iv) The scope of cases in which negotiatedexceptional expenditures by the Army and thecontracts may be concluded was further

Navy and the scope of cases in which the Army

expanded, and the contract procedure wasand the Navy may conclude negotiated contracts.

simplified.
(v) Various

Later, this Imperial Ordinance was amended

exceptional

provisions

were

for

Regulations

on

several times, and the scope of subjects for which

establishedexceptionalandAccounting, such as making it possible tonegotiated contracts may be concluded washave the official in charge of accounting

further expanded; then the contents were passedin the battlefield immediately use revenue

on to the Wartime Exceptional Public Accountingas

Act and the Wartime Exceptional Regulations on

operational needs during war.

expenditures may

be paid

expenditure,

the

due

to

militaryor

In this manner, the Wartime Exceptional

Accounting that were enacted in 1942.

Public

3. Enactment of and changes in the Wartime
Exceptional Public Accounting Act and theWartime Exceptional Regulations on
Accounting

Accounting

Act

was

intendedforincreasing the convenience of procurement ofmunitionsbysimplifying

theaccounting

procedures for expenditures and for promoting
production

As the war expanded, Japan's wartime
195

ofmunitionsthroughmunitionsPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

finance. In order to deal with the emergency

government offices to attach the documents ofproduction increase in the munitions industry, theresolution on the management plan to the

Act was amended twice in 1943 and 1945, andstatement of accounts for all types of treasury

themoney, if the management plan has been decided

Wartime

Exceptional

Regulationsonor changed (Article 45 of the amended Act).

Accounting were also amended six times from1944 onward. The 1943 amendment of the Act

The second amendment was made in 1934.

allowed government offices other than the Army

Based on Article 6 of the Order for Enforcement

and the Navy to also fully enjoy the exceptions.

of the Japan Iron and Steel Manufacturing Co.,

Through three times of amendments of theLtd. Act (Imperial Ordinance No. 24 of 1933),

Wartime Exceptional Regulations on Accounting

the Japan Iron and Steel Manufacturing Company

that followed this amendment of the Act, thebecame subject to BOA's audit in 1933, so thisscope of exceptional expenditures was expanded

amendment was made in order to treat theeven more, and the accounting procedures for

submission of accounts of the "the final accounts

expenditures of the budget were thoroughlythat are specially made subject to audit by thesimplified.

Board of Audit by laws and Imperial Ordinances"(Article 13, item (v) of the BOA Act) in the

Subsection 2
Simplification
during war

Submission of accounts and inoffice audit

same way as the submission of accounts of theofof bodies and public or private structuressubmissionof"the final accounts of revenues and expenditures

accounts

subsidizedor

speciallyguaranteed

by

the

government" (Article 13, item (iv) of the BOA

The Rules on the Submission of Accounts

Act) (Article 80 of the amended Act).

were amended only twice during the period from

After that, Japan entered into the wartime

the beginning of the Showa era to the time before

regime, and delays in submission of accounts

Japan entered into the wartime regime.
The first amendment was made in Aprilbecame noticeable not only for the Army and the1927 for the purpose of rectifying the reckless

Navy, but also for general government offices,management of treasury money by reinforcing

due to personnel and supply shortage. Thus, inaudit.

order to quickly respond to the situation,

The first point of revision was to have arevisions were made several times from 1941

separately designated detailed statement to theuntil the end of the war to simplify the

final statement of accounts for each fiscal year,

submission of accounts. In 1942, the Wartime

from among the statements of treasury money

Exceptional Rules on the Submission of Accounts

management prepared by officials in charge ofwere established as exceptions to the submission

management of treasury money (Article 44 of theof accounts by the Army and the Navy during

amended Act). The second point of revision waswar, and in 1944, the Rules on Temporary

that, while the plan for management of treasury

Measures

Concerningmoney

Accounts

were

was

conventionallyrequired

to

be

the

established

Submission

of

to

for

providesubmitted only for the fund of postal life

applying a part of these wartime exceptions also

insurance, the system was revised to require

to non-military administrative agencies. The
196

Section 2 Operation of Audit Activities

developments of simplification of submission ofpartlydue

accounts under the wartime regime are discussed

Exceptional Rules on the Submission of Accounts

below in stages.

and(1) Amendment of the Rules on the
Submission of Accounts under the wartime
regimeConcerning the Submission of Accounts, and

the

to

enactment

Rules

on

of

the

Temporary

Wartime
Measuresonly minor amendments were made twice in1942 and once in 1945.

In March 1941, the Rules on the Submission(2) Wartime Exceptional
Submission of Accountsof Accounts were amended to drastically simplify

Rules

on

the

the conventional procedure for submission of

After the start of the Pacific War, theaccounts. The contents of the amendment were as

Wartime Exceptional Public Accounting Act andfollows.

the(i)

Wartime

Exceptional

Regulationson

accounts

andAccounting were enacted, and a need arose to

such

the

handle the submission of accounts by the Armystatements of management of treasury

and the Navy separately from those by generalmoney and the fund of postal

life

government offices. Accordingly, the Wartime

insurance, which have been designated or

Exceptional Rules on the Submission of Accounts

approved by BOA may be substituted by(Circular Notice of BOA No. 2) were establishedother documents or their submission may

in May 1942.

Somestatements

documentaryofevidence,

as

These Rules provided for "Submission of

be omitted.

Accounts by the Army and the Navy during War(ii) The matters to be described in theto(Including an Incident Equivalent to War)"documentary evidence for contracts, etc.

(Article 1 of the Rules), and allowed formay

exceptions including the following.

informationbetoomittedbeappended

based

on

BOA's

(i) By gaining BOA's approval, matters to be

designation or approval.
(iii) The scope of contract documents that were

described in documentary evidence which

required to be submitted when having

are categorized as military secrets may beconcluded contracts for construction work

substituted by codes, etc. (Article 2), or alloror part of such maters may be omittedforpurchaseorborrowingof(Article 3).

manufactured articles, etc. was narrowedby raising the level of the contract(ii) If documentary evidence, etc. has beenamounts for which such submission was

discarded due to war or other unavoidable

required.

grounds,agrounds

therefor(iv) The forms of statements of accounts such

indicating

shall

be

the

submitted(Article 4).

as statements of management of treasury
money and the fund of postal

certificate(iii) The Rules allowed for the following as

life

insurance and statements of handling of

simplification

of

the

submissionofcash outside the budget were simplified.

accounts to be applied only to the Armyand the Navy:

After this, there were no major amendments-Omissionof the Rules on the Submission of Accounts,
197ofsubmissionofcertainPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

statements of accounts and documentarybudget was diverted in order to pay urgent andevidence, such as documentary evidence

unavoidable expenses due to the need foron revenue, or substitution thereof byoperation as allowed under Article 10 of theother documents (Articles 5, 6, and 10)

Wartime Exceptional Regulations on Accounting.
The 1944 amendment involved quite drastic-Raising of the limit of the contract
amounts

for

which

documentary

evidence

submissionofrevisions in order to further simplify submissionisinof accounts for armaments expenditures.

required

The first point of revision was to apply thecontracts for sale, loan, etc. of property orarticles (Articles 11 through 15, Article 18,

Rules

to

the

submission

and Articles 21 through 27)

emergency-Reduction in the submission frequency of

Ministry of Munitions that was newly establishedstatements of revenue collecting, andin November 1943. The second point of revisionextension of the time limit for submission

was to amend the provisions on the case ofof statements of expenditures, statements

having discarded documentary evidence, etc. dueof cash revenues, etc. (Articles 9, 16, andto war or other unavoidable grounds; in the past,29)

if documentary evidence, etc. had been discarded,armamentsofaccounts

expenditures

of

for
the

(iv) The provisions on submission of accounts

a certificate indicating the grounds therefor wasfor acquisition of materials and goods by

to be submitted, but this was revised so as tothe method of bartering allowed under the

expand the scope of cases in which a certificate

Wartimeon

may substitute for documentary evidence to cover

Accounting were introduced (Articles 7

not only cases of discarding, but also cases ofand 8)

loss and damage. Also, when it is difficult to

Exceptional

Regulations(v) While it became possible for ministers ofsubmit documentary evidence due to war or otherstate to guarantee bills only in the case ofunavoidable grounds, it became possible tosatisfying military demand or in othersubstitute a written guarantee of another official,necessarysuch as a higher official, for the documentary

cases

under

the

Wartimeevidence, with BOA's approval.

Exceptional Public Accounting Act, theBesides

provisions on submission of accounts inthese,

drastic

simplificationsuch case were introduced (Articles 17, 19,

measures were taken by expanding the scope ofand 20).

cases in which documents may be omitted or be
substituted by other documents, and raising the

The Wartime Exceptional Rules on thesubsequently

level of the contract amounts for which such

amended three times in 1942, 1944, and 1945,

submission of documentary evidence, etc. wasand the submission of accounts became evenrequired.

SubmissionofAccounts

were

Following this major amendment, the third

more simplified with the amendment in 1944 andamendment was made in January 1945. In this1945.
stipulated

amendment,

the

scope

of

submission

provisions on the method of submission of

documentary

evidenceforcontract - related

accounts in the case where cash outside therevenue and expenditure was narrowed by raising

The 1942

amendment

newly

198

of

Section 2 Operation of Audit Activities

the level of the contract amounts for which the

emergency armaments expenditures, Nakajima

submission was required.

Aircraft Company was to submit documents such(3) Rules on Temporary Measures Concerning
the Submission of Accounts

as detailed statement of payment, summary sheet

In May 1944, a part of the Wartimebalance sheet, which it had been preparing before

Exceptional Rules on the Submission of Accounts

the nationalization. This idea was completely

was applied not only to the Army and the Navy,different from the conventional method

but also to general government offices, and thesubmission of accounts, which had been applied

Rules on Temporary Measures Concerning theto government offices; it was a precursor of theSubmission of Accounts (Circular Notice of BOA

corporate-type submission of accounts which

No. 2) were enacted to further simplify the

BOA had adopted for auditing public enterprises,

Exceptional Rules.

etc. after the war.

of manufacturing cost elements, trial balance,of

The provisions in which the Wartime

Following the establishment of the first

Exceptional Rules on the Submission of Accounts

munitions arsenal, Kawanishi Aircraft Co., Ltd.

were applied mutatis mutandis to submission of

was nationalized in July 1945, and the second

accounts

andmunitions arsenal was established, but the war

expenditures included provisions on the case

ended before applying exceptions to submission

where documentary evidence was discarded dueof accounts of the arsenal.

fornon - military

revenues

to war, the provisions on the case where receipt
Subsection 3

and payment were made through military notes orField audits

foreign currencies, and provisions on omission of
information to be appended to documentary
evidence for contracts for sellout of property, etc.

Audit of the Special Accounts for Overseas
Territories

There were also provisions on such handling as

Starting with the acquisition of Taiwan as a

reduction of submission frequency and omission

result of the Sino-Japanese War, Japan leased orof a part of description matters for statements of

took possession of the Kwantung State andaccounts.

Sakhalin(4) Others

Furthermore, in 1910, Japan annexed the Korean

throughtheRusso-JapaneseWar.

Although it was not uniformly stipulated as

Empire based on the Japan-Korea Annexation

provisions on exceptions like (1) to (3) above,

Treaty, and in 1920, it put South Pacific islands

when

was

under its mandate. Each time, a special accountnationalized and its first munitions arsenal wasfor the Government General of Taiwan, theestablished in the last days of the Pacific War in

Kwantung Agency (which became the Kwantung

April

BureauNakajima

1945,

Aircraft

exceptions

Co. ,

were

Ltd.

appliedtoin1935),

theKarafuto

Territory

submission of accounts of the arsenal by way ofGovernment, the Government General of Korea,

approving an Inquiry Letter issued by theor the South Pacific Mandate was established.

Minister of Munitions. Specifically, in lieu of theThese

documentary evidence to be attached to theindividually, and were continued until Japan loststatement of handling of advanced fund ofits sovereignty over these territories with the end
199

specialaccounts

weremanagedPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

the wartime regime, prompted by the outbreak ofof World War II in 1945.

the

For these Special Accounts for Overseas

SecondSino-Japanese

War

in

1937.

Territories, BOA conducted field audits regularly

Specifically, the annual revenue and expenditure

togetherthewere inflated due to the fact that a large amountinconvenient transportation to these areas, andof expenses were required for newly establishing

carried out effective fiscal supervision on theand expanding railways, communication facilities,

Special Accounts for Overseas Territories.

etc., developing and using underground resources,

within-officeaudits,despiteincreasing

The following part describes the audit offood

production,

andpromotingaccounts for Overseas territories from FY1926 tofactory production, and the fact that a large

FY1945.

amount of funds were transferred to the Special(1) Overview of public finance in overseas
territory

Account

forEmergency

Armaments

Expenditures.

The following table shows the fiscal scale ofIn particular, the transfer of funds to thethe Special Accounts for Overseas Territories inSpecial Account for Emergency Armaments

the early Showa era based on the amount of the

Expenditures increased every year. In the case of

final accounts of expenditure. It shows thethe Government General of Korea with thelargeness of the weight of these special accounts

largest fiscal scale, in FY1937 when the transfer

in Japan's public finance. More than 80% of theof funds started, the transfer only accounted for

total amount of expenditure of the Special

2.7% of the expenditure budget, but in FY1942

Accounts for Overseas Territories were those ofwhen the Pacific War started, it increased tothe special accounts for the Government General

14.1%, and further to 17% in FY1944. Althoughof Korea and the Government General of Taiwan.

funds were mostly not transferred in FY1945 dueto the end of World War II, the total amount of

FY

1926
1930
1935
1940

(Unit' 1,000 yen)
Special Accounts for
GeneralOverseas Territories
account
Government Government
General of General of
Korea
Taiwan317,674
189,470
91,9401,578,826
367,854
208,724
109,970
1,557,863
466,493283,958
123,9432,206,477
1,207,749
813,516
262,9075,860,213

funds transferred during the period until FY1944
reached an enormous amount of over 1 billion
yen.
In terms of revenue, revenues from taxes
that had been successively introduced since FY1935 grew every year.
The tax systems themselves had beendeveloped in forms that that were suited to the

Next, looking at changes in the fiscal scale

fiscal conditions of the respective territories sinceof overseas territories, the fiscal scale basicallythe establishment of each Special Account forshowed a moderate increase until FY1935,

Overseas

although there were some changes by fiscal year.

Incident, the mainland tax system was changed

However, it inflated significantly from FY1935

dramatically for securing financial resources foronward.

the war, and in response, new taxes such as the

Territories.

After

the

Manchurian

The cause for such inflation was that theoccasional profit tax the Second Sino-Japanesepublic finance in overseas territories shifted into

War special tax, and corporation tax were200

Section 2 Operation of Audit Activities

introduced from FY1935 onward in order togrewannually,

theproportion

of

the

increase tax revenues. For example, looking at

supplementary funds in overall revenue graduallychanges in tax revenues of the Special Accountdecreased.

for the Government General of Korea in and after
FY1935, the proportion of tax revenues in overall(2) Audit framework for the Special Accounts
for Overseas Territories

revenue gradually decreased due to a notable

BOA audited the Special Accounts forincrease in public bonds and borrowings, but theOverseas Territories by classifying the audit

amount of revenues increased from 100 million

subject matters by region and having two or three

in FY1937 to 160 million yen in FY1940, andDivisions take charge of the audit.
According to distribution of activities as ofreached 640 million yen at the end of World War

April 1937, the audit of the Kwantung Bureau,

II.

the

Lastly, for your additional information, we

Karafuto

Territory

Government,therefer to the existence of supplementary funds

Manchurian Affairs Bureau, and South Manchuria

from mainland accounts,

shows theRailway Co., Ltd. was undertaken by the 1st

peculiar aspect of the accounts for overseas

Division of the 4th Bureau, along with the audit

territories.

of the Ministry of Foreign Affairs and thewhich

Accounts for overseas territories in their

Ministry of Colonial Affairs, the audit of theinitial stage had no sufficient fiscal system, so

Government General of Korea was undertaken by

supplementary funds from mainland accounts

the 2nd Division of the Bureau, and the audit ofwere indispensable for achieving sound fiscal

the Government General of Taiwan and the South

management. At the same time, however, thePacific Mandate was undertaken by the 3rd

overseas territories made active efforts on the

Division of the Bureau. This framework wasSpecial Accounts for Overseas Territories tomore or less maintained as it was throughout theestablish their own public finance by, forearly Showa era until the end of World War II.
The special nature of the divisions that were

example, developing industries and tax systems.
The first overseas territory that succeeded inin charge of auditing the accounts for oversea

establishing independent public finance was theterritories was that they did not audit theGovernment General of Taiwan, which stopped

accounting of specific government offices as inreceiving supplementary funds from the general

the case of divisions auditing general government

account from FY1906. Also, the South Pacificoffices, but instead conducted extensive audit ofMandate stopped receiving supplementary funds

overall fiscal activities in the overseas territories.

inThis was a reflection of the fact that overseas

FY 1932

Government

and
and

the

Karafuto

the Kwantung

Territory
Bureauterritories such as Korea and Taiwan were specialin

FY1936, since their revenue conditions improved.

areaadministrative

districts,

and

their

The special account of the Government General

Governments General, etc. exercised sovereignty

of Korea had received supplementary funds of atwith a considerable level of independence andleast 12.82 million yen (FY1934 and FY1935)

conducted overall administration.

every year until FY1945, and as the scale of

The audit of accounts for overseas territories

revenue and expenditure of the special account

was conducted by using both in-office audits and201

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

field audits, similar to the case of audit conductedby other audit divisions, but setting aside the inoffice audits, the field audits involved various
difficulties with the transportation available at thetime,particularly

after

the

war

situation

deteriorated. The trip for regional audit in Japan
hardly ever exceeded one month, but the fieldaudits of overseas territories generally took a long
period of about one and a half months, andsometimes over 50 days.
From FY1926 to FY1945, a total of 372
officials took trips for audit of accounts foroverseas territories 122 times to conduct fieldaudits of the accounts for those territories, whichmeans 18.6 persons took trips for such fieldaudits six times at annual average. Such audits
were most actively conducted during the five

List of dispatched officials with a description of a fieldaudit of the Government General of Korea

years from FY1937 when BOA's organization
was expanded to FY1942 when the Pacific War
started. The frequency of field audits in overseas

Subsection 4

Commissioned audits

Simplification
systemofterritories differed by area. The frequency was
the highest for the Government General of Korea,
with field audits conducted three times every

thecommissioned

audit

year, or twice a year at the least. In contrast, theIn "Matters on Thorough Simplification of

frequency was the lowest for the South Pacificthe Budget" adopted by the Cabinet in October

Mandate, with field audits conducted only three1943, it was decided to simplify the affairs oftimes over 20 years.

settlement of accounts and to expand the scope ofoverseascommissioned audits. In response, the Wartime

territories which had been extensively conducted

Exceptional Regulations on Accounting werein this manner came to an end as Japan lost all of

amended in May 1944, and the submission ofthese territories with the end of World War II.

accounts for receipt and payment of cash that

The

auditsofaccounts

forwere made subject to commissioned audits was
simplified only during the war.
In the past, statements of receipt andpayment were required to be prepared for cash
receipt and payment that were made subject tocommissioned audits, similar to the case where
BOA directly conducted audit, and entrusted
ministries and agencies were to conduct audit of202Section 2 Operation of Audit Activities

calculations and grant of discharge based onprovisions on cases where account ledgers

those statements. With this amendment, it became

may be used for evidence as a substitutepossible to omit preparation of statements ofwere stipulated (Articles 9 and 10).

receipt and payment, and provide evidence ofBesidestheamendment

above,

new

cash receipt and payment by submitting accountprovisions were stipulated, such as provisions onledgers instead. However, statements of receipt

simplification of the method for processing theand payment were to be prepared even for cash

management period of advanced fund accounting

receipt and payment that were made subject toofficers (Article 4) and provisions on preparationcommissioned audits, if BOA was directlyof a payment record of each advanced fundconducting audit thereof.

accounting officer (Article 6).

At the same time as this amendment, theIn parallel to such legislative development,

Rules on the Handling of Commissioned Audits

the scope of commissioned audits was drastically(Circular Notice of the Board of Audit No. 3 ofbroadened1944) were enacted. The Rules were to replacecommissioned audits were mainly conducted for

the

in

April

1944.

Conventionally,

Handlingofgovernment offices' cash outside the budget and

BOA

had

internally held goods. However, matters such ascommissioned

revenues, diplomatic establishments abroad, ships

government offices of as standards for handlingof the navy units, receipt and payment ofcommissioned audits. And they developed andadvanced funds of Ministries' local offices,

simplified the handling of entrusted ministries

commercial goods at depots, etc. of the Ministryandhandlingof Army, and materials for manufacture, werecommissioned audits. The major points of change

newly shifted to matters subject to commissioned

were as follows.

audits.

"Procedures

Commissioned
previously

for

the

Audits, "informed

agencies

as

which
the

standards

for(i) Provisions on recommission were newly

In this manner, the commissioned audits

stipulated in order to enable entrusted

system contributed to simplifying audit affairs byministries and agencies to commission

developing provisions on their handling, as well

implementation

as

of

the

commissioned

simplifying
the

the

matters to bureaus under its jurisdiction

expanding(Article 2).

commissioned audits.

handling

scope

of

methodandapplicationof(ii) It became possible to set exceptions to
Subsection 5

issuance of a certificate of grant ofdischarge with BOA's approval (Article 3).
(iii) The time limit for submission of theDetermination on Accounting
Officers

extended by one month to the end of

1. Wartime exceptions to the system ofdetermination on liability for indemnity of
Accounting Officers

October of the following fiscal year

If an Accounting Officer had lost or

annual report on commissioned audits wasdamaged cash or goods which he/she retained,(Article 5).
(iv) Provisions on simplification of the form

the Accounting Officer could not be released

for statements of receipt and payment andfrom the liability unless he/she proved to BOA
203

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

that he/she had not neglected the due care of a

2. Number of determinations on liability forindemnity of Accounting Officers andamendment of the system

prudent manager and received a determination on
grant of discharge (Article 36 of the Public

As discussed earlier, wartime exceptions to

Accounting Act).
However, an exception to this provision was

BOA's determination were provided under theprovided by the Wartime Exceptional Public

Wartime Exceptional Public Accounting Act of

Accounting Act of 1942. Specifically, Article 21942 for the system of determination on liabilityof the Act provided that, if an Accounting Officer

for indemnity of Accounting Officers in the earlyof the Army or the Navy lost or damaged cash or

Showa era. In addition, as discussed later, BOA

goods he/she retained at the battlefield or on theappointed

route to or from the battlefield, and the minister

Committee on Determination in 1938 in order toof state found that the Accounting Officer had

make determinations carefully,

not neglected the due care of a prudent manager

measure to simplify the certificate of grant ofand notified BOA to that effect, it shall bedischarge so as to promote the work efficiency inregarded that the evidence under Article 36 of the1942.

membersoftheExamination
and

took

a

Public Accounting Act was submitted, and BOA

From FY1926 to FY1947, the number of

may make a determination of the grant ofdeterminations which were resolved at Generaldischarge.

Meetings and summary General Meetings was

In addition, the following exception was also

111 cases; in these cases, the Accounting Officer

stipulated on preparation of statements of receipt

was held to be liable in 51 cases, the Accounting

and

audit

Officer was exempted from the liability for

Exceptional

indemnity based on Imperial Ordinance in 19

Regulations on Accounting that was promulgatedcases, and the Accounting Officer was held not toin April 1942. If an Accounting Officer or an

be liable in 41 cases. Looking at the number ofofficial responsible for handling goods changed

theto another person during war, and it became

Accounting Officer, advanced fund accounting

difficult to prepare a statement of receipt andofficers accounted for the largest number ofpayment for the receipt and payment made while

determinations with 38 cases, followed by

the former person was in office and submit it to

Revenues Officers with 31 cases, the accounting

BOA together with documentary evidence, theofficers in charge of receipt and payment oflatter Accounting Officer may calculate thediverted cash with 28 cases, officials responsible

former Accounting Officer's receipt and payment

fortogether with his/her receipt and payment, andAccounting Officers in charge of cash outside thetake the prescribed procedure by stating the terms

budget with two cases. The cases subject toof office of the respective Accounting Officers.

determination were mostly cases of embezzlement

BOA was to regard a statement of receipt andby an Accounting Officer or an assistant thereof,

payment prepared under this provision as one

and also included cases of theft and fraud.

payment

fordetermination,byreceiving
the

BOA's

Wartimeprepared by the former Accounting Officer, andmake an audit determination.
204

determinations

handling

categorized

goods

with

12

by

type

cases,ofandSection 2 Operation of Audit Activities

certificate for discharging an Accounting Officer

3. Setting up of members of the Examination
Committee on Determination
As

means

for

supervisingfrom his/her liability, and it was issued, based on
Article 20 of the Rules on Audit Affairs, if the

Accounting

Officers, administrative agencies have conductedstatementofordinary and extraordinary audits, and also BOA

Accounting Officer was determined to be entirely

has made determinations on whether Accounting

proper,Officers were liable or not liable for indemnity,

completed the indemnity voluntarily or by

as mentioned earlier.

obeying the order for indemnity issued by theorifaccounts

submitted

the Accounting

byOfficeranhadhead of the relevant department.

This system was modeled after a Frenchsystem. However, while France had a careful

The form of a certificate of grant ofsystem whereby there were general advocates anddischarge was specified by BOA's internal notice,reporters, and determinations were made by athe "Detailed Regulations on issue and form ofsmall collegial body set up for each Bureau,certificate of grant of discharge" of 1891. Since

Japan had a system whereby the Division inthen, the wording, etc. was revised several times,

charge of audit made a proposal and a General

but the fact that it is to be prepared and issued

Meetingafor each Accounting Officer never changed.

determination of the first and final instance.

Later, as the number of Accounting Officers

There was also a view within BOA demanding

increased, the number of certificates of grant ofthat the determination procedure should bedischarge issued also increased, while on the

carried out carefully, so BOA improved theother hand, problems such as a shortage ofsituation by preparing such document as a

production expenses, an increase in the workcollection of determinations and a collection of

volume, and delay in issuance started to occur.

precedents.

theThe number of Accounting Officers was about

Examination Committee on Determination were

10,000 in around 1932 and 1933, but the number

set up in 1938.

reached 13,000 in 1941. Even if several officials

or

a

In

Bureauaddition,

meeting

members

madeof

The Committee consisted of one Director

skilled in writing were dedicated to preparing

General, two Directors, and three Assistantcertificates of grant of discharge, it took until

Directors. The Committee was chaired by thearound October every year to finish sending the

Director General, and its duty was to examine

certificates of grant of discharge for the previous

proposals of determinations submitted by thefiscal year.
The same situation was found for entrusted

Divisions in charge and to report the results to
the General Meeting as a subordinate organ ofministries

andagencies

which

made

audit

the General Meeting. Finally, it became possible

determinations for a large number of Accounting

to examine the facts, etc. of determination

Officers on commission from BOA. Some suchproposals to a large extent.

government offices revised certificates of grant ofdischarge into a joint notice or published thecontents in the government office's official

4. Simplification of certificates of grant ofdischarge

gazette in lieu of issuing certificates of grant ofdischarge, with the approval of BOA.

A certificate of grant of discharge was a
205

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

In 1940, entrusted ministries and agencies ofsufficiently understand the improper matters bycommissioned audits made a request to revise thegiving a detailed description of the key points ofsystem so as to make joint publication in thematters that were deliberated as being improper

government office's official gazettes in lieu ofand inserting tables and drawings, etc. as much asindividually issuing certificates of grant ofpossible.

discharge. In the same year, a policy was decided
within BOA to simplify certificates of grant ofdischarge as part of efforts to increase the work

2. Limits of the effect of the presentation ofannual audit report to the Emperor

efficiency. At a General Meeting in December

As discussed earlier, the President of BOA

1941, a proposal was made to change thehad brought the annual audit report to thecertificate of grant of discharge to be issued byEmperor

BOA after directly conducting audit into a joint

independently presented it to the Emperor.

notice, and this proposal was resolved. This

However, since the time for presentation waschange was implemented from the beginning ofspecified in advance to about 30 minutes, so the1942. Furthermore,thePresident of BOA could not read out the entire

Handling of Commissioned Audits were amended

annual audit report. Some Presidents of BOA had

in March 1942, and certificates of grant of

prepared a note in advance according to thedischarge issued by entrusted ministries andpresentation time given.

the Procedures for

to

the

Imperial

Palaceand

Because of this, an improvement policy foragencies were also revised to a joint notice.

the annual audit report to the Emperor was
Subsection 6

decided in 1927, and a revision was made to omit

Annual audit report and annual
audit report to the Emperor

the conventional general overall descriptions asmuch as possible and to describe only the key
points in a concise manner.

1. Revival of the issue of attendance
The issue of attendance of BOA's Members

Even so, the presentation did not fit withinat the Diet was raised again at the Diet in 1914.

the given time. Thus, President of BOA Kesao

Then, in 1929, the issue was revived when a bill

OKA, who finished the presentation to theto amend the BOA Act (which ended up being

Emperor in February 1940, gave a strict order toshelved) was proposed with an intention to

the members of the Examination Committee on

include bodies a part of whose stated capital is

Annual Audit Report and Annual Audit Report tocontributed by the State in BOA's auditees, but

the Emperor to prepare a more concise annual

the attendance of Members was never realized.

audit report to the Emperor. However, an annual

BOA was not just passively observing suchaudit report to the Emperor which could be readsituation. It made efforts to clarify the legitimacy

out loud within 30 minutes could not be preparedof BOA's opinions by the way in which theuntil the system of presentation ended upon theannual audit report was written. As part of suchend of the Pacific War.

effort, BOA resolved an improvement policy of

The system of presenting audit results to thethe description in the annual audit report in 1931,

monarch was modeled after the Prussian system,and took a measure for enabling Diet members tosimilar to BOA's many other systems. There was206Section 2 Operation of Audit Activities

also a similar French system that was establishedtheby Napoleon. However, there was a difference

Equipment, based on the Act on the Auditing of

between countries such as Prussia and France

the Goods of Army and Navy for Preparing War

where the monarchs that had established these(Act

systems

closelymunitions were subject to application of theinvolved in national administration, and Japan

Regulations on Accounting of Goods Owned bywhere the monarch ruled the State by gaining

the State and were treated in the same way asadvice from the ministers of state. The system ofother goods, but goods prepared in advance forpresenting audit results to the monarch was notdispatch of troops were not subject to application

so well adaptable to a country like Japan.

of the Regulations on Accounting of Goods

were

autocratic

and

were

Regulations

No.

70

on

of

Accounting1890),

and

of

Army

conventional

The fact that the presentation of annual audit

Owned by the State and were excluded from

reports to the Emperor, which continued for 60

BOA' audit, as explained earlier. Looking at how

years, could not produce significant effects might

this system was actually operated, the Army was

indicate the limits of this system.

quite imprudent unlike the Navy; it had alreadyestablished the Regulations on the Handling of

Subsection 7

Munitions through a Notice of the Minister ofRestrictions on audit

Army in the last year of Meiji, subsequently
amended the Regulations several times, andExpansion of restrictions on audit
In the Showa era, audit of armaments

included most of the major goods in goods

expenditures took up a large weight in the affairs

prepared in advance for dispatch of troops,

of audit, particularly after the outbreak of thetreating them as munitions. When the Manchurian

Manchurian Incident, but the audit of armaments

Incident broke out, the Ministry of Army treated

expenditures had been considerably restricted

all building and repair materials, etc. that werefrom the past. As discussed earlier, goods

necessary for military facilities to be built in

prepared in advance for dispatch of troops andManchuria as munitions which were excluded

secret funds were excluded from BOA's audit

from BOA's audit subject matters, and conflictedsubject matters, and the Military Secret Protection

with BOA. BOA issued an Inquiry Letter

Act, which was aimed at preventing leakage ofdemanding improvement of handling for thismilitary secrets, also restricted implementation ofcase, but it did not receive any reply until the end

audit. Unlike goods prepared in advance forof the war.
In contrast, the Regulations on Accounting

dispatch of troops, secret funds were not militaryspecificfunds,

but

their

use

of

dramatically

Naval

Personnel

Equipment( Imperial

increased, particularly in the Army after theOrdinance No. 22 of 1890) had no provisions on

Manchurian Incident.

goods prepared in advance for dispatch of troops,(1) Goods prepared in advance for dispatch oftroopsand the Ministry of Navy applied the Regulations
on Accounting of Goods Owned by the State towasall military equipment and made them subject toclassified into conventional munitions and goods

submission of accounts for receipt and issue,

prepared in advance for dispatch of troops under

BOA's audit thereof, and BOA's determination on

In the Army,

militaryequipment

207

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

domestic police matters, and less were used by

the liability for indemnity.

the Army. The total amount of secret funds with

However, with the progress of the Second
Sino - Japanese

War,

the

Regulations

the

on

generalaccount

andspecialaccounts

Accounting of Naval Personnel Equipment werecombined was 4.18 million yen in FY1925, 3.94

fully amended in February 1941 in order tomillion yen in FY1926, 6.91 million yen in FY

prevent leakage of military secrets, and similar to1929, and 3.83 million yen in FY1930, but in FY

the case of the Army, naval personnel equipment

1931, the amount used as secret funds for thewas also classified into conventional munitions

Manchurian Incident marked 7.83 million yen forand goods prepared in advance for dispatch of

the Army alone, sharply rising to 23.99 million

troops, and the latter was excluded from BOA's

yen in FY1932. When the Special Account foraudit subject matters.

Emergency

Armaments

Expenditures

wasAlso, the Act on Special Account forestablished in FY1937, this trend became even

Emergency Army Materials Fund was enacted in

more notable, and in the end, the total amount ofApril 1939, and the Regulations on Special

secret funds spent as emergency armaments

Account for Emergency Army Material Fund

expenditures reached an enormous amount of(Imperial Ordinance No. 349 of 1939) provided

nearly 900 million yen.

the provisions of the Regulations on Accounting

It was said that large amounts of secretof Army Equipment concerning goods preparedfunds were used as personnel expenses forin advance for dispatch of troops were to becollecting information or scheming, but theapplied mutatis mutandis to the handling ofspecific uses and amounts of secret funds

materials and goods for exchange that wereparticularly in occupied territories and war zones

acquired under this special account (Article 14).

were totally unknown.
The Army and the Navy had internal(2) Secret funds

regulations

The secret funds, for which was provided

calledtheRegulations

on

the

"Calculation of secret funds of the government

Handling of Secret Funds, which provided thatshall be excluded from the audit by the Board of

the details of use of secret funds should be

Audit," in Article 23 of the BOA Act, werereported the respective Ministries every three

excluded from BOA's audit. As a result, BOA

months. However, this reporting was not strict,merely checked secret funds in terms of theand slack payments were likely to have beennames of the recipients, whether the budget wasmade often, but there was no way to check thisused up, whether any amount remained at the end

from outside.

of the fiscal year, and so on, and did not check at(3) Military Secret Protection Act
With the Act No. 82 of August 1937, theall how the funds were used.

Military Secret Protection Act (enacted in 1899)

With the outbreak of the Manchurianin

was amended and reinforced, and the Act cameamount, and the nature of the funds and theto strictly bind citizens for an extensive range ofgovernment offices using the funds changed

acts through punishment. The Military Secretdramatically. Before the incident, secret funds

Protection Act was aimed to prevent leakage ofwere mostly used for diplomatic matters andmilitary matters which needed to be kept

Incident, secretfunds sharply

increased

208

Section 2 Operation of Audit Activities

confidential from other countries, and it imposed

to ensure careful handling of military secrets, but

considerable restrictions on audit.

the case was proposed again in FY1938 and theAfter this, the stamp of military secret was

proposal was adopted. However, due to a concern

affixed to almost all audit-related documents,that the names of articles and the company namesuch as statements of accounts and documentaryin the draft may violate the Military Secret

evidence submitted to BOA and documents

Protection Act, BOA decided to change therelated to field audits, and audit was conductednames of the articles to Product A and Product B,with care so as not to violate this Act. But theand the company name to Company X, andmethod of reporting matters in annual audit

rewrote the annual audit report that had alreadyreports was also greatly restricted. The final audit

passed the General Meeting.

report of the Special Account for Emergency
Armaments Expenditures, which was establishedin 1937, was not directly restricted in terms of
the reporting method, due in part to the fact that
it was compiled after the war. However, thenames of goods or companies which appeared incases resolved at General Meetings or in cases ofgeneral armaments expenditures reported for eachtentative fiscal year and which were likely toviolate the Military Secret Protection Act were
inevitably all described in the final audit reportby such expressions as Product X or Product Y
or Company A and Company B.
Because of this problem, in FY1938 when
the Military Secret Protection Act passed theDiet, BOA had to rewrite the annual audit reportwhich had already been revolved at a General
Meeting and to which the seals of all Directors
had been affixed.
The part rewritten was a case on purchase ofhigh-price gas masks for the Army's personnel
and horses that was reported as an Improper/
Unreasonable Matter reported in the FY1938
Annual Audit Report. In this case, the Army had
purchased articles from Nippon Kakou Co., Ltd.
in FY1937, but as a result of calculating the cost,
BOA found the profit margin to be too high.
When preparing the FY1937 Annual Audit
Report, BOA did not report on this case in order209

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

Section 3 Overview of Audit Results
Subsection 1

From FY1939 onward, the number ofAudit cases reported in theannual audit report

improper/unreasonable

matters

hadbecomerelatively small due to a decrease in the numberof audit findings on expenditure. Toward the end

1. Outline
The following table shows the numbers ofof the war, in particular, BOA's audit capability

audit cases reported in the annual audit reports

continued to decline as a result of organizational

during the 20 years in which BOA was under thedownsizing due to administrative reform and theformer Constitution in the Showa era.

decrease in the number of officials due to being
called up for military service, etc. Accordingly,

Number of audit cases reported in the annual audit
reportExpenditure

National
government
bonds

Public money

Government
property and
goods

Total

1926
1927
1928
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945

findings other than crime and tax matters.

RevenueFYthe FY1944 Annual Audit Report had no audit

27
27
25
26
42
26
24
27
30
24
22
25
21
15
62
69
51
71
29
15

93
70
35
45
46
40
38
37
40
54
36
33
38
21
21
19
16
11
1
18

―
―
―
―
―
―
1
―
―
―
―
―
―
―
―
―
―
―
―
―

―
1
1
1
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
1

4
5
6
6
4
2
―
3
3
4
1
1
1
―
1
―
1
1
―
―

124
103
67
78
92
68
63
67
73
82
59
59
60
36
84
88
68
83
30
34

As for the contents of the audit cases
reported in the annual audit reports, it wasnotable that the number of improper/unreasonable
matters on the Army and the Navy, which werethe largest auditees in the Meiji and Taisho era,decreased, and a large number of cases werereported on the Imperial Railway, which was oneof the largest companies in the world. In
addition, from FY1925 to FY1932, a large
number of audit findings on improper bonuses
were reported for almost all government offices.
Matters

reportedongeneralarmaments

expenditures, the Imperial Railway, and improperbonuses will be discussed later. This part
discusses other major matters that were reported.
(1) Revenue
Many of the matters reported on revenue
were those on tax, but since they were mostly

Looking at the number of cases reported intypical criticisms and the amount per case wasthe annual audit report by fiscal year, the number

often small, below we discuss major non-tax

of cases was larger for the period from FY1926

matters.

to FY1930 compared to the number in otherfiscal years. This was because BOA conducted

Violation of the budget system throughconfusion between revenue and expenditureaudit of bonuses and special service bonuses paid

In Aomori and five other Regional Forestby all government offices, and reported many

Offices, when selling and disposing of timber,

improper matters as a result, as discussed later.

charcoal, etc., the State used to conduct the210Section 3 Overview of Audit Results

work of collecting and transporting timberfrom a mountain bed or a timber yard at thefoot of a mountain to the final timber yard in
the past. However, they changed the stance toconducting

the

work

on

behalfofthepurchasers; they paid the expenses for thework from funds provided by the purchasers orfrom funds borrowed from to-be purchasers orfrom others, and deducted such amount fromField audit of the timber millthe disposal price. The authorities explained(2) Expenditurethat the demand for producing and delivering
timber, charcoal, etc. suddenly tightened andAudit findings on expenditure were mostly

they were pressed to increase the work

those related to articles, such as purchase of

efficiency, and that it became difficult toarticles or a request for manufacturing articles,

conduct

followed by those related to budget accounting

workwithin

the

scope

of

the

prescribed budget since the outbreak of the

such

as

Second Sino-Japanese War, and there was a

subsidies.

bonuses,construction

work,

and

Of these, more than half of the cases onneed to save costs.

budgetIn response, BOA criticized as follows:

accounting

were cases offictitious

the work of timber collection, transportation,accounting where payments were made foretc. should fundamentally be conducted by thefictitious facts. Most of the remaining cases wereState, and even if it was conducted on behalf

those on improper bonuses that were reportedof the purchasers in this case, it was in factfrom FY1925 to FY1932. Here, examples ofconducted as the State's work; in light of this,cases other than those on bonuses are provided

the expenses for work in this case should be

below.
Implementation of excessive construction

paid based on the budget, and a corresponding

The Agricultural Affairs Bureau of theamount should be collected as forest revenues.
However, the act of the authorities to pay the

Ministry

expensestheimplemented construction of a warehouse ofpurchasers and to deduct this amount from thethe Moji Rice Office of the Bureau at a total of

selling price not only made confusion between

over 850,000 yen, but compared to therevenue and expenditure, but also led toconstruction

holding specific funds without legal basis.

warehouse, the unit cost per tsubo (1 tsubo≒(FY1940 and FY1941; general account; 54.023

3.3m2; hereinafter the same) was about 50%

million yen)higher. When BOA inquired the reason for the

from

funds

providedbyofAgriculture

cost

for

and

Forestry

the same type ofhigh cost, it became clear that, in constructing
thewarehouse,theauthorities

received

donation of land for the site, and because there
was an attached facility that did not need to be
211

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

constructed, they used a budget surplus thatofoccurred for constructing an excess facility for

manufacturers. This subsidy was aimed at

the warehouse. Therefore, BOA criticized that

reorganizing medium and small traders andthe use of the budget in implementing the

manufacturers and subsidizing the smooth job

construction was inappropriate.

conversion(FY1926 and FY1927; Ministry of Agriculture

manufacturers, in order to contribute to having

and Forestry; 855,000 yen)

the national economy demonstrate its full

Inappropriate purchase of articles

potential during war. It was provided to

Bureauspurchased

and

of

the

small

relatedtraders

traders

andandcommercial and industrial associations via

The Tokyo and four other Regional
Monopoly

mediumprefectures,

imported

and

then

providedbytheKwantung State salt of about 65 million kg at

associations to traders and manufacturers thata total of over 1.06 million yen via Dainihon

were forced out of business. The Ministry ofSalt Co., Ltd. and the Kwantung State Salt

Agriculture and Forestry granted the subsidy to

IndustryWhen

the Hokkaido Agency and 46 other prefecturescomparing this purchase price with the price ofbased on a prospect to complete most part ofGrade II salt which the Government General of

the business reorganization within FY1942, but

Korea purchased via Dainihon Salt Co., Ltd. insince this measure lacked consideration to such

July 1932, the purchase price was extremely

facts as that it would be difficult to rapidly

high, even considering the differences in

implement business reorganization of medium

factors such as the sodium chloride content andand small traders and manufacturers, 22

the color difference. Also, the authorities

prefectures and 17 provider associations carried

increased the purchase volume by 20 million

over more than 6.28 million yen. In particular,

kg due to overestimating the expected sales

Fukushima

volume, but as a result, they were to carry overprefectures had carried over the granted

approximately 230 million kg of imported andamount of more than 1.95 million yen to thetransferred salt, which corresponds to the sales

following fiscal year without using any of thevolume for over two years, as of the end of FY

amounts. In response, BOA criticized that this1932. BOA criticized this matter as having

matter occurred because the grant of thetaken an inappropriate measure in purchasing

subsidy was not in conformity with the actual

imported

conditions.

Association

salt,

and

in

FY1932.

havingcausedaPrefecture

and

eight

other

disadvantage to the treasury.

(FY1942; Ministry of Agriculture and Forestry;(FY1932; Monopoly Bureau; 1.063 million

1.957 million yen)
(3) Public moneyyen)

Four cases on public money were reported,

Inappropriate measure taken in granting
subsidies

one case each in FY1927, FY1928, FY1929, andIn FY1942, the Ministry of Agriculture

FY1945. Among these, the case reported in FY

and Forestry issued over 1.95 million yen to1927 was a case on the bailout measure for the

Fukushima

Bank of Korea, reflecting the economic situation

Prefecture

and

eight

other

at the time which led to a financial panic.

prefectures as a subsidy for mutual assistance212Section 3 Overview of Audit Results

During the 20 years in which BOA was

At the time of this financial panic, thethree - week

under the former Constitution in the Showa era,

moratorium nationwide in order to bring the

BOA reported 43 cases on government property

situation under control. The government lent

and goods. By fiscal year, BOA reported 37

overseas assets to the Bank of Korea at a low

cases during the period until FY1935, accounting

interest rate as described below.

for nearly 90% of all such cases. Until FY1930

government

implementedain particular, BOA reported a large number of
Inappropriatemoney

managementofcases at four to six cases every year. BOA seems

treasury

to have reported many cases in this period

The government deposited 15 million US

because the National Property Act was only put

dollars from the overseas designated deposit

into effect, and its purpose was not necessarily

under the general account and silver bullion

understood sufficiently. Major cases are provided

equivalent to 10 million yen from anotherbelow.

deposit to the Bank of Korea at an interest rate

Inappropriate transfer of national property

of 3% in February 1927. Then, the government

Toyama Prefecture had transferred over

had the bank return them by using 40 million

16 cho (about 15.8 ha) of land to the

yen that was accommodated by the Bank ofprefecture itself, and over 219 cho (about

Japan based on the Act on Special Financing

216.8 ha) of land to one city and 51 towns andby the Bank of Japan and Compensation forvillages, etc. free of charge by June 1929. This

Relevant Losses in May 1928. According tomeasure was taken in order to dispose of all

the explanation of the government, this deposit

land to which the Rules on the Government

was made for assisting in operations andLand Special Disposition were applicable bypromoting the reform of the Bank of Korea,

the last day of March 1922, before theand that it set an annual interest rate of 3%

National Property Act came into effect inconsidering that the return rates of other types

April. The prefecture had local governmentof overseas specie were generally within 3%

bodies request free-of-charge transfer, andand that taking into account the precedents andordered the transfer. However, the land to be

the restricted use of silver funds.

transferred had not been decided yet in March

In response, BOA criticized that the low-

1922, and the prefecture gave decisions on theinterest deposit measure was improper because

disposal successively over the period leading

the bank could receive enormous operational

up to 1929 based on the detailed statements ofbenefits from this measure, and the government

land which were submitted in and after April

provided the funds to the bank by means of1922.

management of the treasury money without

In response, BOA stated that it was not

any budgetary or legal basis, while the basis

appropriate for Toyama Prefecture to havefordisposed of land over many years despite that

deciding

theinterest

rate

was

also

the Minister of Finance came to govern the

improper.

management of national property(FY1927)as theNational Property Act came into effect, while(4) Government property and goods
213

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

it was also found that the land disposed ofwork, indicating that there was a need toincluded land for which public use had notchangebeen abolished; on such basis, BOA criticizedrenewed the contract based on the changed

thatdesign, increasing the contract amount by

themeasureswasinappropriate

in

the

design,andsubsequently

over 180,000 yen.

transferring national property in this case.

BOA criticized this matter, stating that

(FY1928)

because the authorities already knew thepart for which the original design needed

2. Audit of armaments expenditures
In the Meiji and Taisho era, the Army andto be changed at the time of concluding thethe Navy were the largest auditees, and accounted

initial contract, they should have taken an

for a large number of audit cases reported in theappropriate measure, such as suspending

annual audit reports. However, in the early

the manufacture of that part, but theyShowa era, the number of their cases wasconcluded

relatively small, possibly due to the effect ofcontractor continue the manufacturing work

fiscal austerity and reduction of armaments. After

without thinking sufficiently, so a large

that, the Manchurian Incident occurred, and theiramount of loss was caused

cases increased again, but after the establishment

reworking.

of

Emergency(FY1935; Ministry of Army; 186,000 yen)

Armaments Expenditures in 1937, the focus of(ii) An arsenal of the Army purchased shells

armaments expenditures were shifted to the

manufactured by a squeeze method for a

special account, and such expenditures in the

total of over 740,000 yen from the Japangeneral account decreased substantially, also in

Steelterms of BOA's audit findings.

However, the price of "bullet steel No. 1

theSpecial

Account

for

the

Works

contract

Co.,

and

Ltd.

in

had

for

the

the

FY1936.

BOA reported many cases in the annual

X" which was the material required for theaudit reports from FY1926 to FY1945, criticizing

shells was higher than the price of thethat the purchase of articles was inappropriate orsame type of product separately purchasedthat the price became higher than that of afromcompetitiveaexplained that the purchase price of thenegotiated contract instead of a competitive

bullet steel was based on the actual

contract.

purchase made from Japan Iron and Steelcontract

Inappropriate
articlesduemeasuretoconcluding

in

the

company.

Theauthorities

Manufacturing Co., Ltd. at the agreed pricepurchasing

in FY1935, and that it was not highaircraftcompared with the computed price of shells"Nakajima Ki-4" (reconnaissance aircraft),manufactured by a squeeze method that are

which the Aviation Depot of the Army andproduced under the direct management of

the Accounting Bureau of the Ministry of

the arsenal. In response, BOA criticizedArmyconcludedthat actual purchases as referred to in the

between May to July 1935, but in August,explanation were not observed from FY

they had the contractor suspend part of the1935 onward, and the arsenal had estimated(i) Thepurchase

contract

implemented,

was

for

214

Section 3 Overview of Audit Results

the material price too high in calculating

In response to the occurrence of suchthe budget for the manufacturing expenses,

matter, the authorities explained that they madeand its estimation of the general indirect

the payment in advance based on the general

expenses was also inappropriate, being too

custom, and they included the overpaid amounthigh in comparison to other cases of thein the time loan in order to prevent failure ofsame type.

the company and to minimize the damage(FY1936; Ministry of Army; 744,000 yen)caused to the State. However, BOA stated that,

Payment in violation of the purpose of thebudgetin construction that require a large amount of

In FY1926, the Accounting Bureaus ofcredibility, and prospect of completing thethe Navy in Yokosuka, Ominato, Lushun, etc.

construction work should naturally be taken

paid for a steel heavy oil tank belonging to theinto

Munitions Bureau and its ancillary equipment,

contract for the work or making payment inwhich was to be paid from water and landadvance, and that it was an improper act todevelopment expenses. However, the payment

have continued to make payments in advancewas made from ship management expenses,

although the contractor was already facing

although the budget for such purchase was notfinancial difficulties at the time of concluding

included in the ship management expenses atthe contract, and to have generated a large

all.

amount of accounts receivable as a result.

payment in advance, the contractor's assets,consideration

when

concludingtheIn response, BOA criticized that the act of(FY1930; general account; 1.403 million yen)having paid the expenses for constructing a

Cases similar to the case of payment in

fixed structure such as the heavy oil tank inviolation of the purpose of the budget inthis case from ship management expenses inconstruction of a heavy oil tank reported in thewhich the budget for such purchase was not

FY1926 Annual Audit Report, were reported inincluded at all was in violation of Article 14 of

the annual audit report every year until FY1929.

the Public Accounting Act.

Looking at how the Ministry of Navy responded(FY1926 to FY1929; Ministry of Navy; 9.878

to this reporting, the Ministry first took a strong

million yen)

attitude in its explanation against the audit report,

Other improper matters

stating that "the use was not in violation of the

The Ministry of Navy had provided

purpose of the budget at all." However, its

payment in advance to Fujinagata Shipyards

attitude slightly softened against the similarCo., Ltd. continuously from FY1927 onward

reporting made in FY1928, stating that it would

based on a shipbuilding contract. Of the"look into an appropriate method in the future."

payment in advance, more than 1.4 million yen

Then, in FY 1929, it changed its attitude, stating

turned out to be overpaid, so the Ministrythat it would "plan to pay all expenses for theseordered return of the amount in FY1930, but it

facilities from the water and land development

could not receive the amount, so in FY1931, it

expenses from FY1931 onward."
A case like this where the matter was finally

took a measure to include the amount in a ten-rectified after BOA made similar criticisms

year time loan.
215

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

repeatedly over several years can also bemade to revive the bonuses for Hanninkan andobserved in other cases. This suggests how strong

lower-ranking officials. After that, general bonus

the executive branch was before the war, andpayments were made throughout the Taisho andhow little influence BOA at the time had on theShowa

executive branch in spite of its formal highamendment a few times.

era,

while

the

systemunderwent

During this course, an Imperial Ordinanceposition as an organ under the direct control of

was established on bonuses for field workers

the Emperor.

engaged in work at arsenals of the Army, etc.,
3. Audit of improper bonuses

and bonuses were paid based on this ordinance.

(1) Outline of the bonus system

Nevertheless, since general bonuses were paid

Unlike under the current system where thefrom the remaining amount of each Ministry'ssalaries of public employees are all regulated bybudget, imbalance in the treatment of officialsa uniform standard that is applied to all

often came to be observed between Ministries. In

ministries, bonuses before the World War II were

response

paid from the remaining amount of the salary

notification to the Cabinet in 1912, insisting on

budget of each ministry based on a Cabinet

the need to unify and adjust allowances paid at

decision or an Imperial Ordinance targetingthespecific field workers.

measure was taken.

torespective

thissituation,

government

BOA

offices,issuedbutnoThe bonus system has a long history, and it

Looking at the bonuses actually paid byoriginated from Circular Notice of Dajokan

government offices in the Taisho era, the amount"Matters on Bonuses for Hanninkan and Lower-of bonuses paid by ordinary government offices

Ranking Officials of Each Ministry for Perfect

was generally lower than the amount paid byAttendance" of December 1875. After that, an

operational agencies, and differences in theImperial

amount were also observed between ordinary

Ordinance

which

stipulated

theorganization of each ministry in 1886 provided

government offices.

Suchdifference mainlythat "each Minister is to pay bonuses to Soninkan

occurred when a government office that has an

and lower-ranking officials who provided special

extraordinary expenses budget used the remaining

service within the fixed amount of budget of theamount of that budget to pay for bonuses. While

Ministry, at the end of the year." However, thisthe rate of the amount of bonuses and special

provision was totally deleted by the Imperial

service bonuses against the settled amount ofOrdinance of 1893, and in November of the samesalaries reached 230% for some government

year, a Cabinet decision was made to abolishoffices, the rate was merely about 10% for somebonuses for officials except for cases where

offices, resulting in significant imbalance in the"bonuses are required to be paid for special

treatment of officials.
Also, because it had become a custom toreasons," and notification to the effect was madepay allowances to the members and secretaries ofto the Ministries.
In December 1895, the Minister for Home

committees, there were cases where one official

Affairs and the Minister of Finance requested

received a large amount of member allowance

revival of bonuses, and a Cabinet decision wasand secretary allowance, and this also caused216

Section 3 Overview of Audit Results

further attention is desired on this matter for theimbalance in the treatment of officials.

future" and demanded the government to takeAccordingly, BOA sent an Inquiry Letter tomeasures for improvement.

the Prime Minister and the Minister of Finance inJuly 1919, insisting on the need to standardize

On July 20, 1929, BOA sent an Inquiry

the bonuses for officials, but the Cabinet merely

Letter stating the following to the Prime Minister

replied that "the method of paying bonuses still

and the Minister of Finance, in order tohas points to be improved, so it is currently understandardize the bonuses paid to officials andreview." In 1920, BOA sent an Inquiry Letter

allowances

paid

to

with similar contents again, stating that BOA

Specifically,

BOA

stated,"inquired about standardizing the bonuses forregrettable that BOA has found the need to

officials in July last year through Inquiry Letter

improve the budget compilation and other various

No. 55, but looking at the subsequent situation,systems for salaries of officials, and has statedtheunstandardized. "such opinion or indicated such need in the annual

However, no reply was made, and the situation

audit reports every year, but no improvement hasremained unrectified.

been made, and the situation has been even(2) Criticisms made over several years

worsening." For the allowances for committee

bonusesstillremaincommittee"itismembers.
extremely

In response to the situation above, BOA had

members, BOA recommended that if balance isall of its audit divisions conduct audit of

to be achieved in salaries by paying no

improper bonuses and special service bonuses

allowances to committee members who are

every year from 1926. As a result, it began toofficials, in principle, and compiling a new bonus

report cases of illegal matters in the annual audit

budget by using the bonuses, special service

reports from FY1925. Every year from then until

bonuses, and allowances for committee members

FY1932, except in FY1928, BOA criticizedthat are currently paid by diversion as the source,

inappropriate use ofsuch

the purpose of improvement can be achieved

payments by almost all government offices, withwithout increasing the burden on the national

the amount totaling over 200 million yen.

treasury in particular. BOA concluded that "inthebudgetforIn response to the FY1925 Annual Audit

line with this, bonuses for officials should be

Report, the House of Peers resolved that the "thepaid from the budget for the relevant expenses,

government

appropriate

and they should not be paid from funds for othermeasures promptly and maintain balance in the

purposes regardless of whether they are calledsalaries," and the House of Representatives also

allowances or by any other names; also, aresolved that the auditee should be "warned forspecific standard should be established to regulate

the future." However, this type of cases continued

the amount of the bonus to be paid."isdesiredtotake

to be observed after that, and when a similar case

However, no reply was made by the Cabinet

was reported in the FY1927 Annual Audit

and the Ministry of Finance against this Inquiry

Report, the House of Representatives resolved

Letter, and only an agreement was made at aagain that "It is unreasonable to have BOA

Vice Ministers' Meeting in December 1929 tocriticize the same manner despite that the"pay sufficient attention, and make effort so as

auditees were previously given a warning, so

not to violate accounting laws and regulations."
217

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

As can be seen in subsequent annual audit

including the expenditures for inventory items

reports, improper diversion of funds continued,

including rails, bridge girders, and clothing,and no improvement was made on payment of

which were distributed during FY1938 fromallowances

Yokohama and other supply warehouses toforcommittee

membersandoffices

allowances for secretaries either.

forconstruction,

improvement,

Such improper payment of bonuses would

operation, maintenance, etc. in the expenditures

be out of the question today, but before the war,of FY1937, and violated the proper fiscal year

not only BOA' call for attention and criticism, but

for expenditures.
(FY1937; 3.486 million yen)also the Diet's warning was overlooked.
4. Improper/unreasonable
Imperial Railway

mattersonIssuance of public bonds in an amountlarger than necessarytheOn issuing public railway bonds, theSince the Meiji and Taisho eras, many major

Ministry issued the bonds at the end of theaudit problems were raised for the Imperial

fiscal year in an amount larger than necessary,

Railway, which was the largest company in thealthough surplus funds were expected in theworld.

final accounts.
(FY1938; 28.547 million yen)In the beginning of the Showa era, theImproper purchase of articles

Imperial Railway was criticized by BOA for

Whenpaying bonuses and allowances by diverting a

the

Tokyo

Railway

Bureauparticularly large amount of budget among thepurchased brass sheets, the purchase price was

Ministries

high due to a failure to conduct sufficient

from

the

three

accounts

ofinvestigation of the purchases made by theconstruction, supplies, and income every year.

Moji and Osaka Railway Bureaus in the past,

In the mid-1930s, the Special Account forwasand because the Bureau had the seller deliver aestablished, so audit findings on the Army andlarge amount of sheets at once, most of thethe Navy under the general account decreased.

sheets were delivered in the following fiscal

BOA reported a total of about 30 to 40 audit

year.

Emergency

Armaments

Expenditures(FY1938; 135,000 yen)cases in the annual audit reports, excluding cases

Improper plan for procurement of articles

on tax and crimes, and there were seven cases on
the Imperial Railway in FY1937, six cases in FY

The Ministry of Railways headquarters

1938, and four cases in FY1939. The major cases

newly ordered manufacture of steel girders forare shown below.

bridges for bridge construction works ofprojects

Violation of the proper fiscal year for
expenditure due to improper budget
accounting

that

were

eitherpostponedorsuspended, and had the girders delivered, so
the girders were abandoned without a prospect
to be used.

In the accounting of inventory items of(FY1939; 121,000 yen)

the Ministry of Railways, in order to consume
the budget surplus of the previous fiscal year
(FY1937), the Ministry settled the amount by218

Section 3 Overview of Audit Results(i) The5. Audit reports on Special Accounts forOverseas Territories

authorities

grantedsubsidiesfor

improvement of arable land, etc. for

Looking at the breakdown of the audit cases

construction work that had no plan forreported in the annual audit reports on Special

implementation, for disaster reconstruction

Accounts for Overseas Territories from FY1926

work to be implemented after completion

to FY1945 by type of special account, theof land improvement work, or other

Government General of Korea accounted for thesimilar construction work for the arable

largest number both in terms of cases and amountland, etc. in the downstream of Han River.

in correspondence to its fiscal scale, and it was(FY1926 to FY1928 and FY1930; 880,000

followed by the Government General of Taiwan,

yen)

the

the

(ii) In purchasing Shandong salt and Tsingtao

Pacific

salt, the authorities purchased the salt

Mandate. Meanwhile, the cases on revenue

based on the conditions of the purchases

exceeded the cases on expenditure both in terms

made inof the number of cases and amount. This wasconsidering changes in the production andbecause many new taxes, such as occasionaltransactions situation of the salt andprofit tax and corporation tax, were introduced

exchange rates, so the purchase pricefrom FY1935 onward.

became comparatively high.

Karafuto

Kwantung

Territory

Agency,and

Government,
the

South

the

previous

year,

without(FY1936; 389,000 yen)

Furthermore, BOA did not report on the(iii) In

amount of the final accounts or cases of violation

granting

railway

subsidiesforof the budget, laws, and Imperial Ordinances

construction of the Jungtae-ri power plant,

concerningtheSpecial

Accounts

forOverseas

authorities

decided

to

bear

the

Territories in the annual audit reports for FY1944

construction expenses for electric light andand FY1945, which were prepared after the war,

power project beyond the construction

due in part to the abolition of the Special

expenses corresponding to the maximum

Accounts for Overseas Territories based on thenecessary electricity for use in the railway

Act on the Abrogation of the Act on Special

project, so the amount of grant became too

Account for the Government Investments andhigh.

Twenty-One Other Laws and Ordinances enacted(FY1936 and FY1937; 1.409 million yen)(iv) Inin 1946. Article 15 of the Act provided that

granting

compensation

for

coal

submission of the final accounts of revenue andproduction, the authorities errored in the

expenditure of the Special Accounts for Overseas

production volume that served as the basis

Territories for FY1944 and FY1945 to BOA may

forbe postponed for the time being, and the final

money, so the amount of the grant became

calculation

of

the

compensationaccounts for these two fiscal years were notprepared at the time27.

27

Major audit cases reported in the annual
audit reports were as follows.
Government General of Korea
219

Later, the Cabinet prepared the final accounts of revenue
and expenditure of the Special Accounts for Overseas
Territories for FY1944 and FY1945 and submitted them to
BOA in October 2015. BOA audited these final accounts,
prepared annual audit reports, and sent them to the
Cabinet in the following month.

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

the island.

too high, with compensation being also

(FY1926, FY1929, and FY1930; 354,000 yen)granted for unnecessary matters.
(FY1940; 1.067 million yen)(ii) In concluding a contract for purchasing(v) In granting subsidies for long-term ricecoal cars, etc., the authorities designatedreserves, the subsidies were granted based

one specific company, and adopted theon the originally planned reserve volume,

company's quoted price as it is, so thealthough the rice reserve had considerablypurchase price was extremely high.

decreaseddue

tochangesin(FY1929; 778,000 yen)rice

circumstances, so the amount of the grant

Kwantung Agency

was too high.

(i) In selling land located in Dalian City, theauthorities did not collect the price, or(FY1942; 1.581 million yen)
Government General of Taiwan

allowed for delayed payment and caused a(i) In selling timber, the authorities set anlarge amount of arrears, but had not taken

extremelyhighdiscountrate

a measure to collect the price.

for(FY1928 and FY1930; 719,000 yen)designated traders, so the selling amount(ii) In granting subsidies for local expenses, thebecame low.
(FY1927; 826,000 yen)authorities granted the total amount in a(ii) In selling timber, the authorities set alump sum at the beginning of the fiscal

highly discounted price for a corporation

year although it should have been granted

that was organized for the purpose of

in installments, or the recipient of the grantsettling the debts of two corporations

had included the remaining amount of thewhich were delaying the payment of thesubsidies in the general revenue for the

price for timber sold by the authorities infollowing fiscal year.
(FY1928 and FY1929; 1.8 million yen)

the past, so the selling price became too

South Pacific Mandate

low.
(FY1931 and FY1932; 1.78 million yen)

In deciding the price of mineral phosphate(iii) In paying compensation money for Jian'ao

which the authorities had sold to Nanyo

salt, the authorities conducted calculation

Takushoku Co., Ltd. as disposal of thebased on a volume that differed from theremainder at the Angaur mine, the authorities

actual volume, so the amount of payment

estimated that the same level of profits would

was too high.

be gained as in the case of a mine run by acompany, although the mineral phosphate(FY1935; 645,000 yen)would be immediately resold by the purchaser

Karafuto Territory Government(i) Inselling

timber,underestimated

the

the

timbercompany, so the selling price became too low.

authorities
volume(FY1936; 405,000 yen)orpoorly estimated the quality of damaged◆Annual audit
drawings◆

timber, so the selling price was too low,
and timber sold at a low price for use
within the island was transferred outside
220

reportusing

tablesandSection 3 Overview of Audit Results

The description of annual audit reports hadchanged with time. Based on the improvement
policy of the description in the annual audit
report, which was resolved at a General Meetingin 1931, tables and drawings came to be used inannual audit reports in order to make the contents
easy to understand (see page 206). Tables anddrawings began to appear in annual audit reports
starting with the FY1931 Annual Audit Report.
After this, many tables came to be used in thecases reported, and drawings came to be
frequently used particularly for matters on
construction work, purchase of land, and sale ofnational property.

Drawing used in the FY1932 Annual Audit Report221Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

Section 4
Subsection 1

Special Account for Emergency Armaments Expenditures and Audit
thereafter, the budget of this special accountSpecial Account for Emergency
Armaments Expenditures

formed the basis of war expenses. As the war

Emergency

was prolonged, the required expenses were added

Armaments Expenditures established in 1937 wasevery year, and after Japan plunged into theunprecedented in both fiscal scale and thePacific War, the accounting of war expenses

influence it had on the system of finance andcontinued to be conducted under this special

accounting, compared to other Special Accounts

account. By the end of World War II in 1945,

for Emergency Armaments Expenditures that

additional budgets were approved 12 times. The

were established in the past for Sino-Japanese

total amount of budget of both revenue and

War and other wars.

expenditure was over 221.9 billion yen, which

The

Special

Accountfor

was an astronomical amount for Japan at thetime. Looking at changes in the amounts of the

1. Establishment and developments
The Marco Polo Bridge Incident that broke

12 times of additional budgets, the amountout in July 1937 expanded to Shanghai innaturally increased every year as the war

August, and the initial policy to resolve the issue

expanded, but the increase after the start of theat the site and not to expand the conflict was

Pacific War was remarkable. In particular, thesuddenly changed. The name "Marco Polo Bridgeamount of the additional budget in FY1945 was

Incident" was decided to be changed to thenearly 18 times the amount of the first additional"Second Sino-Japanese War" at an extraordinary

budget for emergency armaments expenditures

Cabinet meeting on September 2. At the 72ndthat was approved in 1938.
Also, until FY1941, the Special Account for

session of the Diet that was convened in the same
Emergency

Emergency Armaments Expenditures constituted

Armaments Expenditures was established, treating

about 30% to 40% of Japan's total budget, but

the period until the end of the incident as one

the proportion exceeded 50% in FY1942, andfiscal year, as in the case of prior incidents. The

indeed reached nearly 70% in FY1945. The main

initially approved budget amount was 2,023

financial resources for such huge amount of

million yen, but when combining the budget

emergency armaments expenditures were public

transferred from the expenses for the Marco Polobonds, borrowings, and funds transferred from

Bridge Incident, the total budget amount became

the general account. The total amount of these

2,540 million yen. The fact that the amount of

three items constituted more than 90% of thethe final accounts of expenditure of the general

total amount of revenue; in particular, public

account for FY1937 was 2,790 million yen

bonds always served as the basis of revenue.

month,aSpecial

Account

forJapan's fiscal structure was abnormallyindicates how large this budget amount was.

inflated

With the establishment of the Special

by

the

war.

Public

bonds

were

Armaments

excessively issued as a financial resource for

Expenditures, Japan's public finance and fiscal

expenses, and this prompted increased issuance ofsystem shifted to the wartime regime, andBank of Japan notes, and caused a rise in prices.

Account

forEmergency

222

Section 4

Special Account for Emergency Armaments Expenditures and Audit

The hotbed of the vicious inflation that occurredof 1945 were as follows: the total amount ofin FY1947 and FY1948 had already been

expenditures in August was 9,734 million yen,developed during the war.

with the Ministry of Army spending 5,553

Due to the peculiarity of accounting of war

million yen, the Ministry of Navy 1,971 million

expenses, the Special Account for Emergency

yen, and the Ministry of Munitions 2,210 million

Armaments Expenditures, unlike other accounts,

yen; and the total amount of expenditures in

only had three budget items, namely, "emergency

September was 4,561 million yen, with thearmaments

expenditures

Army, "

Ministry of Army spending 1,620 million yen,"emergency

armamentsofthethe Ministry of Navy 2,919 million yen, and theNavy," and "reserve fund," under the title

Ministry of Munitions 40 million yen. The"emergency

This

expenditures during these two months reacheddistinction between the Army and the Navy was

nearly 15,000 million yen. The issuance of Bank

abolished after the fourth additional budget inof Japan notes sharply increased from the latter

1941, so along with "reserve fund," only two

half of August to September, and led to theitems under one title came to constitute thesubsequent vicious inflation; the main cause for

special account. The Army took full advantage ofthis increase was the military-related End-of-War

this

large

payments.

amounts of reserves, diverted funds between

The

and

the

expenditures

armaments

peculiarity,of

expenditures. "freelybudgetedmajor

postwarpayments

throughitems, and concluded national treasury imposition

emergency armaments expenditures included thecontracts out of the budget.

following: retirement pay for the soldiers and the

The Special Account for Emergency Army

civilians employed in Japanese army; payments

Material Fund was also established in 1939 asof compensation for losses caused by termination

another military-related special account, but itof

was abolished in 1942, and all of the materials,

unsettled payments, and the like for the munitions

etc. under the account were transferred to theindustry; and retirement allowance for employees

Special Account for Emergency Armaments

at the first and second munitions arsenals andExpenditures.

payments to related factories. The retirement pay

obligations

for

trade

accounts

payable,to demobilized soldiers and civilians employed inJapanese army was paid by way of the Cabinet

2. End of World War II

confirming the notices issued by the Ministry of

When World War II ended on August 15,
Emergency

Army. The payment of compensation to the

have

been

munitions industry was initially estimated toclosed immediately due to the nature of thereach an enormous amount of 25 billion yen, but

account. However, the End-of-War Settlements

when "Matters on Elimination of War Profits andwas carried out by using the remaining amount of

Reorganization of National Finances" (Supreme

this budget, and this triggered vicious inflation.

Commander for the Allied Powers Directives to1945,

the Special

Armaments

Account

ExpendituresforshouldAccording to a survey by the Bank of Japan,

theamounts

emergency

November 1945, discussions were made towardarmaments expenditures in August and September

discontinuing the payment. As a result, payment

the

of

spendingof

223

Japanese

Government)

wasissuedinPart 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

of obligations for compensation was discontinued

accounts, and had an extremely large weight inunder the Wartime Special Compensation Tax

the State's public finance. In April 1938, BOA

Act of October 1946, and payments that were

established the Rules on Affairs of Audit ofalready made to munitions companies after theEmergency Armaments Expenditures and thewar were also collected as wartime special

Rules on Examination for Final Audit Report ofcompensation tax.

Emergency Armaments Expenditures and Final
Audit Report to the Emperor, and developed an

On February 27, 1946, the government

audit framework for the special account.

promulgated "Matters on Abolishment of Special
Armaments

Based on the Rules on Audit Affairs, theExpenditures" (Imperial Ordinance No. 110)revenues and expenditures of the Special Accountbased on a direction by the Supreme Commander

for Emergency Armaments Expenditures fromfor the Allied Powers, and closed the Special

April 1 of each year to March 31 of the

Account for Emergency Armaments Expenditures

following year were categorized as those in the

on February 28, 1946. Affairs of revenue andsame tentative fiscal year for audit. BOA was

expenditure of the special account were all

stipulated to conduct affairs of audit, such ascompleted by June 30, 1946, and on the same

completing the audit of the accounts submitted byday, the general ledger of the Special Account for

the auditees, and identifying cases to be reported

Emergency Armaments Expenditures was closed

in the annual audit report and the annual audit

in the presence of BOA's Members.

report to the Emperor, every year, similar to the

Account

forEmergency

On March 8, 1947, the final accounts of thecase of general audit, and to compile all results

Special Account for Emergency Armaments

when closing the Special Account for Emergency

Expenditures were submitted to the 92nd session

Armaments Expenditures.

of the Diet. Of the amount of the final accounts,

In this manner, BOA had the auditees

the amount of expenditures spent was based on

submit accounts every month, conducted field

the amounts spent that were identified by theaudits, and compiled the results for each year,

competent ministers by May 31, 1946, andsimilar to the case of general revenue andamounts that were actually spent but were still

expenditure. And if it found illegal or improper

not identified at the time were subsequently

matters as a result of audit, it proposed theprocessed as expenditures of the general account.

matters to the General Meeting in the relevant
fiscal year.

Subsection 2

In addition, the Rules on Examination for

Audit of the Special Accountfor Emergency Armaments
Expenditures

Final Audit Report of Emergency Armaments
Expenditures and Final Audit Report to theEmperor provided that, separately from the

1. Audit of the Special Account for Emergency
Armaments Expenditures

processing of general annual audit reports andEmergency

annual audit reports to the Emperor, BOA was toArmaments Expenditures, which was managed

appoint members of the Examination Committee

separately from the general account, had various

on Final Audit Report of Emergency Armamentscharacteristics that were not found in other

Expenditures and Final Audit Report to theTheSpecial

Account

for224Section 4

Special Account for Emergency Armaments Expenditures and Audit

Emperor, and the members were to prepare asettlement of accounts was likely to delay, there

draft of the audit report for each adjustment year

was a call to prepare and publicly announce theand submit it to a General Meeting. When theinterim settlement of accounts. However, because

Special Account for Emergency Armamentsa large number of Accounting Officers wereExpenditures was closed, the drafts of the audit

scattered across a vast area, and were individuallyreport for each tentative fiscal year that had been

making payments, it was impossible to sum up

resolved by the General Meeting were to be

the overall expenditures in the middle of theadjusted, compiled, and submitted to the Generalfiscal year and to settle the tentative accounts

Meeting.

unless the Army had the eagerness to do so.

Moreover, as for the audit report to the

BOA not only developed legal provisions as

Emperor as well, when the Special Account forabove, but also developed its audit framework.

Emergency Armaments Expenditures was closed,For

the members of the Committee were to adjust theappointed 30 clerks on a temporary basis

audit cases to be reported in the final audit reportpursuant to Imperial Ordinance for the audit ofto the Emperor, which had been sent from theemergency armaments expenditures, and in 1940,

Divisions of the respective Bureaus in eachit additionally established two Divisions. Also, as

tentative fiscal year, prepare the final audit report

the system of finance and accounting wastoarmaments

gradually reorganized into a wartime regime,

expenditures, and submit it to the General

BOA took successive measures to simplify the

Meeting.

audit system, and formed an audit framework thattheEmperorforemergency

instance,

in

1938,

BOA

additionallycan quickly respond to the wartime regime.

In addition, if determination was particularly
necessary on liability for indemnity of an

In this manner, until 1943, BOA conductedAccounting Officer in relation to emergency

field audits as usual, and carried out accounting

armaments expenditures, BOA was to prepare ainspections of military units, etc. that weredraft determination each time, and submit it to alocated overseas.
After closing the Special Account for

Bureau meeting or a General Meeting.

Emergency

Meanwhile, the Rules on Affairs of Audit ofArmaments

Expenditures,

BOA

Emergency Armaments Expenditures and theconsolidated and adjusted the audit cases to be

Rules on Examination for Final Audit Report ofreported in the final audit reports that wereEmergency Armaments Expenditures and Final

examined and adjusted at the General Meeting

Audit Report to the Emperor were also directly

every year. When the Cabinet submitted the final

applied to audit of the Special Account foraccounts of revenue and expenditure of theEmergency Army Material Fund, which was

Special Account for Emergency Armaments

established in 1939. The special account was

Expenditures on March 10, 1947, BOA verified

closed in March 1942, and the final audit reportand confirmed them, and sent the final accounts

on the emergency army material fund wasto the Cabinet on March 17, attaching the final

compiled and submitted in December 1942.

audit report that was resolved at the General

Since

the

fiscalyearofarmaments expenditures was longemergency

Meeting. The final accounts and the final audit

andreport were immediately reported to the 92nd

the
225

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

session of the Diet. In addition, BOA compiled

to the arsenal based on the Cabinet decision

the final audit report to the Emperor, and after

above. The president of the company was

resolution by the General Meeting, President of

appointed as the head of the arsenal, and all

BOA Seiichiro ARAI visited the Imperial Palace

executives and other employees assumed theirand presented the report to the Emperor at theformer positions.
The First Munitions Arsenal, which made aend of April 1947.

new start as a state organ, became required tosubmit accounts to BOA. However, to have the

2. Audit of munitions arsenals

arsenalFrom around the Battle of Midway in June

reviseits

conventional

accounting

1942, the Allied Powers seized the initiative inprocedure to the government style, and to submit

the war due to the superiority of their aviation

the statement of accounts and documentary

power. Japan strongly recognized the need toevidence under the Rules on the Submission ofenhance its aviation power, and considered

Accounts involved great trouble, such as training

replenishment of exhausted aircraft and increaseof the staff, revision and preparation of theof aircraft production capacity as the most urgent

documents and forms, and it could have anissues.

theadverse effect on aircraft production. Therefore,

aircraft

BOA allowed an exception to the submission of

production provided by the Cabinet Planningaccounts on request from the authorities. By way

Board and the Ministry of Commerce andof approving an Inquiry Letter issued by theIndustry to powerful centralized guidance, andMinister of Munitions, a proposal on exception toestablishedinsubmission of accounts was submitted to andNovember 1943 as an organ to provide suchapproved by the General Meeting in June 1945.

guidance.

Specifically, in lieu of the documentary evidenceToconventional

this

end,

dualistic

the

Japan

revisedguidanceon

Ministryof

Munitions

to be attached to the statement of handling ofThen, following the fall of Saipan, air raids
on the main land of Japan intensified fromadvanced

November 1944. Aircraft factories became theexpenditures, the arsenal was allowed to submit afirst bombing targets, and the damage increased

detailed statement of payments, summary sheet of

day by day. A plan was made to recover thecost elements of each manufacturing plant, trial

factories from such damage concurrently with abalancemeasure to move them to safer locations, but thismanufacturing plan, list of balance, and balancedifficult work required support from the State,sheet as of the last day of March of each year,

andwhich it had been preparing since the time whennationalizationofaircraftfactors

was

funds

of

of

totalsemergency

andbalances

armaments

of

each

it was a company.

considered. At the Cabinet meeting in March

The

1945, a plan to nationalize Nakajima Aircraft

production

capacity

of

the

First

Munitions Arsenal had already declined to theCo., Ltd. was suddenly materialized.
In this way, Nakajima Aircraft Co., Ltd. waslowest level at the time of its establishment, due

put under state control. It was established as theto the damage from air raids, but as soon as it

First Munitions Arsenal in April 1, 1945, and all

was established, the arsenal dedicated all its

employees of the company were directly shifted

efforts to moving the production facilities to safe
226

Section 4locations,dispersing

thefacilities,

Special Account for Emergency Armaments Expenditures and Audit

andAmounts in the final accounts of emergency armaments
expenditures for which evidence could not be provided(Unit: yen)constructing underground factories, and spent anenormous amountofemergency

armaments

Competent Ministry
Revenue
Expenditure
180,407,818
Ministry of Finance―554,580,886 6,383,226,877
Ministry of Finance(former Ministry of Army)
142,210,390 6,151,416,330
Ministry of Finance(former Ministry of Navy)―
Ministry of Commerce and58,264
Industry(former Ministry of Munitions)
Total
877,199,094 12,534,701,471

expenditures. However, the war ended in the
midst of such efforts.
On July 9, immediately before the end of the
war,

the

SecondMunitionsArsenalwasestablished by nationalizing Kawanishi AircraftCo., Ltd. Many naval officers entered the arsenal

Of the confirmed amounts of final accounts,

as executive officials, but the war ended before
they

could

make

arrangements

withthe amounts for which the expenditure items weretheunknown were, the Ministry of Finance (former

company's side.

Ministry of Army) 90,598,736 yen and the
3. Final audit report of the Special Accountfor Emergency Armaments Expenditures

Ministry of Finance (former Ministry of Navy)

The final accounts of the Special Account

Next, looking at the audit cases reported infor Emergency Armaments Expenditures were

the final audit report relating to emergency

sent from the Cabinet to BOA on March 10,

armaments expenditures, matters in violation of1947. After BOA completed the audit, it sent thethe budget, laws, and Imperial Ordinances were

final accounts to the Cabinet together with thereported for 53 cases on expenditure and one

final audit report on March 17. The amounts ofcase on government property and goods, totaling

the final accounts were as follows:

54 cases as follows. The breakdown of the cases

Revenue: 173,306,154,239 yen

was as follows: 28 cases under the jurisdiction of

Expenditure: 155,397,218,352 yen

the Ministry of Finance (former Ministry of

165,700,426yen, totaling 256,299,162 yen.

Of these amounts, the following amounts wereArmy); 13 cases under the jurisdiction of thetreated as unconfirmed due to lack of evidence or

Ministry of Finance (former Ministry of Navy);

lack of reply to an Inquiry Letter:and 13 cases under the jurisdiction of the

Revenue: 43,176,596 yen

Ministry

Expenditure: 93,726,072 yen

Munitions).
The

The amounts of final accounts for which

of

Financefollowing

cases(formeron

Ministry

expenditure

of
were

evidence could not be provided due to loss ofreported:

documentary evidence during war, etc. were as

Inappropriate pricing in purchasing articles orshown in the following table. These were

contracting processing
Six cases

necessarily treated as having completed audit.

38.268 million yen

Excessive volume and inappropriate pricing inpurchasing articles
One case

14.918 million yen

Inappropriate measure of payment by roughestimate in purchasing articles
227

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

One caseby officials

9.656 million yen

24 cases

Inappropriate measure of payment in advance

331,000 yen

Other improper mattersestimate in purchasing articles

One case

Four cases 46.202 million yen

36,000 yen

Inappropriate use of the budget in purchasing

The following case on government property andarticlesgoods was reported:
One case

Inappropriate

Inappropriate

2.363 million yen

measureinmanagement

anddisposalofautomobiles after the war

implementing

One case

construction
One case

Of these, 24 cases were reported on crimes

4.014 million yen
thecommitted by officials. These were cases of

construction expenses for building a government-

defraud of public money such as embezzlement

operated factoryof advanced funds, padded payments, or billing

Inappropriate

measureindeciding

2.293 million yen

for fictitious facts by petty officers, etc. who

Inappropriate measure in providing retirement

were in charge of accounting. Although thepay upon the end of the war

number of cases was large, the amounts were

One case

generally not very large.

Five cases 71.749 million yen
forHowever, the 30 cases that were reported forfacilities in cancelling contracts upon the end ofmatters other than crimes involved relatively

the warlarge amounts and were found to be malicious.

Payment

ofcompensationfordamage3.65 million yen

They suggest that accounting of war expenses

Inappropriate measure in paying compensation

tended to be mismanaged due to the nature of thefor damage upon the end of the war

expenses. It should be noted that nearly half of

Two cases

these cases were related to the Ministry of

Two cases 32.568 million yen
Inappropriate measureinpayingpricesMunitions

or

that

was

newly

establishedincompensation for delivered products or products

November 1943, and most of the cases of thein process after the war

Ministry of Army and the Ministry of Navy were
problems that occurred due to the confusion at

One case 195.809 million yen
Inappropriate

measurein

assessing

the end of the war.

the

The following are the major improprieties

manufacturing process of contracted articles after

listedthe warby

Ministry.

Improperprovisionofretirement pay, etc. upon the end of the war was

One case 101.689 million yen
Overlapped payment of the price for purchasing

found in common for all three Ministries.

articles after the war

Ministry of Army
1.5 million yen(i) When a unit under the direct control of theFree-of-charge distribution of goods purchased asWestern Army provided a pay, allowance,

battlefield canteen goods after the waretc.

One casetosoldiers,

civilians

employed

in691,000 yen

Japanese army, etc. who were discharged

Loss caused to the treasury by crimes committed

upon the end of the war, it provided six

One case

228

Section 4

Special Account for Emergency Armaments Expenditures and Audit

three

Ashikaga Dyeing Industrial Association, it

months' payment that was instructed by the

directly acquired the equipment by paying

center.

from emergency armaments expendituresmonths'payment,

exceedingthe(8.07 million yen)although idle equipment was to be purchased(ii) The Branch Clothing Depot of the Army inby Industrial Equipment Corporation or the

Fukuoka had paid compensation for damage,National Rebirth Bank. In addition, it soldsuch as money for facility expansion, which

the equipment to a single company without

was unrelated to the contract to four

using the controlled route, so a large amountcompanies

of loss on sale occurred.

with

which

contracts

were(2.363 million yen)cancelled upon the end of the war.
Ministry of Navy

(1.609 million yen)(iii) When the Main Clothing Depot of the Army(i) When the Navy Otsu Air Corps paid

procured gas masks (for personnel andretirement allowance upon the end of thehorses), etc., it estimated the manufacturer's

war, it failed to follow the instruction fromprofit margin to be extremely high, andthe Ministry, but followed the order of thepurchased the goods at high prices.

immediate supervisor who did not have theright to decide salaries, and paid 20 months'(12.967 million yen)(iv) Whenthe

Accounting

Bureauofsalaries, and also erroneously paid othertheHiroshima Division constructed temporary

allowance,

warehouses

othersubsequently paid the prescribed amountlocations) for storing volatile oil in drum

again based on an order from the central

cans specially purchased in light of thegovernment.

(Innoshima

and

six

etc.

together.

Moreover,itinternational situation, the Bureau decided to(834,000 yen)

set up many large warehouses in close(ii) The Imperial Japanese Navy Aviation Bureau

proximity with each other although danger

made payment in advance as the price forwas expected from the start. After all, thepurchasing polyamide synthetic resin, but

Bureau changed the design due to reasons

although the counterparty was in default, itsuch as disaster prevention, and caused

did not have the counterparty repay the

rework that involved a large amount ofamount in default.
(26.719 million yen)money. Specifically, it removed more than(iii) When

40% of the warehouses that were near to

the

Naval

Technical

Departmentcompletion at three locations, and downsizedpurchased H metal elevator, etc., a Colonel

and distributed warehouses in four otherof Technology who was the head of thelocations by removing more than 70% of

Production Division of the Department, etc.

completed warehouses.

overestimated the production process inconspiracy with the counterparty, and paid an(4.014 million yen)excessive purchase price based on it.

(v) When the Army Air Service Headquarters(101.689 million yen)purchased and sold equipment which became
idle bybusiness reorganizationof(iv) When the Accounting Bureau of the Kure

the
229

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

Navy concluded a contract for processing of

Telecommunications. In addition, at the end

high explosives, it failed to investigateof the war, when it had only used thesufficiently upon pricing, so the unit pricevessels for less than one year, it sold thebecame extremely high compared to the unit

vessels to the original owner at low prices

price of the same type of goods under aof about 20% of the purchased prices.
(22.53 million yen)contract concluded by the Army.

(iv) When the General Bureau for Air Ordnance(315,000 yen)
Ministry of Munitions

purchased(i)

When the First Munitions Arsenal paidnavigation markers, the counterparty hardly

retirement allowance to officials and otherdelivered the goods by the end of theworkers when dissolving the arsenal upon

contract period and was unlikely to deliver

the end of the war, it had the State bear

the goods in the future. However, theover 80% of the total amount of retirement

Bureau kept ordering the goods from theallowance paid although the state-run period

same counterparty, and paid a large amount

was only about five months. Also, it paidof advanced money. As a result, while theretirement allowance that was double thecontract quantities were 3,948 automobiles

amount of the retirement reserve under theand 160,000 navigation markers, only overinternal regulations of Nakajima Aircraft

90 automobiles and 20,000 navigation

Co., Ltd., which was the predecessor of themarkers were delivered, and it becamearsenal, and also additionally paid specialdifficult to collect the amount of repayment

allowance, etc.

of the advanced funds upon the cancellation

automobiles

andof the contract at the end of the war.

(57.896 million yen)(ii)

various(14.055 million yen)

When the Second Munitions Arsenal paid(v)

retirement allowance to officials and other

When the General Bureau for Air Ordnanceworkers when dissolving the arsenal, it had

purchased working clothes, the counterparty

already paid retirement allowance funded bymade no delivery, and the contract should

Kawanishi Aircraft Co., Ltd., which was thehave been cancelled at the end of the war,predecessorofbut the Bureau made payment in advanceadditionally

paid

the

arsenal,retirement

but

it

after the end of the war.

allowance(4.61 million yen)funded by the State, although the state-run(vi) When the General Bureau for Air Ordnanceperiod was only over 40 days.

purchased steel bars and an electric furnace,(4.792 million yen)the(iii) The General Bureau for Air Ordnance

Bureaumadepaymentbyroughpurchased 194 used wooden vessels andestimate, despite that the site was atheir engines, etc. in order to transport

battlefield without access to electricity

aircraft materials, but the prices of vessels

where a factory could not be built.

were about twice to 20 times higher than

(9.656 million yen)

the vessel price standard in conformity with(vii) The General Bureau for Air Ordnance paida Notice by the Ministry of Postal andcompensation for loss of materials to an
230Section 4

Special Account for Emergency Armaments Expenditures and Audit

entity called a production team, whichclaimed that it incurred damage due to theend of the war, although it had no trace of
implementing operations.
(4.479 million yen)(viii) The First Munitions Arsenal and its various
manufacturing

plantspurchasedmany

automobiles of poor quality for passengers
and for goods during the period of overfour months from the establishment of thearsenal until the end of the war.
(14.918 million yen)(ix) When the Second Munitions Arsenal paid
the prices of delivered products, processing
work, products in process, etc. to a
subcontract factory after the war, it paid anexcessive amount corresponding to 16
months' amount of the products it actually
received in the previous year (when it was
still a corporation), although the state-run
period was only over 40 days.
(195.809 million yen)(x)

When the General Bureau for Air Ordnanceand the Adjustment Bureau of the Ministryof Commerce and Industry disposed of 461
motor trucks that were no longer needed
after

the

war,

they

shouldhave

preferentially distributed them to public
offices and local public bodies in order to
help

such

bodies'insufficient

landtransportation capacity at the time, but it
sold

the

individuals

vehicles

to

that

were

companies

andengagedintransportation operations during the war byevaluating the grade of the vehicles low.

231

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

Section 5 BOA Office Building
Subsection 1

BeforetheEarthquakeGreatlocated nearby, and thus, around 1887, this area

Kanto

was already like a government office quarter.

In March 1880, BOA, which was separated
from the Ministry of Finance to become an organ
under the direct control of Dajokan, established
its temporary office in Dajokan's office building
located in the premises of the Akasaka Palace.
On this occasion, it established a branch officewithin the Ministry of Finance, which was later
abolished in February 1881. In May 1882, BOA

Otemachi in 1909 (Land Surveying Department, 1910)

launched the construction of its new officebuilding, and completed it on the former site ofThis building was constructed in 1881. Its

the Ministry of Army in 1 Zenigamecho,

conditions as of 1919 were described in the

Kojimachi-ku (currently 1 Otemachi, Chiyoda-

recordsku), spending more than 15 months and a total of

considerably decayed and declined due to aging

29,998 yen of construction costs. It moved to theas well as being coarsely constructed from the

new building on December 22, 1882, before thebeginning, and, it is now not only coarse but also

construction was finished.

inconvenient for office work, causing problems

asfollows :" Thisbuilding

had

The new BOA office building mainly

such as rooms being scattered throughout theconsisted of a wooden two-story building withbuilding and insufficient sunlight in office

the total ground area of 2,115 tsubo (1 tsubo≒

rooms." The government also became aware of

3.3m ) and the building area of 336 tsubo. As athe necessity to solve the aging of wooden

result of several extensions and alterations, its

government office buildings and inconveniencebuilding area increased to 623 tsubo by the end

arising from the distances between the buildings,

of 1890.

and established the Council for Construction of2

CentralIn December 1891, BOA moved into theGovernment

OfficeBuildings.

The

government office building in 2-1 Otemachi,

Council held the first meeting on January 15,

Kojimachi-ku, from which the Ministry of1920, and through the successive meetings held

Agriculture

tothereafter, it decided to construct a new building

Kyobashi, and continued to use it until the Kanto

for BOA first of all. This suggests how coarse

Great Earthquake occurred in 1923. In this area,

and aged the BOA office building was at thatthe buildings of the Ministry of Internal Affairs

time.

and

Commerce

had

moved

and the Ministry of Finance stood on the opposite
side of BOA's building across the street, and thebranch office of the Ministry of Works and theMinting Bureau of the Ministry of Finance were232

Section 5 BOA Office Building

office building due to the great earthquake, on
September 10, BOA started to use spaces in thebuilding of the House of Peers to place theSecretariat and the 1st Bureau, and spaces in theJapan Prison Association's building within thepremises of the Ministry of Justice to place the
2nd and 3rd Bureaus, and used these spaces as its
branch offices. At the same time, it quickly
launched the construction of the barrack office
Main gate of the BOA office building in 1922

building, warehouses and other facilities on theburned site of the former building, and completedtheThe construction of a new BOA officeconstruction

in

early

December.

Thebuilding was launched in January 1923, with thetemporary Secretariat and Bureaus moved frombudget for FY1922. First, the west side of thethese spaces to the barrack office building byformer building of 387 tsubo was demolished,

December 25.

and a two-story temporary building of 470 tsubo

Thebarrack

officebuilding

including

was constructed on the south side in March. The

warehouses was a one-story building of more

new BOA office building was planned to be athan 1,589 tsubo, constructed using some 353,000

reinforced concrete building facing the Densha-

yen of contingent building and repair expenses

dori street on the west. However, before thefor government office buildings as part of theconstruction work started, on September 1, 1923,

earthquake

9:40 p.m., the Kanto Great Earthquake occurred,

contingent expenditures managed by the Ministry

and the office building was burned down, withof Finance for FY1923. It was very poor inmany important documents stored therein. The

conditions.

response

expenses

out

of

the

areas of the premises and buildings of BOA

As of May 1935, immediately before thefacilities immediately before the earthquake wererelocation to the building in Kasumigaseki

as indicated in Table 1.

demolished in 2004, the areas of the barrackbuilding including extensions and rented facilities

Table 1

were as follows: the office building: 1,136 tsubo;

Item
PremisesArea
5,491 tsubo, including leased land of
67 tsubo
Ground of official 516 tsubo, including leased land of 26
residencetsubo
Office building
6 buildings, 1,509 tsubo in total
Attached houses
18 buildings, 218 tsubo in total
Hallways
176 tsubo
Warehouses
11 buildings, 667 tsubo in total
Office residence
4 buildings, 97 tsubo

Subsection 2

Use ofbuilding

thebarrack

warehouses: 394 tsubo of building area and 498
tsubo of floor area; sheds and other facilities: 246
tsubo; total building area: 1,776 tsubo; total floorarea: 1,880 tsubo; ground area: 3,750 tsubo.

officeFollowing the complete destruction of the233Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

building was finally decided to be located on thepart of the premises of the former Imperial
College of Engineering in Sannencho, Kojimachiku (currently 3-2-1 Kasumigaseki, Chiyoda-ku),
which

was

the

demesneoftheImperial

Household Ministry, on the northwest of thebuilding of the Ministry of Education which wasjust established.
The picture below shows the site of the

BOA office building after the earthquake

BOA office building demolished in 2004. In thisarea, the Naito clan of the Nobeoka Domain in

Construction of the new officebuilding

Hyuga Province (70,000 koku) held its premises

Most government offices were affected byengineering affiliated to the Ministry of Works,

the great earthquake, and they constructed andthe predecessor of the Imperial College ofused barrack buildings as emergency measures.

Engineering, was built in this area. After the

However, these buildings were inconvenient for

Imperial College of Engineering moved to Hongo

office work, and moreover, the policy forin 1886, this area was in the hand of the Imperial

constructing permanent buildings for central

Household Ministry, and used as sites for thegovernment offices would have a significant

Imperial House Museum, Tokyo Jogakkan, andinfluence on the reconstruction plan of the wholeother facilities.

Subsection 3

in the Edo era. In 1871, the college ofcity. From this standpoint, the Preparatory
Committee

onConstructionofCentralGovernment Office Buildings was inaugurated in
October 1925, and discussed a concrete plan for
construction of government office buildings,
including the concentration of central government
offices. Through this discussion process, in which
BOA also participated, a decision was made toconstruct BOA office building as a three-yearplan from FY1932 to FY1934.
Area around Toranomon in 1928 (Land Surveying
Department, 1930)

According to the virtual layout design for
constructionofcentralgovernment

officebuildings as of 1926, the new BOA office

After the buildings in this area werebuilding was planned to be constructed at thedevastated by the Great Kanto Earthquake insouthwest corner of Sotosakuradacho, Kojimachi-

1923, a decision was made to construct buildings

ku, adjacent to the planned site of the building offor BOA, the Ministry of Education, the Peers'

the Ministry of Internal Affairs. The plan wasClub, etc. in this area. The circumstances at thatlater revised, and the site for the new BOA officetime were inscribed in detail on the monument
234

Section 5 BOA Office Buildingoffurniture were taken to be used as the furniture

Kasumigaseki Common Gate. This monument

for the International Military Tribunal for the Far

was created by the graduates of the Imperial

East. The construction budget and areas of theCollege of Engineering to express their affection

BOA office building were as shown in Table 2.

situatedaroundthefrontentrance

to the college, using the college's red brick for its

Table 2

base.

Item
Amount/area
Budget for new construction
1,171,800 yen
Cost for land acquisition
736,149 yen
Ground area
1,891.485 tsubo
Floor area
Underground floor
24.621 tsuboFirst to fourth floors (each 667.303 2,669.212 tsubo
tsubo)
Fifth floor
388.974 tsubo
Rooftop25.081 tsubo
Warehouse (first to sixth floors)
1,019.204 tsubo
Gatekeeper's office0.653 tsubo
Total
4,127.385 tsubo
Other: canopy area
19.260 tsubo

In the construction process of the BOA
office building, special attention was paid to theretention of the documents which were far greaterinvolume

than

those

retained

by

other

government offices. To address this, the wholepart of one wing of the building was made as awarehouse, and the wing which was normallysupposed to be used as a four-story building was
divided into six stories. Thus, consideration was
given

to

increasing

the spaceforInstoringNovember

1943,

the

MinistryoftheMunitions was established and it began to use theconvenience for office work, rooms with water

BOA office building. Therefore, some of the

facilities were annexed to the audit offices to

Bureaus of BOA were forced to move to thestore documents on daily ongoing audits.

building of the Ministry of Education, and saw

documents.

In

The building

addition,

considering

was made ofreinforced

concrete, using multi-pedestal concrete piles for
its base. Its front part had five stories and eachside had four stories. In FY1932, the designingand land development work were launched. In
July 1933, the construction was contracted out toTakenaka Corporation, and after 20 months of
construction work, the building was completed on
March 30, 1935, and BOA moved there on May

BOA office building newly constructed

28.
Most of the furniture used until then had
been produced hurriedly just after the earthquake
and was no longer useable. BOA bought new
furniture to replace most of it upon therelocation.

The

new

furniturewasratherluxurious at that time, to be suited for thebuilding that was said to be the second mostmajestic after the National Diet Building. Afterthe war, a great number of the items of this

Front entrance
235

Part 2

Chapter 4

BOA under the Former Constitution in the Showa Era (1926〜1947)

the end of the war there.

Courtyard

236

Part 3

BOA under the Constitution of Japan

Section 1

Chapter 1

Provisions on Final Accounts under the Constitution of Japan

Establishment of BOA under the Constitution of JapanThe Constitution of Japan came into effectstep forward, within a new framework consistingon May 3, 1947, following which the new BOAof enhanced independence, expanded scope of

Act was put into effect. Under the newaudit subject matters, establishment of two

Constitution, BOA was given a status of a fiscal

internal organizations, i.e., the Audit Commission

supervision authority that is independent from theandCabinet.

relationship with the Diet, and introduction of anGeneralExecutive

Bureau,closerapproach for having audit results reflected

Sixty-seven years after its foundation as apromptly in administration.

state organ under Dajokan, BOA made a new

Section 1

theProvisions on Final Accounts under the Constitution of JapanBoard

As a replacement of the Constitution of theof

Audit "( paragraph

(1);

" The

Empire of Japan which had been promulgated onorganization and competency of the Board of

February 11, 1889, and put into effect on

Audit shall be determined by law" (paragraphNovember 29, 1890, the Constitution of Japan(2)). A closer look at the wording in comparison

was promulgated on November 3, 1946, andwith the former Constitution shows the following

came into effect on May 3, 1947.

features

Under

the

new

Constitution,

BOA

of

the

provisions

of

the

new

Constitution.

isstipulated as an organ that is independent from
1. BOA is to audit "all" of the final accountsof the expenditures and revenues of theState "annually"

the Cabinet and belongs neither to the Diet nor to
the Courts. Article 90 of the Constitution
provides as follows: "All of the final accounts ofthe expenditures and revenues of the State shall

The term "all" used here clearly means thatbe audited annually by the Board of Audit andnothing in the final accounts of the expendituressubmitted by the Cabinet to the Diet, together

and revenues of the State shall be excluded fromwith the statement of audit (annual audit report),

BOA's audit subject matters.
The scope of audit of BOA under the former

during the fiscal year immediately following the" The

Constitution was stipulated in Article 23 of theorganization and competency of the Board offormer BOA Act enacted in 1889, which

Audit shall be determined by law" (paragraphprovided that "Calculation of secret funds of the(2)). These provisions are basically the colloquial

government shall be excluded from the audit byversion of the corresponding provisions of Article

the Board of Audit," thus excluding secret funds

72 of the former Constitution: "The final accountfrom the scope of audit subject matters. Act No.

of the expenditure and revenue of the State shall70 of 1890 further provided that the "Ministers of

be verified and confirmed by the Board of Audit,

Army and Navy shall be responsible for goods inand it shall be submitted by the Government tothe category of goods prepared in advance for

the Imperial Diet, together with the report of thedispatch of troops, and the Board of Audit Act

periodcovered "( paragraph

(1));

239

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

3. While the former Constitution provided that
"The final account shall be verified andconfirmed by the Board of Audit," the word
" confirmed " is not used in thecorresponding provisions of the newConstitution

shall not apply to those goods." For the purposeof preventing the leakage of military secrets,
those goods that were categorized as goods
prepared in advance for dispatch of troops were
excluded from the scope of the former BOA Act.

The phrase "verified and confirmed" as used

The new Constitution does not permit suchin the former Constitution was adopted on the

exception to audit subject matters.

model of the Constitution of Prussia. However,

The term "annually" clearly means that thesettlement of final accounts of the expenditures

what

and revenues of the State and the audit thereof by"confirmed" was not very clear even under the

BOA

and

former Constitution. This word did not mean ancontinuously. Under the former Constitution,

act that would produce such an effect that thesome accounts such as Special Account for

figures of the final accounts prepared by the

Emergency Armaments Expenditures were notgovernment would become unchangeable whensettled annually but their fiscal year extended

confirmed by BOA. Nor did that word mean thatover two or more fiscal years. The new

BOA was authorized to correct the figures ofConstitution no longer allows such accounting

expenditures and revenues and finalize proper

method.

accounts. BOA was considered to be responsible

shouldbeconducted

regularly

function

only

for

was

verifying

meant

and

by

the

word

checking

theappropriateness of the contents of the final

2. The Cabinet is required to submit the final
accounts to the Diet, together with BOA's
statement of audit (annual audit report)," during the fiscal year immediately
following the period covered"accounts and finding illegal or improper accounts.
Accordingly, it is inappropriate to consider thatthe fact that the word "confirmed" is not adopted

The former Constitution did not specify thein the provisions of the new Constitution suggests

deadline for submitting the final accounts to thethat BOA no longer performs these functions, andDiet; from the Meiji era until the mid-Taisho era,

there is no substantial change resulting from thefinal accounts for a given fiscal year were usually

deletion of this word.

submitted to the Diet after two fiscal years. AfterIn the BOA Act, which underwent the fullthe Public Accounting Act amended in 1921

amendment in 1947, Article 21 provides that "theexplicitly provided that final accounts should be

Board of Audit verifies the final accounts of thesubmitted "at the ordinary session of the Diet

expenditures and revenues of the State throughheld in the following year," submission was madethe results of its audit." Here in this provision,in about 11 months following the end of the

BOA's

relevant fiscal year. The new Constitution now

appropriateness of the contents of the final

clearly requires final accounts to be submitted toaccounts is expressed with the word, "verify."

the Diet in the fiscal year immediately following
the fiscal year concerned.

240functiontoverify

and

check

the

Section 1

Provisions on Final Accounts under the Constitution of Japan

4. Article 72, paragraph (2) of the former
Constitution has been maintained as it is in
Article 90, paragraph (2) of the newConstitution
Article 10

of

the

formerExplanation by Minister of State Tokujiro
KANAMORI
on
guarantee
for
BOA's
independence"…Because the Constitution supposes that BOA
is responsible for supervising the expendituresand revenues executed and received by the
Cabinet, it is naturally necessary to guarantee
BOA's independence in carrying out its work.
Although this is not specially prescribed in theConstitution, I think it is a natural interpretationof the constitutional provisions. Matters that need
to be specified in this respect should beprescribed by a law that defines the organizationof BOA. Another point that is left to beconsidered is independence of officials whoconstitute BOA in terms of their status. This
point as well should be prescribed by the law,
and we should make sure that BOA officials
should be guaranteed independence in the samemanner as BOA itself is currently guaranteedindependence…"(September 25, 1946, Special Committee on theBill to Amend the Constitution of the Empire ofJapan, House of Peers)

Constitution

provided that "The Emperor shall determine theorganization of the different branches of theadministration, and salaries of all civil andmilitary officers, and appoint and dismiss thesame. Exceptions especially provided for in thepresent Constitution or in other laws, shall be inaccordancewith( bearing

thereon ) . "establishment,therespective

provisions

The

for

the

jurisdiction,andorganization,

rules

other matters of general government offices thatbelonged to the Cabinet were recognized as
matters under the supreme power of the Emperor
and were specified by Imperial Ordinances,
without the consent of the Diet. On the other
hand, the organization and authority of BOA
were prescribed by law, in accordance with

From the perspective of financial democracy,

Article 72 of the former Constitution which

the "consent of the Imperial Diet" which hadprovided that "The organization and competency

been a requirement for the adoption of a budgetof the Board of Audit shall be determined bysubmitted to the Diet was replaced with thelaw" (paragraph (2)). This was considered as the"decisionbasis for BOA's independence from the Cabinet.
Under

the

new

Constitution,

newConstitution did not. Accordingly, in practice, thefinal accounts submitted to the Diet are treated inthat BOA's organization and competency are

the same manner as financial reports under theprescribed by law can no longer be the proof ofnew

its independence. It is understood that BOA's

Constitution

as

under

the

formerConstitution, while theoretically leaving open a

independence from the Cabinet is already clear

possibility that final accounts would be treated asfrom the Constitution in which Article 90,
oftheexecution of the budget―to the Diet, as the former

120 of 1948) and other laws. Therefore, the fact

matters

undersubmitting the final accounts―the results of the

National Government Organization Act (Act No.

sets forthDiet"

not make any mention of the purpose of

belong to the Cabinet are prescribed by the

(1)

the

Constitution. However, the new Constitution doestheestablishment and mandate of all organs thatparagraphof"reports" or "agenda items."

BOA

separately from the Cabinet.

241

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

Section 2

Background of Enactment of the BOA Act
Under such circumstances, in July 1946, the

1. Publication of the draft for the Amendmentof the Constitution of the Empire of Japan

Examination

Committee

on

the

BOA

Act

In March 1946, the Cabinet of Kijuro

Amendment was established in BOA. Having

SHIDEHARA published an outline of the draft

collected opinions within BOA, the Committee

for the constitutional amendment, and thencompiled the "summary of the review ofpublished the legal text of the draft in April oforganization and mandate of BOA," and thenthe same year.

developed the "outline of the Bill to Amend the
BOA Act" based on this summary in the same

Article 86 of the draft amendment provided

month.

as follows: "All of the final accounts of theexpenditures and revenues of the State shall be

The outline covered 34 items for theaudited annually by the Board of Audit andamendment of the former BOA Act. Amongsubmitted by the Cabinet to the Diet, together

them, the major items were (i) ceasing the systemwith the statement of audit, during the fiscal year

in which BOA was under the direct control of theimmediately

covered"Emperor and abolishing the system wherein BOA(paragraph (1)); and "The organization andwas required to present an address of audit resultscompetency of the Board of Audit shall betodetermined by law" (paragraph (2)). The draft

determination

provisions did not introduce major change toindemnity of Accounting Officers which BOA,

Article 72 of the former Constitution. Article 90

which was not a judicial organ, had carried out asofenactedthe first and final instance. Other items included

incorporated only a slight difference from thethe following: (iii) establishing the term of officedraft version (a comma was added by theand the mandatory retirement age for the

Sumitsuin).

Members (President, Directors General, andthefollowing

new

the

Constitution

periodactually

theEmperor,andsystem

(ii)
of

the

abolishingtheliabilityforHowever, since BOA under the former

Directors), who had held a life tenure under theConstitution existed as an organ under the direct

former Act; (iv) expanding the scope of audit tocontrol of the Emperor, the change in the

cover accounts of juridical persons to which theEmperor's

constitutional

State has contributed half or more of the statedamendment necessarily required the fundamental

capital; (v) establishing branch offices; (vi)change to the nature of BOA. Following thesetting down in the annual audit report BOA's

publication of the draft amendment under which

recommendations on

the Emperor would no longer have the powers

administrative revisions, which had been included

related to government, the former BOA Act wasin an address presented to the Emperor together

also under the pressure to undergo a drastic

with audit results (in connection with item (i));

amendment.

(vii) allowing BOA to explain to the Diet audit

statusthroughthelegal,

institutionalandcases reported in the annual audit report; (viii)
clarifying matters subject to a resolution at the

2. Development of the outline of the Bill to
Amend the BOA Act

General Meeting composed of the Members; and242

Section 2

Background of Enactment of the BOA Act(ix) clarifying details of audit cases reported in

the successor to the Examination Committee on

the annual audit report. All these items had been

the BOA Act Amendment, studied the GHQ's

matters of concern in the practice under theintention, prepared the first draft of the Bill toformer BOA Act. In addition, the outline of theAmend the BOA Act and submitted it to thebill also mentioned amendments of the related

GHQ on February 4.
The first draft clearly provided for thelaws such as the Act on Disciplinary Actions
against Members, the Public Accounting Act, andfollowingmeasures:(i)converting

BOA's

the Act on the Houses of the Diet.

decision-making organ from the conventionallarge collegial body to the small collegial body

3. Development of the Tentative Draft of theBill to Amend the BOA Act

consisting of not more than four Members in

In September 1946, the General Headquarters

General; and (ii) authorizing BOA to "conductof the Supreme Commander for the Allied

continuous audit" and expanding the scope ofPowers (GHQ) demanded an explanation of theaudit by including the "expenditures and revenues

Japan's audit system and its practice. Following

for the current fiscal year" in the scope. The

the repeated negotiations, the GHQ suggested thelatter measure was developed based on theneed to enhance and reinforce BOA's function. In

GHQ's opinion that emphasis should also be

December of the same year, in response to theplaced on audit for the current fiscal year in order

GHQ's request for a draft amendment of theto have audit results reflected in administration

BOA Act, BOA prepared the Tentative Draft ofon an ongoing basis.

addition to the President and Deputy Secretary

the Bill to Amend the BOA Act and presented it
The tentative draft was prepared by making

5. Development of the Second Draft of the Bill
to Amend the BOA Act

some modifications to the outline of the bill

The GHQ gave detailed suggestions on amentioned above, such as classifying audit

very broad range of provisions in the first draft

subject matters into those covered by mandatory

and presented its opinions for each article.

audit by BOA and those covered by BOA's audit

Following this, BOA developed the second draft

as needed basis, and deleting the provision thatof the Bill to Amend the BOA Act by revisingwould allow BOA to conduct audit at the request

the first draft twice, and submitted it to theof the Cabinet.

Cabinet Legislation Bureau for internal review onto the officials in charge at the GHQ.

February 8.
The second draft incorporated the following

4. Development of the First Draft of the Bill to
Amend the BOA Act

measures: (i) making BOA's organization adoubleOn January 17, 1947, the GHQ gave many

structure

consisting

of

the

Audit

suggestions on BOA's tentative draft referring toCommission, as a small collegial decision-making

the U.S. audit system, and instructed BOA tobody composed of three Commissioners, and themake a full amendment to the former BOA Act.

General Executive Bureau, as an organ in charge

The Examination Committee on the Accountingof

System Reform, which had been established as

examination
243

executingaudit;
system(ii)

establishingwherebyBOA

theaccepts

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

requests for examination of the State's accounts

was required to present an address of audit results

and decides whether such request is valid or not;

to

(iii)

determination

requiringBOA

tonotifythe

PublictheEmperor;andsystem(ii)
ofreformingtheliability

for

the

Prosecutors Office if it finds that officials

indemnity of Accounting Officers, by replacing ahandling the State's accounting were engaged in"determination (hanketsu)" with "adjudication

crime in the course of their duties; (iv) requiring(kentei)"

BOA to present its opinion when an official in

objections to adjudication to bring the case to theconnection with the State's accounting seeks an

ordinary court.

andallowing

officers

who

have

explanation with regard to a matter he/she is
his/her duty; (v) delegating BOA to enact

7. Development of the Fourth Draft of the Bill
to Amend the BOA Act

ordinances for the enforcement of the BOA Act;

Since the third draft developed by the(vi) expanding the scope of subjects of audit by

Cabinet Legislation Bureau faced the GHQ's

BOA by including "accounts of an entity that has

strong opposition, the Bureau and the GHQ again

further been contributed to by an entity to whose

started discussing the possibility of a fullstated capital the State has contributed" andamendment of the BOA Act. The biggest issue"accounts of a contractor for construction andraised during this discussion was the appointment

those of a supplier of goods which relate to theand dismissal and the number of Commissioners

contracts." At the stage when the second draft ofand officials of the General Executive Bureau.

unsure of in connection with the performance ofAs

the Bill was developed, the organization andanapproachforsecuring

BOA's

mandate of the new BOA came on the scene

independence from the Cabinet, the GHQ evenalmost entirely.

suggested a plan to make BOA an organ of theDiet. The GHQ's basic viewpoint was that even if

6. Presentation of the Third Draft of the Bill
to Amend the BOA Act by the Cabinet
Legislation Bureau

this plan was unacceptable, a system that would

On February 17, the Cabinet Legislation

avoided. While the GHQ agreed with the Cabinet

Bureau presented its opinion on the second draft,

Legislation Bureau's proposal that Commissioners

expressing

full

be appointed by the Cabinet with the consent of

amendment to the BOA Act, and presented its

the House of Representatives, it strongly argued

own version of the bill, which came to be thethat the appointment and dismissal of officials of

third draft.

the

its

opinion

to

avoid

the

allow the Cabinet to take the initiative indeciding personnel matters of BOA should be

GeneralExecutive

Bureaushouldbe

The third draft was designed to change only

completely cut off from the Cabinet and decided

matters of formality, such as replacing theindependently by BOA. On the other hand, the"Imperial Diet" with the "Diet" and "Imperial

Cabinet Legislation Bureau expressed an opinion

Ordinance" with "Cabinet Order," except for thethat since officials of the General Executive

following measures: (i) ceasing the system in

Bureau of BOA were government officials, they

which BOA was under the direct control of theshould not be excluded from the scope ofEmperor and abolishing the system wherein BOA

officials to be appointed and dismissed by the244Section 2

Background of Enactment of the BOA Act

some modifications of terms to the fourth draft.

Cabinet. The Cabinet Legislation Bureau also
argued that the number of Commissioners andAs reviewed above, the GHQ gave many

officials of the General Executive Bureau shouldsuggestions during the drafting process up to thebe fixed by Cabinet Order, contrary to the second

development of the final draft, referring to thedraft which stated that this matter should be

U.S. audit system. Among them, some were

specified by BOA Ordinance in order to eliminate

incorporated in the final draft and others were not

the Cabinet's intervention by way of Cabinet

adopted due to the differences between Japan andOrder.

the United States in terms of the legal concept or
actual situation.

After going through the conflict in opinions
between the Cabinet Legislation Bureau and the

GHQ suggestions adopted in the Final Draft

GHQ, the fourth draft was completed on March(i)

Making

BOA'sorganizationadouble5, 1947. It provided for the appointment andstructure consisting of the Audit Committee,

dismissal of Commissioners and officials of the

as a small collegial decision-making body,

Generalfollows :and the General Executive Bureau, as an"Commissioners shall be appointed by theorgan in charge of executing audit, in order

Cabinet with the consent of the Diet"; "First-class

to ensure deliberate decision-making and fair

officials shall be appointed, dismissed, promoted,

judgment (Article 2 of the BOA Act)and demoted by the Cabinet pursuant to a(ii) Establishing the examination system (Article

Executive

consensus decision

Bureau

as

by

the

Commissioners";

officials

shall

be

35 of the BOA Act)

appointed,(iii) Requiring BOA to give an explanation withdismissed, promoted, and demoted by the Primea regard to a matter in connection with

Minister pursuant to a nomination by theaccounting (Article 37, paragraph (2) of theSecretary General with the consent of the

BOA Act)

Commissioners"; and "Third-class officials shall(iv) Requiring"Second-class

BOA

to

notifythe

Publicbe appointed, dismissed, and given administrative

Prosecutors Office of any criminal acts

leave by the Secretary General." With regard tocommitted in accounting (Article 33 of thethe number of officials, the draft only provided

BOA Act)that "The number of First-class Administrative(v) Abolishing commissioned audits which had

Officials shall be 11 and they shall serve as full-been conducted under the provision of

time

any

Article 16, paragraph (1) of the former BOA

provisions for the number of Second-class orAct, "the Board of Audit may commission a

Third - classandgovernment office with the audit and theTechnical Officials, in anticipation that BOA

grant of discharge for a part of thewould decide the number independently.

calculation of the government office";

officials,"

and

did

Administrative

notcontain
Officials(vi) Classifying audit subject matters into those
covered by mandatory audit by BOA and

8. Adoption of the Final Draft of the Bill to
Amend the BOA Act

those covered by BOA's audit as neededbasis (Articles 22 and 23 of the BOA Act)On March 7, the final draft of the Bill to(vii) Allowing the Cabinet to request BOA to

Amend the BOA Act was adopted after making
245

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

independence as summarized below.

conduct audit (Article 23, paragraph (1) of
the BOA Act)(i) Explanation by Minister of State Tokujiro
KANAMORI on the nature of BOA's
independence"…In my view, BOA has a special status, as
an organ which is not legislative, judicial or
executive. From a broader, academic
perspective, it is not in charge of legislationor judicial trial but it falls within the
category ofadministration.
However,administration mentioned here is different
from administration under the jurisdiction of
the Cabinet. In a narrower sense, BOA has
an independent status that does not belong toadministration….In conclusion, BOA isgrounded on the constitutional provisions andit is independent, not subordinated to any
other organ of the State.
(March 30, 1947, Committee on Administrative
Authority Bill and Other Issue, House ofRepresentatives)(ii ) Explanation by Minister of State
Tokujiro KANAMORI on the idea ofattaching BOA to the Diet"…in effect, BOA has a close relationshipwith the Diet, so it is natural to take this into
consideration. However, when viewed fromanother side, BOA is a kind of court thattries accounting cases, and it is supposed toform correct opinions on accounting from along-term perspective, without being swayedby the trends of the times. On the other
hand, the Diet's opinions are inevitably
susceptible to the trends of the times anddestined to change considerably as its
members are replaced every four or six
years. Taking into account the natures ofthese two organs, if BOA is subordinated tootightly to the Diet, it would tend to follow
the passing trends despite its function to
make an independent judgment like a court.
With this in mind, I would say that it would
be a common-sense conclusion to recognize
BOA's independence to some extent andprevent the government's influence on BOA
to the greatest possible extent, while placing
BOA under some influence of the Diet…I

GHQ suggestions not adopted in the Final
Draft
(i)

Authorizing

BOA

to

determinetheexpenditures and revenues of the State anddecide claims and debts of the State(ii) Applyingthesystemofliabilityforindemnity not only to officials in charge ofreceipt and payment, but also to accounting
officials in charge of expenditures andrevenues who are in the line of command.
9. Deliberation at the Imperial Diet and theSumitsuin
On March 15, the final draft above was laid
before the plenary session of the Sumitsuin as theBill to Amend the BOA Act, and passed by the
Sumitsuin, and then submitted to the 92nd
session of the Imperial Diet on the same day.
In the Imperial Diet, the bill was firstbrought to the House of Peers in which theSpecial Committee on the Bill to Amend the
BOA Act held deliberations on the bill threetimes from March 18 to 20. On March 22, thebill was passed at the plenary session of theHouse of Peers as-is and sent to the House ofRepresentatives. In the House of Representatives,
the Committee on Administrative Authority Bill
and Other Issue held deliberations three times
from March 29 to 31. The bill was passed andenacted as-is at the plenary session of the Houseof Representatives held on March 31, and waspromulgated as Act No. 73 on April 19. The new
BOA Act was the last law that was enacted by
the Imperial Diet.
During the deliberations on the Bill to
Amend the BOA Act in the Imperial Diet, thegovernment

official

explained

BOA's
246

Section 2

have no doubt that democracy is the best
approach, but I should say that occasional
disturbances caused by democracy are notalways reasonable. I do consider that BOA
should be independent at least to some extent…
(March 30, 1947, Committee on Administrative
Authority Bill and Other Issue, House ofRepresentatives)

Background of Enactment of the BOA Act

While BOA was working on the amendmentof the BOA Act, the Ministry of Finance wascarrying out the work to fundamentally reformthe finance and accounting system on the premiseof the new Constitution that thoroughly adopts
financial democracy.
As a result, the Public Accounting Act
which had been enacted in 1889 (the "former
Public Accounting Act") was amended for manyof its provisions and was also rearranged toestablish two laws, the Public Finance Act (ActNo. 34 of 1947), which provides for mattersconcerning budgets and final accounts and basic
matters concerning public financing, and the
Public Accounting Act (Act No. 35 of 1947),
which provides for procedures for financial
management. Through these legislative measures,
when the new Constitution came into effect in
May 1947, the structure of the basic statutes on

Original of the letter of promulgation of the BOA
Act, signed by the Emperor(owned by the National Archives of Japan)

public finance and accounting was developed on
the basis of Chapter 7 "Finance" of theConstitution, and with the other related laws,
namely, the Public Finance Act, the Public
Accounting

Act,

laws

concerning

specialaccounts, and the BOA Act, and the Cabinet
Order on Budgets, Settlement of Accounts, andAccounting (Imperial Ordinance No. 165 of
1947).
The principles underlying the new publicfinance system are financial democracy, soundfiscal policy, and reinforcement of control. The
major points that were reformed from the time of
the former Constitution are as listed below.
(i) Under Article 62, paragraph (2) of the

Official gazette announcing the promulgation of
the new BOA Act

former Constitution, "administrative fees andotherreceipts

that

are

categorizedasremuneration" were not required to be

10. Enactment of the Public Finance Act andthe full amendment of the Public
Accounting Act

specified by law but were open to be decided
by the government. Article 3 of the Public
247

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

Finance Act changed this treatment by

through underwriting by the Bank of Japan isprovidingprohibited. These rules were introduced with

that

"In

additionadministrative monetarytotaxes,

penalties to

a

be

view

to

maintaining

soundfiscalreceived by the State based on state power,

administration (Articles 4 and 5 of the Public

and the prices of state monopoly or charges

Finance Act).

for enterprises under the statutory or de facto(v) Under the Public Accounting Act, themonopoly by the State must be determinedcertification system for checks and transfer

by law or decision of the Diet." Other

warrants was established and the supervisory

matters such as disposal of property andpower of the Ministry of Finance wasdischarge of claims are also required to bestrengthened, in order to reinforce control

prescribed by law.

(Articles 25 and 46 of the Public AccountingAct).

(ii) The budgetary system under the former

DuringConstitution which allowed the execution oftheamendment

process,thethe budget of the previous fiscal year in theprovisions on the special budget system werecase of failure to adopt a budget for theadded to the bills drafted by the Ministry of

current fiscal year was replaced with a new

Finance, as strongly directed by the GHQ. The

system which allows the Cabinet to compile

special budget system is a system that involves

a provisional budget in such case (Article 30

theof the Public Finance Act). Under the former

Constitution, namely, the Diet, courts, and BOA.

Constitution, the government's consent wasUnder this system, the Cabinet is required to seek

required for the abolition or reduction of

opinions from the heads of the three organs

expenses authorized or required by law or

before deciding the estimate of their expenditures.

legal obligations. This limitation to the Diet's

If the Cabinet reduces the estimated amount of

power to decide on a budget was also

any of these three organs, it must provide them

abolished. The system of disposal of budget

within emergency was abolished, as well.

supplementary note to the budget, and also

threedetails

independent

of

the

organsunder

estimation

in

the

the

(iii) It became obligatory for the Cabinet to report

clearly indicate the financial source that may be

the fiscal situations to the Diet and thenecessary when the Diet revises the estimatedpublic, with a view to achieving financial

amount of expenditure of the three organs. The

democracy thoroughly through the disclosure

special budget system aims to prevent theof the fiscal situations (Article 46 of the

Cabinet, which is vested with the power to

Public Finance Act).

prepare a budget under Article 73, item (v) of theConstitution, from reducing, at its own discretion,(iv) It was provided that annual expenditure of
the State other than public works expenses,

the amounts of budgets requested

government investment, and loans must be

independent

financed by current annual revenue excluding

financial independence of these organs. For BOA,

revenues from public bonds or borrowings.

in combination with its authority to decide

When public bonds are issued to financepersonnel matters and establish rules, this systempublic works expenses,

forms part of the device for guaranteeing its

etc.,

the

issue
248

organs,

and

by

the

underminingtheSection 2

Background of Enactment of the BOA Act

concerned.

independence from the Cabinet.
In the course of enacting the Public Finance

The former Public Accounting Act

Act and amending the Public Accounting Act, theprovided that all final accounts of the annual

Ministry of Finance investigated the state of

expenditure and revenue shall be submitted

actual operations at BOA and heard its opinions.

to the Imperial Diet "at the ordinary session

The following matters were added or revised inof the Diet held in the following year," butthe bills drafted by the Ministry of Finance based

did not provide foron BOA's opinions.

submitting the same to BOA. By specifying(i) The definitions of the terms "revenues"

this deadline under the Public Finance Act,the deadline for( shunyu ) ," expenditures "( shishutsu ) ,the drafters expected that BOA would be"revenue"(sainyu),"expenditure"able to obtain the final accounts earlier than(saishutsu) were additionally provided in

before and have enough time to conduct audit.

and(iii) The legal grounds for a determination to be

Article 2 of the Public Finance Act.
The former Constitution used the phrase

made by BOA on an Accounting Officer's"expenditure and revenue" in Article 64, which

liability for indemnity had resided in theprovided that a "budget for the expenditure andformer Public Accounting Act, not in therevenue of the State shall be prepared annually,"

BOA Act. In the bill for the Public

and in Article 72, which provided that "The final

Accounting Act drafted by the Ministry ofaccount of the expenditure and revenue of the

Finance in February 1947, the relevant

State shall be verified and confirmed by theprovisions in the former Public Accounting

Board of Audit." The same phrase was also used

Act were basically maintained, except thatin the former Public Accounting Act. This

they were revised into the colloquial style

wording was replaced under the new Constitution

and the term "determination" (hanketsu) wasin which Article 90 provides that "All of the final

replaced with "adjudication" (kentei).

accounts of the expenditures and revenues of the

BOA's mandate had been provided forState shall be audited annually by the Board ofin the former Public Accounting Act due to

Audit."

the circumstances at the time of legislation

However, the draft of the bill for the Publicin 1889, but in nature, it should have been

Finance Act followed the wording in the former

provided for in the BOA Act. Based on

Public Accounting Act and used the phrase

BOA's opinion, this was amended in a"expenditure and revenue," and there was amanner that the Public Accounting Act

necessity to specify by law the relationship with

provides for the liability for indemnity to be

the constitutional concepts of "expenditures" andassumed by Accounting Officers, while the"revenues."

BOA Act provides for BOA's mandate to(ii) Article 39 of the Public Finance Act set the

adjudicate whether Accounting Officers aredeadline for the Cabinet to submit the final

liable for indemnity on a case-by-case basis.

account of the expenditure and revenue to
BOA as November 30 of the fiscal year
immediately

followingthefiscalyear
249

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

Section 3 Outline of the BOA Act
As reviewed in the previous section, thesystem established under the new BOA Act,

former BOA Act enacted in 1889 underwent a

focusing on the characteristics of the new systemfull amendment. The new BOA Act

in comparison with the former system.

waspromulgated as Act No. 73 of April 19, 1947,

The outline of the provisions of the newand came into effect on May 3, when the

BOA Act as initially enacted (upon the fullConstitution of Japan came into effect. This

amendment of the former BOA Act) is as

section gives an overview of the new audit

follows.

Subsection 1

Organization

The provisions on the organization of BOA under the new BOA Act were as indicated in the tablebelow.
BOA Act ＊ See the comparative table of the former and new provisions in the Appendix for amendments made after theenactment (page 646).
Chapter I ORGANIZATION
Section 1 General Provisions
Article 1 The Board of Audit has a status independent from the Cabinet.
Article 2 The Board of Audit is organized with an Audit Commission consisting of three
Commissioners, and a 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.
Chapter I ORGANIZATION
Section 2 Commissioners
Article 4 (1) Commissioners are appointed by the Cabinet, with the consent of both Houses of theDiet.
(2) If the House of Representatives consents to the appointment of a Commissioner but theHouse of Councillors does not consent to it, the consent of the House of Representatives shall be
the consent of both Houses, in accordance with the provision of Article 67, paragraph (2) of theConstitution of Japan.
(3) The Emperor attests the appointment and dismissal of Commissioners.
(4) Commissioners are paid an annual salary of 50,000 yen.
Article 5 (1) A Commissioner's term of office shall be seven years, and a Commissioner may bereappointed for one additional term only.
(2) If a vacancy arises in the office of Commissioner during the term of office, the succeeding
Commissioner will hold office for the remaining term of the predecessor.
(3) Commissioners retire from office upon reaching the age of 65.
Article 6 (1) A Commissioner retires from office upon a resolution by both Houses of the Diet, if,by the consensus of the other Commissioners, the Commissioner is found to be unable toperform his/her duties due to a mental or physical disorder or a fact is found that constitutes abreach of obligation in the course of duty.
(2) The provisions of Article 4, paragraph (2) apply mutatis mutandis to the case referred to in
the preceding paragraph.
Article 7 A Commissioner forfeits his/her office if he/she is sentenced to a punishment of
imprisonment without work or greater by a criminal court.
Article 8 Except in cases referred to in the preceding two Articles, a Commissioner does not forfeit
his/her office against his/her will.
Article 9 A Commissioner may not concurrently hold office on any other, nor may a Commissioner
become a member of the Diet, the employee of a local public entity, or the member of a local
assembly.

250

OutlineStatus of BOA
Organization of BOA
Appointment of the
President
Appointment andremuneration ofCommissioners

Term of office andmandatory retirement
age of Commissioners

Retirement ofCommissioners due toinability to perform
duties or breach ofobligation
Forfeiture of office ofCommissioners
Guarantee of status ofCommissioners
Prohibition on
Commissioners holding
more than one officeSection 3 Outline of the BOA Act
Chapter I ORGANIZATION
Section 3 Audit Commission
Article 10 The Chair of the Audit Commission is assumed by the President of the Board of Audit.

Chair of the Audit
Commission
Article 11 The following matters are decided by the Audit Commission:
Matters to be decided by(i) enactment, amendment, or repeal of the Board of Audit regulations under the provisions of the Audit Commission
Article 38;(ii) the statement of audit under the provisions of Article 29;(iii) determination of the audit subject under the provisions of Article 23;(iv) matters relating to the Submission of Accounts under the provisions of Article 24;(v) demand for disciplinary action under the provisions of Article 31;(vi) adjudication of an official responsible for cash or goods handling under the provisions ofArticle 32;(vii) decision for examination under the provisions of Article 35;(viii) presentation of opinions, and demand for measures under the provisions of Article 36;(ix) presentation of opinions under the provisions of Article 37.
Chapter I ORGANIZATION
Section 4 General Executive Bureau
Article 12 (1) The General Executive Bureau undertakes affairs of administration, audit, and Administration andexamination under the direction and supervision of the Audit Commission.
organization of the(2) A Secretariat and the following four bureaus are established in the General Executive Bureau: General Executive
1st Audit Bureau,
Bureau2nd Audit Bureau,
3rd Audit Bureau,
4th Audit Bureau(3) Assignment of tasks to the Secretariat and the Bureaus, and the organizational subdivisions
thereof, are as provided for by the Board of Audit Regulations.
Article 13 (1) One Secretary General, one Deputy Secretary General, Personal Secretaries, Officials of the General
Administrative Officials, and Technical Officials are positioned in the General Executive Bureau. Executive Bureau(2) The Secretary General and Deputy Secretary General are first-class officials, Personal
Secretaries are second-class officials, Administrative Officials are first-class, second-class or
third-class officials, and Technical Officials are second-class or third-class officials.
(3) First-class Administrative Officials shall be full-time and the number of them shall be 11.
Article 14 (1) First-class officials are appointed, dismissed, promoted, and demoted by the Cabinet Appointment, dismissal,
pursuant to a consensus decision by the Commissioners.
promotion and demotion(2) The provisions of laws and regulations concerning the qualification in terms of appointment of officials of theand classification of officials do not apply to the Secretary General or the Deputy Secretary General Executive
General.
Bureau(3) Second-class officials are appointed, dismissed, promoted, and demoted by the Prime
Minister pursuant to a nomination by the Secretary General with the consent of theCommissioners.
(4) Third-class officials are appointed, dismissed, promoted, and demoted by the Secretary
General.
Article 15 (1) The Secretary General presides over the tasks of the General Executive Bureau, and Duties of the Secretary
signs its official documents.
General and Deputy(2) The Deputy Secretary General assists the Secretary General and, if the office of Secretary Secretary General
General becomes vacant or the Secretary General is incapacitated, the Deputy Secretary Generalcarries out the duties of that office.
Article 16 (1) Each Director General is appointed by the President of the Board of Audit from Directors General andamong first-class Administrative Officials pursuant to a nomination by the Secretary General their duties
with the consent of Commissioners.
(2) Each Director General administers the tasks of the Bureau.
Article 17 (1) A Personal Secretary engages in administrative work involving confidential matters, Duties of Personalunder the orders of the Commissioner.
Secretaries(2) Administrative Officials serve as Senior Directors of the Secretariat or Bureaus or belong to
the respective Bureaus or Divisions, and engage in affairs of administration, audit, andexamination under the direction of their superiors.
Article 18 Technical Officials belong to the respective Bureaus or Divisions and engage in Duties of Technicaltechnical work, under the direction of their superiors.
Officials
Article 19 The Board of Audit may have branch offices as provided for by Board of Audit Establishment of branch
Regulations.
offices of the General
Executive Bureau

251Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

BOA

1. Status and independence (Article 1)

underwentadrasticorganizational

Under the new BOA Act, the system toreformation. Its decision-making organ was sizedplace BOA under the direct control of thedown to be a small collegial body, and theEmperor was abolished and BOA was established

General Executive Bureau was established as an

as a purely independent organ. Along with this,organ with strong mandate in executing audit

the new BOA Act reinforced the institution forunder the direction and supervision of theguaranteeing BOA's independence and tightened

decision-making organ.
Under the former BOA Act, the President,

its relationship with the Diet.
When the former BOA was in force, BOA

Director General and Directors had the status of

was under the direct control of the Emperor, andMembers, and every important issue was decided

this fact was supposed to enable BOA toat the General Meeting consisting of thesemaintain its independence in terms of status andMembers (16 persons participated in the meeting

competency. BOA Members also enjoyed lifeat the time immediately before the transition totenuredBOA's

the new system). Such a large collegial body

independence. Under the new BOA Act, BOA

enabled deliberate and impartial decision-making,was established as a purely independent organ

but there were also problems with this system,that did not belong to the Diet, courts, or thesuch as that who should be responsible for

Cabinet. Its independence was assured by suchdecisions was unclear, and that it took long timearrangements as complete guarantee of the status

to make decisions and therefore it was difficult toof the three Commissioners during their term oftake timely actions.

status,

which

also

assuredoffice, BOA's authority to determine personnel

The new BOA Act separated the decision-affairs on its own initiative, and its mandate to

making organ and the executive organ to ensure

establish

fromfairness in decisions. The Audit Commission,

Cabinet Orders. BOA's independence from thewhich would serve as a decision-making organ,

executive powers was further reinforced under thewas formed as a small collegial body consisting

Public Finance Act which allowed BOA toof three Commissioners with equal power, so as

prepare its own budget, as the Diet and courts

to prevent the Commission from making arbitrary

were allowed. As for the relationship between

decisions, while enabling it to take prompt

BOA and the Diet, while BOA under the former

actions. The General Executive Bureau was

BOA Act had essentially no connection with theestablished as the executive organ. The Secretary

Imperial Diet, the new BOA Act made BOA

General and other staff members of the Bureauclosely related to the Diet by requiring thewere given the duty to exclusively engage inconsent of both Houses for the appointment andexecutingretirement of the Commissioners and allowing thesupervision of the Audit Commission. This

Commissioners to attend a Diet session to explainorganizational change amended the conventional

details of the annual audit report.

regime wherein Members had been in charge of

BOA

regulations

separately

audit

under

the

directionandboth executing audit and making decisions of
BOA.

2. Organization (Articles 2 to 19)

Article 6, paragraph (2) of the former BOA

Upon the enactment of the new BOA Act,
252

Section 3 Outline of the BOA Act

Act provided that "Except through criminal

new BOA Act gave guarantee of status only toproceedings or proceedings for a disciplinary

the three Commissioners andaction, a Member shall not be ordered to resign

limitations such as that they shall hold officefrom office, to be transferred in position, or to

only for seven years and may be reappointed

take an administrative leave against the Member's

only once, and shall retire when they reach 65

will.," and thus all of the Members were given

years of age.

providedforlife tenured status by law. On the other hand, theSubsection 2

MandateThe provisions on the mandate of BOA under the BOA Act were as indicated in the table below.
BOA Act ＊ See the comparative table of the former and new provisions in the Appendix for amendments made after theenactment (page 646).
Chapter II MANDATE
Section 1 General Provisions
Article 20 (1) The Board of Audit audits the final accounts of the expenditures and revenues of theState, pursuant to the provisions of Article 90 of the Constitution of Japan, and also audits suchaccounts as are provided for by law.
(2) The Board of Audit continuously conducts its audit, supervises financial management,
ensures its adequacy, and rectifies any defects.
Article 21 The Board of Audit verifies the final accounts of the expenditures and revenues of theState through the results of its audit.
Chapter II MANDATE
Section 2 Scope of Audit
Article 22 The following items require audits by the Board of Audit:(i) monthly expenditures and revenues of the State;(ii) receipt and payment of cash or receipt and issue of national property owned by the State;(iii) acquisition and loss of claims held by the State and increases and decreases of national
government bonds and other obligations;(iv) receipt and payment of cash or receipt and issue of precious metals and securities by the
Bank of Japan on behalf of the State;(v) accounts of juridical persons to which the State has contributed half or more of the statedcapital;(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 in terms of the following, if itconsiders this to be necessary, or at the request of the Cabinet:(i) goods or securities owned or retained by the State, and cash retained by the State;(ii) receipt and payment of cash or receipt and issue of goods and securities by entities otherthan the State, on behalf of the State;(iii) accounts of an entity that the State has directly or indirectly granted a subsidy, incentive, oraid, or extended other financial assistance such as a loan or an indemnity;(iv) accounts of an entity a part of whose stated capital is contributed by the State(v) accounts of an entity that has further been contributed to by an entity to whose stated capital
the State has contributed;(vi) accounts of an entity for whose borrowings the State guarantees payment of the principal orinterest;(vii) accounts of a contractor for construction rendered to the State and those of a supplier ofgoods to the State, which relate to the contract with the State.
(2) When the Board of Audit conducts an audit pursuant to the provisions of the preceding
paragraph, it shall notify the parties concerned of this.
Chapter II MANDATE
Section 3 Auditing Methods
Article 24 (1) An entity subject to audit by the Board of Audit must, pursuant to the regulations on
the Submission of Accounts set forth by the Board of Audit, regularly submit statements ofaccounts and documentary evidence to the Board of Audit.

253

OutlineSubjects, methods andpurposes of audit

Verification of final
accounts
Audit issues

Submission of accounts

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan(2) Other documents specified by the Board of Audit may be submitted to the Board of Audit
regarding the receipt and payment of cash or receipt and issue of goods and securities owned orretained by the State, in place of the statements of accounts and documentary evidence set forthin the preceding paragraph.
Article 25 The Board of Audit may dispatch its staff to conduct field audits on a regular or
temporary basis.
Article 26 The Board of Audit may, if necessary for an audit, request the entity subject to the audit
to submit its books, documents, or reports, and may question any relevant party or request suchparty to appear.

Field audits

Request for submissionof books, documents,
etc., questions andrequest for appearance
to relevant parties
Article 27 If one of the following facts occurs with regard to financial management subject to audit Duty to report onby the Board of Audit, the head of the relevant department, the supervising authority, or other discovery of crimes or
person similarly responsible must report this immediately to the Board of Audit:
loss of property(i) discovery of a crime in connection with an accounting;(ii) discovery of loss of cash, securities, or other property.
Article 28 The Board of Audit may, if necessary for an audit, ask government agencies, public Request for submission
entities, and any other party to submit materials, give expert opinions, etc.
of materials, expert
opinions, etc.
Chapter II MANDATE
Section 4 Statement of Audit
Article 29 The following matters must be set down in the statement of audit to be prepared Matters to be set down
pursuant to Article 90 of the Constitution of Japan:
in the statement of audit(i) verification of the final accounts of the expenditures and revenues of the State;(ii) whether the amounts in the final accounts of the expenditures and revenues of the State
correspond to the amounts in the statements of accounts submitted by the Bank of Japan;(iii) whether the audit resulted in an item being found in violation of the law, Cabinet Order, or
the approved budget, or being found improper;(iv) whether there was any disbursement from the reserve fund that did not pass through theprocedures for obtaining the Diet's approval;(v) matters regarding which the Board of Audit has demanded disciplinary action pursuant to theprovisions of Article 31, and the results thereof;(vi) adjudication of officials responsible for cash or goods handling under the provisions ofArticle 32;(vii) matters regarding which the Board of Audit has presented its opinions or demandedmeasures pursuant to the provisions of Article 34, and the results thereof;(viii) matters regarding which the Board of Audit has presented its opinions or demandedmeasures pursuant to the provisions of Article 36, and the results thereof.
Article 30 If the Board of Audit finds that it is necessary to appear before the Diet to explain the Explanation to the Diet
statement of audit set forth in the preceding Article, it may have a Commissioner explain this in
an appearance before the Diet or in writing.
Chapter II MANDATE
Section 5 Liability of Accounting Officials
Article 31 (1) If the Board of Audit has concluded, as a result of its audit, that an official who Demand of disciplinary
handles accounting for the State has caused substantial damage to the State through intent or action
gross negligence, the Board of Audit may demand the head of the relevant department or otherperson responsible for supervision to take disciplinary action.
(2) The provisions of the preceding paragraph apply if an official who handles accounting for theState does not observe the regulations on the Submission of Accounts, for instance by neglecting
to submit statements of accounts and documentary evidence, or does not comply with a demand
made upon him/her pursuant to the provisions of Article 26.
Article 32 (1) If an official responsible for cash or goods handling has lost or damaged cash or Adjudication on liability
goods, the Board of Audit shall inquire into whether he/she has in fact caused damage to the for indemnity
State through his/her failure to exercise the due care of a prudent manager, and adjudicate
whether he/she is liable to indemnify.
(2) If the Board of Audit adjudicates that an official responsible for cash or goods handling isliable to indemnify, the head of his/her department or any other person responsible forsupervision must order the official to pay the indemnity in accordance with the adjudication set
forth in the preceding paragraph.
(3) The liability to indemnify provided for in paragraph (1) is not remitted or reduced unless bypardon.
(4) Even if the Board of Audit has adjudicated that an official responsible for cash or goods

254

Section 3 Outline of the BOA Act
handling is not liable to indemnify pursuant to the provisions of paragraph (1), the Board ofAudit may re-adjudicate within five years if it discovers that such adjudication was improper, forinstance due to an error or omission, etc., in the statement of accounts or documentary evidence.
The provisions of the preceding two paragraphs apply mutatis mutandis in such a case.
Article 33 If the Board of Audit concludes, as a result of its audit, that an official who handles
accounting for the State has committed a crime in the course of duty, it must notify the Public
Prosecutors Office of the case.
Chapter II MANDATE
Section 6 Miscellaneous Provisions
Article 34 If there are items that the Board of Audit finds, in the course of its audit, to violate laws
and regulations on financial management or to be improper, it may immediately present its
opinions on the financial management to, or demand appropriate measures with regard to thefinancial management from, the head of the relevant department or from the relevant parties, andmay have them take measures to rectify and improve subsequent management.
Article 35 (1) If the Board of Audit has been requested by an interested party to examine theconduct of an official who handles accounting for the State with regard to the handling offinancial management, the Board of Audit must examine that official's conduct and, if the Board
of Audit considers it necessary for such conduct to be corrected in consequence, it must notify
the competent authorities or other responsible parties of this judgment.
(2) If the competent authorities or responsible parties have been notified as referred to in thepreceding paragraph, they must take appropriate measures pursuant to the judgment of which
they have been notified.
Article 36 If, as a result of its audit, the Board of Audit finds there to be matters necessitating
improvement with regard to laws and regulations, systems, or administration, it may present its
opinions to, or demand measures for improvement from, the competent authorities or other
responsible parties.

Article 37 (1) The Board of Audit shall be notified of the following cases in advance and may
present its opinions thereon:(i) enactment, amendment, or repeal of laws and regulations concerning State financial
management;(ii) enactment, amendment, or repeal of rules and regulations concerning State handling andaccounting of cash, goods, and securities, or bookkeeping.
(2) If an official who handles accounting for the State requests an opinion from the Board ofAudit with regard to a matter he/she is unsure of in connection with the performance of his/her
official duties, the Board of Audit must present its opinion about this.

Notification of crimes

Presentation of opinions
or demand of measures
regarding illegal or
improper financial
management
Examination

Presentation of opinions
or demand of measures
for improvement
regarding laws andregulations, systems oradministration
Presentation of opinions
regarding enactment,
amendment or repeal oflaws, regulations orrules, and explanationon uncertain mattersregarding handling ofaccounting

capital the State has contributed; (4) accounts of

1. Scope of audit (Articles 22 and 23)

an entity that the State has extended a loan to or

Under the new BOA Act, audit subject
matters were classified into those that are

the State has provided

financialassistancerequired to be audited by BOA (mandatory audit

indirectly to in the form of subsidies via

subject matters), and those that BOA may audit

prefectural governments; and (5) accounts of awhen it finds it necessary or the Cabinet requests

contractor for construction rendered to the State

audit (discretionary audit subject matters). The

and those of a supplier of goods to the State,scope of audit was expanded to include thewhich relate to the contracts with the State ((2) tofollowing: (1) accounts of juridical persons to(5) in the category of discretionary audit subject

which the State has contributed half or more ofmatters).

the stated capital (in the category of mandatory
2. Auditing methods (Articles 24 to 27)

audit subject matters); (2) accounts of an entity apart of whose stated capital is contributed by the

There was no significant change in relation

State; (3) accounts of an entity that has further

to the auditing methods prescribed by law: in-been contributed to by an entity to whose statedoffice documentary audit conducted by having an
255

Part 3

Chapter 1

Establishment of BOA under the Constitution of Japan

entity subject to audit submit statements ofneglected the duty of care of a prudent manager

accounts and documentary evidence pursuant toand received BOA's determination to grant

the regulations on the Submission of Accounts;

discharge. Thus, the burden of proof regarding

and field audit conducted by dispatching BOA

the breach of the duty of care was imposed on

officials to an entity subject to audit. One change

the alleged Accounting Officers or Clerks, not on

resulting from the amendment was the abolition

BOA which was to make a determination. (iv)of commissioned audit which BOA had been

The liability for indemnity determined by BOA

allowed to perform under Article 16 of the

could not be remitted or reduced unless byformer BOA Act ("The Board of Audit may

pardon. There was a retrial system, which also

commission a government office with the audit

signified that BOA's determination was a sort ofand the grant of discharge for a part of the

final decision.
Under the new BOA Act, (i) all accounting

calculation of the government office").

officials

The new BOA Act additionally provided

of

the

State,

including

officials

that BOA may request any relevant party toresponsible for cash or goods handling, would be

appear if necessary for audit, and that the auditee

subject to disciplinary action pursuant to theis required to report to BOA if it discovers aprovision that if BOA finds such officials havecrime in connection with an accounting or loss ofcaused substantial damage to the State throughcash or goods.

intent or gross negligence, it may demand thehead of the relevant department or other person

3. Adjudication and demand of disciplinary
action (Articles 31 and 32)

responsible for supervision to take disciplinary

When the former BOA Act was in force, (i)BOA's authority to determine the liability forthe liability of accounting officials other thanindemnity to be assumed by officials responsible

Accounting Officers and Accounting Clerks wasfor cash or goods handling was shifted from thenot prescribed in any of accounting laws or

Public Accounting Act to the BOA Act, underregulations. (ii) Pursuant to the provisions of thewhich BOA would adjudicate whether thoseformer

Accounting

officials were liable for indemnity only when

Officers and Accounting Clerks were liable forthey caused the loss or damage of cash or goods.

loss or damage of any and all cash and goods

Accordingly, the conventional system to issue athey handled, and they would not be discharged

certificate of grant of discharge was abolished.

from liability unless after they were examined by(iii) While there was no modification to the rule

BOA and determined to have acted properly,that officials responsible for cash or goods

irrespective of whether the loss or damage washandling would be held liable in case of theaccidental or not. Accounting Officers who werebreach of the duty of care of a prudent manager,

held not liable were given a certificate of grant of

the burden of proof was shifted from the alleged

discharge. (iii) In the event of loss or damage,

officials to BOA. (iv) A determination made by

Accounting Officers and Accounting Clerks were

BOA under the former BOA Act, which was

unable to be discharged from liability forcalled "hanketsu," used the same terminology as

indemnity unless they proved that they had notthat of a court judgment, and had a nature of a

PublicAccountingAct,action against them. (ii) The legal basis for256Section 3 Outline of the BOA Act

final decision. Under the new BOA Act, it was

audit, and that BOA may present its opinions orrenamed "kentei" (meaning "adjudication"), anddemand measures directly to the competent

officials who objected to BOA's adjudication

authorities

were allowed to bring their cases to courts. This

management, and may also demand amendments

point was not specifically prescribed in the BOAof laws and regulations or systems when

Act because it is constitutionally guaranteed.

necessary.

4. Notification to the Public Prosecutors Office(Article 33)

6. Establishment of the examination system(Article 35)
The

The new BOA Act required BOA to notify

torectifyexaminationor

improvesystemwasfinancialanew

the Public Prosecutors Office if it concludes, as a

institution introduced under the new BOA Act. If

result of its audit, that an official who handles

BOA has been requested by an interested party to

accounting for the State has committed a crime in

examine the conduct of an official who handles

the course of duty.

accounting for the State with regard to thehandling of financial management, BOA must

5. Presentation of opinions and demand of
measures (Articles 34 and 36)

examine that official's conduct, and notify the

Under the former BOA Act, BOA wasof this judgment if BOA considers it necessary

allowed to present an address to the Emperor byfor such conduct to be corrected in consequence.

reporting its opinions on legal or administrative

The competent authority or responsible parties,

revisions in the annual audit report to theupon being so notified, must take appropriate

Emperor, but it did not have a means to directly

measures pursuant to BOA's judgment. This

demand the competent authorities to rectify orsystem, which was modeled after the U.S. claim

improve financial management; BOA could only

settlement system, gave BOA an opportunity toissue a warning note as provided in the Rules oninteract with the public directly.

competent authorities or other responsible parties

the Affairs of BOA. This made it difficult for

7. Presentation of opinions on matters that
accounting officials are unsure of in
performing their duties ( Article 37,
paragraph (2))

BOA to have the audit results reflected inadministration immediately. The goal of audit
cannot be accomplished just by finding illegal or
improper matters and criticizing them. It cannot

The new BOA Act made it an obligation of

be said that audit has been sufficiently successful

BOA to present its opinion when an official who

unless measures are taken to rectify them andhandles accounting for the State requests its

prevent the recurrence of the same mistake. From

opinion with regard to a matter that he/she isthis viewpoint, the new BOA Act explicitly

unsure of in connection with performance of his/provided that BOA conducts audit regularly andher official duties. In a way, this system can becontinuously to ensure the immediate effect ofdescribed as a sort of pre-audit.

257

Part 3

Chapter 1

Subsection 3

Establishment of BOA under the Constitution of Japan

BOA regulations

The provisions on the BOA Regulations under the BOA Act were as indicated in the table below.
BOA Act ＊ See the comparative table of the former and new provisions in the Appendix for amendments made after theenactment (page 646).
Chapter III BOARD OF AUDIT REGULATIONSArticle 38 The Board of Audit shall set forth such regulations as are necessary with regard to its Authority to establish
audit, beyond those set forth in this Act.
regulations

The new BOA Act authorized BOA toestablish regulations which are necessary withregard to its audit on its own initiative,
independently of Cabinet Orders issued by the
Cabinet.
This authority was vested in BOA in orderto guarantee its independent status as referred toin Article 1, which is imperative for it infulfilling its mission to audit accounts of theState, etc. Regulations established by BOA may
include provisions which have binding force evenagainstpartiesoutsideitsorganization,inconnection with matters under its authority (e.g.
submission of accounts, demand of disciplinary
action, and adjudication).

258

Section 1

Chapter 2

Amendments of the BOA Act

Audit between the mid-1940s and mid-1960s
the Allied Forces came to an end, and Japan

In August 1945, Japan accepted the Potsdam

finally recovered its sovereignty.

Declaration, putting an end to the war. In
policyBetween the mid-1940s and mid-1950s,

implemented under the Occupation by the Alliedfrauds and other illegal acts took place frequently

Forces, Japan took a first step toward its rebirthin respect of public sector accounting of the

as a member of the Western Block. In the post-

States, etc. due to the turmoil in society and

war turmoil, Japan put the highest priority to

accounting disorder after the war, and BOA

economic reconstruction. After setting out thefound and reported a considerable number ofreconstruction process mainly with the help of

these cases as "improprieties."

accordance

with

the

democratization

the United States, Japan took advantage of the

The Annual Report on Japan's Economy

special procurement boom caused by the Korean("the Economic White Paper") published in July

War that broke out in June 1950, to enter the

1956, ten years after the end of the war, statedstage of full-fledged economic reconstruction.

that Japanese economy could "no longer bethetermed postwar," which became a vogue phrase.

Constitution of Japan and the BOA Act came

From the mid-1950s, as a result of the economic

into effect simultaneously, and BOA made a start

policy that focused on reconstruction as a top

under the new constitutional regime. The newpriority, the Japanese people pulled themselves

BOA was no longer under the direct control ofout of poverty, and the Japanese economy entered

the Emperor; it was established as a purely

a new phase of growth, driven by graduallyindependent organ that did not belong to theincreasing export. In July 1960, the first Cabinet

Diet, the Cabinet or courts. It also underwentof Hayato IKEDA was established, and Primeconsiderable organizational changes, such as the

Ministerintroduction of the double structure consisting of

Doubling Plan" with the goal of doubling the real

the Audit Commission and the General Executive

national income in the ten years from 1961. From

Bureau and the substantial increase in the number

the early 1960s onward, supported by the highof staff members.

level of education, industrious national character,

Meanwhile,

on

May

3,

1947,

IKEDA

announcedthe" Income

and high saving rate of the people, Japan's export

Before the new Constitution coming into
effect, a fundamental reform was made to thecontinued

financial and accounting system in order toincrease in the surplus of the balance of trade. In

establish a new framework for financial order

October 1964, the Tokaido Shinkansen bullet

premised on the spirit of the Constitution thattrain started operation between Tokyo and Shin-thoroughly

Osaka, and the Olympic Games were held in

adoptedfinancialdemocracy.

Inrising,All

resultingtheseresults

in

the

of

dramatic

March 1947, the former Public Accounting Act

Tokyo.

economic

was reorganized into two new laws, the Publicreconstruction enabled the Japanese people toFinance Act and the new Public Accounting Act.

regain self-confidence.

In April 1952, upon the San Francisco Peace

As society and economy became thus

Treaty taking effect, the Occupation of Japan bystabilized, public sector accounting was improved
259

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

considerably after the mid-1950s as compared to1950s, which was reflected in BOA's audit

the situation between the mid-1940s and mid-results.

Section 1
Subsection 1

Amendments of the BOA Act

Status of amendments

After the initial enactment, the BOA Act was amended seven times between the mid-1940s and mid1960s, as shown in the following table.
List of amendments of the BOA Act (between the mid-1940s and mid-1960s)
Governing Act- Organ introducing the amendment
Committee(s) to which the amendment
was submitted
Act Partially Amending the Board ofAudit Act
(Act No. 209 of 1947)- Introduced by the Cabinet
Committee on Financial Affairs (Houseof Representatives/House of Councillors)
Act Partially Amending the Board ofAudit Act
(Act No. 165 of 1950)- Introduced by the Cabinet
Committee on Audit ( House ofRepresentatives/House of Councillors)
Paragraph (2) of the Supplementary
Provisions of the Act on the
Responsibility of Government Employees
Who Execute the Budget(Act No. 172 of 1950)- Introduced by the Cabinet
Committee on Finance (House ofRepresentatives/House of Councillors)
Article 26 of the Act for Enforcement of
the Nippon Telegraph and Telephone
Public Corporation Act(Act No. 251 of 1952)- Introduced by the Cabinet
Committee
onTelecommunications(House of Representatives/House ofCouncillors)

Contents

Date of promulgation(Date on which the
Act came into effect)

The amount of salary for Commissioners was revised from"annual salary of 50,000 yen" to an "amount equivalent to December 19, 1947
the amount of salary for Ministers of State" (revision of (June 19, 1948)
Article 4, paragraph (4)).

The Cabinet was authorized to appoint Commissioners
without the consent of both Houses while the Diet was not May 10, 1950
in session or after the House of Representatives was (May 10, 1950)
dissolved (addition of Article 4, paragraphs (3) to (5), etc.).
Affairs such as demand of disciplinary action andadjudication under the Act on the Responsibility ofGovernment Employees Who Execute the Budget were
May 11, 1950
included in the scope of matters to be decided by the Audit(May 11, 1950)
Commission and the scope of matters to be set down in theannual audit report (revision of Article 11, items (v), (vi),and (ix), Article 29, items (v) and (vi), etc.).
Adjudication and re-adjudication under Article 70, paragraph(2) of the Nippon Telegraph and Telephone Public
Corporation Act were included in the scope of matters to be July 31, 1952
decided by the Audit Commission and the scope of matters (August 1, 1952)
to be set down in the annual audit report (revision of Article
11, item (vi), Article 29, item (vi)).

One Bureau was additionally established, and the provisions
on the appointment, dismissal, promotion and demotion of
BOA officials were amended in line with the provisions of
Act Partially Amending the Board of
the National Public Service Act. The scope of audit on three
Audit Act
public corporations (Japan Tobacco and Salt Public(Act No. 110 of 1955)
August 1, 1955
Corporation, Japanese National Railways, Nippon Telegraph- Introduced by the Cabinet(August 1, 1955)
and Telephone Public Corporation) was expanded to coverCommittee on the Cabinet (House of
the range equal to the scope of audit on the State (revision
Representatives/House of Councillors)of Articles 12 to 14, Article 16, Article 23, paragraph (1),items (ii) (iii), and (v) to (vii), Article 31, Article 33, Article
35, paragraph (1), Article 37, paragraph (2), etc.).

260

Section 1

Amendments of the BOA Act

Goods owned by the State were re-categorized as mandatory
audit subject matters, and adjudication on the liability for
Act Partially Amending the Board ofindemnity assumed by officials responsible for goods
Audit Act
management was included in the scope of matters to be(Act No. 137 of 1956)
June 8, 1956
decided by the Audit Commission and the scope of matters- Introduced by the Cabinet(January 10, 1957)
to be set down in the annual audit report (revision of Article
Committee on Audit ( House of
11, item (vi), Article 22, item (ii), Article 23, paragraph (1),Representatives/House of Councillors)
item (i), Article 29, item (vi), and Article 32; addition of
Article 32, paragraph (2)).
Article 3 of the Act Partially Amending
The provisions on the amount of salary for Commissioners,
the Act on Salaries of Government
which had been prescribed as an "amount equivalent to the
Officials with Special Capacity
amount of salary for Ministers of State," were revised by April 25, 1958
(Act No. 86 of 1958)
stipulating that "the remuneration for Commissioners is (April 25, 1958)- Introduced by the Cabinet
provided for separately in another Act" (revision of Article
Committee on the Cabinet (House of4, paragraph (7)).
Representatives/House of Councillors)thethe official should take disciplinary action against

major

the official (Article 6, paragraph (1)). In line with

amendments shown in the table above whichthese provisions of the Act on the Responsibility

relate to the organization and mandate of BOA.

of Government Employees Who Execute theThefollowingbackgrounds

and

parts

describe

developmentsofBudget, the BOA Act was amended to include
1. Amendment by Paragraph (2) of the
Supplementary Provisions of the Act on the
Responsibility of Government Employees
Who Execute the Budget (Act No. 172 of1950)

demand of disciplinary action, adjudication and(1) Outline of the amendment

decided by the Audit Commission and the scope

The

Act

on

the

Responsibility

other related affairs under the Act on the
Responsibility of Government Employees Who
Execute the Budget in the scope of matters to beof matters to be set down in the annual auditofGovernment Employees Who Execute the Budget

report (revision of Articles 11 and 29).

introduced the following provisions: (i) BOA(2) Backgroundamendment

anddevelopments

must inquire into whether an official responsible
for budget execution has caused damage to the

The systemofliability

for

of

the

indemnity

State by carrying out illegal disbursement ofapplicable to accounting officials under the new

public funds or any other act through intent or

Constitution was inaugurated based on the

gross negligence, and adjudicate whether thefollowing

official is liable to indemnify and the amount ofparagraph (1) of the Public Accounting Act,

indemnity (Article 4, paragraph (1)); and (ii) if

Accounting Officers shall be liable for indemnity

BOA finds that an official responsible for budget

for the loss and damage of cash and goods.

execution has caused damage to the State by

Under Article 32, paragraph (1) of the BOA Act,

carrying out illegal disbursement of public funds

if an Accounting Officer has lost or damaged

or any other act through intent or negligence, orcash or goods, BOA shall inquire into whether

has carried out illegal disbursement of public

the official has caused damage to the State

funds or any other act through intent or grossthrough his/her failure to exercise the due care ofnegligence, although not causing any damage toa prudent manager, and adjudicate whether thethe State, BOA may demand that the appointer ofofficial is liable to indemnify.
261

framework.

Under

Article41,

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

However, since a number of frauds anddamage to the State by carrying out illegal or

improprieties were exposed along with the

improper disbursement through intent or grossdeterioration of accounting order amid the post-

negligence,

war turmoil, in 1949, the General Headquarters

indemnify the State; (ii) in order to compensateof the Supreme Commander for the Allied

for the damage with certainty, the State must

Powers (GHQ) directed Japan to amend the legal

enter

provisions so that the system of liability fordesignating the official as the guaranteed and theindemnity would be applied not only to officials

State as the insured; (iii) BOA shall adjudicate

responsible for cash handling but also towhether the official is liable to indemnify and theaccounting officials who were in the line ofamount of indemnity.

the official

into

a

shall

fidelitybeliableinsurancetocontract,

However, dissatisfied with the content ofcommand.
In the United States, officials in charge ofthis draft, the GHQ presented its own draft based

expenditures and revenues who were in the lineon the U.S. system, which was then deliberatedof command, such as Disbursing

Officers,

from various aspects among the GHQ, BOA, andCertifying Officers, and Revenue Collecting

the Ministry of Finance. Subsequently, the Legal

Officers, were categorized as officials who should

Affairs Division, the Finance Budget Bureau, theassume personal liability to the State, and surety

Ministry

andprovideddeliberation process and continued to holdinsurance protection to cover any liability that

discussion with the GHQ, finally reaching thewould arise from illegal conduct of these officials

decision to enact a separate law. Thus, in May

in the course of their duties, while issuing fidelity

1949, the Ministry of Finance drafted a Bill forbonds. Upon the initial enactment of the BOA

the Act on the Responsibility of Government

Act, the GHQ had suggested a plan to establish

Employees Who

the system of liability for indemnity that would

following the deliberation at the Accounting

be applicable to accounting officials who were in

System Research Council of the Cabinet, the bill

the line of command in addition to officials

was submitted to the seventh session of the Diet

responsible for cash handling, but the plan wasin April 1950.

fidelity

insurancecompanies

ofFinance,

took

ExecutechargetheofBudget,theandshelved due to the differences between Japan and

The bill was deliberated at the Committee

the United States in terms of the legal concept or

on Finance and the Joint Council of theactual situation (see page 246). However, at thisCommittee on Finance and the Committee on

stage, through repeated negotiations with the

Audit of the House of Representatives. A revisedGHQ, BOA drafted a bill for partial amendment

bill in which Article 7 was deleted was adoptedof the Public Accounting Act and the BOA Act

at the meeting of the Committee on Finance heldthat incorporated the minimum changes requiredon April 28, passed at the plenary session of thein this respect, and presented it to the GHQ.

House of Representatives on April 29, andforwarded to the House of Councillors. The

The draft contained the following provisions:(i) if an official entrusted by the head of eachrevised

Ministry with matters concerning disbursement orCommittee on Finance, passed and enacted as-is

an advanced fund accounting officer has caused

at
262

the

bill

was

plenarythensessiondeliberated
of

the

at

House

the
of

Section 1

Councillors on May 2, 1950, and promulgated

Amendments of the BOA Act

2. Amendment by the Act Partially Amending
the BOA Act (Act No. 110 of 1955)

and put into effect on May 11.

(1) Outline of the amendment

Article 7 deleted from the bill by the House

The details of the amendment were asof Representatives stated as follows.

follows.
(Preliminary inquiry)
Article 7 (1) If a government official who
executes the budget, in accordance with theprovisions of Article 37, paragraph (2) of the
BOA Act (Act No. 73 of 1947), files inadvance a written request for the Board ofAudit's opinion with regard to matters that theofficial is unsure of in performing
disbursement or any other act, and carries out
disbursement or any other act based on theopinion presented by the Board of Audit, theBoard of Audit may not adjudicate theofficial's liability for indemnity for the
disbursement or any other act, or demand
disciplinary action against the official.
(2) When the Board of Audit presents its
opinion to government official who executes
the budget, in accordance with the provisionsof Article 37, paragraph (2) of the BOA Act, it
must in advance notify the Minister of Financeof the opinion that it is to present.
(3) If the Minister of Finance, upon being
notified as referred to in the preceding
paragraph, has an opinion that is inconsistent
with the Board of Audit's opinion in terms of
the interpretation of the laws and regulations or
matters on the budget, the Minister may
present his/her opinion to the Board of Audit .

A. In

consideration

of

the

realityintheaccounting of the State and governmentaffiliated institutions for which improprieties
were increasing considerably, the existingorganizational structure would cause hindrance
to the management of affairs by the SeniorDirectors of the respective Bureaus and it
would be difficult for them to meet thedemand for fulfillment of their functions. To
solve

this

problem,one

Bureauwasadditionally established to make the total
number five, and the name of each Bureau
was changed from "XXth Audit Bureau" to"XXth Bureau" (revision of Article 12,
paragraph (2)).
B. At the time of the enactment of the BOA Act,the appointment and other personnel affairs
concerning officials of the General Executive
Bureau were undertaken by the Cabinet, thePrime Minister or the Secretary General,
according to the class of the respective
officials. Subsequently, as a result of theenactment of the National Public Service Act

Article 7, which provided for the preliminary(Act No. 120 of 1947), the system forinquiry system as described above, was deleted

appointment, dismissal and other personnel

because, if it had been adopted, government

affairs concerning officials in the regular

officials who execute the budget, in an attempt toservice was fundamentally reformed, as a

reduce their liability and evade disciplinary action

result of which the President of BOA shallor liability for indemnity, might seek BOA'sserve as the appointer of officials of thepreliminary inquiry more often than necessary,

Generaland if this had actually happened, BOA would

Accordingly, the related provisions were

not be able to deal with all audit cases, whichrevised as necessary (revision of Articles 13,

could cause a delay in the administration of

14, and 16).

accounting affairs.

Executive

Bureau,inprinciple.

C. The scope of discretionary audit subject
263

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

matters in auditing the accounts of the threeshould do its best to prevent the occurrence of

public corporations (Japan Tobacco and Salt

improprieties, save national spending, and ensure

Publicthe efficient use of a budget."Corporation,

Japanese

National

Following

Railways, Nippon Telegraph and Telephone

this,

BOA

consideredthePublic Corporation) was expanded to coverprovisions of the BOA Act that needed to be

the range equal to the scope of discretionary

revised, and prepared an amendment bill as

audit subject matters for the State, so thatoutlined above. On April 30, 1955, BOA made a

BOA would be able to identify the situation of

written request to the Prime Minister for taking athese corporations precisely when it is difficult

step to amend the BOA Act. Based on thisto identify the facts only by auditing theirrequest, in May 1955, the government submitted

financial management. In addition, among thethe Bill Partially Amending the BOA Act to theprovisions applicable to the State, those

22nd session of the Diet. The bill was deliberated

concerning demand of disciplinary action wereat the Committee on the Cabinet and the Joint

made applicable to the public corporations as

Council of the Committee on the Cabinet and thewell (revision of Article 23, paragraph (1),Committee

Article 31, Article 33, Article 35, paragraph

Representatives.

(1), and Article 37, paragraph (2)).

deliberation at the Committee on the Cabinet, the(2) Backgroundamendment

anddevelopmentsofonFinance
On

of

the

House

of

June

23,

duringtheJapan Socialist Party proposed a revision of thethebill to additionally include "accounts concerning

The number and amount of improprieties

loans of the borrowers of finance corporations orfound in audit by BOA had been on the risebanks wholly capitalized by the State" in thesince 1950. Seeing this, the House of Councillors'

scope of discretionary audit subject matters.

Committee on Audit submitted in November

However, this proposal was rejected, and the bill

1954 a draft resolution to seek a budget increase

was passed as-is at the plenary session of theto enhance BOA's functions. In this draft, with aHouse of Representatives, and forwarded to theview

House of Councillors.

topreventing

theoccurrenceof

improprieties and ensuring the efficient use of aIn the House of Councillors, the bill wasbudget, the Committee demanded that BOA's

deliberated at the Committee on the Cabinet andfunctions be enhancedbe

the Joint Council of the Committee on theincreased. On December 7, the draft resolution,

Cabinet and the Committee on Finance. During

after being partially revised, was proposed at thethe deliberation at the joint council, a problem

plenary session of the House of Councillors

was posed with regard to the provisions ofunder the title of "draft resolution for enabling

Article 16, paragraph (1) of the amendment bill,

BOA to fulfil its function." Based on this draft, a"The head of each Bureau shall be the Director

resolution was adopted unanimously to the effect

General and shall be appointed from among

that, "in order to enable BOA to fulfil its

Administrative Officials," under which Technicalfunction to the fullest extent, the government

Officials would be ineligible for the post ofshould take every possible measure to contribute

Director

to the regular practice of continuous audit, andamendment

and

its

budget264

General.
had

Article18

beforetheprovidedthat,"TechnicalSection 1

Amendments of the BOA Act

Officials shall belong to the Divisions of thewere to be prepared by the Minister ofrespective Bureaus and engage in technical work,

Finance, would be required to be submitted tounder the direction of their superiors," under

the Diet after going through audit by BOA

which Technical Officials were ineligible for the(former Article 38, paragraph (3) of the State-

position of Senior Directors. The amendment bill

Owned

was intended to delete the underlined part andAccordingly, goods owned by the State wereopen a path for Technical Officials to become

included in the scope of mandatory audit

Senior Directors. However, since the limitation

subject matters referred to in Article 22, itemby which only Administrative Officials could(ii) of the BOA Act (revision of Article 22

become Director General still remained, many

and Article 23, paragraph (1)).

GoodsManagement

Act ) .

B. Under the Public Accounting Act, Article 38

committee members argued that there was no
reason to exclude Technical Officials from thehadcategorized

eligibility for that post.

handling cash or goods as "Accounting
Officers,"

Through this process, on July 8, theandofficials
Articleresponsible

41

providedforfor

Committee on the Cabinet accepted the request

Accounting Officers' liability for indemnity,from the Committee on Audit for the revision ofwhereas Article 32 of the BOA Act had

the bill and adopted the revised bill in which

provided that BOA shall adjudicate theArticle 16, paragraph (1) provided that, "Aliability for indemnity assumed by officials

Director General is appointed in each Bureau."

responsible for cash handling. Along with the

On July 11, the revised bill was passed at theenactment

plenary session of the House of Councillors, andManagement Act, the Public Accounting Act

forwarded to the House of Representatives. It was

was to cover only officials responsible forthen passed and enacted as-is at the plenary

handling cash and provide for their liability

session of the House of Representatives on Julyfor indemnity, while the State-Owned Goods

12, and promulgated and put into effect onManagement Act was to provide for theAugust 1.

liability for indemnity assumed by officials

of

the

State - Owned

Goods

responsible for goods management, including
3. Amendment by the Act Partially Amending
the BOA Act (Act No. 137 of 1956)

those

responsibleforhandling

goods.

(1) Outline of the amendment

the BOA Act were revised as necessary

Accordantly, the provisions of Article 32 of(revision of Article 32).

The details of the amendment were as

C. As a result of the amendment of the Act onfollows.

the Responsibility of Government Employees

A. Conventionally, goods owned by the State had
been categorized as discretionary audit subject

Whomatters referred to in Article 23, paragraph

Supplementary Provisions of the State-Owned(1), item (i) of the BOA Act. As a result ofGoods Management Act, the liability forthe enactment of the State-Owned Goods

indemnity assumed by officials at public

Management Act, statements of increase andcorporations,decrease and of current value of goods, whichhandling and for goods management were
265

Executeetc.

theBudgetresponsible

by

for

the

cash

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Inprovided for separately. Furthermore, Article

view

of

such

circumstances,the11 was added to the Act on the Responsibility

government drafted a Bill for the State-Ownedof Government Employees Who Execute theGoods Management Act for the purpose of

Budget to provide that BOA shall adjudicate

ensuring the proper and efficient use of goods by

and re-adjudicate the liability for indemnity

specifying the methods and standards for goods

assumed by officials responsible for goods

management, establishing a national institution in

management at public corporations, etc. In

charge of goods management, and clarifying its

line with these changes, adjudication and re-responsibility. In March 1956, the government

adjudication under Article 11 of the Act on

submitted the bill to the 24th session of the Diet.

the Responsibility of Government Employees

The bill, after being partially revised, was passed

Who Execute the Budget were included in theand enacted on May 17, promulgated on May 22,

scope of matters to be decided by the Audit

and put into effect on January 10, 1957.
On the other hand, as mentioned above, theCommission and the scope of matters to be set
down in the annual audit report (revision ofenactment

Articles 11 and 29).

Management Act was supposed to give rise to the(2) Backgroundamendment

anddevelopments

of

of

the

State - Owned

Goods

need to partially amend the BOA Act. Following

thethe discussion between BOA and the Ministry of
Finance on this issue, the Cabinet prepared a Bill

After the war, progress was made in thelaws,

Partially Amending the BOA Act, and submitted

including the enactment of the Public Accounting

it to the 24th session of the Diet in March 1956.

Act in 1947 and the National Property Act in

The amendment bill was deliberated at the1948. However, there was no legislation withHouse of Councillors' Committee on Audit. On

regard to accounting of goods, except for the

April 20, it was passed as-is at the plenary

Regulations on Accounting of Goods Owned bysessionthe State (Imperial Ordinance No. 84 of 1889).

forwarded to the House of Representatives. After

These Regulations provided that, "Receipt andbeing deliberated at the House of Representatives'

issue of goods shall not be allowed unless by

Committee on Audit, the bill was passed andorder issued under the regulations specified byenacted as-is at the plenary session of the House

the Minister of each Ministry," thus regulationsof Representatives on May 31, promulgated on

for the management of goods were supposed toJune 8 of 1956, and put into effect on January

be specified by the Minister of each Ministry.

10, 1957.

developmentof

accounting - related

Because of this provision, these Regulations were
far from appropriate as a basic statute for goods
management to handle the administrative affairsof the State that had become more voluminousand complex than before. BOA reported audit
findings of excessive procurement or improper
management and retainment of goods in its
annual audit reports.
266

of

the

House

of

Councillors

andSection 2 Changes in BOA's Organization

Section 2 Changes in BOA's Organization
Division of the 1st Bureau") but, in response to

The major changes in the organization,
structure of positions and fixed number oftheGeneralHeadquarters

of

the

Supremeofficials of BOA established under the new BOA,

Commander for the Allied Powers (GHQ)'s

between the mid-1940s and mid-1960s, aresuggestion, they were changed to have specificexplained below.

names that clearly articulate the details of theaudit subject matter which the relevant audit
division is in charge of as those currently used.

1. Changes in the organization
After the enforcement of the new BOA Act(2) Changes made on January 16. 1952
(establishment of the Coordination Divisionin each Bureau)on May 3, 1947, the General Executive Bureauof BOA started to operate with an organizationalA

structure composed of 23 divisions consisting of

Coordination

Division

was

newly

19 divisions in four Bureaus (1st to 4th Bureaus)

established in each Bureau to have jurisdiction( including

Division,over the affairs related to adjudication, demand

Adjudication Division and Claims Settlementfor disciplinary action, demand for examination

Division)theand notification to the Public Prosecutor's Office&in addition to the overall affairs within the

the
and

Management

Legal
four

Affairs

divisions including

Division,

Documents

Bureau.

Coordination Division, Research & International
Division and Accounts Division established under

The affairs related to adjudication and

the Secretariat. The changes in the number ofdemand for examination, etc. were exclusively

divisions (including the senior director class such

handled by the Adjudication Division or Claims

28

as the Audit Manager ) established under the

Settlement Division of the 4th Audit Bureau (theSecretariat and Bureaus as a result of the changes

Adjudication Division or Claims Settlement

to the organization after the enforcement of theDivision under the Secretariat since January

new BOA Act in May 3, 1947 are set down in1950) at the time of enforcement of the BOA

Table 1 of "Section 2 Changes in BOA's

Act.

Organization under Chapter 4 Audit in the Heisei

enforcement of the Act on the Responsibility ofEra (1989〜), Part 3"

Government(1) Changes made on January 20, 1949 (namechange of audit divisions)

Budget, in June 1950, such affairs other thanThe previous names of the audit divisions

transferred to the Audit Division of each Bureau

followed the names based on serial numbers

and since January 1952, they came under thewhich had been used since the Meiji era (i.e. "1stjurisdiction of the Coordination Division of each

However,inconnection

Employees

Who

with
Executethethethose related to the demand for examination were

Bureau. In April 1959, these affairs were28

transferred to the Adjudication Counselor or

An Audit Manager or a Manager has a number ofsubordinates and forms an organization as in the case of a
Senior Director. Therefore, such person's position ishereinafter referred to as a "Senior Director" and such
person's organization is referred to as a "Division," inprinciple.

Legal Affairs Division under the Secretariat.

267

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s(3) Changes made on August 1, 1955 (newestablishment of one Bureau and namechange of the Bureaus)(5) Changes made on April 1, 1961
(establishment of the Special Programs
Division)

The 5th Bureau was newly established andIn order to investigate the special issues

the names of the Bureaus were changed to thewhich the Secretary General designates, four

current ones such as "1st Bureau" from thepositions for the auditors of Special Programs

previous "1st Audit Bureau." Along with this

Division were newly set up under the Secretariat,change, a new division was established forone of which was appointed as the Senioragriculture and forestry audit while the Health,

Director of Special Programs Division.

Welfare and Labor Audit Division was divided(6) Changes made on April 1, 1962
(establishment of the position of SeniorDirector)

into Health & Welfare Audit Division and Labor
Audit Division. In the newly established 5th

AuditsBureau, the audit division in charge of entitiesofState - owned

bodieswere

including the three public corporation and State-conducted based on a two-division organizational

owned bodies that was placed under the 4th

structure since January 1955. However, since

Audit Bureau until then was placed, while thesuch bodies were newly established one after

audit divisions in charge of finance, national

another, it became difficult to conduct audits in aproperty and taxes were placed in the 1st Bureau,sufficient manner. For this reason, the First State-those in charge of judicial affairs, defense,

owned bodies Audit Division and Second State-

education and postal services in the 2nd Bureau,

owned bodies Audit Division of the 5th Bureau

those in charge of health and welfare, labor,

were abolished while five positions of Seniortransportation and construction in the 3rd Bureau

Directors were set up under said Bureau to haveand those in charge of agriculture and forestry

them take charge of the audit of every bodies

and trade and industry in the 4th Bureau.

except for the three public corporations and Bank

(4) Changes made on April 1, 1959
( establishmentoftheAdjudication
Division)of Japan. Later, in April 1964, five positions
were added to have 10 Senior Directors in total.
2. Changes in the structure of positions

Nine adjudication auditors were set up in the
Secretariat, three of which were appointed as the

As a result of the enforcement of the new

Senior Directors of Adjudication Division, in

BOA Act, all the positions of BOA under theorder to have them exclusively handle affairs

formerwhich had been under the jurisdiction of the

Directors,

Coordination Division of each Bureau since(Fukukensakan), residents and clerks, while being

Januaryforclassified as either Administrative or Technicaldisciplinary action and notification to the Public

Officials, were reorganized into positions in theProsecutor's Office. Further, the position of anGeneral Executive Bureau such as Secretary

Adjudication Counselor that supervises them wasGeneral, Deputy Secretary General, Directors

newly set up.

General, Senior Directors, Deputy Directors

1952 :

adjudication,

demandAct

includingsecretaries,

Directors

General,DeputyDirectors(Fukucho), chiefs and general officials. The
268

Section 2 Changes in BOA's Organization

changes in the structure of positions between thea reference material for the personnel evaluation

mid-1940s and the mid-1960s are as follows.

for promotion of Auditors.

(1) Deputy Director (from 1947)(4) Counselor (between 1957 and 1978)

On May 3, 1947, the position of Deputy

On December 10, 1957, one Counselor was

Director was set up in each division. Deputy

set up in each Bureau except for the 3rd Bureau.

Directors were made to assist Senior Directors

Counselors

replacingDirectors

coordinate important matters within the Bureau(Fukukensakan). Being ordered to serve as theand assist the Director General. After setting up

Head of Field Audit by the Secretary General,another Counselor in the 3rd Bureau in April

they were also required to oversee the matters

1960, five more Counselors were added from

related to field audits including direction and

April 1964 until April 1973, resulting in two

supervision of officials during the said audit asCounselors in each Bureau. Meanwhile, in thewell as communicating audit observations to

Secretariat, one Adjudication Counselor who

auditees.

supervised the Senior Director of Adjudication(2) Assistant Chief (from 1955)

Division was set up in April 1959 while one

former

Deputywere

requiredtocollectively

Counselor of the Special Programs Division thatOn April 1, 1955, the position of the teamleader which was newly set up in August 1948

supervisedtheSeniorDirectorofSpecialwas abolished and instead, the position of

Programs Division was set up in April 1966,

Assistant Chief was newly set up. Assistantrespectively.
However, one Counselor of each Bureau andChiefs were required to assist the chiefs withrespect to their affairs.

the Counselor of the Special Programs Division(3) Auditor (from 1956)

were changed to the Assistant Secretary General

On April 1, 1956, the position of audit chiefin April 1977 (the job title of the Assistantof each audit division was abolished and instead,

Secretary General of the Secretariat was changed

the position of Auditor was newly set up and theto the Assistant Secretary General for Special

Deputy Director of each audit division was

Programs in April 1978) while the remaining one

appointed to concurrently hold the position ofCounselor of each Bureau and the Adjudication

Auditor and Deputy Director. Auditors were set

Counselor were converted to the Assistantup for the purpose of having senior officials with

Secretary General and the Assistant Secretary

excellent experience, knowledge and skills serve

General for Adjudication, respectively, in April

as auditors and conduct audit in order to fulfill

1978, resulting in all Counselors serving as

the heavy responsibility of audit and enhance its

Assistant Secretaries General.

credibility.
3. Changes in the fixed number of officials

From FY1958, BOA started implementing
evaluation tests after the Assistant Chief Training
Course (an Assistant Audit Training Course(1) Sharp increase in the fixed number ofofficials in FY1947

between FY1979 and FY2008 and a Government

The fixed number of officials of BOA was

Auditing Technique Training Course (Standard)

set to be 386 in the initial budget of FY1947.

from FY2009), in order to use the test results as

However, as a result of the enforcement of the269

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

new BOA Act, BOA's mandate was reinforced

Administrative Organs, a furlough system wasand its organization was expanded to have an

established at BOA in order to cope with theorganizational structure consisting of 19 divisions

personnel cutback following the examples of theunder four Bureaus and four divisions under theadministrative organs that are subject to the Act.

Secretariat, thereby leading to the necessity of(3) Increase in the fixed number of officials by
60 officials in FY1955

significant increase in the number of officials in

In light of the significant increase in the casecomparison to the previous fixed number.
ofAs such, in order to increase the number of

improprieties mainly

in

the

subsidizing

officials to be assigned to the new organization,

projects, a "resolution on the fulfillment of the

BOA negotiated on the expenditures from thefunction of BOA" was passed by the House ofreserve fund with the Ministry of Finance. BOA

Councilors in December 1954. In response to

demanded to more than triple the fixed number

this, the BOA Act was amended and one Bureau

of officials at a stroke (386 in the initial budget

was newly established to have five Bureaus infor FY1947 to 1,200) and over 18.42 million yen

total and the fixed number of the officials ofas the amount from the reserve fund. In response

BOA was increased by 60 officials resulting

to this, the Ministry of Finance initially reduced

1,178 officials in total.

the requested number of officials to 600 but on
May 16, the demanded amount was approved in(4) Increase in the fixed number of officials
between FY1961 and FY1963

whole and thus officials could be sequentially beOver the three-year period between FY1961

employed and assigned to each division. Since aand FY1963, more than a dozen of people wasnumber of competent persons had to be employed

added to the fixed number of officials and, on

in a short period of time, exceptional methods

July 1, 1964, 20 Auditors were added, resulting

were taken such as the use of newspaper ads toin 1,212 officials of BOA.

recruit competent persons widely from thegeneral public in addition to employing a numberof new university graduates.
(2) Reduction in the number of officials due topersonnel cutback between 1951 and 1954
Later, the fixed number of officials of BOA
increased, resulting in 1,252 in the FY1951
budget. However, in response to the government's
request for cooperation for personnel cutback,approximately

10%

of

them

were reduced

resulting in 1,140 officials in the FY1952.
The number of officials was further reduced
to 1,118 due to personnel cutback in FY1954
budget and on June 17, 1954, in response to theenforcement of the Act for Partial Amendment of
the Act on Limitation on Number of Personnel of270Section 3 Audit activities

Section 3 Audit activities
Subsection 1

audit by BOA (item (vi)).

Audit subject matters

Among these items, the precious metals
included in item (iv) and item (v) have been

1. Scope of audit
In prewar days, Article 23 of the former

newly added at the time of enactment of the new

BOA Act excluded secret funds from the scope

BOA Act. In addition, goods owned by the Stateof audit subject matters of BOA, thereby placing

were included in the scope of discretionary audit

restrictions on audit. Under the new BOA Act,

subject matter at the time of enforcement of thethe scope of audit of BOA has been expanded

new BOA Act. However, as a result of theand is broadly classified into the following two

repeated audit findings made in relation to goods,

categories based on the level of connection to thethe State-Owned Goods Management Act was

account of the State: (i) those that require audits

enacted in 1956. Along with this, the BOA Act

by BOA (mandatory audit subject matter); andwas amended in January 1957, resulting in(ii) those that BOA may audit if it considers thisprescribing receipt and payment of cash or receipt

to be necessary, or at the request of the Cabinet

and issue of goods owned by the State as well as(discretionary audit subject matter).

national property in item (ii) and including goods(1) Scope of mandatory audit subject matter

owned by the State in the scope of mandatory
audit subject matters.

At the time of enforcement of the new BOA
matters(2) Scope of discretionary audit subject matterprescribed in the provision of Article 22 of the

At the time of enforcement of the new BOA

Act,

the

mandatory

audit

subject

BOA Act were provided as follows.

Act, the discretionary audit subject matters(i) monthly expenditures and revenues of theprescribed in the provision of Article 23,
paragraph (1) of the BOA Act were provided asState (item (i));

follows.

(ii) receipt and payment of cash or receipt and(i)issue of national property owned by the State

goods and securities owned or retained by
the State, and cash retained by the State(item (ii));(item (i));(iii) acquisition and loss of claims held by theState and increases and decreases of national(ii) receipt and payment of cash or receipt andgovernment bonds and other obligations

issue of goods and securities by entities(item (iii));

other than the State, on behalf of the State(item (ii));(iv) receipt and payment of cash or receipt andissue of precious metals and securities by the(iii) accounts of an entity that the State has

Bank of Japan on behalf of the State (itemdirectly or indirectly granted a subsidy,(iv));

incentive, or aid, or extended other financial
assistance such as a loan or an indemnity(v) accounts of juridical persons to which the(item (iii));

State has contributed half or more of the(iv) accounts of an entity a part of whose statedstated capital (item (v));

capital is contributed by the State (item(vi) accounts specified by law as being subject to271

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

mandatory audit subject matters as the result of(iv));

the amendment of the BOA Act in January 1957.

(v) accounts of an entity that has further been
contributed to by an entity to whose statedcapital the State has contributed (item (v));(vi) accounts of an entity for whose borrowings

2. Establishment, revision and abolition of
bodies subject to mandatory audit

the State guarantees payment of the principal

After the enactment of the new BOA Act, as
stated above, there was hardly any change in theor interest (item (vi));(vii) accounts of a contractor for construction

scope of mandatory audit subject matters under

rendered to the State and those of a supplier

the BOA Act. However, in association with theof goods to the State, which relate to the

expansion, diversification and other changes incontract with the State (item (vii)).

the administrative demands, the organizations of

After the enforcement of the new BOA Act,

the State became larger and many State-ownedin view of the significant increase in the number

bodies were established. Most of these state-of improprieties found mainly in subsidized

owned bodies are subject to mandatory audit thatprojects, the "Resolution on the fulfillment of

were established by the State contributing to halffunction of BOA" was passed in the House ofor more of the stated capital and since theirCouncilors in December 1954. Following this, theprojects are directly implemented by these bodies,

BOA Act was amended in August 1955 totheir budgets are running into a large amount ofexpand the scope of audit for the three publicmoney and they are holding a prominent position

corporations, namely, Japan Tobacco and Salt

in audit in concurrence with the State.

Public Corporation, Japanese National Railways

The overview and major establishment,

and Nippon Telegraph and Telephone Public

revision and abolition of the bodies subject toCorporation,

mandatory audit between the mid-1940s and mid-

as

the

scope

for

the

State.

Specifically, BOA was allowed to audit not only

1960s are explained below.

thethemselves, but also those such as the accounts of(1) Overview of bodies subject to mandatory
audit

an entity that the public corporations have

The total number of bodies subject togranted a subsidy, incentive or aid, or extended

mandatory audit as of the enforcement of theother financial assistance such as a loan or an

BOA Act in 1947 was 36, the breakdown ofindemnity, the accounts of an entity that has

which is: (i) 34 entities as the juridical persons tofurther been contributed to by an entity to whose

which the State has contributed half or more ofstated capital the public corporations havethe stated capital, including various banks,

contributed and the accounts of a contractor for

corporations

construction rendered to the public corporations

companies that were closed in association withor accounts of a supplier of goods to the public

the end of the war but have yet to be liquidated,

corporations, which relate to the contract with thein addition to the Bank of Japan, Reconstruction

public corporations.

Financialaccountsofthepubliccorporations

oroversees

Corporation

businessandoperation

State - owned

companies for production materials that wereIn addition, as stated above, goods owned bypreserved

the State were included in the scope of
272

for

the

near - termindustrial

Section 3 Audit activities

development; and (ii) 2 entities as the accounts(3) Establishment of three public corporations

specified by law as being subject to audit by

In July 1948, in association with the

BOA, including the Committee for Liquidating

amendment of the National Public Service Act,

Holding Companies and the Committee fortheLiquidating Closed Institutions.

Commander for the Allied Powers (GHQ) sent toGeneralHeadquarters

of

the

SupremeLater on, most of these entities disappeared

the Japanese Government a letter stating thatin the postwar process and instead, three public"public enterprises should be organized in an

corporations

government - affiliatedappropriate manner, [. . .] only for government

institutions (finance corporations and banks) were

projects such as the government monopoly of

established one by one from the mid-1940s while

railways, salt, camphor and tobacco." Based on

public corporations engaged in public projects

this letter, in June 1949, the Japan Tobacco andand agencies, associations and other organizations

Salt Public Corporation and Japanese National

in charge of economic and social policies were

Railways, and in August 1952, the Nippon

established gradually from the mid-1950s, mainly

Telegraph and Telephone Public Corporation

in a manner of taking over the projects andwerebusiness carried out by the State. In association

changing their management form based on thewith this, the number of bodies subject tospecial account of the State. Since the statedmandatory audit also increased.

capital of these three public corporations wereandestablishedaspublicenterprisesbywholly contributed by the State, they became(2) Establishment and abolition of 15 public
corporations including distribution public
corporations and foreign trade public
corporations

subject to the audit as bodies subject tomandatory audit.
(4) Establishment of Japan Broadcasting
Corporation (Nippon Hoso Kyokai) (NHK)A total of 15 public corporations includingInvarious types of distribution public corporations

June

1950,

Japan

Broadcasting

and foreign trade public corporations were

Corporation (NHK) was established as a special

established one after another as State-wholly-

public institution. While entities linked to theowned bodies in FY1947 in order to have themaccounts of the State are subject to the audit byengage in businesses such as control of supply of

BOA whose mission is to supervise the financial

goods that were implemented in the postwar

management of the State, no contribution was

period. These bodies were subject to audit frommade to the stated capital of NHK by the State

their

to

nor does NHK fall under the category of bodies

mandatory audit, which resulted in numerous

subject to mandatory audit as prescribed in

audit findings of improprieties. However, these

Article 22, item (v) of the BOA Act.

establishment

asbodiessubject

However,

public corporations were abolished along with the

since

NHK

is

run

by

the

gradual abolition of control and transition to thesubscription fees widely collected from thefree economy and all of them were dissolved bypeople as a public broadcasting system, it must

April 1951. In addition, their liquidation was

be audited in the same way as the State andcompleted by August 1952 and they disappearedState-owned bodies that are funded with national

they were removed from the list of auditees.

taxes. Thus, NHK was especially made subject to273

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

the audit by BOA pursuant to the provision of
Article 41 of the Broadcast Act (Act No. 132 of
1950).
3. Determination of the audit subject fordiscretionary audit subject matters
When BOA finds it necessary to conduct anaudit of discretionary audit subject matters, a
determination of conducting an audit of such
body

is

made

by

the

meetingof

Scrapping of naval vessels of the old Japanese navytheCommissioners and the determination is to be(2) Determination of the audit subject for
shipping companies for interest subsidies
regarding loaning funds to build vessels foroverseas services

notified to the parties concerned (Article 11, item(iii) and Article 23, paragraph (2) of the BOA
Act). This process is called the determination of
the audit subject, and thousands of bodies

In 1954, a scandal called "shipbuilding

including prefectural governments, municipalities,

scandal" was brought to light. Specifically,various cooperatives, educational foundations andshipping companies were suspected of offering

companies are audited.

bribes to Diet members and relevant government

Determinations of the audit subject that were

officials with respect to the selection of shipmade between the mid-1940s and mid-1960s andowners for the planned-shipbuilding for which

considered to be closely linked to socioeconomic

interest subsidies can be received from the State

circumstances at that time are explained below.

and the scope of application of oil tankers which(1) Determination of the audit subject for
shipbuilding companies for scrapping of
naval vessels

are eligible for such subsidies. It was pointed out

In relation to the scrapping of remaining

companies, which were the order destinations, asthat the shipping companies were allegedly
acceptingkickbacks

from

the

shipbuilding

the funds for such bribes.

naval vessels held by the old Japanese Navy, theIf the shipbuilding companies were giving

determination of the audit subject was made in
were

kickbacks to the shipping companies, a ship pricecontractors for the scrapping work, as theequivalent to such amount would have been

contractor for the construction rendered to thediscounted and interest subsidies calculated based

State and the entity dealing with cash and goodson the ship price have been paid in excessive

on behalf of the State as prescribed in Article 23,

amounts.

March

1949

for

35

companiesthat

As such, in April 1954, BOA hastily made aparagraph (1), items (ii) and (vii) of the BOA
Act, and their audit was implemented. As a result

determination of the audit subjectof such audit, BOA reported the situation ofcompanies that received loans in relation toexcessive settlement of accounts (overstatement

interest subsidies (153 ships covered by interestof expenses) for the construction cost in the FY

subsidies) as the entities that the State has

1949 Annual Audit Report as improprieties.

indirectly extended assistance as prescribed in
274

for

54

Section 3 Audit activities

Article 23, paragraph (1), item (iii) of the BOA

results

Act and audited them. As a result of such audit,

expected effects.

BOA found that the contract ship price wasAmong these objectives, audits conducted

reduced and thus reported in the FY1954 Annualwith the objectives of economy, efficiency and

Audit Report as improprieties the circumstances

effectiveness are called 3E audit taking theirin which interest subsidies were paid in excessive

capital letters.

producethe

In Japan, BOA has conducted audit with theamounts.
five
Subsection 2

andobjectives

above

or

other

objectives

necessary for auditing. The emphasis which BOA

Audit objectives

has placed on the respective objectives haschanged

BOA conducts audits with broad and diverse

considerablyaccordingtotheobjectives. While audit objectives vary depending

socioeconomic situation of the times. Looking

on factors such as the field of projects andback on the period between the mid-1940s andprograms and the contents of the financial

mid-1960s, generally, a major trend of change

management,from audit focused on regularity to audit focused

theirindividual

andspecificon economy and efficiency can be found.

objectives can be largely classified into the

In the following parts, the major changes

following five types based on the common

between the mid-1940s and mid-1960s shall becharacteristics found.
(i) Accuracy:

accounts

reviewed and the relation between the audit

accurately reflect the financial

objectives and the BOA Act shall be briefly

situation such as the execution

explained at the end.

whether

the

final

of the budgets.
(ii) Regularity:

whetherthemanagement

financialis

1. Regularity-focused audit and accuracy audit
between the mid-1940s and mid-1950s

properly(1) Audit focused on regularity

conducted in conformity with

Against the background of disorder in thethe approved budgets, laws,(iii) Economy:

and regulations.

postwar troubled socioeconomic circumstances

whether the implementation ofand public sector accounting, there were many

projects

orcases of accounting ignoring laws and regulations

isor budgets, and BOA was preoccupied withadministered with the minimum

detection of such fraud between the mid-1940s

cost.

and mid-1950s.

budget(iv) Efficiency:andprograms

execution

whethertheprojects

BOA

andreported

those

fraud

cases

as

programs gain the maximum

improprieties. Notable audit findings of thoseresult with the given cost or

improprieties included the following: the use ofhave

budgets for purposes other than the original

the

best

cost-efficient

intent, violation of the assignment categories ofoutcome.
andthe fiscal year, debt burden outside or beyond theprograms achieve the intended

budget found in various fields in the late 1940s(v) Effectiveness: whether

theprojects

275

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

and fictitious accounting for works implemented
by the National Government in public projects,
fictitious works and piggybacking work forgovernment-aided disaster recovery work foundin the early 1950s. In addition, in the late 1940s,
BOA successively presented opinions and/or
demanded measures, many of which called for
fundamental improvements such as developmentof laws and regulations and enhancing qualities
of

the

staff

members

in

light

of

the

Audit findings on financial statements containedin the FY1950 Annual Audit Report

abovementioned circumstances.
These situations made it inevitable for BOA
to focus on the objective of regularity in the

In particular, in the audit of Japanese

audits at that time. In addition, BOA also

National Railways, BOA adopted the corporate-

conducted audits with the objectives of economy

type financial statement audit from 1951 basedand efficiency but was unable to consider theon the suggestion of GHQ and mainly conductedobjective of effectiveness.

audits with the objective of accuracy. However,(2) Audit of accuracy

this audit method was amended in a brief period

Another characteristic found between theof two years due to a large number of cases

mid-1940s and mid-1950s is the audit ofwhereby substantive rectification was necessary

accuracy of financial statements.

in financial management.

Specifically, taking into account the newfinancial accounting system at the time and the

2. Development of audit focused on economy
and efficiency between the mid-1950s andmid-1960s

establishment of various entities including public
corporations as State-owned bodies that were

After

newly subject to audit under the new BOA Act,themid-1950s,

fraudsgradually

BOA also focused on audit with the objective of

subsided and the number of improprieties were

accuracy in the audits of special accounts andreported in the annual audit report considerablyState-owned bodies. As a result, BOA made adecreased. Against this background, after 1962,

considerable number of audit findings in the early

BOA changed its attitude of putting detection of

1950s with respect to the situation where theimproprieties first and started to actively conductperiodic profit or loss or financial conditions

audit oriented towards presentation of opinions

were not properly presented in the financial

and demand for measures to investigate andstatements due to auditees' inexperience in the

improve the cause of occurrence of inappropriate

system and insufficient establishment thereof,and unreasonable financial management.

resulting in the establishment of the item

These circumstances also had an impact on"financial statements" as one of the categories forthe audit objectives. Specifically, the audit

improprieties in the annual audit reports for FY

focused on the detection of improprieties that was1949 and FY1950.

conducted between the mid-1940s and mid-1950s
276

Section 3 Audit activities

was mainly about auditing individual financial

based on the interpretation that BOA could audit

management with the objective of regularity ascases in which any disadvantage might be caused

stated above. However, in the audits conductedto the State, regardless of whether the cause

on and after the early 1960s, BOA also focused

could be found in the breach of budgets or lawson circumstances that cannot be regarded asor regulations or in the authority's uneconomic or

improprieties. Since many of such circumstances

inefficient treatment.

were related to economy and efficiency of

As is the case of the former BOA Act, no

projects and programs rather than the regularity

specific provision concerning audit objectives wasof financial management, more weight was

stipulated in the new BOA Act at the time of its

placed on audits with the objectives of economy

enactment. However, based on the lessons learnt

and efficiency.

from the abovementioned situation, it was clearly

The representative case is one wherein the

stipulated to set down in the annual audit report

estimation standard for the construction cost was"an item found being improper" (Article 29, item

required to be amended to realize economic(iii) of the BOA Act) in addition to the items inestimation based on the actual state, etc. of theviolation of laws and regulations or approved

construction. There were also many other cases

budget. As a result, in actual audits, BOA

where BOA required economic and efficient

conducted audits with the objectives of economy

operations ofand efficiency, further leading to full-fledged

various businessesofpublicaudits with the objective of effectiveness andcorporations and other relevant entities.

expansion of the scope of audit objectives.
3. Relation between the audit objectives andthe BOA Act

Subsection 3

Procedures of audit

Although there were no specific provisions
1. Audit cycle

concerning audit objectives in the former BOA
Act, in actual audits, traditionally, a great deal of

As a result of the enforcement of the newweight was given on the objectives of economy

BOA Act, it was clearly stipulated that BOA canand efficiency along with the objective ofcontinuously conduct audits without waiting theregularity. Among such objectives, with respectconclusion of the final accounts while it was also

to the objective of regularity, it was provided

provided in Article 90 of the Constitution of"whether or not it is contrary to the provisions ofJapan that the Cabinet shall submit to the Dietbudgets or laws or Imperial Ordinance" in a

the final accounts together with an annual audit

provision stipulating the audit cases to bereport clarifying the results of the audit by BOA

reported in the annual audit report, but there wereduring the fiscal year immediately following theno clear provisions for the objectives of economy

period covered. In addition, it became a usualand efficiency, and BOA sometimes engaged inpractice for the Cabinet to submit the final

arguments with the auditees over whether BOA

accounts at the ordinary session of the Diet held

was mandated to conduct audits with suchin the fiscal year immediately following theobjectives. However, audits with such objectives

period covered pursuant to Article 40 of thewere allowed even under the former BOA Act,

Public Finance Act, which was basically derived
277

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

from the provision of the Public Accounting Act

important points for auditing of the relevant year

amended in the Taisho era.

established by each audit division in charge were

Under the new Constitution of Japan, BOA

put together, considered and examined by the

conducts audit at a cycle of approximately one

General Executive Bureau and then part of themyear closing at the timing of submission of thewere consulted and approved by the Audit

annual audit report to the Cabinet.

Commission as "priorities for auditing." In
addition,

the important

points forauditing

established for each audit division in charge

2. Audit plan
In order to produce better effects by limited

including the "priorities for auditing" and thestaff, budget and period, etc. in regard to theaudit aspects thereof were separately specified byvoluminous cases of financial management that

the General Executive Bureau in the form of

are subject to audit by BOA, it is important for"priorities and precautions for auditing."

BOA to prepare appropriate audit plans andAt the time of presenting the "priorities for

conduct efficient and effective audits. After theauditing" to the audit bureaus and divisions by

enforcement of the new BOA Act, with regard to

the Secretary General, the matters of special

auditing between the mid-1940s and mid-1960s,

attention were also presented, which were based

audit plans were prepared as follows.

on(1) "Important points for auditing" (audits in1948)

consultation and other means by the Audit

The FY1946 Annual Audit Report that wasin 1962, sufficient attention was to be paid toprepared for the first time under the new BOA

circumstances requiring presentation of opinions

Act was submitted to the Cabinet in March 1948,

or demand for measures and thereby presentation

but there is no evidence showing that plans wereof opinions and demand for measures that weredeveloped in conducting this audit.

made only in small numbers until then was madetheopinions,

etc.

expressed

throughCommission. For example, in the audit conductedin large numbers in the same year.

In conducting the audit in 1948, the"important points for auditing" for the audit
divisions were determined at the meeting of the

3. Conduct of audit

Commissioners in March 1948. At the time of(1) Method of audit

presenting the "important points for auditing" by

The in-office audit and field audits that have

the Secretary General to the audit bureaus andbeen employed under the former BOA Act

divisions, the audit issues to be focused on bycontinued to be used even after the enforcement

each audit division in charge in conformity withof the new BOA Act.

the "important points for auditing" and the audit

In addition, the commissioned audit systemaspects thereof were separately specified in thethat were provided in the former BOA Act was

matters of special attention and other forms forabolished by GHQ's proposal suggesting that it iseach bureau and division.

not appropriate to entrust audit with the auditees(2) "Priorities for auditing" (audits between
1949 and 1968)

and accordingly, BOA came to directly conduct
every audit.
(2) In-office audit

In conducting the audit in 1949, the278Section 3 Audit activities

With

respecttothecontents,major

A. Submission of accounts and conduct of inoffice audit

amendments were made on the following four(A) Submission of accounts

points: (i) it was provided in the general

With respect to the submission of accounts

provisions that every submission of accounts

made to BOA on a regular basis by the auditees,

shall be made monthly and the provisions on theRules on the Submission of Accounts underdeadline of submission of the statements ofwhich the auditees prepared the statements ofaccounts and method for editing documentaryaccounts in which the actual results of financial

evidence which were provided in each chapter inmanagement

attached

the past were provided in a uniform manner indocumentary evidence to prove the authenticity

the general provisions; (ii) while a uniform form

and legality, etc. of the contents, were provided

for the statements of accounts was established foras the Circular Notice of the Board of Audit

every category of treasury money in the past, thebased on the provision of Article 18 of thestatements

former BOA Act. Under the new BOA Act, theseparately designated according to the type ofdetails of the procedures were established by thetreasury money; (iii) it was allowed to make

Regulations on the Submission of Accounts

submission of accounts for the handling of cash

(Board of Audit Regulations No. 6 of 1947)and goods by a handling report in a simple form

based on the provision of Article 24 of said Act.

in lieu of submitting statements of accounts andaremarshalled

and

of

accounts

were

made

to

be

the

documentary evidence; and (iv) the statements ofSubmission of Accounts were prepared in a veryaccounts of entities such as State-owned bodies

short time in order to be enforced together with

were made to be separately designated for eachthe new BOA Act, they basically took over thejuridical person, etc.

Since

the

new

Regulationson

Initially, necessary amendments were madeRules on the Submission of Accounts enacted inin response to the expansion of the scope of audit

1922.

under the new BOA Act and transition of the

The Regulations consist of a total of 10
revenue,accounting system into a new organizational

expenditure, management of treasury money,

structure as a result of the enactment of theincrease and decrease of national government

Public Finance Act, etc. However, for thebonds, handling of cash, increase and decrease of

purpose of streamlining and simplifying thegoods, increase and decrease of national property,

affairs concerning submission of accounts in line

handling by Bank of Japan and accountings ofwith the actual circumstances of accounting

State-owned bodies, assisted corporations andaffairs, simplifying and clarifying the provisions

others. When compared to the old Rules on theand adapting the provisions to the subsequent

Submission of Accounts, the new Regulations areamendments of various laws and regulations oncompletely identical except that the title ofaccounting, all of the provisions were drastically

Chapter 10 which reads "The final accounts ofamended and the current Regulations on thebodies and public or private structures" wasSubmission

changed to "Accountings of State-owned bodies,

Regulations No. 6 of 1952) was newly enacted.

chapters,

i. e.

generalprovisions,ofAccounts(Boardof

Audit

Since then, reviews have been made toassisted corporations and others."279

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

simplify the affairs by amending the form of theCollecting Officers and the Disbursing Officers tostatements of accounts in 1964 and enabling the

BOA. This cross-checking is so-called collation

preparation of the statements of accounts by aof three related data.

ledger system integrated with the report to the

C. Issue of submission of accounts―Appearanceorder against delay in the submission of
accounts―

Ministry of Finance while bearing in mind thenecessity for auditing by BOA and circumstancesof auditees such as administrative burden.

Until around 1951, there were many cases(B) Position of in-office audit

where the time limit for submission of documents

Under the former BOA Act, since theincluding the statements of accounts as provided

number of days of business trips was relativelyinsmall, in-office audit was considered to be the

Accounts was not kept and thus, in March 1948,

main method of audit. Since the early days of the

BOA made appearance orders based on theShowa era, an "extract system" was implemented

provision of Article 26 of the BOA Act for cases

to extract matters that are important for auditing

where gross violation of the time limit wasfrom the statements of accounts and documentary

found.

the Regulations on

the Submissionofevidence and examine them, and such a system

This order was issued against the case where

has been continuously conducted even after thethe statement of expenditures for FY1946 was yet

enforcement of the new BOA Act.

to be submitted although almost one year had

B. In-office audit and "verification of the final
accounts"

passed. According to the written appearance"Verification of the final accounts" refers to"although BOA has repeatedly demanded thethe act of officially announcing that an audit toperson in charge to submit the statement, thedetermine the appropriateness of the statements

statement has not only been submitted until now

and contents of the State final accounts of the

but also there are no responses to the demand. As

revenue and expenditure and this enables thesuch, there is no choice but to consider that the

Cabinet to submit the final accounts of therelevant person in charge is neglecting his/herrevenue and expenditure to the Diet.

duties as Disbursing Officers" and demanded theorder,

BOA

wasbitterly

denouncingthat

In the course of this "verification of the final

relevant person in charge to "appear with all theaccounts," the verification of the accuracy of thestatements of accounts and explain the reason forstatements has consistently, to the present, been

delay in submitting the statements."

carried out by cross-checking the following threestatements to confirm if they agree: (i) the final
accounts of revenue and expenditure submitted
from the Cabinet to BOA; (ii) statement ofhandlingofthe government's revenue

andexpenditure and statement of handling of treasury
money submitted by Bank of Japan to BOA; and(iii) statement of revenue collecting and statementof expenditures submitted by the Revenue
280

Section 3 Audit activities

postwar period.
B. Special form of field audits(A) Unannounced audit
In the period of the former BOA Act, BOA
was required to notify the auditees without failprior to conducting field audits pursuant to theprovision of Article 19 of the former BOA Act.
However, such provision was not stipulated in the
new BOA Act, enabling BOA to conduct aStatement of accounts and other documents
submitted from the auditees

surprise unannounced audit. However, in the late
1940s, BOA followed past precedents and(3) Field audits

conducted field audits by notifying in advanceA. Organizational structure for conducting
field audits

every auditee.
This policy was changed in June 1950 and a

Currently, field audit is the most important

notice stating that unannounced audit shall beand effective audit method, and most of the audit

conducted when necessary was given to theresults that are reported in the annual audit reportministries and agencies, public corporations, etc.

is obtained by field audits. Under Article 25 ofand prefectural governments. In reality, even after

the BOA Act, field audits can be conducted "on asuch a notice was given, BOA is still conducting

regular or temporary basis." Accordingly, field

field audits by notifying the auditees in advance

audits could be conducted by stationing at thein most cases. However, this method is used inlocal office or business office of the auditees, but

the case of audit whose objective would not be

BOA conducts every field audit by visiting themachieved if notice was given in advance, i.e. induring a business trip. "On a temporary basis"the case of auditing the state of handling cashrefers to "temporary" audit in comparison to

and goods or the state of organizing/filinggeneral "regular" audit or "special issues audit"

account ledgers, and there are cases where thisconcerning specific issues.

method was used for auditing the state ofhandling and retaining cash at post offices.

After the new BOA Act was enforced, theSenior Director of the audit division or the newly(B) Overseas audit

set up Deputy Director (Auditors equivalent toToday,

audit

activities

have

gone

the assistant senior director rank of the headinternational. Yet, field audits conducted overseas

office of ministries) was ordered to serve thecan be regarded as audits in a special form fromhead of field audits as the responsible person for

aspects including the number of audits and audit

execution of field audits and thereby, field audits

mandate.
Its history has been developed as follows.

are conducted by a team consisting of about four

a. Audit based on the request by the Diet

to six members. "Auditors" play a key role in thefield audits. The period of one business trip for

Regarding the issue of import of yellowed

field audits often lasted for a month in prewar

rice which became problematic from around thedays, but it has been gradually shortened in

end of 1951, the House of Councilors' Committee
281

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

on Audit considered that the actual circumstances

letter to those who are responsible in each auditee

and countermeasures should be examined by(Article 26 of the BOA Act). The inquiry letter isdispatching officials of BOA to the scene such as

sent for the purpose of confirming the facts andthen Burma in 1954 and demanded the Ministry

recognition of facts and clarifying doubtfulof Finance to use the reserve fund for BOA'spoints. Generally, the outline of the financial

overseas travelling expenses to Southeastern Asia

management, doubtful point and observations

which was accepted by the said Ministry. In thismade in the process of the audit and the reasons

way, an overseas audit (to Burma and Thailand)

thereof are stated as their contents. Following

which was extremely rare at that time wasthis, BOA requests the auditees to give an

realized and field examination was conducted for

explanation (response) in writing to further clarify

about a month at the end of the same year.

the situation.

b. Audit of overseas diplomatic establishments(2) Request of evaluation, etc.

Following the coming into force of the San

Since some audit subject matters include

Francisco Peace Treaty in 1952 and Japan's

highly technical matters, there are cases in whichaccession to the United Nations in 1956, the scale

determinations cannot be made solely based onofremarkably

the review by officials of BOA. In this case,enlarged amidst the internationalization mainly in

BOA has the option to ask other government

economic terms. Accordingly, BOA conductedagencies, public entities and any other specialized

field audits of overseas diplomatic establishments

agencies to submit materials, provide evaluations

located in seven countries within the Southeasternor conduct examination or tests (Article 28 of the

Asia region in 1960 for the first time. Following

BOA Act).

overseas activities ofJapanthis, BOA has been conducting field audits of◆Method to carry out field audits◆overseas diplomatic establishments every year.

Since entities subject to field audits reached3,000 a year in association with the enforcementof the new BOA Act, the following uniform
principle was specified for the method of carryingout field audits in 1950.
Method to carry out field audits [summary]July 31, 1950, Secretary General
1. Principle
Deep audit shall be conducted by providing
flexibility to field audits while leveling them andat the same time, dignity of the head of fieldaudits shall be preserved.
2. Period of working at the BOA office of thehead of field audits
Currently, in principle, the period of working
at the BOA office is set to be approximately two
weeks, which is insufficient for the head of fieldaudits, who is preoccupied with the preparation of
inquiry letters and field audits reports, to prepare

4. Analysis and review of the audit findingsWhenmanagements

BOA
that

are

discovers

financialconsideredtobeinappropriate or unreasonable as a result of audits
including field audits, while BOA carefully
examines the cause of occurrence and measures
for improvement in addition to confirming thefacts and relevant matters in order to ensure thatno errors be made in the determination, it is also
conducting the following activities as measures toclarify the situation.
(1) Inquiry letters to the auditees
If financial management is found likely to
be inappropriate or unreasonable or the like as aresult of field audit, etc., BOA sends an inquiry282

Section 3 Audit activities

limited to 40 days in principle.
(3) Business trip to regions that will be carriedout between January and March shall not
exceed 14 days.
(4) Senior Directors shall work at the BOA officewithout fail between October and December.
(5) Senior Directors, in principle, should notconduct field audits for those other thanimportant auditees.
4. Setting of reserve for miscellaneous expenses
In order to provide flexibility to the fieldaudits of each audit division, it is preferable foreach Bureau to hold a certain amount of thereserve fund and to prepare for extension of theperiod of field audits, increase of personnel andfield audits outside the predetermined plan.
The distribution plan for future travel
expenses shall be as follows.
(1) TheDirector
Generalshall
holdapproximately 20% of the amount distributed
to each division additionally as the reserve
fund.
(2) The Secretariat shall hold the reserve fund for
itself and each Bureau.
5. Others(1) The selection for the head of field audits shallbe made in a stricter manner.
(2) The results of field audits shall be stated to
the responsible personnel such as the head of
the auditee without fail.
(3) Business trips by trainees and business trips toregions for a long period of time by thosewith insufficient audit capability shall not beallowed.

for the next field audit, make a study on various
laws, clarify questions that arose in a field audit,
process issues requiring inquiries to the head
office of ministries and conduct in-office audits.
This situation may result in sloppy inquiry lettersand shallow consideration of the issue and islikely to affect the dignity of BOA together with
the insufficient knowledge of the head of fieldaudits.
Therefore, from now on, the period ofworking at the BOA office shall be set to at least
20 days between business trips for the head offield audits. However, this shall not apply to
special issues audit, audits based on the proposalof the GHQ and temporary business trips.
3. Business trip of Senior Directors
While it is unavoidable for the number ofdays of business trips of Senior Directors to belarge in light of the current audit capability ofeach division, Senior Directors have often madeinsufficient instructions and supervisions as aresult of being preoccupied with the preparationand organization of his/her business trips; it issometimes said that Senior Directors are just oneof the heads of field audits.
The appropriate attitude to be taken by the
Senior Director with respect to field audits should
be focused on fulfilling the function of generalcoordination while constantly giving flexibility toaudits in the following manner: the SeniorDirector should collect the results of field audits
from each head of field audits, give instructions
how to handle them, plan the next business trips
for cases where audits were insufficient or which
require further examinations and promptly order
other heads of field audits to conduct examination
for common issues.
Accordingly, the business trips of SeniorDirectors should comply with the following:(1) The business trip shall be conducted between
January and the end of the relevant fiscal year
to carry out a comprehensive research on awide scope and used as a reference for the
future audit plan to understand the trend of
the ministry or agency under the jurisdictionof the Senior Directors, of the relevant fiscal
year or the following fiscal year.
(2) Business trip to regions that will be carriedout between April and September should be

Subsection 4

Annual audit report

BOA prepares an annual audit report every
year based on the provision of Article 29 of the
BOA Act as a report of the audit results. The
annual audit report so prepared is submitted to
the Cabinet from BOA and then submitted to theDiet by the Cabinet together with the final
accounts of revenue and expenditure based on theprovisions of Article 90 of the Constitution of283

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

set down in the annual audit report pursuant toJapan and Article 40 of the Public Finance Act.
Under the new BOA Act, since the first

the BOA Act (mandatory reporting matters) andannual audit report, "FY1946 Annual Audit

matters which may be set down in the annual

Reportwas

audit report at BOA's discretion pursuant to the

prepared in March 22, 1948 and submitted to theRegulation for Enforcement of the Board of

Cabinet, annual audit reports have been prepared

Audit Act (optional reporting matters).

every year.

A. Mandatory reporting mattersonrevenueandexpenditure,"

In addition, while the "Annual Audit Report

Pursuant to the provision of Article 29 ofon National Property" prepared based on thethe BOA Act, the mandatory reporting matters

National Property Act is one of audit reports, theare specified as follows:

outline of national property is also stated in the(i)verification of the final accounts of theannual audit report and it has become a practice

expenditures and revenues of the State (itemto report in the annual audit report the details of

(i));
(ii)

any observations, etc. which should be describedwhether the amounts in the final accounts

as a result of the audit. Moreover, an "Annualof the expenditures and revenues of the

Audit Report on Goods" was also prepared based

State correspond to the amounts in theon the State-Owned Goods Management Act forstatements of accounts submitted by thethe final accounts between FY1957 and FY1963,

Bank of Japan (item (ii));

but this report is no longer prepared as a result of(iii) improprieties (item (iii));

the amendment of that Act in 1965.

(iv) whether there was any disbursement fromthe reserve fund that did not pass throughthe procedures for obtaining the Diet's
approval (item (iv));(v)

matters

regarding

which

BOA

has

demanded disciplinary action against theaccounting officials and the results thereof(item (v));(vi) adjudication of the liability for indemnity
against the accounting officials (item (vi));(vii) matters for which opinions were presented
or measures were demanded pursuant to theprovision of Article 34 and the results
thereof (item (vii));

The first annual audit report after the war(the FY1946 Annual Audit Report on
Revenue and Expenditure)(viii) matters for which opinions were presented
or measures were demanded pursuant to theprovision of Article 36 and the results

1. Audit cases reported in the annual audit
reportthereof (item (viii)).
B. Optional reporting matters

Audit cases reported in the annual audit

Pursuant to the provision of Article 15 ofreport belong to matters that are required to be284Section 3 Audit activities

the Regulation for Enforcement of the Board of

into four categories which are "matters being

Audit Act, the optional reporting matters arefound illegal," "matters being found improper,"specified as follows:"matters that caused damage to the State by an(i) matters notified to the Public Prosecutors

official's crime" and "matters which have been
rectified." Later, in the annual audit reports from

Office;(ii) matters for which BOA has determined

FY1947 to FY1949, these matters were integrated

necessary to rectify in response to a request

into "improprieties" and in the annual audit

for examination; andreports from FY1950 to FY1960, they wereclassified into "improprieties" and "matters which(iii) other matters found necessary.
The description of the "other matters foundhave been rectified." Finally, in the FY1961

necessary" stated in item (iii) among the optional

Annual Audit Report, they were integrated into

reporting matters has gradually been expanded"improprieties" again.
"Matters that caused damage to the State by

and the major state between the mid-1940s andan official's crime" refer to the situation of

mid-1960s is as follows.

embezzlement of public money, etc. and have

Description of the "outline" (the annual audit

been set down in the annual audit report asreports from FY1949 to FY1974)
The audit cases reported in the annual audit"illegal acts" among the "improprieties" since thereport shall be explained with focus on the

FY1949 Annual Audit Report. "Matters which

abovementioned matters, etc. in the following

have been rectified" are set down in the annual

section.

audit report as showing the category of matters(1) Improprieties

which have been rectified by having the damage

Improprieties are "item[s] being found inrecovered by the time of preparation of theviolation of the law, Cabinet Order or approved

annual audit report and have been named so withbudget, or being found improper" as provided in

an intention to advise the auditees to promptly

Article 29, item (iii) of the BOA Act and are therectify. Later, matters which had been rectified

most traditional type of improper/unreasonable

were set down in the annual audit report asmatters that have been taken over from the period"improprieties" based on the degree of unjustnessof former BOA Act. Under the new BOA Act,and after the mid-1950s, only the mattersthe wording "item being found improper" hasrequiring rectification in relation to the collection

been clearly stated in order to clarify thatof taxes and social insurance premiums have been

improprieties include uneconomic and inefficientset down in the annual audit report under thismatters that do not constitute violation of laws

category. However, in the FY1961 Annual Audit

and regulations or approved budgets.

Report, the category of "matters which have been

A. Setting down improprieties in the annual
audit report

rectified" was abolished for reasons that whether

In the FY1946 Annual Audit Report, whichof after-the-fact treatment and they have the same

was the first annual audit report prepared after

characteristics as "improprieties" in their nature

the

act,

and that, since the matters for which opinions

improprieties were set down by being classified

were presented or measures were demanded

enforcement

of

the

new

BOA

or not any rectification has been made is an issue285

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

which had temporarily been ceased to be set

beyond the budget and violation of discipline ofdown had come to be set down in the annual

accounting such as fictitious accounting; (iii)

audit report in a number of cases as "matters for"fund management" refers to the situation where

which BOA demanded measures to rectify andthe management of fund is inappropriate due toimproveillegal loans made without taking legitimateorpresented

its

opinionfor

improvement," the identical beginning of the title

collection(in Japanese) would cause confusion.

misappropriating

B. Classification based
accounting, etc.

on

the

the

them;

and
and

temporarily(iv)"financial

statements" refers to the situation where state ofsubjectthe management and finance are not accurately
presented in the financial statements of the

In the late 1940s, amid the situations
including

procedures

confused

special accounts, public corporations and othersocioeconomic

circumstances, deterioration of moral sense andrelevant entities.

change in the public sector accounting system

C. Establishment and abolition of categories

organizational

The following categories were established or

structure of BOA, a variety of audit findings

abolished one by one between the mid-1940s andwere made in various fields leading to a sharp

mid-1960s reflecting the relative numbers ofincrease in the number of audit findings ofcases in each category reported in the annual

improprieties. In the FY1949 Annual Audit

audit report.

Report,of(A) In the FY1950 Annual Audit Report, since

improprieties reached 750 in total and the

BOA expanded its focus to cover services for

improprieties were set down in the annual audit

which

report by further being classified into the

conducted in the past including services

following nine categories based on the subject,provided to occupation forces of Alliedetc.

" taxes, "Powers which accounts for a large portion,"uncollected receivables," "budget accounting,"

the number of audit findings concerning"construction," "articles," "fund management,"

transportation,"financial statements," "illegal acts" and "others."

increased and thus the item "services" wascombined

with

the

of

the

enhancednumberfinancial

of

audit

findings

management :sufficient

audit

cargo

had

handling

not

and

been

rent

newly established.

Among these categories, the following items
are those in which the respective situation has(B) In the FY1951 Annual Audit Report, since

been identified as follows: (i) "uncollecteddistribution public corporations and foreign

receivables"

where

trade public corporations dissolved by April

measures, etc. for collection of the sellout price1951 in connection with the transition to freeor rent of articles, hospital income, social

economy, hardly any audit findings were

insurance premiums and others are inappropriate

made with respect to the items "fundand such amounts have yet to be collected; (ii)management" and "financial statements" and"budget accounting" refers to the situation where

thus these items disappeared. On the otherthe budget was used for purposes other than thehand, BOA dealt with the audit on a full

original intent, violation of the assignment of thescale of government-aided disaster recovery

budget to a specific year, debt burden outside orwork by the Ministry of Construction in the

refer

to

the

situation

286

Section 3 Audit activities

same year and as a result, discovered
numerous illegal situations. In the FY1950

D. Changes in the counting method of thenumber of improprieties

Annual Audit Report, BOA described themAmong the sub-categories of improprieties

as audit findings concerning "construction,"based on the subject of accounting, with respect

but when it further conducted audit by

to the sub-category of "taxes," audit findings

expanding the scope of audit to include otherwere made until the FY1955 Annual Audit

ministries

ofReport by counting the situation where theAgriculture and Forestry in 1952, many moreamount of excess or deficiency in collected tax

cases of audit findings were made and thus,

was 100,000 yen or more as one case, but since

the item "subsidies" was newly established.

FY1956 Annual Audit Report, the counting(C) In the FY1955 Annual Audit Report, themethod was changed to count the situation where

item "uncollected receivables" was abolishedsuch amount is 500,000 yen or more as one case.

and instead the item "insurance" was newly

With respect to the sub-category of "insurance,"

introduced. With respect to social insurance,since the FY1957 Annual Audit Report, its

BOA conducted more substantial audit thancounting method was changed from counting thethat in the prewar days in reflection of thenumber of prefectural governments or otherenhancement of social insurance and new

relevant entity to counting the number of theestablishment

types of social insurance.

including

and

the

Ministry

expansionofvariousindustrial social insurance in the postwar

In principle, the number of improprietiesdays, and as a result, BOA described thewas counted based on each financial management

situation of insufficient collection of social

but, based on the cause of occurrence, degree of

insurance

findings

responsibility of the relevant authority and theconcerning "uncollected receivables" and theamount of money involved, there were cases

situation related to social insurance payment

where proper balance cannot be achieved if theas"others."

relevant case was counted as one case. The

However, in the FY1955 Annual Auditchange in the counting method mentioned above

Report, while there were no audit findings

was a measure taken due to the increase andfalling"uncollected

expansion of unbalance between sub-categories

receivables" other than those concerningcaused by the increase and decrease in thesocial insurance premiums, a number of audit

number of their cases.

findings for insufficient collection of social(2) Presented
measuresaudit

premiums

findings

under

the

as

audit

concerning

item

of

insurance premiums of health insurance andopinions

anddemanded

employees' pension insurance was made andMatters subject to presentation of opinions

the number of audit findings concerningor demand for measures are those wherein the

agricultural insurance projects which had

facts for which BOA presented opinions or

been set down in the FY1953 Annual Audit

demanded measures to the relevant minister orReport increased. In light of these situations,other persons pursuant to the provision of Article

the relevant items were abolished or newly

34 or 36 of the BOA Act are set down in theestablished as mentioned above.

annual audit report pursuant to the provisions of287

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Article 29, items (vii) and (viii) of the BOA Act

especially,

between

1957

and

1961,

no

to.

presentation of opinions or demand for measures

A. State of exercise until 1961

was made for five consecutive years. On the

The first matter subject to presentation ofother hand, between the mid-1950s and mid-1960

opinions or demand for measures was made ins, the number of improprieties substantiallythe "case of accountings of public corporations"decreased except for cases under sub-category ofthat was filed with the Director-General of the"subsidies", etc. thanks to the stabilized state of

Economic Stabilization Board on November 21,

society and improved execution of accounting.

1947. In this case, BOA demanded with respect

Amid such a situation, after around 1960, theretopublicwere some opinions alleging that the attitude ofcorporations and foreign trade public corporations

putting the detection of improprieties first should

to prepare the final accounts by promptly

be changed but the tendency of detecting

determining the policy of payment of expenses,

improprieties between the mid-1940s and mid-salaries of the employees, interests of the

1950s remained popular.

borrowings from the State and other relevant

B. Massive exercise in 1962theaccountingof

distribution

such

Under such circumstances, following theaccounting. During the occupation, GHQ's control

House of Representatives' Budget Committee

reached every field under the indirect rule

held in February 1961, the Committee on Audit

method, and as a result of conducting audit inheld in December of the same year also requested

response to the investigation request made by

BOA to exercise its power under Article 36 ofGHQ, BOA found that the living allowance for

the BOA Act. In response to this, in January

government officials equivalent to 0.8 month

1962, BOA decided through the deliberation andsalary was given prior to the passage of theexamination of "Priorities for Auditing" in the

supplemental budget in both communication andsamerailroad projects and thus in February 1948, BOA

examining the possibilities of presentation ofdemanded the relevant vice-ministers to avoid

opinions or demand for measures in addition tosuch fact from occurring in the future.

the audit of improprieties.

matters that serve as the basis for

year

to

conduct

auditssufficiently

Later, BOA demanded drastic improvement

As a result, eight cases, which was an

measures for laws and regulations, systems andunprecedented large number in a single year

administration to eradicate numerous cases of(1962), were reported in the FY1961 Annual

fraud found in the confused public sector

Audit Report under the title of "matters for which

accounting in the postwar days while demanding

BOA demanded measures for rectification andrectification of defects found in the major change

improvement

to the accounting system and some of them

improvement." These cases in 1962 were related

achieved significant results.

to property management and loans and althoughorpresented

opinionsfor

However, since the detection of numerous

until then similar cases had contained problems

incidents of improprieties was put first at thatfrom audit point of view, it had not beentime, presentation of opinions or demand forappropriate to categorize them as improprieties

measures were made only in a small number andand thus, BOA had been alerting the relevant
288Section 3 Audit activities

auditees by describing them in the category(1951 the Ministry of Finance Establishment"outline" which is explained (3) below.

Act)(iii) 1962: Collection of development costs in

C. State of measures taken in response topresentation of opinions and demand formeasures
The matters forwhich

opinions

the case of diverting the landfill or otherlands developed by land improvement
projects to another purpose

were(1964 Land Improvement Act)

presented or measures were demanded as well as(3) Description of the "outline"

the state of measures taken by the relevant

In the FY1949

authorities as a result thereof must also be set

AnnualAudit

Report,down in the annual audit report pursuant to theobservations made in the audit for matters otherprovisions of Article 29, items (vii) and (viii) of

than

the BOA Act.

presentation of opinions or demand for measures

improprieties

andmatters

subjecttoThis state of measures taken is usually set

were described in the Chapter and Sections

down in the annual audit report immediately

describing the audit results for each ministry,following the one in which the relevant matteragency and body in the form of comments at thefor which opinions were presented or measuresbeginning chapters and sections devoted to somewere demanded have been set down.

ministries,

D. Amendment of laws in response to thepresentation of opinions or demand formeasuresspecifically giving titles or subject lines. For

While measures taken by the relevant

Annuity in the section of the Ministry of Posts

authority in response to the presentation of

and Telecommunication said that it is preferable

opinions or demand for measures are of endlessto win a good and lucrative but modest contract

variety, here, some examples of amendment offor business management since a shortfall forlaws that were triggered by the presentation ofincorporation into liability reserves has been

opinions or demand for measures under thegenerated due to the decreased income caused byprovision of Article 36 of the BOA Act between

unexpected lapse or cancellation of contracts inthe mid-1940s and mid-1960s shall be listed (thethe insurance account.

agenciesandbodieswithout

example, the comment with respect to the Special
Account for Postal Life Insurance and Postal

years stated before the case title show the years

This part is called "outline" and in Marchin which the presentation of opinions or demand

1951, the following description principles were

for measures were made; the years in thespecified: (i) describe those that are particularly

parenthesis after the case title refer to the years innecessary instead of making descriptions on every

which the amended law was enacted and the title

ministry and agency; (ii) make business analysisof the law refers to the law which was amended).

and constructive criticism in the outline for(i) 1948: Case concerning the accounting ofspecial account for enterprise; and (iii) with

the State handled by the prefecturalrespect to government-affiliated institutions andgovernment (1948 Public Accounting Act)

other contributed associations, state the opinions(ii) 1950: Case concerning the improvement ofto their accounting system, internal control

the qualification of accounting officials

organization and financial statements as well as289

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

activities and audit results by BOA.

the constructive criticism thereof.
Later,

theabovementioned

In

description

theFY1946

AnnualAudit

Reportprinciples were reviewed in 1954 and the case of"Chapter 1 General Remarks" at the beginningmaking descriptions and the scope of subject

looked like a mere introduction to the audit

were expanded.

results, only briefly touching on the following:(4) Other reporting matters

the amount of the final accounts of the

A. Verifying the State final accounts of theexpenditures and revenues

expenditures and revenues of the State, treasury

Verification of the State final accounts of the

major amount to be carried over to the following

expenditures and revenues is conducted tofiscal year and major amount of unnecessary

officially announce that BOA has conducted

expenditure as well as the current value of theaudits on the accuracy of the statements and thenational property and the types and numbers ofadequacy of financial management. It is an

State-owned bodies. They were also described inimportant matter wherein BOA states that it has

just a few pages (the annual audit report at that

confirmed the final accounts in the annual audit

time was written vertically in a sheet of A5-size

report and submits it to the Cabinet, which

paper).

acknowledges it and submits the final accounts to

C. Description of the overview of the audit
activities

net total, amount of revenue yet to be collected,

the Diet.
Until the final accounts for FY1967, BOA

This part explains the overall outline of thewas preparing the annual audit report by treating

audit activities and is set down in the annual

those that are unsettled by using payment inaudit report with the recognition that it is usefuladvance or payment by rough estimate as

for the understanding of the audit activities andunconfirmed

audit results.

amounts.

In

these

cases,

unconfirmed did not refer to a contrary conceptThis part has also been gradually expandedof the verification of the final accounts mentioned

between the mid-1940s and mid-1960s while

above and instead, the expression of unconfirmedchanging its contents (the numbers in theamount was used only for those that were foundparenthesis in each beginning shows the fiscal

in the final accounts confirmed and whose

year of the annual audit report in which theappropriateness cannot be found by the time ofdescription was first made)preparation of the annual audit report.

(FY1946) Scope of audit (Scope of audited

B. Description of the outline of the audit
subject matters

State accounts, State-owned bodies

This part explains the outlines such as thenumbers thereof and name of thescope of auditees including State, government-

juridical person and other relevant

affiliatedmatters)

institutions andotherand subsidized bodies as wells as theState-owned

bodies, their numbers and final accounts and(FY1950) Results of in-office audit (number ofbusiness results. It is set down in the annual audit

books and pages regarding audited

report with the recognition that it is useful andstatements

thus necessary to the understanding of the audit

documentary evidence), number of
290ofaccounts

andSection 3 Audit activities

system.

inquiry letters sent

(1) Deliberation system of the annual audit
reportD. Description of the outline of the audit
results
This part explains the overall outline of theA. Establishment
Committee

audit results. However, between the mid-1940s

of

the

AnnualReportand mid-1960s when this part was introduced,

In September 1947, the "Rules on Audit

only the improper amounts found in improprieties

Report Committee" was enacted and the Audit

were presented and the amount of improper/

Reportunreasonable matters other than improprieties

Secretariat. The committee was chaired by thewere not presented in the outline of audit results.

Deputy Secretary General while the members

Committee

wasestablished

in

the

consist of the Senior Directors and othermembers of the Secretariat. When the Senior

2. Deliberation of the annual audit report
In preparing the annual audit report, careful

Directors of each audit Bureau submit to thedeliberation is carried out so as to avoid any

Secretary General documents concerning theerrors in the determination as the criticizing

matters that must be set down in the annual audit

authority. The deliberation system was renewed

report, such submission must be made via thein association with the establishment of a double-

Audit Report Committee and the Committee mustlayered organization consisting of the Audit

provide a draft report of individual audit results

Commission and the General Executive Bureau

after deliberating and marshalling the documents

pursuant to the new BOA Act, but the basic partand then submit them to the Secretary General.

of deliberations took over that under the former
Deliberation system after the mid-1940s

General Executive Bureau

Audit
Commission

Audit report

The following
procedures wereintroduced in Feb. 1950

Secretary General

Audit Report
Committee

Audit Report Deliberative
Committee (Audit Report
Coordination Committee
from Feb. 1951)
Bureau Audit Report
Committee

Inquiry letters
Each Audit Division

Auditees
Written replies

B. Adoption of the peer review system

Committee had a BOA reviewer who examines

In addition to its members, the Audit Report

the submitted documents and conducts peer291

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

review prior to the deliberation. The reviewer
verifies the accuracy of the facts and examines
the points made in the draft from a third party
viewpoint

andreports

theresults

totheCommittee. This kind of peer review system wasalso adopted in the General Meeting (a majority
consensual decision-making

body

under

the

former system comprised of the President of theBoard of Audit, Directors General and Directors

The Audit Commission meeting room in the former BOA
office building(Senior Director) who were tenured "Members"
and wherein important matters were to be decided(2) Changes in the deliberation system of theannual audit reports

in the meeting) in order to secure objectivity andAfter a few years, slight changes were madecredibility of the determination.
C. The Audit Commission and the deliberation
systemto the deliberation system of the annual audit

The draft report of individual audit results
which has been deliberated by the Audit Report

A. Establishment of the Bureau Audit Report
Committee (February 1950)

Committee is proposed to the Audit Commission

In reflection of the postwar turmoil andplan as follows.

after approval is made by the Secretary Generalotherrelevant

representing the General Executive Bureau. The

improprieties proposed by the Senior Directors ofdraft finalized by the Audit Commission is voted

the audit bureaus sharply increased, making thethrough deliberations in three stages staring fromAudit

the first reading to the third reading stage

established in the Secretariat very busy withpursuant to the "Detailed Regulations on the

deliberations.

Agenda of the Audit Commission" decided inabovementioned

August 1947.

Committee" was abolished and the "Rules on

ReportDeliberation

This three reading system is named after thesituations,

Committee
Thus,

of

in

" RulesAudit

thenumberwhich

Februaryon

had

Report"

been

1950,

Audit
was

of

the

Reportnewly

system used in the British Parliament where theadopted. As a result, a "Bureau Audit Reportbill was deliberated three times and the secretary

Committee" (Bureau Committee) was establishedread aloud the bill each time when the printing

intechnology was immature. In the first reading, theDeliberative Committee" was established in theoutline of the bill is discussed and in the second

Secretariat. The Bureau Committee is chaired byreading, the details are deliberated and finally, inthe Director General while the members consist

the third reading, decision is made based on theof Senior Directors and other relevant members

overall examination. Similar to the peer reviewof the bureau.

eachbureauwhilean"AuditReportThe Senior Director of each audit bureausystem, this system was also adopted at thesubmitted to the Bureau Committee a draft report

General Meeting in the prewar days.

of individual audit results which was deliberated
and
292

then

submitted

to

the

Audit

ReportSection 3 Audit activities

Deliberative Committee. The Bureau Committee

audit reports were submitted to the Diet around

conducted the first and second deliberations. In

January to February.

addition, the peer review system was also

In this regard, after the war, the timing ofadopted in both the Bureau Committee and Audit

submission of the final accounts to the Diet was

Report Deliberative Committee.

stipulated to be "the following fiscal year"

B. Establishment, etc. of the Audit Report
Coordination Committee (February andMarch of 1951)

pursuant to the provision of Article 90 of theConstitution of Japan, while the time limit for
submitting the final accounts to BOA by theon

Cabinet was fixed to be November 30 of thewas wholly

following fiscal year pursuant to the provision ofamended and the Audit Report Deliberative

Article 39 of the Public Finance Act. This

Committee under the Secretariat became theprovision of the Public Finance Act was added to"Audit Report Coordination Committee." In

the original draft submitted by the Ministry ofaddition, in March 1951, deliberations at the

Finance in response to the opinions of BOA

Bureau Committee were separated into threewhen it was adopted in 1947 with an expectation

stages (since 1970, they have been named as thethat audit be conducted with sufficient time by

first reading stage, second reading stage and third

speeding up the timing of submission of the final

reading stage, respectively).

accounts to BOA.

In

February

1951,

Deliberation of Audit

the

Report"" Rules

As described above, although the timing of
3. Submission of annual audit reports to the
Cabinet and the Diet

submission of the final accounts to BOA was

In this part, matters associated with the

improprieties made between the mid-1940s andhandling of the final accounts and the annual

mid-1950s required time to marshal, and thus

audit report thereof by the Cabinet and the Diet

submission of the annual audit reports to theshall be explained.

Cabinet was made not later than late-January but(1) Timing of submission of the final accounts
and annual audit report

particularly earlier than that until the FY1950

In the prewar days, timing of submission of

Later, in response to the demand for early

the final accounts and annual audit report wasreflection of the results of the deliberation of the

only provided in the Public Accounting Act that

State's final accounts to the budget drafting, thethe final accounts should be submitted to thetiming of the Cabinet's submission of the final

ordinary session of the Diet which was held after

accounts to BOA gradually became earlier, now

the end of the fiscal year. Therefore, the final

becoming October, while the annual audit reports

accounts are submitted to BOA from the Cabinet

have been submitted to the Cabinet by mid-around December to January of the following

December since FY1954. In addition, since FY

fiscal year, the annual audit reports were1955, the final accounts were submitted to thesubmitted to the Cabinet by BOA around the end

Diet every December based on the provision ofof that December to the beginning of February of

Article 40 of the Public Finance Act which

the next year and the final accounts and annual

prescribed that final accounts be submitted to themade slightly earlier, many audit findings ofAnnual Audit Report.

293

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

ordinary session of the Diet of the following

occupation

in

which

GHQ's

intention

fiscal year.

absolute

and

under

an

(2) Correction of annual audit reports after
the submission to the Cabinet

international situation of outbreak of the Korean

extremely

was
tense

War.

Under the occupation by the Allied Forces,
translations of important documents of the State

4. Follow-up of improper/unreasonable mattersand other relevant entities were required to be

BOA conducts follow-up of the improper/

submitted to GHQ, and this was no different for

unreasonable matters set down in the annual audit

annual audit reports prepared by BOA.

reports to make the audit findings effective
instead of simply stating them in the report.

Amid such a situation, although the FY1950

Follow-up

Annual Audit Report was submitted to thematters include

whethertheCabinet on January 18, 1952, there was a request

damage incurred by the State or State-owned

on January 31 from GHQ to which translations

bodies has been rectified or what corrective

were submitted suggesting reconsideration for themeasures have been taken to prevent any

audit findings of improprieties regarding therecurrence. While follow-up activities have been

Police Reserve Force. Specifically, GHQ asked

continuously conducted in the postwar days, theBOA to understand such relevant circumstances"Rules on Audit Affairs" providing the methodthat among the 25 improprieties, those for whichand procedures of audit affairs were wholly

BOA

made

procurement

audit
of

findings

goods

relationtoamended in 1960 to include the matter for which

executionoffollow-up should be made and the contents

in

and

thereof.

construction works included cases where the staff

The major follow-up activities for improper/

members of the Civil Affairs Section of GHQ
directly took procedures for procurement due tounreasonable matters shall be explained below.

urgent(1) Follow-up on rectification measuresnecessity

at

the

time

when

the

organizational structure of the Police Reserve

This follow-up activity is continued until theForce was yet to be developed or cases where thedamage incurred by the State or State-owned

Police Reserve Force made purchase based on thebodies is rectified with respect to the audit

recommendation of the advisory group of GHQ

findings made in improprieties. In this follow-up

and thus the Police Reserve Force could not be

activity, for example, BOA looks into whether orheld substantially responsible for such cases.

not insufficient revenue collection was rectified,

Since BOA had not received any explanation

whether or not excessively paid social security

on these circumstances in the process of audit, it

benefits or excessively granted subsidies have

hastily held the meeting of the Commissioners

been returned, whether strengthening work or

and reexamined the cases, resulting in the

improvement work has been made if there weredeletion of 12 cases from the annual audit report,

any inappropriate designs or defects in thethe breakdown of which were 10 cases of

construction work or whether refund has been

articles, one case of budgetary accounting andmade if there were any illegal acts by the official.

one case of construction.

This state of corrective action is related to thenecessity of adjudication of the liability forThis was a unique case during the period of294Section 3 Audit activities

indemnity and if no corrective action is taken,(3) Follow-up on disciplinary action against
the officials concerned

BOA is to examine the necessity of adjudication.

This

BOA has conducted audits for improprieties

follow - up

activity

aims

atuntil the corrective actions are completed forunderstanding the status of disciplinary action

them ever since 1947. The oldest such case(not financial disposition) taken by the auditees

where a large amount of revenue was yet to bewith respect to the officials involved in the cases

collected was the audit finding reported in the FY

that were reported as improprieties.

1946 Annual Audit Report. This was related to

The officials concerned include supervisors

the situation where the refund was required due

and officials in charge while the type ofto the necessity for settling the payment made in

disciplinary actions include those under theadvance or payment by rough estimate madePublic Service Act as well as administrative

mostly by the former Ministries of Army andactions such as warning and notice. While mostNavy or the payment for goods disposed by themcases subject to disciplinary action under the

but was yet to be collected at the former

Public Service Act are cases of illegal acts,

Demobilization Agency. Since the debtors weredisciplinary actions are made in the case of fraud.

designated as closed institutions or had become

There are cases where BOA must request theoverseas companies, about 38.5 million yen was

auditees to take disciplinary actions depending on

yet to be collected.

the kind of actions taken by them.

While there is such an old case like this,Subsection 5

most of the cases where the corrective action had

Reflection of audit results

not been completed were those related to the
1. Operations concerning the Diet

illegal acts of employees. Most of the persons
who conducted illegal acts served a sentence and

The ties between BOA and the Diet have

had insufficient resources for compensation andbecome closer compared to the prewar days

thus this tendency is no different these days since

under the former BOA Act, since the role of thethe mid-1940s.

deliberation(2) Follow-up on preventive measuressubmitted to the Diet, result of which was

improprieties

theannualaudit

orpresented

reportopinions

final

accounts

Institutionally, it is provided as follows: (i)taken by the auditees with respect to the mattersinState'srecognition.

purpose of understanding the preventive measures
down

the

intended to be reflected in the budget, has gainedThis follow-up activity is conducted for the

set

of

as

the Cabinet shall submit the final accounts

andtogether with BOA's annual audit report to theDiet (Article 90 of the Constitution of Japan); (ii)demanded measures.
With respect to presented opinions andfor the purpose of giving a briefing on the annual

demanded measures, the status of subsequent

audit report, the Commissioner may appear

measuresbefore the Diet (Article 30 of the BOA Act and

taken

by

the

auditees

includingpreventive measures are required to be set down

Article 72 of the Diet Act).

in the annual audit report as stated above.

(1) Deliberation of the State's final accounts at
the Diet295

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

until the decisions were made for the FY1958

A. Decision for the final accounts
Under the provisions of the new Constitution

final accounts, the matters stated in (ii) were noof Japan, it is provided that "the Cabinet shalllonger included in the draft decision since theprepareits

deliberation of FY1959 final accounts due to theconsideration and decision a budget" (Article 86

same reasons mentioned in the House ofof the Constitution of Japan) while it is provided

Representatives).

that "Final accounts of the expenditures and

B. Deliberation of the State's final accounts at
the Committee on Auditand

submit

to

the

Diet

for

revenues of the State shall be audited [. . .] andBOA was not

submitted by the Cabinet to the Diet, together

allowedtoattendthewith the statement of audit" (Article 90 of thedeliberation of the Committee on Audit in theConstitution of Japan); the two terms "decision"days when the former BOA Act was in force andand "submission" are used separately. Thus, thedeliberations were conducted by reading thetreatment method of the final accounts which are

annual audit report and the government's written

the results of execution of the budget adopted byexplanation and hearing the explanation given by

the decision of the Diet has been discussed, but

the government delegate. However, as a result ofso far, the decisions on the final accounts havestipulation of Article 30 of the BOA Act and

been

of

Article 72 of the Diet Act, the Commissioner was

Representatives and House of Councilors and theallowed to appear in the Diet and nowadays, thedecision by the Diet itself has not been made.

President of BOA attends the Committee on

madeseparately

at

the

House

The contents of the draft decision are mainly

Audit when requested and the relevant Directors

consisted of the following matters in both the

General attend the Committee on a regular basis.

of

The final accounts had been deliberated

Councilors and votes are taken collectively forbased on the policy decided in 1947 of focusing

these contents: (i) matters for warning or special

on the annual audit report prepared by BOA in

attention; (ii) opinions regarding the improper/

both Houses of the Diet but both Houses changed

unreasonable matters raised by BOA; and (iii) thethe deliberation method focused on the annual

fact that there are no objections for matters otheraudit report prepared by BOA. In 1960, thethan those mentioned above (in the House ofHouse of Representatives changed its deliberation

Representatives, decisions were made for thepolicy "to deliberate the final accounts as a wholematters mentioned in (ii) and (iii) above until thein comparison to the budget by focusing on how

FY1957 final accounts in which deliberations

the budget adopted by the Diet was executed." In

were mainly made on the annual audit report

1962, the House of Councilors changed its policy

prepared by BOA, but since the FY1958 final"to deliberate the final accounts as a wholeaccounts the matters stated in (i) above wasincluding whether or not the budget and relevant

added to the draft decision since it was decided

laws adopted by the Diet have been properly andto deliberate the final accounts as a whole toeffectively executed and thus critically discuss theunderstand how the budget had been executed. In

results of the policies."

the House of Councilors, while decisions were

(2) Major resolutions of the Diet (including
committee decisions) concerning audits

House

of

Representatives

and

House

made on the matters stated in (i) to (iii) above
296

Section 3 Audit activities

・1947 [House of Representatives and House

Public Corporations, etc. of the Committees on Auditof the House of Councilors regarding the two cases ofimproper/unreasonable matters contained in the FY
1948 Annual Audit Report
1951 The governor and relevant personnel of Ishikawa
Prefecture and the Director General of the 4th Audit
Bureau of BOA appeared in the House ofRepresentatives' Special Committee on Audit andOversight of Administration as the witness for theexamination of irregularities found in public works
expenses such as disaster recovery.
The president and other relevant personnel of theJapan Tobacco and Salt Public Corporation as well as
the President of BOA and Senior Director of the audit
division appeared in the Special Committee on Audit
and Oversight of Administration as witness for theexamination on the transportation of salt and purchaseof materials by said public corporation.
1953 Summoning of sworn witness at the subcommittee ofthe House of Councilors' Committee on Audit
regarding improper accounting of the Japan Coast
Guard and request for audit to BOA
1954 Request for audit concerning yellowed rice
Implemented field examination in Burma andThailand in response to the request for audit by theHouse of Councilor's Committee on Audit
1960 Questions on the relation between the Houses'
investigation of governmental affairs and BOA's auditof Councilors] Decision on the deliberation
policy of the final accounts
Deliberations shall be focused on the annual
audit report prepared by BOA using it as themain material but final outcome shall bepresented to the authorities concerned bymaking examination and criticism from a
political viewpoint ("Deliberation policy of theFY1945 final accounts" of the House ofRepresentatives)
・1954 [House of Councilors] Resolution on
the fulfillment of the function of BOA
The

government

shall

take

appropriate

measures to have the function of BOA fulfilled
and should thereby contribute to the rigid
enforcement of continuous audits and be fullycommitted to the prevention of occurrence ofimproprieties, saving of national expendituresand effective use of the budget.
・1960 [House of Representatives] Change to

2. Round-table conference with the financial
authorities

the deliberation policy of the final accounts

After the new BOA Act was enacted, theThe final accounts as a whole shall bestatusofBOA

improved

andappropriatedeliberated in comparison to the budget by

responses were made by ministries with respect

focusing on how the budget adopted by theto matters for which BOA made audit findings.

Diet was executed.

Yet, there were still difficulties in directly

・1962 [House of Councilors] Change to thereflecting the audit results in the budget of thedeliberation policy of the final accounts

following fiscal year.

The result of the policies shall be criticallyAs such, a round-table conference was held

discussed by deliberating the final accounts as

between BOA and budget officer of the Ministry

a whole including whether or not the budgetof Finance in around 1959. This conference was

and relevant laws adopted by the Diet haveheld not under the approval of the Audit

been properly and effectively executed.

Commission but instead at a working level(3) Major discussions at the Diet related toauditswherein

BOA

heard

reference

mattersfor

Year
Matters
1950 Summoning of sworn witness in relation to improper/
unreasonable matters contained in the annual audit
reportHeld at the Subcommittee on the Accounting ofbudget-making from one budget officer and thenauditing such as the circumstances at the time of
told such examiner what they noticed as a resultof the audit.

297

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Section 4 Overview of Audit Results
Subsection 1

Between the mid-1940s and mid-1950, Japan

Audit results between the mid1940s and mid-1960s

was striving to rebuild a new nation amid thepostwar turmoil.
In the field of public sector accounting,

1. Between the mid-1940s and mid-1950s
The FY1945 Annual Audit Report was theincluding accounting of the State, fraud andlast annual audit report formulated under theillegal acts had frequently occurred due to theformer BOA Act. BOA sent the report to thepostwar turmoil and disordered accounting. BOA

Cabinet on May 1, 1947, and presented it to thereported

Emperor on May 2, which was the day before theimproprieties during these times. The number of

day on which the BOA Act came into effect. On

audit findings hit its peak in the early 1950s, withthe following day, May 3, the BOA started its

more than 2,000 cases reported each fiscal year.

large

numbers

of

such

cases

as

operation under the new scheme.
Number of audit findings on improprieties by category(unit: number of cases)

FY

Total

Taxes

Uncollected
receivables

Budgetary
accounting

Fundmanagement

Financialstatements

Construction

ArticlesServices

Insurance

Subsidies

Illegal acts

Others

1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

175
386
623
750
1,113
1,198
1,813
2,232
2,247
2,185
1,128
501
355
292
338
579
651
616
664

68
95
216
268
288
309
399
745
693
619
177
215
161
121
115
153
200
196
181

―
―
―
44
80
62
45
11
10
―
―
―
―
―
―
―
―
―
―

32
44
62
63
101
40
10
8
5
10
2
3
―
―
―
―
―
―
―

―
―
―
13
8
―
―
―
―
―
―
―
―
―
―
―
―
―
―

―
―
―
12
30
―
―
―
―
―
―
―
―
―
―
―
―
―
―

4
20
18
49
61
62
34
51
118
128
60
19
9
10
17
17
17
31
25

34
71
154
128
157
122
89
76
66
58
35
26
12
10
8
20
18
16
6

3
8
22
―
32
27
11
11
7
6
3
3
1
―
―
4
1
4
―

―
―
1
―
―
―
―
―
―
398
214
11
33
22
22
29
36
23
38

8
69
56
―
137
500
1,166
1,279
1,114
907
598
194
107
111
159
346
364
333
403

7
10
44
147
193
72
45
36
38
51
30
24
30
16
13
10
9
7
5

19
69
50
26
26
4
14
15
196
8
9
6
2
2
4
―
6
6
6

298

Section 4 Overview of Audit Results
Number of presented opinions and demanded measures
Year ofissuance

Total

Article 34of theBOA Act

1947
1948
1949
1950
1951
1952
1953
1954
1955
1956

2
4
―
4
―
―
2
1
―
1

―
2
―
2
―
―
―
1
―
―

Articles
34 and 36of theBOA Act
2
―
―
―
―
―
―
―
―
―

(unit: number of cases)

Article 36of theBOA Act
―
2
―
2
―
―
2
―
―
1

Year ofissuance

Total

Article 34of theBOA Act

1957
1958
1959
1960
1961
1962
1963
1964
1965

―
―
―
―
―
8
11
14
16

―
―
―
―
―
3
3
2
1

BOA

In response to the high frequency ofdemanded

Articles
34 and 36of theBOA Act
―
―
―
―
―
―
―
―
―

measuresof

Article 36of theBOA Act
―
―
―
―
―
5
8
12
15

appropriate

improprieties, BOA presented its opinions andexecution of receiving inspections (FY1954;

demanded measures for a systemic reform todemanded measures (Article 34 of the BOA

promote appropriate accounting. In accordanceAct)) in July 1954, demanding the improvement

with

of

of the situation. Moreover, in the overview of the

improvement of the quality of the accounting

annual audit reports in those fiscal years, BOA

officials (FY1949; presented opinions (Article

consecutively dedicated a whole section to

36 of the BOA Act)), the government decided todemand the improvement of goods accounting, asestablish a training center (current Accounting

there had been large numbers of audit findings ofCenter) under the Ministry of Finance to provide

improprieties in this area.

thepresentationofanopinionspecialized training for the accounting officials of
2. Between the mid-1950s and mid-1960s

individual Ministries. In the field of subsidy

Between the mid-1950s and mid-1960s,

administration, given that there were large
numbers of cases of improper accounting in

Japan

was

movingtowardrelation to such projects as disaster recovery

independence and high growth.

economic

constructions, BOA presented opinions on acts

Driven by BOA's efforts such as intensive

resulting in expenditures in the field of subsidy

crackdown on improprieties between the mid-administration (FY1952; presented opinions

1940s and mid-1950s and opinions presented and(Article 36 of the BOA Act)) in July 1953, in

measures demanded to prevent their recurrence,

order

of

the government worked on the enhancement ofadministrative operations for disaster assessment

public sector accounting systems from 1955, suchworks and on-site investigations and to demandas establishing

the clarification of the relationship between

Execution of Budget Pertaining to Subsidies insubsidy laws and regulations and the Public

July

Accounting Act, with the aim of clearly defining

Management Act in May 1956, and amending thesubsidy-related responsibilities. In response to the

Public Accounting Act in December 1961 tohigh frequency of defective construction works,

include clear provisions regarding inspection andtopromotetheimprovement

299

1955

and

the Act
theonRegulation

State - Owned

of

Goods

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

supervision obligations for contract works. In line

related works, to cost estimations for construction

with the stabilization of social and economic

projects, material and equipment procurement,

situations,sectoroperational matters regarding financing, social

accounting showed a significant improvement,

insurance, etc., and basic accountancy. Contrary

with the number of impropriety cases rapidly

to the presented opinions and demanded measuresdecreasing from 2,185 cases in FY1955 to 1,128

between the mid-1940s and mid-1950s, many of

in FY1956, 501 in FY1957, and to 355 in FY

the audit results were made with the objective of

1958.

economy and efficiency.

thesituationofpublicWhile the number of impropriety cases had

As seen above, the early 1960s was adecreased, the number of presented opinions andtransitional period for audit activities. This wasdemanded measures was small in the late 1950s,

what people then called "an audit turning point."

as BOA had continued to prioritize the correction

Below, audit results between the mid-1940sof audit findings on improper accounting. In

and mid-1960s are described by category ofparticular, BOA did not present opinions or

major policy area and other matters.

demand measures in five consecutive years from1957 to 1961. Amid such situation, comments

3. Audit results
settlements

were made to the effect that BOA should

relatedtoend - of - war

proactively invoke Article 36 of the BOA Act, at

In the late 1940s, one of the first things

the meeting of the House of Representatives'

BOA addressed in the midst of postwar turmoil

Budget Committee in February 1961, and also at

was audit on matters related to end-of-war

the meeting of the House of Representatives'settlements. The audit in this area was mainly

Committee on Audit in December 1961. In

conducted on [1] the management and disposition

response to such comments, BOA carried outof military property that used to belong to theaudit for the following year (1962) with a policy

former Army and Navy, including what is called

to pay due attention to matters that require"special articles" (such as weapons and militarypresentationforsupplies), remaining ships, and real estate, [2]measures and to prompt processing of works

expenditures for end-of-war settlement, which

related to such matters, while also working on the

covered the costs of occupation by the Allied

detection of improprieties. During this year, BOA

Forces, and [3] various distribution

presented its opinions and demanded measures

corporations, foreign trade public corporations,for as many as eight cases. Subsequently, theetc. that were established for economic control

number further rose to eleven in 1963, and to 14

after the war. BOA vigorously conducted audits

in 1964, resulting in making many audit resultson such end-of-war settlements related mattersfor issues that had not been addressed in the pastand made a number of audit findings under aannual audit reports.

new organizational structure that had beenof

opinions

anddemandsignificantly

In the early 1960s, BOA presented its

enhancedandpublicstrengthened

opinions and demanded measures for 33 cases,

accordance with the newly enacted BOA Act.

which addressed a wide range of issues, from

(1) Special articles

in

The Allied Forces presented a policy for thenational property management, subsidy and loan300

Section 4 Overview of Audit Results

disposition of weapons and other goods andaddition, the Ministry had failed to fully exercise

materials, etc. that used to belong to the former

its contractual right to review Committee's

Army and Navy, according to which weapons

accounting.

were destructed, while other goods and materials

Following an instruction from the General

were first allocated to fulfill the Allied Forces'

Headquarters of the Supreme Commander for theoperational needs, and then the rest was returned

Allied Powers (GHQ) in May 1948, the Cabinet

to the Japanese government. The term "special

decided to (1) dissolve the Committee and assign

articles" originally referred to the returned goods

its duties to Industry Reconstruction Public

and materials. However, the Japanese government

Corporation, (2) cancel the arms sales contract

collected insofar as possible goods and materials,

between the Ministry of Internal Affairs andetc. that were not taken over by the Allied ForcesArms

due to being urgently released by the Army andConstruction Board to calculate the balance from

Navy before occupation by the Allied Forces, andthe date of the establishment of the Committee toreclaimed fees on goods and materials that had

the date of the termination of the contract andbeen disposed of for free, and it processed such

pay the amount payable to the Committee, andgoods and materials also as "special articles."(3) have BOA to carry out an audit before

DisposalCommittee

and

have

the

confirming said amount payable.

Among these special articles, weapons weretransferred to the Arms Disposal Committee,
which comprised of five private iron, steel andmetal companies, and were destructed anddisposed of by the Committee. However, there
were many illegal or improper cases occurred inrelation to the disposition of arms by theCommittee. Some of such cases were subject tocriminal

prosecution,

causingvariouscontroversies in the public.
Since BOA has no audit mandate for theArms

DisposalCommittee,

the

audit

was

conducted on contracts, etc. between the Ministryof Internal Affairs and the Arms Disposal
Committee. BOA reported a failure to takeappropriate action to sell disposed arms (FY
1946; improprieties), pointing out the improper
conducts of the Ministry of Internal Affairs where
the Ministry consigned disposed arms to theField audit report on disposal of weaponsCommittee without specifying the volume or
price, let the Committee determine the volume

In March 1950, the Ministry of Construction

and decided on the price based on balance

assessed the amount payable to the Arms

calculation carried out by the Committee; in

Disposal Committee at 146.22 million yen. The
301

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Cabinet Decision to the effect that the amount

deconstruction, based on the premise that thepayable is to be confirmed after an audit by BOA

companies will undertake the deconstruction

cannot be implemented according to the rules ofworks, with permission for sales and disposal of

BOA, the Ministry of Construction obtained a

the by-products that are produced in the course of

Cabinet approval for omitting this procedure

deconstruction. While the prices for selling thebefore it paid the rest of the amount. BOA

battleships to the companies were to be assessed

carried out an audit on this payment, whichandrevealed that it included a large amount of social

investigation revealed that there were dubious

expenses for entertainments, meetings, gifts, etc.

accounting practices in relation to some of thefor government agencies, etc. BOA set down incompanies. In order to clarify the balance of thethe FY1949 Annual Audit Report that such

scrapping

expenses are unreasonable spending that must

recommended the relevant authority to include

have been avoided as much as possible in thethese expenses in the budget and advised thecourse of arms disposal. BOA concluded that it isnational government to take over the disposal ofinevitable to pay up to just above 133.82 million

by-products. BOA submitted a report to thisyen, which was 12.4 million yen less than theeffect to the Diet by including this issue in theamount assessed by the Ministry of Construction.

FY1946 Annual Audit Report. Following the

Meanwhile, audit on goods and materials

Diet's approval for this proposal, the government

was extremely difficult as they were goods

changed the policy for the scrapping of naval

prepared in advance for dispatch of troops during

vessels to carry out deconstruction works by

the war and thus were outside of audit mandate.

consigning

However, in the annual audit reports up to FY

companies. Following the conclusion of the1949, BOA reported many audit findings, such as

consignment contract, BOA carried out thethat goods and materials that were supposed to be

determination of the audit subject matter for 35

paid for were transferred free of charge, theshipbuilding

process towascontractors, in March 1949, in accordance withinappropriate, sales were not recorded as revenue,

Article 23, paragraph (1), items (ii) and (vii) of

but instead, they were separately managed or

the BOA Act. In order to carry out an audit,

used to cover other non-related expenses, and

BOA established a special issue audit team undercollection and receipt of sales were delayed.

the(2) Scrapping of naval vessels

accounting expert staff. Based on the results ofdetermine the

sales

price

decided

audit

on

of

the

a

later

the

naval

works

companies,

divisions

by

to

date,

a

BOA's

vessels,

the

which

BOA

shipbuilding

weregatheringmajor

corporate

The remaining naval vessels of the former

this audit, BOA demanded from the authorities

Navy were once transferred to the Allied Forces.

the reduction of construction expenses andThese naval vessels were then returned to theincrease or correction of sales prices for the by-Japanese government based on the premise that

products in quite a few cases. These cases were

they would be all scrapped, except for those kept

set down in the FY1949 Annual Audit Report.

by the Allied Forces for special purposes.

(3) Former military property
andLand, buildings, machineries, etc. owned bytransferred to shipbuilding companies, etc. before

the former Army and Navy were taken over by

These

naval

vessels

were

sold

302

Section 4 Overview of Audit Results

the Ministry of Finance. Initially, these properties

Since September 1947, the Special Procurement

were often provided for temporary use, but thenBoard became the sole implementation agency totheir sell-off was promoted in accordance withaddress those demands.
BOA'svarious legislative measures introduced later.

audit

on

end-of-war

settlement

BOA started on the full-fledged audit on the

expenses had been conducted from the times

management and disposition of the former

when these expenses were still paid from themilitary property in 1949. As a result, it madeBank of Japan's temporary account, but it wasnumerous audit findings, such as the delay of

not until 1948, when BOA started to havecollection and receipt of royalties, rental fees andenoughsales, and excessively low sales prices. Theseestablishing two audit divisions dedicated to audit

findings were mainly included in the annual audit

under the 4th Bureau, that BOA had become able

reports from FY1948 to FY1951.

to attain sufficient audit results. Since 1949, BOA(4) End-of-war settlement expenses

further increased the number of audit findings by

numbers

ofaudit

officials

after

End-of-war settlement expenses refer tosegmentalizing audit subject matters into theexpenses to cover the facilities, materials andcategories of construction, articles, services,

services that were to be provided for thelabor, etc. and allocating officials exclusively

stationing of the Allied Forces.

work in each of these categories for a certain

These expenses were initially paid out on

period of time. This method was called "special

behalf of the government from the Bank ofissues audit." BOA reported in the annual audit

Japan's temporary account. After the approval ofreports from FY1946 to FY1952 as many as 261

the FY1946 amended general budget for revenue

audit findings, including debt burden beyond the

and

said

budget, overstatement and overestimation of

expenses were posted under a new expense item

construction expenses, etc., defective construction

entitled "end-of-war settlement expenses."

works, purchase of non-urgent, unnecessary

expenditurein

September

1946,

The accumulated amount of end-of-war

goods, receipt of disqualified goods, overpayment

settlement expenses paid from FY1946 to FYof labor costs, gas and electricity costs and1953 reached 516.8 billion yen. In particular,transportation fees.

those for FY1946 and FY1947 accounted for(5) Distribution public corporations, foreign
trade public corporations, etc.

over

30%

of

the

generalaccount

total

Following

expenditure. These expenses were a great burden

the

GHQ's

instructions,thegovernment introduced material control after theon Japan's finance during occupation.
The items included in the end-of-war

war so as to rebuild the economy and stabilize

settlement expenses were remuneration for labors

people's lives by distributing commodities equallyprovided to the Allied Forces, expenses foramong the people.

various supplies, fees for services, such as

In order to carry out material control,

laundry, cargo handling and automobile repair,various distribution corporations were establishedexpenses for the construction of barracks andin FY1947 as public corporations fully supported

accommodation facilities for soldiers' families,

by the national government. These corporations

and communication and transportation expenses.

are
303

eight

publiccorporations,

namely,thePart 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Petroleum Distribution Public Corporation, Solid

Audit Division under the 4th Bureau in line with

Fuel Distribution Public Corporation, Fertilizer

the enforcement of the BOA Act. In March 1948,

Distribution

PublicCorporation,

Liquor

BOA expanded said division as the 5th Division

Distribution

PublicCorporation,

Groceryand 6th Division under the 1st Bureau so as toDistribution

PublicFeedcarry out audits on many public corporations

Distribution

PublicOilstuff

listed above. By April 1948, BOA carried out

Distribution Public Corporation, and Foodstuffs

designation for all of the 15 public corporations

Distribution Public Corporation.

in accordance with the Regulations on the

Corporation,
Corporation,

For a while after the war, trade was

Submission of Accounts to have them submit

controlled by the national government, whichstatements of accounts and documentary evidence

designated private associations and companies toand carry out in-office audit. BOA conductedconduct practical trade operations. However,field audits, with approximately 7,000 person-

since this system was problematic in thatdays from the establishment to the settlement ofpractical operations were consigned to specificthe public corporations.

companies, four public corporations, namely, theFollowing the audits, in November 1947

Public Corporation for Ironworks Trade, Public

BOA quickly demanded measures for accounting

Corporation for Textile Goods Trade, Publicof public corporations (demanded measures

Corporation for Foodstuffs Trade, and Public(Articles 34 and 36 of the BOA Act)) to the

Corporation for Raw Materials Trade, were

Secretary of the Economic Stabilization Board. Itestablished in 1947 in the same form as

called for measures to address the unclarity

distribution corporations.

surrounding

fundamental

matters

concerning

In the same year, the government establishedpublic corporation accounting, such as thethree more public corporations, namely, thepayment policies for the payment of public

Industry

Corporation,

corporation

toemployees, due to which the public corporation

which

Reconstruction
aimed

at

Publiccontributing

industrial

even

expenses,
incapable

andofremuneration
creating

forrevitalization, Shipbuilding Public Corporation,

were

financialwhich aimed at supporting the construction ofstatements. It was the first demand for measures

ships, and Price Adjustment Public Corporation,

made after the entry into force of the current

which aimed at implementing price control over

BOA Act.
In the annual audit reports from FY1947 toimportant commodities other than those handled

FY1950, BOA reported as many as 135 cases ofby the distribution public corporations.
playedimproprieties, equivalent to 2,708.13 million yen.

significant roles in the postwar economic control.

Such case included illegal loans using money

As inflation declined and the supply-demand

stored at commercial banks, payment of unlawfulbalance improved, the economic control wasand unreasonable remunerations using fictitious

gradually scaled down toward free economy andnames, etc., improper collection of receivables,

all of the 15 public corporations were dissolved

but the most dominant impropriety was fraud

by April 1951.

such as misappropriation of public funds, with as

These

15

publiccorporations

many as 63 cases reported. The reasons behind

BOA established the State-owned Bodies
304

Section 4 Overview of Audit Results

the occurrence of such corruption were rushed

amount further increased to 305.72 million yen,establishment of public corporations, which led towhich is 2.7 times higher than the previous fiscal

implementation of operations in absence ofyear. The amount continued to increase in almost

establishedrules,

every year from there on. One of the factors for

employees with poor quality, and lack of sense of

the dramatic increase in the improper amount insecurity due to the absence of guarantee of status

FY1948 was the increase in human resources

after the dissolution of the corporations.

allocated to tax audit works, as a part of BOA's

fundamental

accounting

organizational reform of March 1948, with
Subsection 2

approximately 150 officials allocated under threeTaxes

new audit divisions for the tax field under the 1st
Audit Bureau.

Against a backdrop of social and economic
confusion, the government amended the Income

Audit findings from this period covered as

Tax Act, Inheritance Tax Act, and other laws inmany as 16 tax categories, including classified

August 1946, and introduced property tax inincome tax.

November 1946. In May 1949, the Shoup
Mission, a delegacy to oversee the Japanese tax

2. Audit cases reported in the annual audit
reports between the mid-1950s and mid1960s

system, headed by Professor Carl S. Shoup at
Columbia University, visited Japan at the request
made

Between the mid-1950s and mid-1960s,

recommendations on the overall streamlining andJapan achieved an extraordinary economic growth

optimization of national and local tax systems.

with a series of economic booms, from the Jinmu

Following

Boom to the Iwato Boom and Olympics Boom.

of

the

GHQ.

The

these

Shoup

Missionrecommendations,theMeanwhile, the improper amounts of excess

government adopted the direct taxation-oriented
tax

and deficiency in collected tax, which rapidly

administration reforms, including the introduction

grew from the late 1940s, came to a plateau andof the blue return system. Furthermore, wealthhovered around 0.3 to 0.4 billion yen as more

tax was abolished and security transaction tax

firm tax processing procedures were established

was introduced in FY1953. As seen above, tax

at tax offices, etc.

approachandimplemented

varioussystems were streamlined and optimized at a

Audit cases on excess and deficiency indizzying pace between the mid-1940s and mid-collected tax were set down in annual audit

1950s.

reports under the title of "improprieties" and"matters corrected" until FY1960, and then

1. Audit cases reported in the annual audit
reports between the mid-1940s and mid1950s

integrated under the title of "improprieties" since

The amount of excess and deficiency intransactions increased since FY1960, expanding

collected tax increased from 190,000 yen in FY

its portion in audits on the Tokyo Regional

1945 to 2.19 million yen in FY1946, and to

Taxation Bureau and Osaka Regional Taxation

113.25 million yen in FY1947. In FY1948, theBureau, the number of audit findings on capital

FY1961.
Since

305

the

volumeofsuburbanlandPart 3

Chapter 2

Audit between the mid-1940s and mid-1960s

gains rose among other kinds of income tax.

1958
1959
1960
1961
1962
1963
1964

The following table shows the improperamounts of excess and deficiency in collected tax
by fiscal year from FY1945 to FY1964.
Improper amounts of excess and deficiency incollected tax by fiscal year
Amount
FY
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957

FY
1949

1950

1951

1952
1953
1954

1955

1956

Deficiency incollected tax
million yen
0.18
2.18
113.25305.62311.44224.36236.59224.4
364.81335.92437.94348.55445.25453.83316.96272.74345.6
411.78467.53447.41

△
△
△
△
△

5.92
4.45
2.53
2.63
9.77
―
―

The following table shows audit cases

Excess incollected tax (△)
million yen△ 0.01△ 0.01―△ 0.1△ 17.98△ 18.79△ 13.83△ 20.34△ 49.04△ 62.63△ 12.73△ 7.55△ 3.82reported in the annual audit reports from the mid1940s to mid-1960s, other than those on an
excess and deficiency in collected tax.

Item
Erroneous tax refund (improprieties)
Expenditures made not in accordance with the budget (improprieties)
Claiming expenses for an unfinished building and temporarily misappropriating the money for another purpose(improprieties)
Failure to take appropriate action to purchase buildings (improprieties)
Failure to take appropriate action to carry out construction works for additional governmental buildings, etc.
(improprieties)
Payment for a fictitious name (improprieties)
Misappropriation of sales (improprieties)
Failure to take appropriate action to decide on the disposition of seized articles (improprieties)
Excess supply of paper from the government under a printing contract (improprieties)
Overpayment for purchases of lead seals (improprieties)
Payment for a fictitious name (improprieties)
Failure to take appropriate action to pay interest on refund (improprieties)
Failure to take appropriate action to refund tax (improprieties)
Failure to take appropriate action to refund tax (improprieties)
Cancellation of an approval for the submission of a blue tax return form and rectification of deficiency in collected tax(rectified matter)
Failure to take appropriate action to render disposition on delinquency (improprieties)
Failure to take appropriate action to refund tax (improprieties)
Cancellation of an approval for the submission of a blue tax return form and rectification of deficiency in collected tax(rectified matter)
Failure to take appropriate action to refund tax (improprieties)
Cancellation of an approval for the submission of a blue tax return form and rectification of deficiency in collected tax(rectified matter)

306

Section 4 Overview of Audit Results
1957

1964

Failure to take appropriate action to refund tax (improprieties)
Cancellation of an approval for the submission of a blue tax return form and rectification of deficiency in collected tax(rectified matter)
Failure to take appropriate action to refund overpayment (improprieties)

Subsection 3

the settlement of accounts; (2) payment ofSocial security

subsidies to entities that had not fulfilled the
1. Audit cases on social insurance expenses
reported in the annual audit reports

requirement that the receipt ratio of social

Between the mid-1940s and mid-1950s,

had to be 50% or more; (3) overpayment of

insurance premiums in the previous fiscal year

collected

subsidies that were calculated without noticing

premiums for national health insurance andthat the social insurance premium receipt rate

employee's pension insurance were set downreported in performance reports were false; andunder the title of "improprieties" in the FY1950(4) overpayment of subsidies due to errors in

Annual Audit Report, followed by the FY1953

calculation of income of insured persons andAnnual Audit Report and the FY1954 Annual

underestimation of municipal income.

audit

findings

ondeficiencies

in

Audit Report. Furthermore, such deficiencies
were reported in the annual audit reports every

2. Audit cases on social welfare expenses
reported in the annual audit reports

fiscal year from the mid-1950s, except for FY

Audit findings on grant for child aid

1958.
mariners'

expenses (subsidy) under the category of social

insurance premiums were reported in the annual

welfare expenses were reported as a failure to

audit reports in FY1950 and FY1951. Such audit

take appropriate action to pay subsidies

findings were reported in the annual audit report(improprieties) in the FY1950 Annual Audit

under the title of "improprieties" every year from

Report.

FY1961 to FY1990.

registering of a spending larger than the actual

Audit

findings

oncollected

The first

such

audit

findingwasAudit cases on the payment of insurance

amount necessary for the subsidy calculation.

benefits were reported as improprieties in the

Other than that, improprieties concerning theannual audit reports in FY1956 and from FY1961

reduction and exemption of childcare fees wereto FY1964. One of the major audit findings wasreported in the annual audit report in FY1956.

the failure to deduct remunerations an insured
person received during an unemployed period

3. Audit cases on public assistance expenses
reported in the annual audit reports

from the payment of insurance benefits.

Improprieties related to public assistance

Audit findings on national subsidies fornational health insurance were reported

expenses were reported in the annual audit

asreports for FY1947, FY1954 and FY1955.

improprieties in the annual audit reports from themid-1940s to mid-1970s. Major audit findings

Audit cases on public assistance expenses

were as follows: (1) overpayment of expenses

between the mid-1940s and mid-1950s were

due to inclusion of expenses for medical

reported in the FY1947 Annual Audit Report.

equipment that had not been actually installed in

The reported cases included overestimation of307

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

state contributions to public assistance andbenefits had been reported in annual audit reports

delayed collection of overpaid state contributions.

every year from FY1954. One of such cases was
the payment

Based on the results of sampling audit in FY

ofunemployment

benefitsto1953, BOA carried out a nationwide investigation

unfaithful beneficiaries who failed to report theiron permanent beneficiaries who had been in

reemployment

hospital and received medical assistance alone forworks, due to failure to carry out appropriate

six or more consecutive months in FY1954 andinvestigation on applications.

ortemporaryandshort-term

FY1955. BOA reported the results in the annual
Subsection 4

audit reports for FY1954 and FY1955, stating
that

there

was

contributions

an

due

overpayment

of

state

inadequacy

in

the

to

Public Works

1. Audits immediately after the war
In order to help people from job loss

determination of household income.

immediately after the war, Japan started toallocate budgets to public works that would

4. Audit cases on employment measure
expenses reported in the annual audit
reports
Audit

cases

on

employment

contribute to economic reconstruction, such ascivil engineering and construction projects, fromFY1946.

measureSince construction materials were in short

expenses are grouped into those related toalleviation

supply back then, budgets were allocated in an

program and those related to benefits, including

inclusive manner. Budgets for public works were

unemployment benefits.

submitted

subsidies

for

the

unemployment

altogether

to

the

Economic

The unemployment alleviation program was

Stabilization Board to have its approval. The

initiated in FY1949 to help a great number ofBoard reviewed each ministry's project plan on a

unemployed people after the war. The number ofquarterly basis, and authorized only those projects

beneficiaries reached 350,000 at its peak, butthat were found to be appropriate, which werethenthen to be carried out (authorization system forreduced

to

3,000

in

FY1994.

After

promoting the self-support of elderly people, thepublicworks).

Accordingly,

it

was

often

program was terminated at the end of FY1995.

immediately before the end of a fiscal year that
Disbursing Officers received a notification of a

Improprieties related to subsidy for thepayment plan.

unemployment alleviation program were reported
in the annual audit reports from FY1950 to FY

As a reflection of such situation, audit

1962. One of the major audit findings was thefindings on public works in the late 1940s that

inclusion of unauthorized expenses in basic

were reported in annual audit reports included a

subsidy amounts. In the FY1964 Annual Audit

number of cases reported as "inappropriate

Report,theaccounting extended beyond fiscal year," where

improvement of execution and accounting ofexpenses for uncompleted construction projects

the unemployment alleviation program (Article

were fully paid, deeming that the projects were

36 of the BOA Act).

completed by the end of the fiscal year even

BOA

presented

Improprieties

relatedopinions

toonthough it was not true. Construction works using

unemployment
308

Section 4 Overview of Audit Results

subsidies reported in annual audit reports were

projects at the time were directly managed by thelimited to similar cases that were particularly

national government. BOA's audit in 1950

malicious, such as the case where construction

revealed that five construction offices at thewas not even started by the end of the fiscal year.

Ministry of Construction were keeping funds

On the other hand, there were also manyobtained by claiming fabricated labor costs,

cases reported in annual audit reports wherematerial costs, etc. and using such funds byexpenses for completed construction projects

independent accounting, unbounded by budget

were not duly paid because the amounts agreed

rules or the Public Accounting Act (FY1949

based on the contracts exceeded the budget

Annual Audit Report).

amounts. In such cases, the shortage was covered

In response to this situation, BOA conductedby a budget obtained by fabricating a fakespecial issues audits on 47 construction offices

contract in the following fiscal year, unauthorized

across Japan―approximately one third of allloan, or fund obtained by selling out government-

construction

provided materials at hand without permission.

Construction―in the following year (1951). As aoffices

under

the

MinistryofMoreover, audit cases reported in the annual

result, there were cases of fictitious accounting

audit reports also included some cases on theequivalent to 447 million yen at 31 construction

relationship between the national and local

offices. Although a major portion of 412 million

governments where, in projects carried out based

yen that had been already spent was used toon the premise that local governments would

cover labor costs, material costs,

makeconstruction projects, approximately 5 million

certaincontributions

to

the

national

yenmake a decision to collect contributions or failed

officials, overtime allowances, benefit expenses,

to collect contributions even after a decision to

foodsuch effect. We have seen audit findings related

allowances, etc. was beyond the budget or madeto budgetary accounting, which accounted for aanmajority of audit findings on public works in the(extraordinarily improper accounting practices

late 1940s.

for

from

the

mid-1940s

as remuneration

anddrinksexpenditure
works

for

for

government, the national government failed to

However,

spent

etc.

expenses,outsideimplementedby

non-regularentertainment

the
the

budgetnational

government (FY1950; Improprieties)).

onward, audit findings on more malicious cases
which came to the center of public attention

Fictitious accounting practices for works

increased, compared to the previous cases which

implemented by the national government werecaused no actual loss and which were more about

also seen at other ministries, including theformality. The first thing that created a sensation

Ministry of Telecommunication and Ministry ofat the time was the issue of fictitious accounting

Agriculture and Forestry. Fictitious accounting at

for public construction projects, which occurredthemainly at the Ministry of Construction.

incredible improvement as a result of working on

MinistryofConstruction

showedancorrecting issues reported by BOA after its
2. Fictitious accounting for works implemented
by the national government

intensive audits. BOA also negotiated with

The majority of state-run public construction

flaws, which was one of the factors behind therelevant ministries on the elimination of systemic

309

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

fictitious accounting issue. As a result, theSubsequently, BOA carried out nationwide

authorization system for public works was

audits on the Ministry of Construction, Ministryabolished. From FY1952, budgets for publicof Agriculture and Forestry, and Ministry ofworks were integrated into budgets for theTransport under an integrated policy in 1952. As

Ministry of Construction. In addition, continued

a result, BOA made more than 500 audit

expensesfindings, which were mainly related to the

were

also

introduced

after

the

Ministry of Agriculture and Forestry.

amendment of the Public Finance Act.

(2) Implementation of assessment audit
Audits in 1951 and 1952 revealed the

3. Audits on disaster recovery projects andothergovernment - aided
construction
projects

situation of improper construction projects thatspread widely across the nation. Among such

(1) Enhancement of and audits on subsidies
for disaster recovery

cases, those related to defective construction

Japan had to go through frequent disasters

corrected by reinforcement works following

after the war, due to the deterioration of national

audits after the completion of construction

land during the war. Recovery from suchprojects. On the other hand, it was practicallydisasters required an enormous amount of money.

impossible to restore damages to national funds

Following the recommendation by the Shoupby collecting subsidies that had been already

Mission, the government enacted a Special Act

spent on overestimated designs, projects carried

which provided that the treasury would fullyout on the coattails of disasters, overlapping

cover the expenses for projects to restore

approval, etc., because of the extreme financial

buildings to the pre-disaster state and that it

hardship faced by the local governments at thewould cover two-thirds of the expenses fortime.

works and unaccomplished quality could be

When BOA was working on the formulation

projects to recover and upgrade buildings onlyoffor FY1950.

preventive

measures

for

such

improperFollowing the enforcement of this Act, BOA

construction projects, a massive disaster of an

conducted audits on disaster recovery projects

unprecedented class hit the nation in 1953. As

carried out by the Ministry of Construction in all

special acts that required the national government

prefectures in 1951. As a result, BOA discovered

to cover 90-100% of construction expenses werea number of extremely inappropriate cases in allenacted one after another, boosting disaster

prefectures, except for one prefecture, such as

recovery - related

cases

affecting the national finance.

offictitious

construction

projects,

budgetsandsignificantly

construction projects carried out on the coattails

As a result of careful consideration, BOA

of other construction projects, padded design

reached a conclusion that it was necessary toestimations, defective construction works, anddiscover predicted improper use of massive

double claiming of subsidies. The number ofnational funds due to inappropriate grants at anaudit findings on government-aided construction

early state before the initiation of construction

projects reported in the annual audit reports

projects, and take corrective measures to prevent

jumped from 17 in FY1949 to 128 in FY1950.

such wrongful practices effectively. In 1954,
310

Section 4 Overview of Audit Results

immediately after the completion of assessmentof projects, reducing assessed expenses foron disaster recovery expenses at the Ministry ofdisaster recovery projects every fiscal year. In

Agricultureorder to address such audit results, the ministries

andForestry,

MinistryofConstruction, and Ministry of Transport, BOA

improved

theircarried out audits on assessment on disaster-

workedonaffected areas in approximately four months fromassessments. As a result, the situation was

late

the

gradually improved from 1954, reducing thecommencement of construction works, with aamount of inappropriately claimed expenses tofocus on prefectures that suffered particularly

approximately 0.1 billion yen in 1958. However,significant damage.

the number of audit findings increased again in

January

to

early

May

beforeassessment

themechanisms

enhancement

of

and

on - site

BOA'syears with many disasters, such as FY1959 in

prediction was right. There were many cases ofwhich Japan was hit by the Ise Bay Typhoon,

padded claiming, such as double claiming,and FY1961 in which Muroto Typhoon No. 2 hit.

projects carried out on the coattails of the

In November 1965, BOA presented opinions on

disasters, and overestimated designs. Construction

theexpenses cut at competent ministries following

construction projects and budget assessment

the report of audit findings from BOA reached anonextraordinary amount of approximately 11 billion

presented opinions (Article 36 of the BOA

yen (18,964 cases) in total, which is broken downAct)), requesting the Ministry of Agriculture andto approximately 8.7 billion yen (16,725 cases) at

Forestry and Ministry of Construction to takethe Ministry of Agriculture and Forestry, 2 billion

bolder improvement measures based on the pastyen (2,141 cases) at the Ministry of Construction,

audit results. In 1970, the rate of audit findings

and 0.2 billion yen (98 cases) at the Ministry of

finally fell below 1%, ending the prolonged

Transport.

history of audits on assessed expenses.

The

audit

results

Construction

provedthat

projects

for

which

implementation
disasterofrecoverygovernment - aided
expenses(FY1964;expenses were approved by assessment were cut
4. Rise of defective construction works

by as much as 70% at the Ministry of Agriculture
and Forestry, and 20% at the Ministry ofWhat is remarkable about audit on public

Construction. Initially, audits on assessment on

works from this period is the high frequency ofdisaster recovery expenses faced criticisms fromdefective construction works. In particular, 100 topeople in various fields―most of them claimed

200

that such audit would exceed BOA's authority―

government-aided projects every fiscal year. The

but as the above situation became clear, suchaccumulated number of audit findings between

criticisms were faded

the mid-1940s and mid-1960s reached nearly

and

taken

over

by

audit

findings

were

made

regarding

4,000.

supportive voices standing on the viewpoint of

The majority of audit findings on defective

taxpayers.

construction works was comprised of those

In addition to ordinary audits after the
BOA

related to concrete structures, such as retaining

continued to carry out audits on assessed

walls, canals, piers (bridge abutments), debris

construction expenses before the commencement

dams, breakwaters, irrigation systems, and footcompletionof

construction

projects,

311

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

internal voids in concrete structures, since water

protection works.

would be immediately absorbed into the voids, if

One of the common causes for defective

there were any.

concrete structures was the poor quality ofIn response to frequent audit findings on

concrete itself. Such concrete structures did notindefective construction works, BOA demanded adeliberatemeasure of proper execution of receiving

diluting, insufficient compaction resulting in

inspection, etc. (FY1953; demanded measures

voids between mortar and coarse aggregates, or(Article 34 of the BOA Act)) to the heads of theinadequate curing in cold or hot weather. Thererelevant ministries and agencies in July 1954,

were also many audit findings on construction

demandingworks using concrete mixed with stones, such as

improvement

debris dams, where the ratio of stones exceeded

assigning responsibilities concerning receiving

the prescribed value or only the surface of theinspection by designating assistants to Obligation

structure was covered with pure concrete, as well

Officers as persons in charge of inspection, andas audit findings on construction of mortared(ii) clearly defining procedures, methods, etc. forstone walls, where the volume of body filling

Obligation Officers to carry out the direction andconcrete

supervision of receiving inspection conducted byhaveenoughcomposition,andstrengthdue

impropermixing,backfillingtoflaws

concrete

was

them

to

take

measuresrectification

such

as

(i)

and

clearly

their assistants.

insufficient, or the depth of embedment fell short.
In addition, there were also many audit

Driven by this demand for measures, thefindings on asphalt pavement, such as defective

Public Accounting Act was partially amended inmaterials

December 1961 to include provisions concerning

contained

inasphalt

mixture,the supervision and inspection obligations.

compaction of asphalt mixture at a temperature
lower than the appropriate temperature, andinsufficient thickness of pavement bodies.

5. Audit cases of presented
demanded measures

Audits on defective construction works were

opinionsor

carried out using destructive testing methods,

In the early 1960s, BOA presented many

when the status of construction works could notopinions and demanded many measures. In

be observed from photographs, etc. or when therelation to public works, 10 cases were set down

quality of structures was questioned as a result ofin annual audit reports from FY1961 to FY1964.

visual inspection on the appearance of theSuch cases varied widely, from those related tostructures at the construction sites, such as whenconstruction

the color of concrete varied here and there andconstruction works, to those related to project

when there were cracks or leakages in extreme

accounting. Cases on public works related to thecases.

Ministry of Construction included the following.

For example, one of the inspection methods

plans,

designs,

estimations

orstated above was to inject water in a hole drilled

Construction of overpasses, etc. (FY1964;
presented opinions (Article 36 of the BOA
Act))

in the structure from the upper concrete surface.

The Ministry of Construction had been

to examine the status of stone-containing concrete

conductingThis was an effective way to see if there were312

construction

works

to

upgradeSection 4 Overview of Audit Results

crossings of roads and railways into overpasses

from those special accounts. (ii) Contributions

with contributions from the Japanese Nationalfrom prefectural governments, etc. to be used as

Railways. Construction works for crossing points

expenses for public works for road and riverof roads and railways were delayed compared to

improvement, etc. were used as expenses forother parts, as the road entities and the Japanesegeneral administrative works at some regional

National Railways often conflicted about theconstruction

terms of construction, such as the cost sharing

expenses for acquiring assets, such as governmentand detailed designs, having failed to negotiatebuildings,

on the overall construction plan and having only

construction equipment, etc., were covered bydiscussed matters on individual construction work

prefectural

between the divisions involved in implementing

beneficiaries of projects carried out in the fiscal

the work. Some of the upgraded roads were evenyear in which such assets were obtained;left

however, such contributions from the prefecturalunused,deterioratingtheeffectsofbureaus.

Ingovernment
governments,

addition,

partofficial
etc.

ofhousing,
that

were

governments were not adjusted based on theinvestments in the construction project.

remaining value, etc. of acquired assets upon the

Estimation of equipment and other expenses
for road improvement projects (FY1963;
presented opinions (Article 36 of the BOA
Act))

completion of the projects. Such practices weredeemed as unreasonable.
Subsection 5

When selecting equipment to be used andcalculating equipment's effects, the ratio of
equipment expenses―which were under the

Educationtechnologies

andscienceroad

1. Audit cases reported in the annual audit
reports between the mid-1940s and mid1950s

construction

Audit findings on subsidies in the late 1940s

expenses, among other expenses, was inconsistent

included many cases of granting subsidies toamongconstruction projects that were uncompleted or

categoryofdrilling,

loading,

improvement

civil

engineeringleveling,

projects―toregional

expenses for

etc.

directconstructionforbureausandwere not even started.

construction offices. As there were considerable
different

Audit findings on improprieties concerning

construction projects that would be conductedsubsidies between the mid-1940s and mid-1960s

under almost the same conditions, there was awere as follows.

gaps

in

estimation

amountsforneed to carry out proper estimation based on thestandardized, optimal criteria.
Accounting for special accounts for road
improvement
and
flood
controlandcontributions from prefectural governments
etc., to public works implemented directly by
the national government (FY1962; presented
opinions (Article 36 of the BOA Act))(i)

Expenses forgeneraladministrative

works at regional construction bureaus were paid
313

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

including their assessment methods, and that the

Number of audit findings on improprieties by
fiscal year
FY
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954

Number of
Cases
―
―
12
10
11
3
4
26
32
18

FY
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

connection between the scope of responsibilities

Number of
Cases
27
8
2
2
―
―
―
6
7
4

of Obligation Officers (the head of the civilengineering

divisionofgovernment,

etc.)

relevant

andtheprefectural
laws

and

regulations should be clarified.

2. Audit cases reported in the annual audit
reports between the mid-1950s and mid1960s
As for subsidies other than those for public

For example, the above audit findings

works between the mid-1950s and mid-1960s,

included those related to the lack of contracts forseven cases of improprieties related to state

the subsidy for the construction of new public

contributions to compulsory education expenses

junior high school buildings, subsidy for theof the Ministry of Education, Science and Culture

restoration of public elementary and junior highwere reported in the FY1955 Annual Audit

school buildings, etc., which were provided inReport. Said state contributions were included inline with the introduction of "six grades/three

the local finance equalization grant in 1950, in

grades school system" lead by the Ministry ofaccordance with the recommendation by the

Education, Science and Culture from FY1947 toShoup Mission, but then revived as contributions

FY1949. Such cases were caused by complicatedin line with the enactment of Act on National

administrative

delayedTreasury's Sharing of Compulsory Education

implementation of budgetary measures for public

Expenses in 1952. In the seven impropriety cases

works.

in FY1955, approximately 23.3 million yen wasproceduresandOn the other hand, there were many cases ofoverpaid as remunerations for clerical officials at

improper construction projects carried out by theprefectural education offices falling outside of the

Ministry of Education, Science and Culture andscope were not excluded when settling said

other ministries, which were not suitable forcontributions.

disaster recovery aid program between the mid-In

FY1962,

cases

where

funds

were

1940s and mid-1950s. BOA presented opinions

independently retained and managed outside ofon obligation in subsidy administration (FYthe budget, by such means as not sending the1952; presented opinions (Article 36 of thecollected revenues to the national treasury, were

BOA Act)) in July 1953 to the Minister ofreported as improprieties. Four cases related to

Finance, the Minister of Education, Science andthe Ministry of Education, Science and Culture

Culture, Minister of Health and Welfare, Minister

were set down in the annual audit report.

of

At the same time, there were some audit

Transport, Minister of Labour, and Minister ofcases related to the administration of national

Construction, stating that competent ministries

property, including national universities. The FY

must urgently improve administrative operations,1961 Annual Audit Report included demand forofAgriculture

andForestry,

Minister

314

Section 4 Overview of Audit Results

measures titled "matters for which rectification

experiment forests for research, etc., for purposes

and improvement measures were demanded inother than the original purpose, such as farming

relation to the administration of nationaland site for building general housing, etc., unused

property of national schools" (Demanded

lands and buildings, and unauthorized long-term

Measures (Article 34 of the BOA Act)), which

lending of lands to external parties.

contained 16 audit findings concerning three

Between the mid-1940s and mid-1960s,

cases, summarizing the situation of administration

there were some audit cases related to basicof national property. Such cases included use ofaccountancy reported in annual audit reports. The

administrative

following are examples of such cases.

FY
1947
1948
1949
1959
1962
1963

assets,

such

as

farms

and

Item
Inappropriate accounting extended beyond fiscal year (improprieties)
Failure to take appropriate action to spend the reserve fund (Hokkaido University, improprieties)
Failure to take appropriate action to purchase land (Tokyo Vocational Sports School, improprieties)
Improvement of the handling of medical income at national university hospitals (opinions for improvement)
Inappropriate accounting extended beyond fiscal year (University of Tokyo, improprieties)
Retaining and managing funds independently outside of the budget by not sending collected revenues to the nationaltreasury (University of Tokyo and other three universities, improprieties)
Retaining and managing funds independently outside of the budgets by requesting extra fund for remunerations, etc.
(Hokkaido University, improprieties)

Subsection 6

integrate the management of the National Safety

DefenseForces, which is the successor to the Police
After the mid-1940s, the Korean War broke

Reserve Force, and the Coastal Safety Force,out on June 25, 1950. The U.S. Forces stationing

which had been established under the Japanin Japan moved to the Korean Peninsula,

Coast Guard in April 1952.

spearheading the UN Forces. Meanwhile, GHQ

On March 8, 1954, the Mutual Defense

decided to allow the Japanese government to take

Assistance Agreement between Japan and thenecessary measures in order to maintain domestic

Unitedsecurity. Following this decision, the Order forbolstering Japan's defense capacity. In July 1954,

the Police Reserve Force was promulgated andthe two defense laws, namely the Defense

enteredAgency Establishment Law and the Self-Defense

into

effecton

August10,

1950,

StatesofAmericawasconcluded,

Forces Act entered into effect. The National

establishing the Police Reserve Force.
As the Treaty of Peace with Japan entered

Safety Forces and the Coastal Safety Force were

into effect on April 28, 1952, the Allied Forces'

reorganized into the Ground Self-Defense Forceoccupation of Japan that lasted for six years andand Maritime Self-Defense Force, respectively. In

eight months finally came to an end. In May

addition, Air Self-Defense Force was newly

1952, the number of officials of the Police

established. The Defense Agency centered on the

Reserve Force was increased to 110,000. In

current three self-defense forces was established

August of the same year, the National Safety

as an external organ of the Prime Minister's

AgencyOffice.

Act

wasenacted,establishingtheIn line with the establishment of the Defense

National Safety Agency as an organization to315

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Agency, the First Staff Office of the National

Audit cases reported in the annual audit reports by fiscal
year and by category(unit: number of cases)

Safety Agency was reorganized into the Central

Improprieties

anexternal organ to the Defense Agency in August
1958. In November 1962, the Defense Facilities
Administration Agency was established as anexternal organ to the Defense Agency to takeover and integrate the duties of the Construction
Headquarters under the Defense Agency andduties of the Procurement Agency.

1. Audit cases reported in the annual audit
reports between the mid-1940s and mid1950s

Presented
opinions

into

Otherswas reorganized

Illegal acts

Minister's Office,Subsidieslabors as an external organ to the Prime

Services

1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964

and provision of various compensations andArticleswhich had been dealing with military base issues

Construction

FY

Defense Agency. The Procurement Agency,

Budgetary
accounting

Procurement Office as an organ affiliated to the

6
―
―
―
―
―
―
2
―
―
―
―
―
―
―

―
―
―
2
5
4
3
1
1
2
4
4
―
1
―

4
6
8
24
17
9
8
8
4
1
―
2
4
4
2

1
―
―
―
―
―
1
1
1
―
―
2
―
―
―

―
―
―
―
―
―
―
―
1
―
1
―
3
3
3

2
1
―
―
―
3
1
―
1
―
1
―
―
―
―

―
―
―
―
3
―
―
1
1
―
2
―
―
―
―

―
―
―
―
―
―
―
―
―
―
―
―
1
―
1

by

(1) Characteristics of the audit cases onarticles reported in the annual audit
reportsincreasing staff, equipment and facilities rapidly

Audit cases concerning articles reported inin a short term from the establishment of theannual audit reports included audit cases related

Police Reserve Force to immediately after theto the Police Reserve Force, such as failure toestablishment of the Defense Agency. For thistake appropriate actions to purchase articles

reason, many cases of improprieties related to(improprieties) in FY1950 and purchase of aarticles, construction works, etc. were reported inlarge quantity of non-urgent articles, etc.

annual audit reports during these times.

(improprieties) in FY1951. Many of these audit

Japan's defense capacity was built

The number of audit cases reported in thefindings were related to commodities, such as

annual audit reports by fiscal year and category

shoemaking equipment, absorbent cotton, andfrom FY1950 to FY1964 is shown below.

polished rice. From FY1952 to FY1954, failure
to take timely measures for the purchase ofarticles (improprieties) in FY1952, improper
decision on the contract method and thedetermination of the prices (improprieties) in
FY1953standards

andfor

impropermaterials

decision
and

on

the

equipment(improprieties) in FY1954 were reported in theannual audit reports. Such audit findings wererelated to peripheral devices of the National
316

Section 4 Overview of Audit Results

Safety Agency, such as vehicles, radio, andwithout having set the estimated value of the

supporting equipment for blank cartridges. Fromcontract and started construction before enough

FY1954, the number of audit cases increased instudy. In yet another case, the design was

relation to the Defense Agency's equipment, such

frequently changed due to commencing theas aircrafts, ships, mines, and live cartridges.

construction work without sufficient study, andthe officials in charge processed such changes by

Audit findings related to the above audit

themselves, failing to take formal procedures.

cases reported in the annual audit reports
included hoarded or unused articles due toimproper procurement plans, expensive purchaseprices,

uneconomical

procurementdue

2. Audit cases reported in the annual audit
reports between the mid-1950s and mid1960s

toimproper standards or designs, and damages to

The number of audit cases reported innational treasury due to improper inspections.
(2) Audit cases on construction reported in theannual audit reports

annual audit reports showed a decline in the mid-

Audit cases concerning construction reported

articles and construction projects were on an

in annual audit reports included those related toincreasing trend. In addition, improprieties andthe National Safety Agency and Defense Agency,

presented opinions related to subsidies started tosuch as failure to take appropriate action to

be seen.

carry out construction works (improprieties) in(1) Audit cases on articles, etc. reported in theannual audit reports

1950s. Among them, audit findings related to

FY1953, and failure to take appropriate actionto

implement

construction

As with the period from the mid-1940s toprojects

mid-1950s,

audit

construction for the National Safety Agency's

reported

annualconstruction projects reported as audit cases ininadequate

the FY1953 Annual Audit Report were carried

expensiveprocurements,

out by either the National Safety Agency itself or

specifications

anddesigns,by the Ministry of Construction or Hokkaido

inspections.

Development Agency. The audit cases included

Lookingataudit(improprieties)in

FY1954.

Designing

and

in

cases

concerning

audit

procurement

reportplans,

articlesincludedunreasonably
inappropriate
and

cases

improperconcerning

excessive construction works due to improper

construction reported in annual audit reports,

designs, and payment of construction fees without

following the establishment of the Defense

havingor

Agency and Air Self-Defense Force in FY1954,

inspection on the construction works. In addition,

there was a dramatic increase in the number ofvarious improprieties were found for the Defense

air station-related audit cases, such as those

Agency's construction projects in FY1954. For

related to runway expansion, repair, etc. In theexample, in one case, the Agency divided one

late 1950s, there were many audit findings on

construction project into multiple projects as it

improper runway designs and estimations. Suchrushed to commence the construction works

audit

before the completion of planning and designing.

improper estimated value of the contract, andIn another case, the Agency concluded a contract

improper supervision or inspections.

conducted

propersupervision317

findings

included

improperdesigns,

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

With regard to the agricultural policy during(2) Other audit cases reported in the annual
audit reports

these years, structural improvement projects wereAudit cases related to subsidies reported in

implemented in order to cope with the immediate

annual audit reports included those related to thetask of increasing food production and ensuring"subsidy for construction works to prevent special

equitable and smooth distribution of food. In thelosses." This subsidy was granted to people inarea of food production increase, national andagricultural, forestry or fisheries business to coverprefectural cultivation and reclamation projects

costs for construction works to prevent damages

were carried out. Subsequently, the focus of theto their business caused by actions of occupying

project shifted from land reclamation to land

forces. The granted value was increasing year byimprovement. Following the enactment of theyear. In FY1958 and FY1960, failure to takeLand Improvement Act in 1949, Japan geared up

appropriate action to grant subsidies forfor the full-fledged infrastructure development for

construction works to prevent special losses

agricultural production. These land improvement(improprieties) were reported in the annual audit

projects,

reports. In addition, in FY1963 and FY1964,

governments, etc., started as comparatively small

failure to take appropriate action to grant

projects that were mainly carried out for the sakesubsidies for noise prevention projects forofeducational institutions, etc. (improprieties)

reclamation

was reported in the annual audit reports.

prefectural governments, etc. on behalf of theled

farmers.

byThe

prefecturalstate-runprojects

were

and

municipal

cultivation

andcarriedbyoutnational government, which was facing labor

Opinions presented in relation to services

shortage.

included opinions presented for optimized
accommodation and procurement of shared

On the other hand, the deterioration of land

equipment among the Ground, Maritime andfrom the war, followed by a series of natural

Air Self-Defense Forces (presented opinions

disasters, caused great damage to infrastructures(Article 36 of the BOA Act)) in FY1962 andfor agricultural production. Disaster prevention

opinions to improve contract categories for

projects accounted for a great portion in public

electricity supply contracts (presented opinions

works.

(Article 36 of the BOA Act)) in FY1964. BOA

Due to such situation, BOA had to wait until

made audit findings similar to the above opinions

around 1950, when the turmoil immediately after

presented

the war started to settle down, to start full-inrelation

toelectricity

supplyfledged audit on agricultural administration.

contracts for other ministries.

Improprieties accounted for a great portion of
Subsection 7

Agriculture,
fisheries

forestry

audit findings from these times.

andCharacteristics, etc. of audit cases reported in
the annual audit reports

1. Audit cases reported in the annual audit
reports between the mid-1940s and mid1950s(1) Agriculturalprojects, etc.

structural

A. Audit cases on construction reported inannual audit reports
Audit findings related to construction works

improvement

implemented by the national government that318Section 4 Overview of Audit Results

were reported in annual audit reports included

subsidies,construction

improper accounting, failure to take appropriate

achieved what are specified by the designs,

action to implement construction projects, andexcessive designs, construction works that were

improper expense estimations. The annual audit

treated as if they had restored the pre-disaster

reports from the late 1940s reported many cases

state despite exceeding the restoration level inof improper accounting practices, stating thatreality, and evasion of own contributions bydisorderly accounting practices were seen at theclaiming padded construction expenses.
Thesetail end of the government structure in relation to

kinds

of

works that

audit

had

findings

not

were

constantly reported until around the early 1950s.

construction projects.
In some cases, the national government

Although the number started to decline from theconsigned to prefectures the implementation oflate 1950s, a considerable number of such cases

state-run land improvement projects, such aswere still reported. The majority of such audit

cultivation and reclamation projects, for whichfindings

expenses were fully covered by the national

projects. BOA decided that it was necessary to

government.

such

audit the budget assessed and approved by theconsigned construction works reported in annual

Ministry before the completion of construction

audit

were

and promptly correct improprieties related tohandled as consigned construction projects

disaster recovery projects, such as the inclusion

although they should have been handled asof improper projects in disaster recovery projects,

government-aided construction projects, andexcessive designs, etc. From 1954 to 1970, BOA

uneconomic

projects

cultivation

plans

Audit

reports

cases

includedor

relatedprojects

to
that

were

relatedtodisasterrecoverytoimpropercarried out what was called "assessment audit of

districtselection.

the budgets."due

Specifically, these audit findings were defective

In response to such situation, BOA presented

construction works that require repair due toits opinions in the FY1952 Annual Audit Reportinsufficienttosupervisionandinspection,

full

the

MinistryofFinance,

Ministryof

payment of bills for insufficient construction

Education, Science and Culture, Ministry ofworks, overestimation of construction expenses

Health and Welfare, Ministry of Agriculture anddue to insufficient on-site investigations, etc.

Forestry, Ministry of Transport, Ministry of

B. Audit cases on subsidies reported in theannual audit reports

Labour, and Ministry of Construction, demanding

Audit cases concerning subsidies reported incalling for the clarification of the scope ofannualaudit

reports

includedthe improvement of administrative operation and
Obligation Officers' duties so as to fully achieve

fictitious

the objectives of introducing said post.

construction projects included in a disaster
construction

In 1955, the Act on Regulation of Execution

projects not related to disaster recovery conductedof Budget Pertaining to Subsidies, etc. wasas disaster recovery projects, diverting funds

established.

obtained through overlapping approval to other(2) Food management

recoveryprojects,

improvement

construction

The Food Management Act was enacted inworks that did not reach the objectives ofFebruary 1942. The food crisis immediately after

construction

projects,

defective

319

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

the war was still ongoing in the late 1940s. Many

resources were put into tree planting projects

improprieties were reported in annual audit

aimed at gaining natural resources and recovering

reports in these times.

mountains and forests. As demand for woodaudit

materials etc. increased in line with economic

reports included incidents of loss of imported

revitalization, the industry saw a vigorous market

wheat and rice in FY1947, improper management

situation. Such situation was still remaining fromof foodstuff, such as wheat and sweet potato

the early 1960s to the early 1970s. The shortage

starch, in FY1950 and FY1951.

in raw wood accelerated the import of foreign

Improprieties

reportedinannualImproprieties concerning the payment andwood materials. Amid such situation, the Forestry

collection of receivables for foodstuff that were

Basic Act was enacted in 1964, followed by thereported in the annual audit reports from FY1948

commencementto

improvement project.

FY1950includeddoublepaymentforpurchased brown rice and barley, overpayment

of

the

forestry

structure

due to errors in the entry of quantity and price,

Characteristics of audit cases reported in theannual audit reports

sale of wheat at former low prices, and failure to

Audit cases concerning construction works

collect receivables for imported corn flour andimplemented by the national government werestarch flour for processing use.

reported in annual audit reports for FY1953, FY
1957, and from FY1961 to FY1965. Major audit

Although the supply and demand balance forfoodstuff had been gradually improving sincefindings

around 1950, Japan still had to resort to imported

conservation projects. After that, there was only

foodstuff to cover the shortage. In these times,

one audit finding related to such cases, whichmany

was reported in FY1989.

improprieties

concerning

imported

wererelatedtodefective

forestAudit cases concerning subsidies reported infoodstuff were reported in annual audit reports.
Specifically, improprieties concerning yellowed

annualrice were reported in the annual audit reports forconstruction works for mountain and forest

FY1952

facilities. Such cases continued to be seen afterand

FY1953.

Contamination

with

audit

reports

included

improperthe mid-1950s as well.

yellowed rice had already been known since

Other than the above, the annual audit

around the end of 1951, but no proper measures
were taken, resulting in enormous and constantreports fromlosses.

improprieties concerning the Special Account forthe

In addition to staple food rice, improprieties

FY1947

Adjustmentofto

FY1949Fuelwoodreported

Supplyandconcerning the purchase of imported foodstuff

Demand, with which revenue and expenditure forwere reported in relation to barley, wheat, etc. in

fuelwood control were processed during and after

the annual audit reports for FY1952 and FY1953,

the war.

as well as jute bags purchased to secure imported

On the other hand, many audit cases

Thai rice in the annual audit reports for FY1951

concerning articles were reported in annual audit

and FY1952.

reports from the early 1960s. Such audit findings(3) Forestry

included unauthorized resale of raw materials

From

the

mid-1940s,

abundant

which

labor
320

were

sold

designating

the

use,

Section 4 Overview of Audit Results

disadvantageous exchange ofcarried out by the government under the Special

lands due tooverestimation of the value of the lands to be

Account

forreceived, sale of timber at a low price due toReinsurance.

Agricultural

MutualAidmisestimating quality timber as fuelwood, andAudit cases related to this program reported

sale or rent of lands at low prices due toin annual audit reports included improprieties

improper assessment of land prices.

concerning(4) Fisheries

mutualtheaidmanagement

The fisheries industry between the mid-1940s

management

insuranceofof

agriculturalprojects.

Improperagricultural

mutualaid

and mid-1950s was subject to strict direction andinsurance (improprieties) was reported in the

supervision by the GHQ. With fishing area

annual audit reports every year since FY1953.

control, shipbuilding quota, and distribution
control, the revitalization of the industry was

2. Audit cases reported in the annual audit
reports between the mid-1950s and mid1960s

promoted to secure the minimum production tomeet domestic demand. Such restrictions were
removed after the mid-1950s, leading to the(1) Agriculturalproject, etc.

development of Japanese fisheries industry.

structural

improvement

Audit cases concerning subsidies reported in

A decade from the mid-1950s was referredannual audit reports from the mid-1940s and mid-to as the "turning point" of the agricultural

1950s

of

defective

industry. The Agricultural Basic Act was enacted

fishingfacilities.

in 1961 with an aim to improve productivity andExamples of such cases were improper concrete

increase farmers' income. Measures for expanding

composition as seen in breakwaters at fishingoptions for agricultural production, improvement

facilities, and shortage in the amount of fillingof productivity, and improvement of industrial

stones and riprap in foundation works. Audit

structure were promoted. In 1962, the agricultural

findings concerning such improper construction

structural improvement project was commenced.

works continued to be reported after the earlyThis project was aimed at promoting the1950s.

development of agricultural environment led at(5) Audit cases on the agricultural disastercompensation program

farmers'

includedconstruction

many

works

for

cases

own

initiative,

mechanization

andtechnological innovation through the introduction

theof modern facilities, diversification of business

Agricultural Insurance Act and the Livestock

options (such as livestock business and fruited

Insurance Act into the Agricultural Disaster

farming business), improvement of productivity,

Compensation Act in FY1947, the agriculturaland modernization of agricultural business. The

disaster compensation program was introduced.

government intended to promote cultivation ofThis program comprised of mutual relief projects

independent farmers through such project.

carried out by the municipal agricultural mutual

Characteristics of audit cases reported in theannual audit reports

Following

relieftheassociations,reconstitutionsocialinsuranceofprojects

A. Improprieties

carried out by prefectural agricultural mutual
reliefassociations,andreinsurance

The number of audit cases concerning

projects
321

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

construction works implemented by the national

The number of audit cases concerning

government was on a decreasing trend, as audit

improprieties reported in annual audit reports

findings on consigned construction projects wasturned to a decreasing trend from the early 1960s.

decreasing.

Instead, the annual audit reports included more

Looking at the breakdown, the number ofdescriptions concerning demanded measures andaudit findings concerning inappropriate planningpresented opinions, some of which were related

and insufficient outcome due to insufficient on-

to fundamental accounting issues.
For example, the FY1961 Annual Auditsite investigation decreased, while defective
construction works were still often seen. In

Reportaddition, audit findings related to the estimation

approach to the implementation of constructionof construction costs were increasing.

works

Meanwhile,

improprieties

includedfor

improvement

concerningtheopinions

concerning

agriculturalproject.

As

such

the

infrastructure
issue

was

subsidies that had continued to be seen since thepersistent for a long term after that, the samemid-1940s turned to a decreasing trend following

issue was stated the annual audit reports for FY

the enactment of the Act on the Regulation of1965, FY1967, FY1977, FY1982 and FY1983.
Other than the above, in FY1963 BOA

Execution of Budgets Pertaining to Subsidies, etc.

presented its opinions on the approach toin 1955.

accounting concerning long-lasting construction

Audit findings related to subsidies for public
works were mainly comprised of defective

projects.

Improprieties

relatedtoproperty

construction works, as with the period between

management were reported in the annual audit

the mid-1940s and mid-1950s.

reports from FY1961 to FY1965.

Audit cases related to subsidies other than

After this, issues concerning the conversion

those for public works were first reported in theof farmland emerged in various forms in line

FY1953 Annual Audit Report. The number ofwith changes in the social and economic

such cases kept increasing little by little sincesituation.

then. Major categories of granted subsidies were(2) Food management
As Japan's food supply-demand balance

grant for rural revitalization, grant for generalthecame to equilibrium over years from the early

improvement of the agricultural structure, and1950s to the early 1960s, the food management

grant for livestock production development. Main

system was upgraded to gain more flexibility.

rural

construction

projects,

grant

for

audit aspects were the situation of granting of

Improprieties concerning imported foodstuff,

subsidies, effects of aided projects, and use ofwhich were reported between the mid-1940s andgranted subsidies. Major examples of the audit

mid-1950s, continued to appear in annual audit

findings included use of subsidies for different

reports after the mid-1950s onward.
Audit cases other than improprieties reported

purposes, insufficient outcome due to evasion ofcontributions

from

local

governments,

in annual audit reports included opinions toandimproveoverstatement of expenses.
B. Demandedmeasuresopinions, etc.

andretailers'

marginal

gains

after

increase in rice price (presented opinions

presented(Article 36 of the BOA Act)) in FY1962, and322

Section 4 Overview of Audit Results

opinions to improve sales of imported feed

annual audit reports from the mid-1950s onward.

(presented opinions (Article 36 of the BOA

In addition, there were many audit findingsAct)) in FY1964.

related to fishing boat reinsurance between(3) Forestry

around the early 1960s and the late 1960s. These

A. Audit cases on improprieties reported inannual audit reports

audit findings included cases on expenditures of

In 1964, the Forestry Basic Act was enacted,

insurance payments of fishing boat insurance

followed by the commencement of the forestry

unions where excessive benefits were paid

industry structure improvement project.

without noticing that an excessive compensation

ordinary reinsurance payments made to coverworks

amount was approved, and reinsurance benefits

implemented by the national government, the FY

were paid for accidents that occurred before the1953 Annual Audit Report reported improprieties

undertaking of the fishing boat insurance.

related to insufficient outcome of construction
and renovation works for forest roads from FY(5) Audit cases on the agricultural disastercompensation program

1957 to FY1965. For example, the audit findings

Improper management of agricultural

included defective construction works for forest

mutual relief insurance (improprieties) reported

conservation.

in the FY1953 Annual Audit Report was alsoIn

relationtoconstruction

As with the period from the mid-1940s toreported in annual audit reports for every year

mid-1950s, audit cases concerning subsidies foreven after the mid-1950s. In response to thisconstruction works for mountain and forest

situation, the Ministry of Agriculture and Forestry

facilities continued to appear in the annual audit

amended laws in FY1957 and FY1963 toreports after the mid-1950s onward.

promoteB. Demanded measures, presented opinions,etc.

strengthening of supervision and regulation on

BOA started to include demand for measuresliability. With such measures, the profits andconcerning the forestry industry in annual audit

losses of the special account were improved. The

reports from the early 1960s. In the annual audit

intensive audit was discontinued in FY1968, asreports, BOA reported audit findings concerning

its initial purpose was fulfilled. The following

articles related to national forests, such as land

table shows audit cases reported in the annual

and wood materials, demanding the ensuring ofaudit reports from the mid-1940s to mid 1960s,

proper procedures.

other than improprieties and measures taken.

systemicreform,

such

as

the

the associations, and revision of mutual aid(4) Fisheries
The fisheries industry started to develop
gradually from the mid-1950s, following therelaxation of various controls on the fisheries
industry under GHQ's direction and supervision.
As with the period from the mid-1940s to
mid-1950s, defective construction works forfishing facilities continued to be reported in
323

Part 3
FY
1952

1961

1962

1963

1964

Chapter 2

Audit between the mid-1940s and mid-1960s

Items
Obligations in subsidy administration (presented opinions (Article 36 of the BOA Act)) (to Minister of Finance,
Minister of Education, Science and Culture, Minister of Health and Welfare, Minister of Agriculture and Forestry,
Minister of Transport, Minister of Labour, and Minister of Construction)
Opinions presented to improve the implementation plans for the state-run agricultural and irrigation project andaccompanying prefectural and organizational subsidy projects (presented opinions (Article 36 of the BOA Act))
Measures demanded to rectify and improve the management of property that belongs to the Special Account for the
Owner-Farmer Establishment Special Measures (demanded measures (Article 34 of the BOA Act))
Opinions presented to improve the collection of construction costs in cases where reclaimed land constructed underland improvement projects (presented opinions (Article 36 of the BOA Act))
Opinions presented to improve retailers' marginal gains after the increase in rice price (presented opinions (Article 36of the BOA Act))
Opinions presented to improve the management of national property that belongs to the Special Account for National
Forest Service (presented opinions (Article 36 of the BOA Act))
Opinions presented to improve the measures for budget, etc. for state-run land improvement construction projects thatlast for two or more fiscal years (presented opinions (Article 36 of the BOA Act))
Measures demanded to rectify and improve accounting practices for subsidies, etc. for the Agricultural Commission's
special projects (demanded measures (Article 34 of the BOA Act))
Opinions presented to improve the handling of lumber inspection (presented opinions (Article 36 of the BOA Act))
Opinions presented to improve the implementation of government-aided construction projects and assessment on
expenses for disaster recovery projects (presented opinions (Article 36 of the BOA Act))
Opinions presented to improve sales of imported feed (presented opinions (Article 36 of the BOA Act))

Subsection 8

entire funds by the end of the fiscal year due to

Commerce and industry

the late notification of subsidy allocation.
Meanwhile,

The industry showed recovery from war

there

were

a

considerable

damage from the mid-1950s, and entered into

number of audit findings related to industrial

rapid economic growth. Amid such situation,

insurance. Improprieties related the payment of

audit

for

insurance benefits were reported in relation toexperiment and research and fostering of small

export insurance in FY1954, small and medium-and medium-sized enterprises started to be

sized enterprise credit insurance from FY1954 toreported.

FY1956, and machinery installment payment

cases

concerning

subsidies,

etc.

Many of such cases were revealed duringcredit insurance in FY1962. In 1964, BOA

audits on projects to lend funds created bypresented its opinions based on the provision ofprefectural governments with national subsidies to

Article 36 of the BOA Act, demanding proper

small and medium-sized enterprises introducing

management of export insurance and machinery

modern facilities. Such audit cases, including the

installment payment credit insurance as blanket

non-installation

insurance.

offacilities,

installationoffacilities at low prices, were reported in annual
Subsection 9

audit reports every fiscal year from FY1956. In

State-owned bodies

1964, BOA presented its opinions based on theprovision of Article 36 of the BOA Act,

1. Three public corporations

demanding the solution of the issue that a great(1) Establishment of three public corporations

amount of surplus funds was left unused as

In July 1948, the General Headquarters ofprefectural governments were not able to lend thethe Supreme Commander for the Allied Powers
324

Section 4 Overview of Audit Results(GHQ) sent a letter to the Prime Minister stating

Public Corporation, the designation concerning

the issue of amending the National Public Service

the submission of accounts notified in May 1949

Act. This letter recommended Japan to restrict

set forth that "submission of accounts will begovernment

required as before as national administrative

officials'

right

to

collective

organs."bargaining and right to engage in labor disputes.
At the same time, it also suggested as follows.

However, in the following year, 1950, the"We believe that public servants engaged in the

GHQ suggested that the U.S. method of auditing

railway project and monopoly business for salt,

public enterprises should be followed in order tocamphor and cigarettes can be eliminated fromprevent

public offices. In such case, however, publicmanagement of public corporations. This method,

corporations to manage and operate such businesscalled corporate audit, is intended to examine

need to be established by proper means." Basedcompanies'

on this suggestion, the Monopoly Bureau, ansystems and present opinions as to whether or notexternal bureau to the Ministry of Finance, wastheir financial statements appropriately represent

reorganized into Japan Tobacco and Salt Publictheir profit and loss status in a relevant

Corporation, and the Ministry of Transport's

accounting period and their financial conditions.

state-run

In other words, audits conducted through thisrailway

projectwasformedinto

auditsfromaccounting

obstructing

andinternal

efficientcontrolmethod are the same as the private company

Japanese National Railways, in June 1949.
In addition, in order to promptly restore theaudit conducted by certified public accountants.

telephone and telegraph business that had been

In this case, individual transaction items such asdeteriorated through the war. Following therevenues and expenditures are subjected merely

termination of post-war occupation, the Ministry

to audit sampling, with close examination of

of

was

dissolved

andthese items left to internal audit. In April 1951,

NipponTelegraphand

BOA decided to adopt this audit method for the

Telephone Public Corporation in August 1952.

audit of public corporations. However, this audit

What is called "three public corporation system"

method was revised only two years later, in

was launched.

February 1953, and it was confirmed at a meeting

Telecommunication

reorganized

into

The management goal for these publicof the Commissioners that audit of improprieties

corporations was to achieve the balance between

should be conducted in the same way as in the

public interest and efficiency as a company. Ascase of audit of the State's accounts and that insuch, accounting rules for the public corporations

addition to this, audit of financial statements andbecame something in the middle of controlled

management efficiency should be conducted.

factors arising from its public nature and

The reason for this is that corporate audit

entrepreneurial factors that focus on efficient

was found to be unsuitable as it is difficult tomanagement.

judge public corporations' management efficiency(2) Introduction and correction of corporate
audit

based on the business performance as represented

With regard to in-office audit of Japaneseexample, some of them are monopolies andNational Railways and Japan Tobacco and Salt

others are adopting the policy of keeping prices

by

325

their

financialstatements

because,forPart 3

Chapter 2

Audit between the mid-1940s and mid-1960s

low due to the public nature of their businesses.

unnecessary articles were reported.

(3) Japan
TobaccoCorporation

Purchase of non-urgent articles (FY1950;
improprieties)

and

Salt

PublicOf 75 packing machines for

The annual audit reports between the mid-cigarette

1940s and mid-1950s reported a total of 56

manufacturing, 50 units were not found to be

improprieties, including 19 illegal acts, 10

urgent in light of the necessary number of units

services cases, nine articles cases, three budgetarycalculated based on planned production volume,

accounting cases, three subsidies cases, and threenumber of existing packing machines, capacity

financial

per unit, increase in production volume, etc.

statements

cases.

Examplesfor

BOA

categories for which the number of reported cases

also

referred

to

the

loss

of

was high are as follows.

approximately 3.7 million yen from the purchase

A. Illegal actsof a large amount of packaging paper for Golden

Between the mid-1940s and mid-1950s,

Bat. The purchase was made in the beginning of

there were a number of cases of illegal acts at thethe fiscal year, when packaging paper was still innational government and public corporations.

stock, but then the package of Golden Bat was

Audit cases reported for Japan Tobacco and Saltchanged in the middle of the fiscal year. A large

Public Corporation included misappropriation of

portion of purchases paper was left unused. As

cash and stored cigarettes and salt.

packaging, etc. of manufactured cigarettes is

B. Services

subject to frequent change, BOA stated in thefor

Audit findings related to transportation costs

annual audit report that extra care must be taken

saltwhen deciding purchase amount so as to prevent

andmanufactured

cigarettes

werereported.

losses from such change (FY1952; outline).

Failure to take appropriate action fortransportation of imported salt (FY1949;
improprieties)

Improper purchase method for coal (FY1952;
improprieties)

Barge costs and warehouse costs could havebased on negotiated contracts, designating coal

been saved, as some of the imported salt stored atbrands. BOA pointed out that there was no needwarehouse after unloading from the importingfor such negotiated contracts; rather, the coalship could have been directly forwarded to

could have been purchased easily under moredomestic distribution ships.

advantageous terms by bidding. Indeed, Tokyo

Uneconomic transportation expenses (FY1950;
improprieties)

National Hospital purchased coal at a lower price

Railway costs for transporting cigarette roll

Audit findings for Japan Tobacco and Salt

paper to cigarette factories could have been

Public Corporation rapidly decreased in the mid-

saved, as the number of wooden boxes loaded per

1950s, with only three cases of illegal acts andcar was less than the maximum number and a

two cases of subsidy-related cases reported in thelarger amount could actually be loaded.

annual audit report.

C. Articles(4) Japanese National Railways

Machinery manufacturers purchased coalby a selective tendering contract.

Between the mid-1940s and mid-1950s, 147

Many audit cases of purchase of non-urgent,326Section 4 Overview of Audit Results

improprieties were reported in the annual audit
reports,

including44

articlescases,(iv) Audit cases concerning the rental andmanagement of articles, etc.

26

construction cases, 22 uncollected receivable

Damages caused by improper material
management (FY1950; improprieties)

cases, and 17 services cases. Between the mid1950s and mid-1960s, 115 improprieties were

Failure to take appropriate action to lend rails
for light railways (FY1953; improprieties)

reported, including 61 construction cases, 35
articles cases and eight illegal acts.
A. Articles(v) Audit cases concerning action related tocontracts(i) Purchase at unreasonably high prices due
to overestimation and undue specification

Failure to pursue the contractor's defects
liability (FY1951; improprieties)

Purchase of brackets at an unreasonably highprice (FY1953; improprieties)

Failure to take appropriate action to purchase
Indian coal (FY1952; improprieties)

Purchase of expensive blanket covers (FY1955;
improprieties)

It was inappropriate to change the purchaseprice for Indian coal due to hike in sea

Purchase of cars at an unreasonably highprice due to inadequate estimation (FY1955;
improprieties)

transportation fees, although the contract did not

The estimated product yield rates of theConstruction-related audit findings included

necessary steel amount used for the calculation ofas many as 44 cases of overestimation and 21

the estimated value of the contract was 68.7%.

cases of defective construction works. In addition

However, looking at a state-run factory thatto these, audit findings related to planning werecarried out modification works for the same caralso reported as follows.

type, which were almost the same process as theEstablishment of a tunnel that was not foundto be in urgent need (FY1950; improprieties)

include any clause to such effect.
B. Construction

production works for new cars in question, theaverage product yield rates by steel category were

Failure to utilize existing facilities andestablishment of new facilities (FY1951;
improprieties)

between 84.6% and 88%. According to BOA's
investigation, product yield rates for works of thesame kind at vehicle manufacturers were close toto be unreasonably overestimated. The excessive

Projects that became uneconomical projects
due to delayed construction ( FY 1953 ;improprieties)

amount was estimated to be approximately 20

C. Uncollected receivables

million yen.

Slow action against
improprieties)

this range. The necessary steel amount was found(ii) Audit cases concerning the sale of articles

The

Failure to take appropriate action to sell
obsolete rails, etc. (FY1951; improprieties)

Accounting

payment
Bureauof(FY1949 ;Japanese

National Railways had not collected connectedtransportation fees of approximately 64.1 million(iii) Audit cases concerning the inspection ofarticlesyen from 33 railway companies.

Failure to take appropriate action to inspect
raw wood for cars (FY1952; improprieties)
327

Part 3

Chapter 2

Audit between the mid-1940s and mid-1960s

Failure to take appropriate action to collectdeferred payment of cargo transportation fees
(FY1952; improprieties)

account, it was difficult to say the number of

It had become extremely hard to collectsupport the validity of estimated income decrease

receivables of 159.6 million yen from nine

rates. It was inappropriate to compensate fortransportation

damage that was uncertain to occur. Such act

companies,

as

the

tourists would decrease due to the establishmentof the Shinkansen, nor was there any evidence toRailwayManagement Bureaus failed to suspend thedeviates greatly

deferredcompensation.

payment

systemalthough

such

This

insolvency was predictable.

from

the

extraordinary

usual

case

of

scope

of

" tourism

compensation" became a big social issue, causing

D. Other improprieties

intensive debate at the Diet.

The construction of Tokaido Shinkansen was

E. Presented opinions and demanded measurescommenced in 1959. Due to the financialof

In early 1960s, there were six cases for

Shinkansen was carried out with the loan fromwhich opinions were presented or measures were

the International Bank for Reconstruction anddemanded

Development. For this reason, the total expenses

between FY1962 and FY1964. One of the six

for the project were strictly limited. As such,cases is as follows.

BOA focused on whether construction expenses

Specifications for materials to be purchased(FY1962; presented opinions (Article 36 of the
BOA Act))

situation

at

the

time,

the

construction

could be cut as it carried out audit. It reported
audit findings related to the construction projectforJapanese

National

Railways

The following improvement measures areitself, land acquisition, and compensation, etc.

needed. (i) The design of internal combustion

Failure to take appropriate action tocompensate
damagecausedbytheestablishment of Shinkansen rails in parallel to
the
Tokyo
Expressway( FY1962 ;improprieties)

components for the repair purpose was revised toincrease the performance, strength, etc. of thecomponents and thereby reduce operational costs.

anHowever, some internal combustion components

Tokaidowere purchased based on the old design. It is

Shinkansen, demanded the Construction Bureau

necessary to ensure all relevant departmentsof Osaka Shinkansen to pay compensation forfollow the new design. (ii) Gas oxygen used for

decreased tourism income that would be caused

welding at the factories should be switched toby deterioration of tourism values of the areas

liquid oxygen so as to save purchase costs. (iii)surrounding Shinkansen rails due to spoiled

Japanese National Railways purchased paperboard

scenery, in addition to compensation for the land.

of a common size to produce four types of train

The Bureau paid 150 million yen to acquire thetickets. The loss rate of paperboard is 9 to 18%.

land and 100 million yen as compensation for the

Costs forloss (decrease rates for income from tourists andpurchasing paperboard in different sizes that areincome from general passengers were estimatedsuitable for the production of each kind of

to be 50% and 25%, respectively). However,tickets.

A

private company,

expressway

that

runs

which

parallelownedtowhen the situations of the areas were taken into
328

paperboard

can

be

reducedbySection 4 Overview of Audit Results(5) Nippon Telegraph and Telephone Public
Corporationof the aforementioned construction works in July

There were 36 improprieties the early 1950s

million yen from the profits that should have(from

FY1952

to

FY1954),including1953. This resulted in a loss of approximately 31
been yielded from the expansion of telephone20

lines.

construction cases, 10 articles cases and four
illegal acts. The number of improprieties from theIn FY1954, the number of improprieties

mid-1940s to mid-1950s was 50, including 22

reached its peak, 19 cases, of which 12 cases

construction cases, 13 articles cases and 12 illegal

were

acts.

majority

relatedoftoconstruction

such

audit

projects.

The

findings

wereFive improprieties concerning construction

inappropriate planning and implementation ofwere reported in the FY1952 Annual Audit

construction projects. A considerable portion ofReport, which was the first annual audit report

telephone and telegraph construction expenses

after the establishment of the corporation. They

was covered by telephone and telegraph bonds

were

the

and other kinds of debt loans. Facts concerning

construction work was substantially delayed due

the timing and required amount of works need toto delayed construction orders, inappropriate

be fully understood in order to use the funds

designs, and lack of coordination with related

effectively.

cases

where

the

completionofHowever, insufficient ex ante investigations

construction works, resulting from stagnation in
the processing of affairs by relevant departments

andinterdepartmental

communication,andcaused by the shift to the corporation in Augustcareless operation of construction works resulted

1952 and the organizational reform in Novemberin the implementation of non-urgent construction

1952.

works, excessive facilities, and uneconomical
construction woks.

An Example is shown below.
Failure to take appropriate action to design
construction works (FY1952; improprieties)
As part of a construction project to establish

Excessive designs for temperature andhumidity
control
devices( FY1954 ;improprieties)

telephone lines between Tokyo and Kawasaki, theNippon Telegraph and Telephone Public

Construction Department of Nippon TelegraphCorporation and the Tokai Telecommunication

and Telephone Public Corporation carried out

Bureau carried out a project to install temperature

construction works to install city cables between

and humidity control devices in four facilities,

the Osaki Station and Omori Station, spending

including branch bureaus, in FY1954, so as to79.2 million yen, in March 1953. However, as

control temperature and humidity of the entire

the completion was delayed due to the defective

buildings. However, the same devices were

design, which required a long time for obtaining

intended for the protection of switches ofapproval, the long-distance telephone line that

automatic exchangers from grit and dust, the heat

had already been completed between the Kamata

and humidity in summer. Therefore, to control

Station and Kawasaki Station in a separate

heat and humidity in rooms other than those withconstruction

automatic exchangers was found to deviate fromproject

were

left

unusedfortheapproximately seven months until the completion329

original

purposeof

thedeviceandPart 3

Chapter 2

Audit between the mid-1940s and mid-1960s

uneconomical. There had never been such a case

Corporation for Small and Medium Enterprise.

at other bureaus. If the project was carried out

As with the three public corporations, these

only for the rooms that required temperature andgovernment-affiliated institutions were required

humidity control during the summer, construction

by the law to obtain the Diet's approval for

expenses would have been approximately 57

budges and submit final accounts to the Diet after

million yen less.

BOA's audit.

This audit finding reflects the situation of

From the mid-1950s, public organizations to

the life of people back then. It is interesting todevelop social assets and corporations to leadknow such a case today, when people all have airsocial and economic measures were founded one

conditioners.

after another. In the late 1950s Japan Housing

The following

is anexampleofCorporation, Japan Highway Public Corporation,

thepresented opinions.

Forest Development Corporation, Labor Welfare

Opinions presented on preferential treatment
for retirement for the reorganization of
Nippon Telegraph and Telephone Public
Corporation (FY1955; presented opinions(Article 36 of the BOA Act))

Corporation,

were

established.

Organizations

established in the early 1960s included Water
Resources

Development

PublicCorporation,

Japan Railway Construction Public Corporation,

As customary human affairs practice in place

Postal Life Insurance Welfare Corporation, Metalof the system of mandatory retirement age for

Mining Agency of Japan, and Overseas Technicalemployees, Nippon Telegraph and Telephone

Cooperation Agency.

post - retirement

Audit findings for finance corporations, etc.

allowances for up to 12 months under the title ofincluded improprieties concerning loans provided"temporary staff" to old employees who werebydismissed for reorganization before prescribed

Finance Corporation from FY1953 to FY1957.

retirement age. However, the corporation had

The largest number of audit findings was

already paid the maximum retirement benefits

reported in FY1956. For example, the followingthat were allowed by the law. It was notcases were reported.

appropriate to pay the aforementioned allowances

Inadequate management after the lending ofagriculture, forestry and fisheries funds (FY
1956; improprieties)

PublicCorporation

paid

as they were practically additional retirement
allowances. Therefore, necessary measures need

the Agriculture,

Forestry

andFisheries

As a result of audit on 12,690 million yen

to be taken.

for 4,070 cases that the Agriculture, Forestry and2. Finance corporations, public corporations,etc.

Fisheries Finance Corporation lent directly or

In the early 1950s, various governmental

March to September 1957, there were 797 cases,

financial institutions were established, such asequivalent to 834 million yen, which required

National Life Finance Corporation, Housing Loan

advanced redemption. Such cases included the

Corporation, Export-Import Bank of Japan, Japan

failure to request the borrowers to advance theDevelopment Bank, Agriculture, Forestry andredemption of money equivalent to the received

Fisheries Finance Corporation, and Japan Financesubsidies, provision of excessive loans as a result

through its contracting financial institutions from330

Section 4 Overview of Audit Resultsof borrowers' failure to carry out construction

found improprieties related to the designation of

works

contractors, such as use of improper technicalasstatedintheapplications,andcompletion of construction works with expenses

review

methods,

less than the claimed amounts, and use of funds

estimations,for other purposes.

estimations that fell below the estimation limit

andinappropriate

handlingofunconditional

dismissalofprices.

As for organizations other than governmentaffiliated institutions, BOA reported many audit

Audit findings other than those related tofindings for distribution public corporations, etc.

construction projects included cases of thewhich were established and dissolved for postwar

Employment Promotion Corporation, such as

economic control, etc. between the mid-1940s

failure to constantly keep the budget pending

and mid-1950s as stated above. Audit findings on

book,state-owned bodies established after the mid-1950

management of the general ledger, cashbook,s such as public corporations, started to appear indeposit ledger, etc. In response to this issue,

the annual audit reports from FY1962, following

BOA presented opinions for the improvement andenhancement of the organizational structure for

optimization of financial management works

audit on state-owned bodies in April. Reflecting

through proper allocation of staff, improvement

the content of those organizations' projects at theof staff's capability of financial management

time, many audit findings were related to designs,

works through planned training sessions, andestimations, etc. for construction projects. The

enhancement

annual audit report included the following

corresponding to individual branch departments,

presented opinions.

etc. (opinions presented on the appropriate

Opinions presented on the estimated value ofthe contract for road construction works (FY
1962; presented opinions (Article 36 of the
BOAAct ) ;
Japan
Highway
PublicCorporation)

implementation

andinadequateofbookkeeping

headquarters'offinancialandmechanisms

management

works (FY1962; presented opinions (Article 36of the BOA Act); Employment Promotion
Corporation)

Opinions presented on the provision of
construction materials (FY1963; presented
opinions (Article 36 of the BOA Act); Tokyo
Expressway Public Corporation)
Opinions presented on the estimated value ofthe contract for construction of new lines (FY
1963; presented opinions (Article 36 of the
BOA Act); Teito Rapid Transit Authority)
Opinions presented on the designation ofcontractors for power plant construction
projects (FY1964; presented opinions (Article
36 of the BOA Act); Electric Power
Development Co., Ltd.)As a result of conducing audit on theconstruction of the Nagano Power Plant, BOA
331

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Chapter 3

Audit between the mid-1960s and late 1980s
CabinetEven from the mid-1960s onward, Japan'sof

Yasuhiro

NAKASONE,the

GNP continued to grow, producing a huge tradeprivatization process was initiated, targeting thesurplus and making Japan the second largest

three public

economy after the United States. Under such

National

Railways,

Nipponcircumstances, Japan came to hold a significant

Telephone

PublicCorporation,

position in the international community as one of

Tobacco and Salt Public Corporation. In 1988,

the developed countries, and started to betherequired to play an important role commensurate

consumption tax was introduced. In addition, theto that position. However, in 1973, in the wakePlazaof the oil crisis which affected Japan by throwing

triggered the rapid appreciation of the yen,

the people into panic and making them rush to

causing Japan to fall into depression. As thebuy up toilet paper, the high economic growth

government adopted the easy monetary policythat had begun in 1960 came to an end, and thewith a super-low interest rate as an economic

Japanese economy entered a stable growth period.

recovery measure, a money game for lands and

The economic growth had a dark side as well; itstocks or "economic bubble" started, causing thecaused serious environmental pollution problems.

economy to pick up, boosting consumption, andBetween the mid-1960s and mid-1970s, pollution

temporarily revitalizing the domestic markets.

lawsuits were filed one after another by those

The United States, on the other hand, wasaffected by pollution-triggered diseases such as

suffering the fiscal deficit and trade deficit, and it

Minamata disease, Itai-Itai disease, and Yokkaichi

intensified its economic pressure on Japan

asthma.

because Japan one-sidedly had a trade surplus

Tax

corporations,

Reform

AccordAct

adoptednamely,TelegraphwasinJapanese

and

and
Japan

enacted

September

and
1985

From the mid-1970s, Japan experienced

with the United States―which is generally termedchanges in its industrial structure; because of theas "Japan bashing." This movement pushed

technological innovation centering on electronics,

forwardthe light industry achieved growth, taking the

agricultural products.

theliberalizationofimportsofplace of the heavy industry that had supported

Meanwhile, between the Occupation period

the high economic growth such as steel industry.

and the late Showa era, women, having acquired

In terms of fiscal policy, due to the slowing

the suffrage and eligibility for election, gradually

economic growth rate and the stagnant tax

expanded their area of activities in society and arevenues resulting therefrom, deficit-financing

significant progress was seen in their social

national government bonds were issued in FY

advancement. In May 1985, the Law for Equal

1975 for the first time after the end of the war.

Employment Opportunity of Men and Women

The issuance of a large volume of national(Equalgovernment bonds worsened the fiscal conditions,enacted, following which companies started to set

and the administrative and financial reform forthe number of women to be employed in thefiscal reconstruction was called for.

recruitment process or reduced or eliminatedIn the late 1980s, under the initiative of thegender332

Employment

gaps

in

Opportunity

terms

of

Law)

conditions

was

for

Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate

employment such as promotion and pay increase.

opinions on audit results. By making use of thisThis Law contributed to strengthening women's

new section, BOA reported audit findings on

voices not only within the corporate community

various problems with business management,

but also within the whole society.

system management, and business effect, and thus
playedFrom the mid-1960s onward as well, BOA

a role in

the institutional

reforms

continued to actively engage in audit work, while

including the tax reform and privatization of

responding to changes in the socioeconomic

public corporations.

conditions and administrative and fiscal situations

From the mid-1980s, in response to theat home and abroad. Between the mid-1970s andrapid progress in the aging of population,

mid-1980s, with a view to taking a positive

globalization, and digitization, BOA upgraded its

stance to raise questions on a wide range oforganizational structure and started working on

difficult cases involving national policy issues,

audit in new fields, such as medical care,

BOA created a new section titled "special

pension, and official development assistancedescription" in annual audit reports to express its(ODA).

◆Commemoration Event for the 100th Anniversary of BOA◆
Since its foundation on March 5, 1880, as the fiscal supervision authority under Dajokan, BOA celebrated
its 100th anniversary in March 1980, and held the following commemoration event.
On March 5, 1980, the memorial ceremony for the 100th anniversary of BOA was held at the National
Education Center, Toranomon Hall, with the attendance of the Emperor. The ceremony was also attended byabout 1,400 persons, including: the Prime Minister, the Speakers of the House of Representatives and thePresident of the House of Councillors, and the Chief Justice of the Supreme Court as guests; delegates from thelegislative, executive and judicial branches, local governments, and government-affiliated institutions; the press;
former BOA officials; and the bereaved families of persons who had provided distinguished service to BOA.
After the opening address by President of BOA Torao CHINO, the Emperor gave words to the attendees,
followed by the messages of congratulations by Prime Minister Masayoshi OHIRA and other guests. The
ceremony was closed with the address by the President of BOA.
As part of commemoration event for the 100th anniversary, History of the Board of Audit from 1880 to1980 was published in March 1980. A memorial stamp (worth 50 yen) was issued to celebrate the 100th
anniversary of the fiscal supervision system.

333

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Memorial Ceremony for the 100th Anniversary of BOA held with the attendance of the Emperor Showa(March 5, 1980)

334

Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate

Section 1 Amendments of the BOA Act and Discussions on BOA's Organizationand Mandate
Subsection 1

Status of amendments

Between the mid-1960s and late 1980s, the BOA Act was amended three times as shown in thefollowing table.
List of amendments to the BOA Act (between the mid-1960s and late 1980s)
Governing Act
Date of promulgation- Organ introducing the amendment
Contents(Date on which theCommittee(s) to which the amendment
Act came into effect)
was submitted
Article 2 of the Act on Arrangement of Upon the privatization of Japan Tobacco and Salt Public August 10, 1984
Relevant Acts Incidental to Enforcement Corporation, the provisions on discretionary audit subject (April 1, 1985)of the Tobacco Business Act (Act No. matters with regard to this corporation were deleted (revision of
71 of 1984)
Article 23, paragraph (1), item (ii))- Introduced by the Cabinet
Committee on Finance (House ofRepresentatives/House of Councillors)
Article 2 of the Act on Arrangement of Upon the privatization of Nippon Telegraph and Telephone December 25, 1984
Relevant Acts Incidental to Enforcement Public Corporation, the provisions on matters with regard to (April 1, 1985)of the Act on Nippon Telegraph and this corporation, including matters to be decided by the Audit
Telephone Corporation, etc. and the Commission, discretionary audit subject matters, audit cases
Telecommunications Business Act (Act reported in the annual audit report, adjudication and reNo. 87 of 1984)
adjudication, and demand of disciplinary action, were
- Introduced by the Cabinet
rearranged (revision of Article 11, item (vi), Article 23,
Committee on Communication (House paragraph (1), items (ii), (iii), and (v) to (vii), Article 29, item
of Representatives/House of Councillors) (vi), Article 31, Article 33, Article 35, paragraph (1), andArticle 37, paragraph (2))
Article 41 of the Act for Enforcement of Upon the privatization of Japanese National Railways, the December 4, 1986
Japanese National Railways Reform Act provisions on matters with regard to this corporation, including (April 1, 1987)(Act No. 93 of 1986)
matters to be decided by the Audit Commission, discretionary- Introduced by the Cabinet
audit subject matters, audit cases reported in the annual audit
Committee on Transportation (House of report, adjudication and re-adjudication, and demand ofRepresentatives)disciplinary action, were rearranged (revision of Article 11,
Special Committee on Japanese National items (v) and (vi), Article 23, paragraph (1), items (ii), (iii),
Railways Reform (House of Councillors) and (v) to (vii), Article 29, items (v) and (vi), Article 31,
Article 33, Article 35, paragraph (1), and Article 37, paragraph(2))

Subsection 2

Legal Discussions on BOA's
Organization and Mandate

The issue on the change of the status of
BOA

officials,

except

of

the

three

1. Issue on the change of BOA officials' status
to national government employees in special
serviceCommissioners,

fromnational

government

employees

regularserviceto(1) Issue on the change of BOA officials' status
to national government employees in
special service, raised upon the amendmentof the National Public Service Act due tothe ratification of the International Labour
Organization (ILO) Convention

raised in April 1960, when BOA made a request

innational

government employees in special service was firstof the change to the Director General of the
Cabinet Legislation Bureau and the Director of
the Government Employee System Research
Office. At that time, the government was working
335

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

on amending the legal provisions on national

Public Service Act.

government employees' right to organize for the(2) Issue on the change of BOA officials' status
to national government employees in
special service, triggered by the decision of
the House of Representatives' Committee
on Auditpurpose of ratifying the Freedom of Association
andProtection

of

the

Right

to

OrganiseConvention (ILO Convention No. 87), and alsoOncarrying out reforms such as creating the

May

10,

1971,

the

House

of

Personnel Bureau in the Prime Minister's Office

Representatives' Committee on Audit made ain order to establish the organ responsible fordecision to the effect that, "BOA must ensure

personnel management of national government

strictness in conducting audit and endeavor toemployees. BOA's request for the change of its

enhancing

officials' status was in line with these movements.

Following this, in June 1971, the General

Under the amendment bill for the National

Executive Bureau of BOA prepared a proposal

Public Service Act drafted at that time, thetitled "Improvement of Status and Treatment of

mandate for affairs concerning the position

BOA Officials."andreinforcing

its

functions. "ofIn this proposal, the General Executive

employees according to the job class was

Bureau explained that in order to materialize

supposed to be shifted from the National

what had been decided by the House of

Personnel Authority to the Prime Minister. There

Representatives' Committee on Audit, there waswas a concern that if this change were actually

no way except for increasing the number oflegislated, it would enable the Prime Minister to

Auditors who were given the duty to carry out

impose more restrictions on BOA and would go

affairs of audit, and enhancing their capabilities.

against the spirit of the BOA Act, in which

It also argued that, to this end, it was necessary

Article 1 provided that, "The Board of Audit has

to treat BOA officials as national governmenta status independent from the Cabinet." In order

employees in special service, on a par with Diet

to break free from such restrictions, BOA made amembers andrequest three times (April 1960, November 1962,

establishing the conception that BOA is an

and December 1964) for the amendment of the

independent organ, and also to raise remuneration

National Public Service Act, in which BOA

for BOA auditors by compiling an appropriate

Commissioners were categorized as nationalsalary schedule for them.

classification,

appointment,

andnumbercourt

judges,therebyfirmlyIn the same month, after hearing opinions

government employees in special service under
Article 2, paragraph (3), item (iii), so that "otherthrough

repeatednegotiations

with

Senior

BOA officials" would also be included in thisDirectors of Bureaus and officials in higher ranks

category.

and the staff union, the General Executive Bureau

Since BOA was unable to receive a desired

also drafted an outline of proposed improvement

answer to its requests, it had no option in the endof treatment of BOA officials, which contained

but to express its desire that BOA officials otherthe following improvement measures: (i) all staff

than Commissioners should be categorized as

members of the General Executive Bureau should

national government employees in special service

be categorized as national government employeeson the next occasion of amending the Nationalin special service; (ii) an equity commission
336

Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate

should be established in BOA as a third party
organ assigned to protect the interests of BOA

2. Issue on BOA's audit mandate over thefinancial aid for Okinawa

officials; (iii) and the basic salaries for Auditors

Before the return of Okinawa to Japan inand Assistant Auditors should be increased by

May 1972, the financial aid for Okinawa had

adding 12% or 8% of their monthly basic salaries

been granted by the Japanese government to therespectively.

government of the Ryukyu Islands based on theofficial

With this outline, BOA approached thenoteexchanged

with

the

U. S.

related government entities including the National

government. At that time, Okinawa was covered

Personnel Authority and the Cabinet Legislation

by Japan's residual sovereignty but effectively

Bureau, but received negative reactions, such as

under the administrative right of the Unitedthat "BOA cannot be regarded as such a special

States, and therefore it was considered that theorgan that has completely the same footing as the

BOA Act, a Japanese national law, was not

Diet or courts," and "categorizing BOA officials

applicable to the execution of budgets by theas national government employees in special

government of the Ryukyu Islands.

service means BOA officials will no longer beWith regard to this financial aid, the Prime

subject to the control of the National Personnel

Minister's Office of the Japanese government andAuthority, but in practical terms, BOA does not

the government of the Ryukyu Islands signed aseem to have had any problem due to being

memorandum

subject to the control of the National Personnel

arrangement based on the exchanged note. This

Authority." Thus, the negotiations at the working

memorandum provided that the Prime Minister'slevel were not successful.

Office of the Japanese government may send its

every

year

as

a

practical

This result made BOA aware of theofficials to complete the aided projects and checknecessity to present its view to the government

proper disbursement of the aid money. In theand the Diet and obtain their formal approval for

Diet, it was repeatedly argued that although Japanthe basic direction of the change. In January

only had residual sovereignty over Okinawa,

1973, BOA prepared an abridged edition of the

because a certain amount of taxes paid byrequest for the change of its officials' status toJapanese people was spent for a part of Japan's

national government employees in special service,sovereign

titled "Request for the change of the status ofnecessarily be audited by BOA.

territory,such

spending

shouldUnder such circumstances, the Ministry of

BOA General Executive Bureau staff members tospecialForeign Affairs held negotiations with the U.S.

service," and started negotiating with related

counterpart on the legal basis for BOA's field

government entities.

audits on Okinawa's spending of the financial aid

national

government

employeesinHowever, despite its repeated requests, BOA

granted by the Japanese government. As a result,

was unable to gain support from government

BOA developed the interpretation that it wasentities and the desired change of the status ofnecessary to assure perfection of audit on the

BOA officials did not come true.

financial aid by conducting field audits in
Okinawa on the premise that the spending of theaid money was part of the "expenditures of the337

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

State," which was a mandatory audit subject

Bank,

and

Hokkaido - Tohoku

Development

matter under the provision of the Article 22 ofCorporation for its audits of financial assistancethe BOA Acts, and that the provisions on audit inunder the auditee's mandate.

the memorandum represented a basic agreement

Under such circumstances, in February 1976,

that was necessary for this purpose. In 1964,

it was revealed that Lockheed Corporation, abased on this interpretation, and with the

major U.S. aircraft manufacturer, offered a hugecooperation of the Prime Minister's Office, BOA

amount of bribes to government officials of Japan

officials started to conduct field audits in theand other countries, in an attempt to sell its large

capacity of officials of the Prime Minister's

jet aircraft, TriStar, to airline companies around

Office, using the memorandum as the basis forthe world including All Nippon Airways (ANA)

their status. This approach was maintained until―which is generally called the Lockheed bribery

Okinawa's return to Japan in May 1972.

scandals. ANA's purchase of TriStar had been
financed by Export-Import Bank of Japan andcovered

3. Audit of financial assistance under theauditee's mandate and the amendment of
the BOA Act in 1979

by

the

debt

guarantee

by

Japan

Development Bank. Since both institutions were
BOA's auditees, BOA was questioned several

BOA does not have audit mandate overtimes during the Diet session about the status ofaccounts of borrowers of State-owned bodies

audit on them. In this process, it became clear

such as finance corporations, except for Housingthat BOA did not have audit mandate over ANA

Loan Corporation and Okinawa Development

and was not able to audit the financial assistance

Finance Corporation that have vested audit

received by the company even under the auditee's

mandate in BOA under separate laws (in the casemandate. This provoked an argument that BOA

of Okinawa Development Finance Corporation,

should be vested with audit mandate over

only for accounts which relate to housing loans).

borrowers of State-owned bodies. At the plenary

Therefore, BOA audits accounts related tosessionindividual loans under the auditee's mandate, orRepresentatives adopted a resolution to the effectmore specifically, by a method wherein BOA

that "Every possible measure should be taken as

officials

bynecessary for strengthening and enhancing BOA's

employees of the State-owned bodies, based on

audit." After that until 1984, resolutions to thethe bodies' contractual mandate to investigate

same effect were adopted repeatedly in boththeir borrowers. However, since this method

Houses (see the following table).

conduct

audit

accompanied

in

May

1977,

the

House

of

necessarily requires the cooperation of the Stateowned bodies, which are the auditees, its

Background for the amendment of the BOA Act

feasibility is limited in that whether the objective(Year/Month)
Events1977
May Resolution at the plenary session of theHouse of Representatives [ HR ; 1 st
resolution]". . . measures should be taken as necessary
for strengthening and enhancing BOA's
audit on financing and debt guarantee by
government-affiliated institutions, etc. . . ."of audit can be achieved or whether audit can be
conducted effectively depends on the auditee's
attitude. In fact, until around the mid-1980s,
BOA was unable to gain cooperation from
Export-Import Bank of Japan, Japan Development
338

Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate
1978

May Resolution at the plenary session of theHouse of Representatives [HR; 2ndresolution]". . . measures should be taken to extend
the limit of BOA's mandate, increase thenumber of its officials, and improve theirtreatment including remuneration . . ."June Statement by Prime Minister Takeo
FUKUDA at the House of Councillors'
Committee on Audit"(the government will) take measures inlight of the outcome of the discussion at
BOA"
June Resolution at the plenary session of theHouse of Councillors [HC; 1st resolution]"The government . . . should endeavor totake sufficient measures to extend the limitof BOA's mandate, increase the number of
its officials, and improve their treatment
including remuneration . . ."1979
The amendment of the BOA Act was
February frequently discussed in the Diet session.
〜 BOA delivered the outline of the BillMay Partially Amending the BOA Act to the
Cabinet.
June Resolution at the House of Representatives[HR; 3rd resolution]
June The Japan Socialist Party submitted a Bill
Partially Amending the BOA Act to theHouse of Representatives [1st submission]
Deliberation unfinished; the bill scrapped.
September The Japan Socialist Party submitted thesame amendment bill to the House ofRepresentatives [2nd submission]
Deliberation unfinished; the bill scrapped.
November The Japan Socialist Party submitted thesame amendment bill to the House ofRepresentatives [3rd submission]
Deliberation
continued( deliberation
unfinished; the bill scrapped in May 1980).
1980
April Resolution at the House of Councillors[HC; 2nd resolution]
October Resolution at the House of Representatives[HR; 4th resolution]
October The Japan Socialist Party submitted thesame amendment bill to the House ofRepresentatives [4th submission]
Deliberation
continued( deliberation
unfinished; the bill scrapped in November1983).
1981 March Intensive deliberation at the House ofRepresentatives' Committee on Audit:
Amendment of the BOA Act
PolicyResearch
Council,
LiberalDemocratic Party

March Informal gathering for discussing theamendment of the BOA Act"As there are many problems to be solved
for the legal amendment, emphasis will beplaced, for the time being, on thedevelopment and enhancement of BOA's
organizational structure."
April Resolution at the House of Councillors[HC; 3rd resolution]
July Notice issued by the Deputy Chief Cabinet
Secretary to the Vice Ministers of therelated nine ministries and agencies.
"Urging cooperation for BOA's audit offinancial assistance under the auditee's
mandate"1982
April Resolution at the House of Representatives[HR; 5th resolution]
April Resolution at the House of Councillors[HC; 4th resolution]
1983
May Resolution at the House of Councillors[HC; 5th resolution]
May Resolution at the House of Representatives[HR; 6th resolution]
1984 March Resolution at the House of Representatives[HR; 7th resolution]
July Resolution at the House of Councillors[HC; 6th resolution]
1985February Notice issued by the Deputy Chief Cabinet
Secretary to the Vice Ministers of the
Ministry of Finance and the Hokkaido
Development Agency"We would like to request that you give
instructions to the government-affiliatedinstitutions
under
your
respective
jurisdiction to cooperate with BOA's audit
of financial assistance under the auditee's
mandate . . ."March Statements during the discussion at theHouse of Councillors' Budget Committee(Prime Minister, Chief Cabinet Secretary,
the President of BOA)". . . we should aim to achieve effective
audit by BOA's audit of financial assistanceunder the auditee's mandate, by way ofadministrative guidance, not throughlegislation, for the time being . . ."Taking into consideration this series of theDiet resolutions, BOA set about amending the
BOA Act to allow it to conduct audit morethoroughly with regard to the financing businessof State-owned bodies. In October 1978, it
drafted an outline of the Bill Partially Amending
the BOA Act (the first draft) that was intended to339

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

expand the scope of audit as follows, and sought

Accordingly, in April 1979, BOA drafted a bill

opinions of the related ministries and agencies on

for amending the BOA Act which clarified thethis draft.

distinction between audit and examination and set
a limit to BOA's mandate to examine, and based

An outline of the Bill Partially Amending the
BOA Act
For the purpose of enabling BOA to exercise
its audit mandate over accounts of the borrowersof State-owned bodies, including governmentaffiliated institutions, which relate to the loans,
Article 23, paragraph (1) of the BOA Act should
be amended as follows:(1) prescribing BOA's audit mandate overaccounts of entities receiving financial
assistance, such as subsidy, incentive, aid,loan, and indemnity, directly or indirectlyfrom juridical persons to which the State has
contributed half or more of the stated capital,
which relate to the financial assistance;(2) prescribing BOA's audit mandate overaccounts of entities receiving guarantee forpayment of loan principal or interest fromjuridical persons to which the State has
contributed half or more of the stated capital,
which relate to the guarantee for payment;and(3) prescribing BOA's audit mandate overaccounts of contractors for services oroperations of the State or a public corporation(meaning Japan Tobacco and Salt Public
Corporation, Japanese National Railways, orNippon Telegraph and Telephone Public
Corporation) or entities entrusted by the Stateor a public corporation to carry out
operations, which relate to the contract with
the State or a public corporation.

on this draft, it prepared the final version of an
outline of the Bill Partially Amending the BOA
Act, as shown below.
〈Bill to amend the BOA Act〉
(Note) The clauses with the underlined numbers
were added by the amendment bill.
Article 11 The following matters are decided by
the Audit Commission:(i) to (iv) (omitted)(iv)-2 deciding a counterparty to a contract or arecipient of financial assistance that may be
examined or requested to submit books,
documents, etc. under the provisions of Article
26-2, paragraph (1);(v) to (ix) (omitted)
Article 23 (1) The Board of Audit may audit
financial management in terms of thefollowing, if it considers this to be necessary,or at the request of the Cabinet:(i) to (vi) (omitted)(vii) accounts of a contractor for construction,etc. and those of a supplier of goods to theState or a public corporation which relate to
the contract with the State or a public
corporation.
(2) (omitted)
Article 26-2 (1) If the Board of Audit conducts
field audit under the provisions of Article 25
with regard to accounts which relate to acontract for construction, etc. or a contract forpurchase of goods for a corporation to which
the State has contributed half or more of thestated capital (excluding a public corporation)or accounts which relate to financial assistancesuch as subsidies, grants, loans, andcompensation (including guarantee for paymentof loan principal or interest; the same applies
hereinafter) extended by such corporation, it
may investigate the counterparty to the contract
or the recipient of the financial assistance orrequest them to submit records such as books

BOA continued negotiating with the related
ministries andagencieswhilerevisingtheamendment bill many times, but it was unable tocoordinate the opinions of these ministries andagencies, such as that the expansion of BOA's
audit mandate would lead to the excessiveinterventionofpublicauthorityinprivatecompanies, or would scare borrowers and resultin undermining the smooth policy finance.
340Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate

related ministries and agencies. The notice also

and documents if it finds this to be necessary
for achieving the objective of the audit;
provided, however, that such investigation orrequest for submission is limited to the extent
related to the accounts which relate to thecontract or the financial assistance.
(2) When the Board of Audit conducts
investigation or requests submission of books,
etc. pursuant to the provisions of the preceding
paragraph, it shall notify the parties concernedof this.
(3) When the Board of Audit conducts
investigation pursuant to the provisions ofparagraph (1), it shall seek the attendance ofthe employees of the entity subject to audit.

stated that while the issue was being underdiscussion, in order to enhance BOA's audit
functions, an agreement was reached among therelated ministries and agencies having jurisdiction
over government-affiliated financial institutions to
the effect that they should take practical measures
to urge these institutions to cooperate with BOA's
audit, etc.
Cabinet Kaku No. 113
July 23, 1981
To:
Vice Minister of Finance
Vice Minister of Agricultural, Forestry and
Fisheries
Vice Minister of Health and Welfare
Vice Minister of International Trade andIndustry
Vice Minister of Construction
Vice Minister of Home Affairs
Vice Minister of Hokkaido Development
Vice Minister of Okinawa Development
Vice Minister of National Land

!
%
#
#
"
#
#
%
$

Also in April 1979, BOA prepared adocument titled "Partial Amendment of the BOA
Act." In May of the same year, BOA delivered it
to the Cabinet together with the abovementioned
outline of the amendment bill, explained thedevelopments of the issue of the amendment of
the BOA Act and BOA's basic stance on thisissue, and requested that this issue be dealt withby the government and the Diet.

Deputy Chief Cabinet Secretary Kyujiro OKINA

While the Cabinet expressed its intention totake some more time to consider this issue, theEnhancement of BOA's audit functions

Japan Socialist Party, an opposition party, pressed
The Cabinet Secretariat has made earnest
efforts to coordinate opinions on the pending
issue of the amendment of the BOA Act, but due
to a large gap in opinions between BOA and therelated ministries and agencies, it is difficult for
the Cabinet to submit the amendment billpresented by BOA to the Diet without making
any modification to it. Accordingly, we would
like to request that this amendment issue continue
to be discussed between BOA and the related
ministries and agencies.
While the issue is being under discussion, inorder to enhance BOA's audit functions, anagreement has been reached among the related
ministries and agencies having jurisdiction over
government-affiliated financial institutions to theeffect that they should take practical measures as

the Cabinet to work on the amendment of the
BOA Act. The Japan Socialist Party submitted to
the House of Representatives four times a bill for
amending the BOA Act that provided for theenhancement of BOA's audit mandate, which
ended up being scrapped due to the deliberation
unfinished (see table on 338 page).
Being under pressure at the Diet, the Cabinet
tried to coordinate opinions but failed. In July
1981, Deputy Chief Cabinet Secretary OKINA
issued a notice to the Vice Ministers of therelated ministries and agencies, stating that theissue of the amendment of the BOA Act should
continue to be discussed between BOA and the341Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

to provide further cooperation.

described in the attachment and extend further
cooperation for BOA's audit, etc. We would liketo request that you notify the governmentaffiliated financial institutions under yourrespective jurisdiction of this.

According to this agreement, if BOA cannot
achieve the objective of audit without conducting
audit of financial assistance under the auditee's(Attachment) Cooperation for BOA audit, etc.
The related ministries and agencies shouldurge government-affiliated financial institutions
under their respective jurisdiction to cooperatewith BOA audit, etc., as indicated below.

mandate, the related ministries and agencies
should urge the government-affiliated financial
institutions under their respective jurisdiction toprovide necessary cooperation to BOA dependingon the circumstances of the audit on a case-by-

1. Cooperation with audit of financial assistanceunder the auditee's mandate
If BOA cannot achieve the objective of audit
without conducting audit of financial assistanceunder the auditee's mandate, the governmentaffiliated financial institutions should provide
necessarycooperationaccordingtothecircumstances of the audit on a case-by-casebasis.
More specifically, due to the conventional
requirement that strict preliminary inquiry or expost control should be executed for each
institution, some institutions have not at all been
subject to or have rarely been subject to BOA's
audit of financial assistance under the auditee's
mandate. In the future, if BOA finds a goodreason to conduct such audit but it is impossible
to confirm the facts by any other means, these
institutions should respond to BOA's audit under
the auditee's mandate.
Institutions that have been subject to BOA's
audit of financial assistance under the auditee's
mandate should continue to cooperate with theaudit as before, while giving consideration totheir borrowers.

case basis. This notice officially recognized auditoffinancialassistance

under

the

auditee's

mandate as a method of audit, but there was aquestion as to whether it would produce a
positive result because, in light of its text, therespective financial institutions had discretion todecide whether or not they would cooperate with
BOA's audit. In fact, even after the notice wasissued, BOA was unable to gain cooperation from
Export-Import Bank of Japan, Japan Development
Bank,

and

Hokkaido - Tohoku

Development

Corporation for its audit of financial assistanceunder the auditee's mandate.
This problem was frequently discussed at theDiet. Through the discussion among BOA, theCabinet Secretariat, and the Ministry of Finance,inFebruary

1985,

DeputyChiefCabinetSecretary FUJIMORI again issued a notice to theVice Ministers of the Ministry of Finance and the

2. Cooperation with examination upon BOA'srequestIf BOA requests the related institutions tocooperate with its examination on loans asnecessary for audit, these institutions should
cooperate with BOA as much as possible.

Hokkaido

Development

Agencytocooperation

for

audit

financial

BOA's

of

seek

assistance under the auditee's mandate. What wasprescribed in this notice was acceptable to BOA,
and after this notice was issued, BOA started togain cooperation from financial institutions that
had previously not cooperated with BOA's audit

3. Cooperation for documents
The related institutions have cooperated with
BOA as much as possible by submitting
documents necessary for audit; they are requestedoffinancialassistance

under

the

auditee's

mandate.
At present, BOA conducts examination on
342

Section 1 Amendments of the BOA Act and Discussions on BOA's Organization and Mandate

borrowers of loans with the cooperation ofand such doubt cannot be cleared by meansof the documents or other materials
submitted by the institution;(ii) there are concrete grounds to suspect that theloan has been used against the purpose of theloan, and such suspicion cannot be clearedby means of the documents or other materials
submitted by the institution;(iii) the loan has been in arrears over a long term
and in a large amount, making thepreservation of the loan claim uncertain, andsuch uncertainty cannot be cleared by meansof the documents or other materials
submitted by the institution; or(iv) other cases equivalent to those referred to in(i) to (iii).

financial institutions for its audit under theauditee's mandate, and the issue of BOA's audit
mandate over borrowers of loans has been solvedin practical terms.
Cabinet Kaku No. 26
February 13, 1985
To:

!Vice Minister of Finance"#Vice Minister of Hokkaido Development
Deputy Chief
FUJIMORI

CabinetSecretary

Shoichi

Cooperation for BOA's audit ofassistance under the auditee's mandate

financial

The competent authorities should, whenrequested by BOA, instruct the financial
institutions to cooperate with BOA's audit offinancial assistance under the auditee's mandate,following consultation with BOA.

You have provided guidance to thegovernment-affiliated financial institutions under
your respective jurisdiction to cooperate with
BOA's audit, etc. In order to provide further
cooperation for audit, we have decided to seek
cooperation for BOA's audit of financial
assistance under the auditee's mandate as
indicated below. We would like to request thatyou notify the relevant divisions and governmentaffiliated financial institutions under yourrespective jurisdiction of this.
Due to the conventional requirement thatstrict preliminary inquiry or ex-post control
should be executed for each financial institution
and each loan transaction, some financial
institutions have not at all been subject to or haverarely been subject to BOA's audit of financial
assistance under the auditee's mandate. These
institutions should provide cooperation with suchaudit when requested by BOA on the grounds
that the transaction falls under any of thefollowing and a doubt arises as to theappropriateness of the loan through the audit
under BOA's mandate.
(i) there is a doubt about the appropriateness of
the loan due to the fact that the party related
to the loan is found to have been involved ina criminal act in connection with the loan,
343

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Section 2 Changes in BOA's Organization
Bureau, to make the organization for construction

This section discusses the major changes in
BOA's organization, structure of positions, fixed

audit a three-division structure.

number(2) Changes made on January(organizational restructuring)of

officials,

andpersonnel

systembetween the mid-1960s and late 1980s.

7,

1978

Organizational restructuring was carried out
1. Changes in the organizationaccording to the following basic policies. (i) In(1) Changes made on January 20, 1971
(assignment of Senior Directors to the
Bureaus)thecategories

of

construction

auditsandagriculture and forestry audits, different audit
divisions conventionally took charge of works

nine

implemented by the National Government andSenior Directors in the 5th Bureau for conducting

works subsidized by the State. In order to

audits on State-owned bodies (each for one

identify the administration in each field as asector). With this organizational structure, thewhole, rearrangement of distribution of activities

Senior Directors tended to focus on the businessamong the audit divisions should be designed toactivities of the bodies in the respective sectors

correspond to the organizational structure of theassigned to them and found it difficult to criticize

ministries and agencies. (ii) Reallocation of

the status of business in light of the purposes ofaffairs of audit among the divisions should bestate contributions to these bodies, which caused

designed to equalize density and increase quality

inconsistency with the audits on the competentof audits. The major changes are as follows.

ministries and agencies. Furthermore, the 5th

A. The Prime Minister's Office Audit Division in

Bureau took on far greater workload than otherthe 1st Bureau was reorganized into the

Bureaus. To solve these problems, the Senior

Science & Technology Audit Division in the

Directors were reshuffled by having the 5thsame Bureau to mainly take charge of audits

Bureauon the Science and Technology.

Conventionally,

continue

BOA

toconcentrated

engageinauditsonpublicB. The position of audit division of the 2nd

corporations and finance corporations), bodies

Bureau, who had taken charge of audits onunder joint jurisdiction of multiple ministries andbodies affiliated to the Ministry of Education,agencies,

stock

Science and Culture, was abolished, and thecorporations, in principle, while assigning the six

2nd Education Audit Division was establishedremaining Senior Directors taking charge of otherin the 2nd Bureau to take charge of audits oftypes of bodies to the 1st to 4th Bureaus asSpecial Account for National Schools, toappropriate.

make the organization for education audit a

government-affiliatedandinstitutions

bodiesformed(e.g.

astwo-division structure.

At the same time, the National Property
Audit Division was abolished by transferring its

C. The affairs of audit on the Defense Facilities

work to the National Property Audit Division

Administration Agency were separated from

(Audit Manager), and the 3rd Construction Audit

the Maritime Defense Audit Division andDivision was newly established within the 3rdtransferred to the Ground Defense Audit
344

Section 2 Changes in BOA's Organization

Division.

(3) Changes made on April 11, 1984
(establishment of the Information &Communication Technology Division)

D. The affairs of audit on the Civil Aviation
Bureau, the Coast Guard, the Meteorological

Affairs

Agency, and other government authorities

on

information

processingbywere separated from the Transport Audit

computers used to be treated as special issues

Division and transferred to the Transportation

under the order of the Secretary General and

Audit Division newly established in the 3rd

handled by the Special Programs Division. In

Bureau,order to deal with an increasing amount of

to

make

the

organizationforworkload in this field, the Information &transportation audit a two-division structure.

Communication

E. The affairs of audits assigned to the three

Technology

Divisionwasdivisions in charge of construction audit were

established within the Secretariat to exclusively

rearranged so that the division of affair amongtake charge of these affairs.

theconstruction

audit

divisions

Along

would

with

this change,theTraining

correspond to the organizational structure of

Division was abolished and the affairs concerning

the

1st

training of officials were transferred to the OfficeConstruction Audit Division to take charge ofof Training newly established in the Personnel

bodiesDivision.

MinistryofaffiliatedConstruction:
to

the

the

MinistryofConstruction as a whole and those affiliated to
the Housing Bureau and the City Bureau; the(4) Changes made on December 17, 1984
(organizational restructuring)

2nd Construction Audit Division to take

Organizational restructuring was carried out

charge of bodies affiliated to the Riveraccording to the following basic policies. (i) In

Bureau; and the 3rd Construction Audit

order to identify the administration in each field

Division to take charge of bodies affiliated toas a whole, audits on State-owned bodies, etc.

the Road Bureau, the Hokkaido Development

should, in principle, be assigned to the division

Agency,or Bureau that took charge of audits on the

and

the

Okinawa

Development

ministries and agencies having jurisdiction overAgency.

the respective bodies; (ii) In abolishing or

F. The organizational structure for agriculturebyestablishing divisions, consideration should be

abolishing one division to make it a four-

given to ensure that audits would adopt todivisionthechanges in the administration. (iii) Reallocation

organization of the Ministry of Agricultureof affairs of audit among the divisions should be

and Forestry.

designed to equalize density and increase quality

andforestry

audit

structure,wasrestructured

corresponding

toof audits. The major changes are as follows.

G. The Health & Welfare Audit Division in the
3rd Bureau was transferred to the 4th Bureau.

A. According to the principle that audits on

H. "Audit of special issues on which the Director

State-owned bodies, etc. were assigned to theGeneral of BOA requires audits" were added

division or Bureau that took charge of audits

to the affairs of audits assigned to theon

Coordination Division of each Bureau.

jurisdiction over the respective bodies, thetheministries

andagencies

havingpositions of three Senior Directors in the 5th345

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

audit on bodies affiliated to the Ministry of

Bureau were abolished.
B. The National Property Audit Division (Audit

Agriculture, Forestry and Fisheries as a whole

Manager) was abolished with its audit workand those affiliated to the Food Agency,transferred to the National Property Audit

Agriculture, Forestry and Fisheries Finance

Division, and the Finance Project Audit

Corporation,

Division in the 5th Bureau was abolished with

Infrastructure Audit Division to take theits audit work transferred to

the Stateaffairs of audit on bodies affiliated to theProperties Audit Division in the 1st Bureau.

Agricultural Structure Improvement Bureau;

The affairs of audit on the bodies affiliated to

the Fisheries & Livestock Audit Division to

the Ministry of Internal Affairs were separated

take the affairs of audit on bodies affiliated to

from

the

the

Finance

Audit

DivisionandLivestocketc. ;

Industrythe

Agricultural

Bureauandthetransferred to the National Property Audit

Fisheries Agency; and the Forestry Audit

Division. As a result, the organization for

Division to take the affairs of audit on bodies

finance audit was made a three-divisionaffiliated to the Forestry Agency.
G. The Government Financial Institutions Audit

structure.
C. The Rural Development Audit Division was

Division was newly established in the 5th

newly established in the 3rd Bureau as an

Bureau as an organ mainly in charge of auditsorgan in charge of audits on the Hokkaido

on government-affiliated financial institutions.

Okinawa

H. The Science & Technology Audit Division

Development Agency, and the National Land

was transferred from the 1st Bureau to the 2nd

Agency, and the bodies affiliated to these

Bureau; the Postal Services Audit Divisionagencies.

was transferred from the 2nd Bureau to theDevelopment

Agency,theD. The affairs of audit on the Sewerage and5th Bureau; the Labor Audit Division was

Wastewater Management Department weretransferred from the 3rd Bureau to the 4th

separated from the 1st Construction Audit

Bureau;Division

Industry Audit Division and the Internationalandtransferred

to

the

2 nd

and

the

International

Trade

&

Trade & Industry's Affiliates Audit Division

Construction Audit Division.

were transferred from the 4th Bureau to theE. The affairs of audit on the Health Insurance

5th Bureau.

Bureau, the Pension Bureau and the Social
Insurance Agency were separated from thetransferred to the Medical Care Audit Division(5) Changes made on December 18, 1987
(establishment of the Foreign Affairs Audit
Division, etc.)

newly established in the 4th Bureau, to makeIn order to appropriately deal with new

the organization for social security audit a

fields of audit that emerged along with the aging

two-division structure.

of population and progress in globalization,

Health&Welfare

Audit

Divisionandorganizational reshuffling was carried out as

F. The affairs of agricultural, forestry andfisheries audit assigned to the four divisions

follows.

were rearranged as follows: the Agriculture

A. In order to conduct full-fledged overseas

Audit Division to take charge of the affairs ofaudits including examination for Official
346

Section 2 Changes in BOA's Organization

Development Assistance (ODA) recipients, the1, 1967, one of the Deputy Directors in eachaffairs of audit on the Ministry of Foreign

division was appointed as Senior Deputy Director

Affairs were separated from the Finance Audit

to directly assist the Senior Director with all

Division and transferred to the Foreign Affairs

duties assigned thereto.

Audit Division newly established in the 1st(2) Assistant Secretary General (from 1977)
In April 1977 and April 1978, the position

Bureau.
Accordingly, the National Property Auditof Assistant Secretary General was set up as a

Division was abolished and its audit work was

replacement of Counselor. In April 1984, in ordertransferred to the State Properties Audit

to expand the scope of affairs to be organized by

Division, to make the organization for financethe Assistant Secretary General in the Secretariat,

audit a two-division structure.

both

the

Assistant

Secretary

GeneralforB. In order to further strengthen the audits on

Adjudication and the Assistant Secretary General

medical benefits expenditures, the Medical

for Special Programs were renamed AssistantCare Audit Division (Audit Manager) was

Secretary General. As a result, a total of 12

abolished with its audit work transferred to theAssistant Secretaries General were appointed, two

Medical Care Audit Division, to make theeach for the Secretariat and each Bureau.
However, on May 29, 1989, along with theorganization for social security audit a two-abolition of one position of Assistant Secretarydivision structure.
Accordingly, the 2nd Railways Audit

General in the Secretariat and the establishment

Division whose workload was reduced due toof a new position of Senior Assistant Secretary

the privatization of Japanese National Railways

General for Management discussed later, all of

was abolished with its audit work transferred

the 11 Assistant Secretaries General in total (tento the Railways Construction Audit Division,in the five Bureaus and one in the Secretariat)

to make the organization for railway audit awere concentrated in the Secretariat to engage in

two-division structure.

planning important affairs among those under thejurisdiction of the General Executive Bureau andorganize the related affairs.

2. Changes in the structure of positions
The structure of positions in the GeneralAmong the 11 Assistant Secretaries General,

Executive Bureau initially set up under the new

two were Assistant Secretaries General for

BOA Act was composed of the Secretary

Bureau and one Assistant Secretaries General for

General, Deputy Secretary General, Director

Secretariat. The Assistant Secretary General for

General, Senior Director, Deputy Director, chief,

Secretariat was to organize research and training,and general officials. The following changes werein addition to legal affairs and adjudication. Since

made to this structure between the mid-1960s andDecember 2002, one of the two Assistantlate 1980s (including some changes in the Heisei

Secretaries General for Bureau was to organize

era).

important(1) Senior Deputy Director (from 1967)

operations as well.

affairs

concerninginternational

In May 1947, the position of Deputy

Following the organizational changes madeDirector was set up in each division. On February

on April 1, 2005, one additional position of347

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Assistant Secretary General for Special Issues

for communication and coordination among the

Audit was set up, to make the number ofdivisions. In order to solve the problem arising

Assistant Secretaries General for the 5th Bureau

from such sectionalism, on April 1, 1984, five

three. Further through the organizational reform

new Coordination Director positions were set up

made on April 1, 2009, one additional Assistant(one for each Bureau) under the Senior Director

Secretary General for Secretariat was appointedof Special Programs for the Secretariat. The

to engage exclusively in planning general audit

Senior Deputy Director of the Coordination

operations and organizing the related affairs,

DivisionsmakingAssistantsimultaneously serve these positions (one Director

Secretaries General, one in charge of generalof Coordination was additionally appointed foraudit affairs, and the other in charge of audit

the Secretariat in FY1986).

the Secretariat

have twoin

five

Bureaus

were

made

to

support and planning of international operations.

For further enhancing the planning and

As of the end of December 2009, there were 13

coordination functions for audits, on April 6,

Assistant Secretaries General in total.

1985, two Directors of Audit Policy Planning(3) Assistance Auditor (from 1979)

were appointed (one for the 3rd Bureau and theOn April 1, 1979, the position of Assistant

4th Bureau each) to replace two Directors of

Auditor was set up in each Audit Division

Coordination in the position of director class to(including

Audit

engage in planning and coordinating important

Manager). Among the Assistant Chiefs, which

affairs on the planning and implementation of

had been appointed until then, those who wereaudits. The replacement of the Director of

supposed to become Auditors in the future andCoordination with the Director of Audit Policy

those who were engaged in administrative work

Planning was carried out for one post in FY1986

were mixed. By making a clear distinction(5th Bureau), two posts in FY1988 (Secretariat

between these two groups, those in the first groupand 2nd Bureau), and one post in FY1990 (1stwere appointed as Assistant Auditors, with a

Bureau).

those

under

the

title

of

On January 6, 2001, the Director of Audit

view to educating and training them to be
Auditors.

Policy Planning was changed into the Audit(4) Director class (from 1984)

Policy Planning Division for Secretariat. On April

Between the mid-1970s and late 1980s, the1, 2005, one additional position of Director of

positions of director class including Director of

Audit Policy Planning for Secretariat was set up

Office, Director of Audit Policy Planning, andto take charge of works of internal audits, making

Director for Consolidated Audit were set up as

the total number of Directors of Audit Policy

follows.

Planning seven.
On April 1, 2009, the position of Director of

A. Director of Audit Policy Planning (from1985)

Audit Policy Planning for Secretariat in charge ofIn principle, BOA's organizational structure

works of internal audits was changed to theconsisted of the divisions corresponding to the

Director

respective

causing

Accounting and Auditing Cooperation under thehindrance to the flow of information necessary

Capacity Development Division, and the other six

ministries

andagencies,

348

of

the

OfficeofPublicSectorSection 2 Changes in BOA's Organization

Directors

of

Audit

PolicyPlanning

weretransferred to the Management Division. As of
April 12, 1991

the end of December 2009, there were six
Directors of Audit Policy Planning in total.

April 10, 1992

B. Director for Consolidated Audit (from1986)
In order to enable each audit division, whichis responsible for directing audits, to conduct

April 1, 1993

more efficient and effective audits on importantmatters, including cross-cutting audits on thesame auditee, the position of Director for

April 1, 1999

Consolidated Audit was set up in 1986 as the
position of director class to take charge ofApril 1, 2002

planning and coordinating audits on importantmatters and conducting audits necessary for these
April 1, 2006

operations.
As shown in Table 1, the positions of
Directors for Consolidated Audit (including the
Director for Consolidated Audit of Information
and Communication Audit) were set up andApril 1, 2009

reorganized, and as of the end of December
2009, there were six Directors for Consolidated
Audit.

5th Bureau: 1stAbolished on April
Railways Audit
1, 2005
Division
2nd Bureau: Health Changed to the& Welfare Audit
Director of Office
Divisionon April 1, 2006
3rd Bureau:
Currently Port &Transport Audit
Aviation Audit
Division
Division
4th Bureau: 1stChanged to the
Education Audit
Director of Office
Divisionon April 1, 2004
5th Bureau:
Changed to theInternational Trade Director of Officeand Industry Audit on April 1, 2007
Division
3rd Bureau: 2ndCurrently Water
Construction Audit Resources Audit
Division
Division
4th Bureau:
Agriculture
Infrastructure Audit
Division
5th Bureau: Special Changed to theIssues Audit
Director for
Division for
Consolidated Audit
Ministriesof the Information
andCommunication
Audit Division on
April 1, 2009
5th Bureau:
Information andCommunication
Audit Division

C. Other positions of director class

Table 1 Set up and reorganization of the position of
Director for Consolidated Audit

Positions of director class other than those

Audit divisions
Reorganization of
Date of set up
where the position
the position
was set up
January 1, 1986 Secretariat:
Information &Communication
Technology
Division
1st Bureau: 1st Tax Changed to the
Audit Division
Director of Officeon April 1, 2005
2nd Bureau:
Ground Defense
Audit Division
3rd Bureau: 1stChanged to theConstruction Audit Director of Office
Divisionon January 1, 2003
4th Bureau:
Changed to theAgriculture Audit Director of Office
Divisionon April 1, 2003

mentioned in A and B were set up as follows:
DirectorofOfficeofTraining,

Personnel

Division on April 11, 1984 (abolished on April
10, 1992); Director of Accounts Division in the
Accounts Division on April 5, 1986; Director of
Office of Public Relations in the Management
Division and the Director of Office of Data andInformation in the Research & International
Division on May 21, 1987 (see page 443).

3. Changes in the fixed number of officials
Changes between FY1966 and FY1988
From the mid-1960s, the fixed number of349

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

BOA officials increased and decreased by thein maintenance of the office buildings).

same number due to the suspension of filling of(C) The employment extension system applies tovacantpositions

since

FY 1966

andAuditors (including Deputy Directors).

thecooperation for the government's plan to reduce

Subsequently, through the amendment to 11-

the number of officials since FY1969. As a

8 (Retirement of officials) of the Rules of theresult, the number of BOA officials remained to

National Personnel Authority, as from September

be 1,212 until FY1974.

1997 the mandatory retirement age was raised toSince FY1975, the government allowed a62 years of age for Vice Ministers of ministries

slight increase in the number of officials every

and agencies, and the Secretary General andfiscal year in order to enhance and strengthen the

Deputy Secretary General of BOA.

audit functions, and the fixed number of BOA

B. Employment extension system
As an exception to mandatory retirement, theofficials reached 1,234 in FY1988.

National Public Service Act permits an extensionof employment for three years at the maximum in

4. Changes in the personnel system(1) Mandatory
retirement
systememployment of elderly persons

cases

and

where

the

retirementofnational

government employees would cause considerably
disturbance to the operation of official duties,

A. Mandatory retirement systemwassuch as where it is difficult to secure newamended by Act Partially Amending the National

employees to substitute for retired employees

Public Service Act promulgated in June 1981

immediately because, for example, those retired(Act No. 77 of 1981), and the mandatory

have been engaged in extraordinary services, orretirement system generally applicable to officials

where those retired are currently performingin the regular service was introduced on Marchspecial duties. Upon the introduction of the31, 1985.

mandatory retirement system, BOA decided to

The National

Public Service Act

Under the mandatory retirement system,

apply the employment extension system towhen employees reach the mandatory retirement

Auditors (including Deputy Director) according

age, they retire on the day of mandatory

to the following policy.

retirement without the Appointer's disposition.

(A) Theemployment

extension

systemis

Except for some cases, the mandatory retirement

scheduled to be operated for about ten years

system was applicable to officials in the regularfrom FY1984.
(B) BOA officials whose employment is to beservice in principle, and they were to retiree upon

extended are selected from among officials

reaching the age of 60, in principle.

who reach the age of 60, 61 or 62 by March

BOA adopted the following policy toimplement the mandatory retirement system.

30, 1985, and those who reach any of these(A) BOA officials are to retire on the first Marchages on or after March 31, 1985, within the

31 after the day on which they reach thefollowing scope:mandatory age.

a. 100% of those who reach the age of 60 ineach fiscal year (with approval of the(B) The mandatory retirement age is 60 years of

National Personnel Authority)age (or 63 years of age for officials engaged
350

Section 2 Changes in BOA's Organizationb. around 70% of those who reach the age of

Recruitment Examination from April 1986), so as

61 in each fiscal year (with approval of

to have female officials engage in audit activities

the National Personnel Authority)

directly after employment. In April 1990, BOA
recruited the first female official who passed thec. around 70% of those who reach the age ofLevel I Recruitment Examination, and continued

62 in each fiscal year

to recruit female officials who passed this(C) BOA officials whose employment is to be

examination.

extended are selected by comprehensively
takingrecords,

into

consideration

healththeirservice

Table 2 shows how BOA increased the

and

other

number of female audit officials. After two

conditions,circumstances.

female officials were promoted to this position in

For eight years from the beginning of FY

April 1976 for the first time as mentioned above,

1985 to the end of FY1992, BOA extended

the number of female officials converted to

employment of 63 retired officials.

officials specialized in audit increased, reaching(2) Employment and promotion of female
officials

ten in April 1984 (seven as Auditors and three as

A. Promotion to Auditors and other positions

recruited new female officials as audit officials

Assistant

Auditors).

From

FY1985,BOA

At BOA, the first female Auditors werefor every fiscal year. As of April 2009, there

appointed in April 1976 (two Auditors). Until

were 101 female audit officials. Thus, BOA

then, most female officials of BOA had belonged

increased the number of female officials engaged

to administration units at each division of thein audit activities.

Secretariat, or the Coordination Division or Audit

On January 1, 1989, female officials were

Division of each Bureau, and engaged exclusively

promoted to the post of Deputy Director for thein administrative work. However, against thefirst time in the Medical Care Audit Division of

backdrop of the mass recruitment of officials

the 4th Bureau and the International Trade andbetween the mid-1970s and late 1980s and theIndustry Audit Division of the 5th Bureau. The

decline of the average age of officials, BOA

number of female Auditors also increased fromsought to actively engage women for audit work,

two in FY1976 to 53 in FY2009.

and therefore it moved to appoint more womenas audit officials.

Table 2 Number of female audit officials by fiscal year
(unit: persons)

In order to secure female officials as

FYpersonnel for audit activities, BOA first took the

1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

measure to convert those engaged exclusively inadministrative work, referred to as officials
specializedinadministration,

toofficials

specialized in audit. Since April 1985, in addition
to this measure, BOA adopted the measure to
recruit women who passed the Intermediate-Level
Recruitment

Examinationfor

National

Government Employees (referred to as Level II
351

DeputyAssistant Junior
AuditorDirector
Auditor Auditor
0
2
0
0
0
3
0
0
0
3
0
0
0
4
1
0
0
4
3
0
0
4
3
2
0
5
2
3
0
7
1
2
0
7
3
0
0
9
1
3

Total
2
3
3
5
7
9
10
10
10
13

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

1986
0
10
2
3
1987
0
12
0
4
1988
0
12
0
10
1989
2
10
1
11
1990
3
9
4
13
1991
3
10
3
16
1992
3
11
7
15
1993
1
12
7
18
1994
1
14
9
17
1995
1
15
11
19
1996
2
18
11
20
1997
2
22
15
16
1998
3
23
15
17
1999
4
27
15
17
2000
2
33
13
16
2001
4
34
14
17
2002
5
36
13
16
2003
4
40
13
16
2004
6
42
13
18
2005
5
43
12
21
2006
3
47
12
24
2007
3
47
13
26
2008
1
53
11
31
2009
1
53
13
34
Note: The number as of April 1 of each fiscal year(B) In

15
16
22
24
29
32
36
38
41
46
51
55
58
63
64
69
70
73
79
81
86
89
96
101

until

FY1998,afemaleofficialwas(C) In April 1981, the position of Senior
Librarian was set up in the Research &International Division of the Secretariat as a
specialist post that was higher than Chief,
and a female official was appointed for thisposition.

higher positions.
officials

wasAudit Division every fiscal year.

achievements in promoting female officials tofemaleofficial

appointed as the Administration Chief in theofficials to Auditors, BOA made the following

1982,

a femalefirst time in the Audit Division. Since then,In addition to the promotion of female

April

1987,

promoted to the Administrative Chief for the

B. Promotion to Chiefs(A) In

April

were

promoted to Administrative Chiefs for the
first time in the Coordination Divisions of
the 4th and 5th Bureaus, following whichfemale officials were also promoted to thisposition in the Coordination Divisions ofother Bureaus. In April 1984, all Bureaus had
the female Administrative Chiefs in the
Coordination Divisions. In April 1984 andApril 1985, female officials were appointed
as the Administrative Chiefs in the Special
Programs Division and the Information &Communication Technology Division of theSecretariat.
352

Section 3 Audit Activities

Section 3 Audit Activities
Subsection 1

established one by one from around the mid-1950

Audit subject matterss, mainly in a manner of taking over the projects
and business carried out by the State. In

1. Scope of audit
The scope of audit is broadly classified into

association with this, the number of bodies

the following two categories: [i] mandatory audit

subject to mandatory audit also increased andsubject matters under the provision of Article 22

exceeded 90 after the mid-1960s.

of the BOA Act; and [ii] discretionary audit(2) Split and privatization of three public
corporations

subject matters under the provision of Article 23,

Among Japan Tobacco and Salt Publicparagraph (1) of the BOA Act (see page 271).
Among them, with respect to the scope ofCorporation and Japanese National Railways

discretionary audit subject matters, the scope oflaunched in June 1949 and Nippon Telegraph andaudit for the three public corporations, namely

Telephone Public Corporation launched in August

Japan Tobacco and Salt Public Corporation,

1952, Japan Tobacco and Salt Public Corporation

Japanese

Nipponand Nippon Telegraph and Telephone Public

Telegraph and Telephone Public Corporation, wasCorporation were privatized in April 1985 andexpanded as that for the State, as a result of thebecameamendment of the BOA Act in August 1955.

Telegraph and Telephone Corporation (NTT),

However, it was deleted due to the amendment ofrespectively. Although the stocks of the two

the BOA Act in April 1985 and April 1987 incompanies held by the State were gradually sold,association with the privatization of public

the State's stock holding ratio remains to be half

corporations.

or more and thus the two corporations were

National

Railways

and

Japan

TobaccoInc.

andNipponaudited as bodies subject to mandatory audit.
Meanwhile, Japanese National Railways was

2. Establishment, revision and abolition of
bodies subject to mandatory audit

split and privatized into the following entities inApril

The overview and major establishment,

1987 :

Japanese

National

Railways

Corporation,

Hokkaido

Railway

revision and abolition of the bodies subject toSettlement

mandatory audit between the mid-1960s and mid-Company, East Japan Railway Company, Central

1980s are as follows.

Japan Railway Company, West Japan Railway(1) Overview of bodies subject to mandatory
audit

Company, Shikoku Railway Company, Kyushu

In

the

corporations

postwarandRailwayCompany,

publicCompany( JRgovernment - affiliatedcompanies,

theprocess,

three

Japan

Freight

companies ) .
Japan

Railway

Among

Nationalthese

Railwaysinstitutions (finance corporations and banks) wereSettlement Corporation was audited as bodies

established one by one since the mid-1940s andsubject to mandatory audit since the State had

public corporations engaged in public projects

contributed to the whole amount of its statedand agencies, associations and other organizations

capital.

in charge of economic and social policies were353

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

3. Determination of the audit subject fordiscretionary audit subject mattersmanage and operate storage facilities that are

Determinations of the audit subject that are

Oil Corporation which was a State-wholly-owned

considered to be closely linked to socioeconomic

body made contribution and granted interest-freecircumstances among those made between theloans in large amount for funds necessary formid-1960s and mid-1980s are explained below.

establishing the storage facilities.

necessary for storing oils and the Japan National

It was found necessary for BOA to ensure(1) Determination of the audit subject forJapan Starting System Co., Ltd. in relation
to fraud

adequate financial management in the operations

In November 1979, it was broadcast that

audit for the following reasons: [i] a large

Japan Starting System Co., Ltd. ("JSS") had fakeamount of contribution, etc. has been made byincome most of which were unaccounted-for

the Japan National Oil Corporation; [ii] theirexpenditures.

businesses were conducted as part of the nationalof these companies by continuously conducting

JSS was established by separating theoil storage business, which was one of thestarting system division of the Japan Racing

important businesses of the Japan National Oil

Association (JRA) which was originally one of

Corporation; and [iii] a large amount of funds

the State-wholly-owned bodies. 50% of its statedwerecapital was contributed by JRA and it was

Corporation every year as the usage fee of theundertaking all of the starting operations forstorage facility even after the installation of thehorse racing and starting practice from JRA

national stock oil. As such, during the period

which meant that the failure of its managementfrom 1983 to 1990 in which the construction of

could

management.

the facility was fully in progress and the business

Therefore, it was found necessary to clarify thescale expanded, BOA determined their audit

actual conditions of its accounting.

subject from their establishment to the future by

inhibit

JRA's

Accordingly,

businessin

January

1980,

audit

subject

for

paid

from

the

Japan

NationalOildesignating them as indirectly State-owned bodies

BOA
byunder the provision of Article 23, paragraph (1)designating it as the indirectly State-owned body

item (v) of the BOA Act and decided to audit

under Article 23, paragraph (1), item (v) of thethem every year.

BOA Act and conducted audit. As a result of the(3) Split and privation of Japanese National
Railways and determination of the audit
subject for JR companies

determined

the

JSS

audit, BOA found breach of accounting and thus
set down such fact as improprieties in the FY

As stated above, Japanese National Railways

1980 Annual Audit Report.

was split and privatized in April 1987 into Japan(2) Determination of the audit subject for oil
storage companies after the oil crises

National Railways Settlement Corporation andother JR companies.

In light of the oil crises in 1973 and 1979,
calls for expansion and enhancement of oil stock

Among the abovementioned corporations,were made. Thus, from December 1979 to May

Japan National Railways Settlement Corporation

1986,

were

was subject to mandatory audit as a State-wholly-

sequentially established in order to construct,owned body while JR companies became the

eight

oil

storagecompanies

354

Section 3 Audit Activities

wholly-owned body of said corporation and thusof NTT Data by continuously conducting audit

became subject to discretionary audit as thefor the following reasons: [i] its business

indirectlyinincluded telecommunication businesses that were

Article 23, paragraph (1), item (v) of the BOA

provided in laws and were originally conducted

Act. It was found necessary for BOA to ensure

by NTT in the past, and thus have integrity; [ii]adequate financial management in the operations

its amount of stated capital is large and isofcontinuously

contributed by NTT in whole and also has a large

conducting audit for the following reasons: [i]amount of property transferred and debts; [iii]they succeeded to a large amount of assets fromtheir business scale is large and is expected to

the former Japanese National Railways and have

expand in the future; and [iv] it is implementing

large business scales; [ii] the State is providing

highly public projects such as the social insurance

financial aids such as subsidies andsystemthese

State-owned

JRbodiescompanies

prescribed

by

debt

serviceasSpecialBusiness

Type

II

and

the

guarantees; and [iii] above all, they are strongly

Telecommunications

required to achieve good management due to theGovernment Accounting Affairs Data Transaction

background to their establishment. As such, BOA

System of the Ministry of Finance.
As such, in July 1988 BOA determined thedetermined their audit subject for the future in
April 1987 and decided to audit them every year.

audit

subjects

for

NTT

Data

from

its

(4) Determination of the audit subject for thesubsidiary split from NTT

establishment to the future by designating it as

As stated above, Nippon Telegraph andparagraph (1), item (v) of the BOA Act andthe indirectly State-owned body under Article 23,
decided to audit it every year.

Telephone Public Corporation was privatized andbecame NTT in April 1985. In association with

Subsection 2

this, it was decided to establish a new company

Audit objectives

and separate and transfer part of the business
which has been conducted by NTT in the past in

In the past, audits in Japan have beenorder to realize fair and effective competition

conducted based on five objectives (i.e. accuracy,with other telecommunications carriers based on

regularity, economy, efficiency and effectiveness)the report of the Provisional Commission on

and other objectives necessary for auditing but

Administrative Reform. In May 1988, NTT Dataconsiderable changes can be found in the weight

Communications Systems Corporation ("NTTon each objective based on the socioeconomic

Data": current "NTT DATA Corporation") was

circumstances of the time. Looking back on theestablished as the wholly-owned company ofperiod between the mid-1960s and mid-1980s,

NTT and the businesses including the provision

generally, a major trend of change from auditof telecommunication services in relation to TypefocusedII telecommunications business which had beeneffectiveness audit can be found. In the following

conducted

parts, the major changes between the mid-1960s

as

data

communication

facilities

oneconomyandand mid-1980s shall be reviewed.

service in the past were transferred.
It was found necessary for BOA to ensure
adequate financial management in the operations
355

efficiency

toPart 3

Chapter 3

Audit between the mid-1960s and late 1980s

1. Establishment and development of theeffectiveness audit between the mid-1960s
and early-1980s

measures, as "matters demanded for special(1) Effectivenessaudit
directedforpresentation of opinions or demand formeasuresobjective of effectiveness took root from aroundattention" (see page 365).
Throughthese audits,

audits withthe1965 and were tentatively established.

The active presentation of opinions or(2) New establishment of special description
and effectiveness audit

demand for measures that was made from theLater, from the FY1975 Annual Audit

early 1960s led the audit with the objective ofReport onward, BOA began to raise questions byeffectiveness to be conducted on a full scale insetting

addition to audits with the objectives of economy

circumstances as special description that is foundand efficiency.

inappropriate under audit, such as the case where

down

in

the

annualaudit

reportOf course, audits with the objective of

the effect of budget execution has not beeneffectiveness had been conducted in the past, andachieved but is neither categorized as presentation

audit findings based on such audits wereof opinions nor as demand for measures, not to

occasionally seen. Yet, in the full-scale recovery

mention improprieties, due to involvement of

period starting from the mid-1950s after thefundamental policy issues of the State. As acompletion of the postwar process, numerous

result, more focus was proactively placed on

projects including social capital improvement

issues mentioned above, resulting in wider

based on various long-term plans were developed

implementation of audits with the objective ofand the scope of audit was also expanded toeffectiveness and increased weight.

include the evaluation of the achievement state of

These special descriptions include thosethe effects of various public works, etc. As arelated to investment effects of big projects such

result, starting from the state-run irrigation

as New Tokyo International Airport, nuclear shipproject in 1962, between the mid-1960s and mid-"Mutsu,"1970s BOA presented opinions or demanded

reclamation project, those related to the businessmeasures one after another based on the objective

conditions of Japanese National Railways, thoseof effectiveness with respect to the state-run

related to the use of houses and lands and thoseproject for construction of irrigation and drainage

related to the function of the Cocoon Thread

facilities, farming and forestry projects including

Price Stabilization system.

multipurpose

dam

and

state-runreclamation projects and construction projects of
new railway lines of local lines. In addition, in

2. Audits with the objectives of economy andefficiency between the mid-1980s and late1980s

the annual audit reports from FY1965 to FY1967,
BOA stated situations for which there wereandSince the three public corporations were allcomprehensive viewpoint in relation to theprivatized by April 1987, BOA examined how

investment effect, etc. of the State but which

the audit

cannot be regarded as improprieties or become

conducted, in May of the same year. As a result,subject to presentation of opinions or demand for

BOA, understanding the purpose of privatization,

criticismoropinions

from

a

broad

356

for

stock

companies

shouldbeSection 3 Audit Activities

decided to conduct audits with the objectives ofdivision in charge between the mid-1960s andeconomy and efficiency by particularly placing

late 1980s are as follows.

emphasis on whether or not management isconducted in an efficient manner. With respect to

A. Audit policy of each audit division (audits
in 1969)

JR companies, BOA decided to conduct audits

In conducting audits in 1969, each audit

also with the objective of effectiveness to confirm

division in charge was made to explain its audit

whether stable and convenient service is secured

policy to the relevant entities including the Audit

by bearing in mind their strong public nature

Commission and to conduct audit based on theeven after the privatization.

opinions raised by such entities in regard to suchpolicyThe representative audit findings made after

insteadofdeciding/determining

thethe privatization include those related to revenues"priorities for auditing" which was the practice inand expenditures and management of directly

the previous years.

managed stores in relation to JR and those related

B. "Audit plan" (audits since 1970)

to the provision of color telephone sets, etc. in

In conducting the audits in 1970, it was

response to the liberalization of devices, etc.

decided to develop a specific and detailed plan

which was one of the measures to secureby using the method used in the previous year.

competition in relation to NTT. While all of themSpecifically, it was decided to develop an audit

were made in the form of presentation ofpolicy for budgets which were determined to beopinions under the provision of Article 36 of theimportant from the standpoint of audit after

BOA Act demanding promotion of efficiency ofanalyzing and examining the FY1969 budget andmanagement, most of the audit findings were

results of the execution thereof and clarifying thethosepoints at issue and then develop an "audit plan"demandingeconomic

andefficient

based on such audit policy.

implementation of various businesses.

The name "audit plan" was used for the first
Subsection 3

time. This was based on the idea to ensure

Procedures of audit

consistency within BOA as a whole and perform
audit in a well-planned manner by adopting the

1. Audit plan
BOA develops plans in the form of setting

method of consulting all of the plans of the audit

items which should be intensively audited bydivisions in charge with the Audit Commission

each audit division in charge in conducting audits

insteadevery year for the purpose of conducting efficientconsultation with the Audit Commission is onlyand effective audit based on the collection andmade for "priorities for auditing" as in the past.

of

adoptingthemethodwhereinanalysis of information on the audit subject

This "audit plan" had detailed contents

matter. Moreover, since the audit in 1981, BOA

including the number of personnel and days

has developed basic audit policies which should

planned to be used for field audits, the auditees

be taken by the BOA in whole.

and audit time in addition to the aspects, method(1) Changes in planning for each audit divisionin charge

and scope of audit for each audit subject matter

The changes in the plans for each audit

This principle was basically taken over ingroup (budget division)

357

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

the audit conducted in 1971 but the contents ofaudit findings on special descriptions dealingthe "audit plan" were slightly simplified and thewith situations involving political or social issues

matters requiring intensive audit were establishedand widely raising questions and detection ofas "Focus of audit" while the aspects and method

fraud in public offices. As a result, BOA keenlyof audit, percentage of the human resource

realized that audit plans that were developed

allocation for field audits and planned number of

separately by each audit division in charge inauditees for field audits were to be decided.

past practice were insufficient to respond to the

The structure, form and other matters

expectations from various quarters and to conduct

concerning the "audit plan" have been reviewed

audits that better meet the needs of the times, andbut so far no major changes have been made tothat it was necessary to clarify the specificthe abovementioned development policy.

attitude to be taken by BOA as a whole for the(2) Audit policy

audit of the relevant year and to have a top-down

A. Outline of preparation of the audit policy

policy that controls each audit plan. Accordingly,
BOA started to develop a "Basic Policy on Audit

Audit policy shows the basic guideline forPlan" from the audits conducted in 1981.

audit which the audit divisions in charge should
comply with as part of the affairs of audit underThis policy presented the basic policy

the jurisdiction of the General Executive Bureau

initiatives for audit which the audit divisions in(Article 12, paragraph (1) of the BOA Act).

charge should comply with, in relation to theaudit

The audit policy is developed in theobjectives

andvariousprojects

andfollowing steps: first, the division in charge underprograms that are subject to audit. It was also

the Secretariat develops a draft policy which is

specifically and strongly presented that BOA

deliberated by the Secretary General and turned

should find new audit fields and develop new

into one decided at the level of the General

audit methodologies. As a result, audits in the

Executive Bureau, and then it is discussed andsocial-oriented fields such as those related toapproved by the Audit Commission to receive

socialdirection and supervision therefrom (Article 12,

developed while audits using computers wereparagraph (1) of the BOA Act).

also conducted in a proactive manner.

Until

the

audit

conducted

in

1998,

security

andeducation

werelargely(B) "Basic Policy on Audit Plan" and"Guideline on Preparation of Audit Plan"(audits between 1986 and 1998)

consultation of the audit policy with the Audit
Commission was customarily made together withIn December 1985, the Secretary Generaldrafts of audit plans in late March.

presented the "Guideline on Preparation of Audit

B. Changes in preparation of the audit policyPlan" in conducting the audit in 1986. This

Changes related to the audit policy are as
follows.

guideline included matters which the audit(A) "Basic Policy on Audit Plan" (audits
between 1981 and 1985)

divisions in charge should comply with in

Since

the

mid-1970s,

BOA's

developing drafts of audit plans and the points ofconsideration for performing audit activities, in a

activities

specific and detailed manner.

received unprecedented attention and expectation

While this guideline was prepared based onfrom the people, Diet and the media through358

Section 3 Audit Activities

B. Position of in-office audits

the same idea as that of the "Basic Policy on
Audit Plan," it was presented to show the policy

From the early 1970s, the number of days

for preparing audit plans prior to the development

working at the office decreased due to theof drafts of audit plans by the audit divisions inincrease in the number of official trips and it

charge, to represent the intention of the Audit

became difficult to completely conduct in-officeCommission, in order to substantially fill the gap

audits. Thus, each division decided to implement

caused by the development of drafts of audit

an "extract system" wherein important matters inplans by the audit divisions in charge ahead ofaudit are extracted from the statements ofthe consultation of the audit policy with theaccounts and documentary evidence and are

Audit Commission.

examined, by taking into consideration the actual
circumstances

such

as

the

organizational

structure.

2. Conduct of audit

In this way, the main part of audit made the(1) In-office audit

shift to field audits and in-office audits became

A. Submission of accounts
The rules of the submission of accounts

more characterized as a preparation for field

have been reviewed four time after the enactment

audits in addition to being conducted as theof the BOA Act (twice in 1965 and 1982

means to verify the accuracy of the statements in

between the mid-1960s and late 1980s) tothe "verification of the final accounts."

simplify the affairs by raising the limit for(2) Field audits

keeping

A. Special form of field audits

theattached

documentsofthedocumentary evidence to the auditee instead ofsending

them

to

BOA

by

taking(A) Overseas audit - Audit ofDevelopment Assistance (ODA) -into

Official

BOA started to conduct field examinations

consideration the necessity for audit by BOA andadministrativein the counterparty country on a full scale fromworkload of the auditees and increase in the price1987 in relation to ODA since the Marcos

level.

Scandals in 1986.

circumstances

such

as

the

(B) Temporary and urgent audits - Audit of
the issue of coarse stone materials in
Aomori In summer of 1986, a suspicion suggestingthat the stone materials used in the government
subsidy projects involving fishing ports, harbors
and coasts in Aomori Prefecture were coarse
came

into

light.

Field

examinations

wereconducted by Diet members for this issue which
was also covered at the Diet and by the media.
Under such situation, BOA temporarily andDocumentary evidence kept in the book storeroom

especially implemented field audits by a teamconsisting of a total of ten members including the359

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Director of Audit Policy Planning ofJanuary 1978.

the(3) Cross-cutting audits

Secretariat serving as the Head of Field Audits

The organizational structure of BOA is, inand the auditors of the relevant audit division for
agriculture, forestry and fisheries, transportation

principle,composedand construction in mid-October when it wasorganization of the ministries and agencies. Thisalready compiling the annual audit report bykindcompleting the ordinary field audits.

structure had drawbacks such that it was difficultofofverticallydivisionssegmented

for

each

organizational

In this case, as a result of the examination

to make agile responses to cross-divisional audit

asking external experts to analyze the stone

issues. Thus, when the auditees under thematerials, it was determined that there would bejurisdiction of multiple divisions are engaged in

no major trouble in terms of the stability andrelevant or similar projects and programs anddurability of the structure.

they must be audited based on a comprehensive

B. Issueoverfieldentertainment issue-

auditsor same viewpoint, it may be preferable for a- Businesssingle organizationentertainment

fromcross-cutting

BOA established divisions that conduct

daily in the newspaper that BOA's auditors were
excessive

conduct

audits.

From November 13, 1977, it was reported
acceptingtocross-cutting audits in order to cover thetheauditees at the time of field audits. This issue

shortcomings

of

such

verticallysegmented

was also taken seriously at the House oforganizational structure and to achieve better

Representatives' Committee on Audit and theaudit results. The changes and outcomes of such

House of Councilors' Committee on Audit andorganizational structure are as follows.

tough questions were asked one after another.

A. Cross-cutting audits until 1985
(A) Efficiency audit and cross-cutting audits

BOA promptly conducted close examinationIn

to determine the facts and thereby took measures

April

1961,

the

SpecialPrograms

so as to prevent its staff members from receiving

Division was established under the Secretariat toany of such entertainment in the future in orderconduct examination on special issues on which

to maintain the authority and reliability of BOA

the Secretary General of BOA required audits. In

and to respond to the criticism from the Diet and1971, examination on the efficiency audit was

the public. Specifically, on November 19, 1977,

added to one of the special issues requiring

the Secretary General notified every official toexamination. The efficiency audits conducted

exerciseduring the period from 1971 to 1985 includes

theirself - control

anddisciplinethemselves in a strict sense and also called forcross-cutting

audit

issuesthe auditees' nationwide cooperation for thebureaus and divisions.

covering

multiplepolicy to firmly decline any kind of entertainment

The audit results that have been set down inin the future. In addition, in order to secure suchthe annual audit report as a result of suchmeasurespreparations

efficiency audit include the one which was set

including the arrangements of accommodations at

down in the FY1976 Annual Audit Report as

the time of official trips for field audits havespecial description by conducting cross-cuttingcome to be directly carried out by BOA since

auditstobeeffective,

all

360

in

1977

on

the

constructionandSection 3 Audit Activities

management of houses using public funds by the

Planning and Coordination Team of the Special

Ministry of Construction, Government Housing

Programs Division took charge of cross-cutting

Loan Corporation, Japan Housing Corporation

audits from 1986. In association with this, cross-and other relevant entities that were under

cutting audits were conducted by basicallyseparate jurisdiction of four audit divisions ofadopting a divisional structure wherein the Audit

two bureaus at that time.

Planning(B) Cross-cutting audits related to computersplanning and coordination for cross-cutting audits

andCoordination

Team

conducts

while the relevant audit divisions conduct and

The Special Programs Division had beenarrange cross-cutting audits.

conducting research study on various audit issues
related to computers by establishing an Automatic

It can be said that cross-cutting audits started

Data Processing System (ADPS) team since 1963

to be conducted on a full scale from 1986 in theand a cross-cutting audit on the establishment andsense that they were conducted as a policy of theoperating cost of computers was conducted on a

overall BOA.

full scale for the first time in 1979. In addition,(4) Audit using computers
Businesses

the team demanded for measures under theof

auditees

have

becomeprovision of Article 34 of the BOA Act withcomplicated and significantly increased while

respect to the circumstances where the Small andpaperwork using computers has involved wide

Medium Enterprise Mutual Aid Corporation was

range

outsourcing part of its business although theadvancement

central processing unit had the ability to spare

Against such a situation, it has become effective(the FY1978 Annual Audit Report).

to use computers for audits and BOA has beenoffieldsofinassociation

withinformation-oriented

thesociety.

expanding their use.

Since April 1984 when the Information &was

The historical change in the audits using

established under the Secretariat, the division has

computers can be broadly divided into fourbeen in charge of cross-cutting audits related toperiods. The following two periods can be foundcomputers.

between the mid-1960s and late 1980s. The state

B. Cross-cutting audits since 1986of using computers for audits will be explained

Communication

Technology

Division

below (see page 461).

In light of the increase in the number ofFirst period (1963 to 1983)

cross-divisional issues in association with theof

The period during which the ADPS teamadministration, cross-cutting audits have been

was established under the Special Programs

conducted by specifically and clearly presenting

Division and the development research on thethe items subject to such audits in the "Guideline

audit method using computers was conducted.

on Preparation of Audit Plan" and "Basic Policy

Second period (1984 to 1985)

complication

anddiversification

Period during which the Information &on Audit Plan" from the audits conducted inCommunication

1986.

Technology

Divisionwas

Amid such a situation, in December 1985,

established and audits using computers on a fullthe efficiency audit team under the Special

scale by introducing all-purpose computers were

Programs Division was abolished and the Audit

started.
361

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

3. Analysis and review of the audit findings(1) Request for evaluation, etc.
In clarifying the abovementioned issue ofcoarse stone materials in Aomori in 1986 (seepage 359), which is one of the examples whereconclusion was reached by requesting analysis
and examination of the safeness of various
materials

andconstructionsorrequestingevaluation and appraisal of the price of realestate,BOA

requestedoutsideScene of field audits

university

professors to provide evaluation by conducting
specialized

examinations,analysis

Subsection 4

andAudit reportconsideration on matters such as the specificdensity of the stone materials and whether or not
the stone materials are likely to weather.

1. Audit cases reported in the annual audit
reports(2) Setting up of technical counselors

The major state of descriptions of item (iii)

In April 1969, one "Technical Specialist" in"other matters found necessary" (see page 285),

the senior director class was set up with an aim

that are among the optional reporting pursuant toto provide support by a higher level of expertisethe provision of Article 15 of the Regulation for

in

Enforcement of the BOA Act between the mid-theconsideration

anddeterminationoftechnical problems. The number of Technical1960s and late 1980s is as follows.

Specialists was later increased to five and their・Measures taken (from the FY1966 Annual
Audit Report)

name was changed to "Technical Counselor" in・Special description (from the FY1975 Annual

1979. In 1980, one personnel has been reduced.

Audit Report)

These Technical Counselors mainly consistof experts with rich knowledge and experience in

The abovementioned measures taken andthe relevant technical field who have been

special description have been derived from theaccepted based on BOA's request for temporary

description in the "outline."
In addition, among the mandatory reportingtransfer from other ministries and agencies. At
the time when audits on medical expenses started

matters,

improprieties,

on a full scale in 1987, a person qualified as apresentation of opinions or demand for measures

doctor was present to take charge of medical

and the abovementioned matters for whichissues.

measures have been taken and special description
are commonly

calledmatters

subjectto"improper/unreasonable

matters."
The audit cases reported in the annual audit
reports shall be explained below by mainly
focusing on these matters.

362

Section 3 Audit Activities(1) Improprieties

B. Changes in the counting method of thenumber of improprieties

A. Establishment and abolition of categories
Improprieties were set down in the annual

While several changes have been made inaudit report based on the categories such as thethe organization of cases for the category "taxes"

subject of financial management (see page 286),

among the categories based on the accounting

but these categories were later changed into new

subject to improprieties (see page 287), all of theones or abolished in reflection of the relative

improprieties have been counted as one case fromnumber of cases being set down in the annual

the FY1969 Annual Audit Report.
In principle, the number of improprieties is

audit report.
(A) In the FY1977 Annual Audit Report, thecounted based on each financial management,

category "loan" was established. While BOA

but, based on the cause of occurrence, degree of

had made several audit findings regarding

responsibility of the relevant authority and theloans in relation to the agriculture, forestry

amount of money, there are cases where properand fisheries finance and small-and medium-balance cannot be achieved in terms of thesized enterprises (SMEs) finance, etc. sinceseriousness of the matters if the relevant case is

the mid-1940s, there were several othercounted as one case as other cases are counted.

financial audit findings related to housing

The change in the counting method mentioned

and social security, etc.; loans became

above was a measure taken due to the increase

increasingly important as one of the audit

and expansion of unbalance between categories

fields and thus a category was newly

caused by the increase and decrease in theestablished.

number of cases.

(B) In the FY1985 Annual Audit report, thecategory"insurance"" insurance

waspremiums "dividedinto

representing

the(2) Presentation of opinions and demand formeasuresbenefits"

A. Development of presentation of opinions
and demand for measures

representing the expenditures side. Since

Since a large number of presentation ofrevenues

side

and

"insurance

wereopinions or demand for measures, i.e. eight cases

thein total, were made in 1962, many issues that had

advancement of aging of the population,

not been dealt with in the past annual audit

audits were improved by organizing andreports were dealt with, leading to significant

expanding the organizational structure ofaudit results. As a result, there were increasing

audits in relation to the Ministry of Health,momentum within BOA to present opinions orLabour and Welfare. As a result, more audit

demand measures and accordingly, BOA started

findings on excessive payment of old-age

to present opinions or demand measures in large

employees' pension were made in relation tonumbers annually from 1962.

socialsecurity

increasinginbenefitexpenses

associationwiththe payment of pensions which is one of the

One of the characteristic incident that

representative insurance benefits and thus aoccurred was many demands for measures were

new category was established.

made claiming amendment of the estimation
standard which was not catching up with the363

Part 3

Chapter 3

Audit between the mid-1960s and late 1980schanges in the advancement of machines andIn addition, adversely, there are cases whereform of construction amid the fast-evolving

the state of measures taken is disrupted or nottechnological innovation, mainly between thecompleted,mid-1960s and mid-1970s. In addition, there wereconducted every year until measures are taken

also cases where BOA questioned the projectappropriately and such state being set down in

effect from a higher perspective.

the annual audit report every year.

Furthermore, based on the fields, many

resultingintheauditsbeing

demanded in relation to agriculture throughout

C. Amendment of laws in response to thepresentation of opinions or demand formeasuresthe years in reflection of the agricultural policy

While the contents of measures taken by thewhich was shaken by sensitively reacting to therelevant authority in response to the presentationinfluence of changes in the socioeconomicof opinions or demand for measures are of

circumstances, in addition to a number of cases

endless variety, one of the example of cases

related to public works which were questioned

where the law was amended in response to thefrom the perspectives of the abovementioned

presentation of opinions or demand for measuresestimation standard or project effects. Throughunder the provision of Article 36 of the BOA Act

the years between the mid-1960s and mid-1980s,

is shown below (the year stated before the casemany cases were related to the business operation

title shows the year in which opinions wereof State-owned bodies including the three publicpresented or measures were demanded; the year

corporations. Since the mid-1980s, BOA has

stated in parenthesis after the case title shows thepresented opinions or demanded measures inyear in which the amended law was enacted andrelation to social security and education in

the name of the law refers to the law which was

combination with the social-oriented audits inamended).

association with the advancement of the aging(1983) Regarding the grants-in-aid for national
health insurance(1984 National Health Insurance Act)

opinions were presented or measures weresociety.
B. State of measures taken in response topresentation of opinions or demand formeasures(3) Description of the "outline"
A. Description policy for the "outline"
The description policy of the "outline" wasIn principle, this state of measures taken isreviewed in 1967 to expand the cases whereusually set down in the annual audit report of thedescription should be made and the subject ofyear immediately following the year in which

description. In November 1970, the cases where

matters for which opinions were presented or

the outline should be described was provided asmeasures were demanded were set down in thefollows for the purpose of organizing andannual audit report. Yet, there are some cases

standardizing the description of the outline. Yet,

where measures were taken at an early stage andwith respect to government-affiliated institutions,the state of measures taken were set down in theit was decided to describe the final accounts orsame annual audit report in which the matters forthe outline of the project even if they did not fall

which opinions were presented or measures were

under the abovementioned case, as in the

demanded are set down.
364

Section 3 Audit Activities

previous practice.

commonly called "matters demanded for special(A) Cases where there is a phenomenon where

attention" based on the wordings used in thethe amount of revenues yet to be collected,

preface and a total of 50 cases were set down inamount to be carried over to the following

the annual audit report in three years. These were

fiscalunnecessary

set down in the annual audit report in response to

expenditures is substantially large and it isopinions suggesting that attention should benecessary to state a comprehensive criticism

called to the budget execution of the governmentor opinion regarding the budget execution;

from

year

or

amountofabroaderandmorecomprehensive(B) Cases where there is a phenomenon ofperspective and that observations should be madesubstantial increase or decrease in the items

to serve as reference for the deliberation of theof the financial statements or deterioration inState's final accounts at the Diet.

management and it is necessary to state

However, many of these "matters demanded

critical opinions or raise questions in regard

for special attention" were made subject toto such facts;

presentation of opinions or demand for measures(C) Cases where there are situations for which

as much as possible for the following reasons; [i]questions must be raised to conduct further

essentially they had the same characteristics as

examinations in light of their significancethat of matters for which opinions were presented

althoughberegardedasor measures were demanded; and [ii] since these

becomesubjecttomatters demanded for special attention were

presentation of opinion or demand forstated as criticism prior to the description of

measures but are fundamental policy issues

improper / unreasonableof the State.;

improprieties that are the most major audit

it

improprieties

cannotormatterssuchas(D) Cases where it is especially necessary toresults, the weight on the audit cases reported in

explain the business of an organization for

the annual audit report became difficult towhich improprieties, etc. are set down in theunderstand. Accordingly, the practice of setting

annual audit report in order to make thedown matters demanded for special attention wascontents understandable.

abolished from the FY1968 Annual Audit Report.

B. Setting down the "matters demanded forspecial attention" in the annual audit
reportC. Abolition of the description of the "outline"

During this period, situations for which

or matters subject to presentation of opinions or

critical opinions were raised were set down in the

demand for measures which are mandatory

annual audit report in an organized mannerreporting matters. Yet, there were criticisms

equivalent to that for improprieties or matters forconcerning its description method and thus, it

which opinions are presented or measures are

was largely changed from the FY1975 Annual

demanded by attaching a case title under the

Audit Report. Specifically, a new section for

preface which reads "The following requires

audit cases to be reported in the annual audit

special attention" in the outline of the annual

report that is called special description was

audit reports from FY1965 to FY1967. This wasestablished and the opinions or criticisms or

The outline part had played a certain role toclearly articulate issues that are not improprieties

365

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

questions described in the outline which meet the

B. State of setting down matters for whichmeasures have been taken in the annual
audit report

standard to be set down as special description
section were set down as such. In addition, it was

These

decided not to describe the outline except for themeasures

taken

were

originally

overview of matters including the final accounts

described below the preface which reads "Theof government-affiliated institutions. However, it

following are those for which the competent

was decided to describe the outline in the part

ministry (or agency, etc.) took measures indescribing the outline of the audit subject matter

response to the questions asked by BOA" withoutfrom the FY1976 Annual Audit Report, andany special title along with the matters demanded

thereby the outline which was stated at thefor special attention which have been described in

beginning of the description of each ministry,the outline. However, these matters were moved

agency and organization disappeared.

from the outline from the FY1968 Annual Audit(4) Matters for which measures have been
taken

Report as a result of abolishing the practice of

A. Background to setting down matters forwhich measures have been taken in theannual audit reportattention in the annual audit report and have been

Measures taken are descriptions of situations

matters for which opinions were presented orwhere the auditees voluntarily took measures formeasures were demanded. In addition, from theimprovement in response to the audit findings

FY1975 Annual Audit Report where the special

received at the time of audit without waiting fordescription section was newly established, they

BOA to present opinions or demand measures

have been clearly set down in the annual audit

based on the observations made in the audit

report under the title of "measures in response towhile BOA is preparing to do so. These matters

the BOA's instruction/advice has been made inhave been set down from the FY1966 Annual

the course of the audit" along with improprieties,

Audit Report.

matters for which opinions were presented orAsagencies

described
orabove,

associations

set down in the annual audit report without any
title after the description of improprieties orministries,

measures were demanded and special description.

improvement

This title has been changed to "measures taken"

when
take

setting down the matters demanded for special

measures in the process of audit, it becomesfrom the FY1977 Annual Audit Report.

unnecessary for BOA to present opinions or(5) Special description

demand measures. Yet, such situation is a major

A. Background to setting down special
description in the annual audit reportachievement of audits and is also a valuable
financial

Special description is set down in the annual

management. As such, such situation is set down

audit report to clearly present the situation byin the annual audit report when it is founddevelopmentally eliminating the outline section

necessary to do so in order to serve as reference

which had been used in the past and establishingfor other similar project management or account

independent groups for situations for which it isexecution.

found necessary to state critical opinions or raise

information

toensureadequatequestions. They have been set down in the annual366Section 3 Audit Activities

substantially deteriorating;audit report from the FY1975 Annual Audit(iii) Situation with salient issue of budget

Report.

execution or property management, etc.:

This kind of independent item was newly

andestablished for reasons such that there were
opinions regarding the annual audit reports made(iv) Situation found necessary to make special

at that time that major situations for which thedescription on the contents of indications

public has serious concerns such as the failure tosuch as the final accounts (i.e. a situationachieve investment effects have not been set

where the amount to be carried over to thedown in the annual audit report and that thefollowing

situations set down in the outline of the annual

unnecessary

audit report have been buried in the description

expenditures due to transfer or diversion,on the overview of the final accounts andamount of revenues yet to be collected or

projects and the situations intended to be

deficit amount due to non-payment runs

presented have not been necessarily highlighted.

into a large sum of money, due to a cause

There

that

were

also

criticismsuggestingthat,fiscal

makes

year,

amountofexpenditures,amountofthespecialdescription

necessary).

especially, in relation to the latter situations,consideration must be made for the part andcontents for making such statement to clearly

B. Initial contents of the special description set
down in the annual audit reportshow the situation instead of stating them in the

Among the above, a total of 22 cases in theinitial three years (i.e. eight cases in FY1975,vague part such as the outline.

eight cases in FY1976 and six cases in FY1977)

In this way, when there were situations
thewere set down in the annual audit report and thestandpoint of audit such that the achievement ofmajor situations set down in the annual audit

the effect of budget execution is stagnant butreport in these three-year period are as follows.

cannot be regarded as improprieties or matters for(A) Situation where there is a large amount of

which

were

found

inappropriate

fromwhich opinions will be presented or measuresloss inwill be demanded due to involvement of thecorporation and the project management isState's fundamental policy issues, they were set

substantially deteriorating (special accounts

down in the annual audit description as specialfordescription to widely raise questions in order tonational forestry project and postal business,promoteasJapanese National Railways, telegram projectreference for future project management andof Nippon Telegraph and Telephone Public

account execution.

Corporation and hospitals directly managed

future" Situations

development

which

and

cannotserve

beinsurance,

food

or

publicmanagement,(B) Situation where the operation of the largescale projects is significantly delayed and theclassified as follows.

investment effect has not been achieved(i) Situation where the effect of budget(projects such as New Tokyo International

execution has not been achieved;wheresocialaccount

by the three public corporations)foundappropriate from the standpoint of audit" were(ii) Situation

the special

project

operation

Airport, nuclear ship "Mutsu," state-run

is367

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

reclamation, new railway lines, irrigation andReport, approximately three to five cases havedrainage facilities, multipurpose dam andbeen set down in the annual audit report aslarge-scale recreation base)special description every year, and these included(C) Situation where the use of lands or facilities

matters which BOA analyzed the present situationacquired or constructed is sluggish and theand problems of the major three projects ofproject effect has not been achieved (such as

Japanese National Railways (i.e. freight service,

the apartment building built by the Housingbaggage service and passenger service) from its

Corporation and the site therefor)

unique perspective and which later contributed toMany of these situations were those which

the discussion on the institutional reform ofJapanese National Railways.

BOA were aware of, and particularly, thoserelated to the profit and loss of the special

In addition, in October 1983, when aaccount as well as the apartment building built bysituation where the expected intention is not

the Housing Corporation were issues whose facts

satisfied continues even after a reasonable period

were described in the outline.

of time has passed such as the case where no

However, in the FY1978 Annual Audit

advancement has been made for situations for

Report when these expected cases took a roundwhich questions have been raised in the special

and ran out of new case, only one case was set

description part, BOA decided to deal with such

down followed by only two cases in FY1979.

situation based on a policy to deal with the

C. Promotion of audits aimed at actively
setting down special description in theannual audit reportsituation as matters subject to special description
again (or in some cases, matters for whichmeasures are demanded under the provision ofabovementioned

Article 36 of the BOA Act) and to strongly urge

circumstances, BOA presented a policy seeking

the situation to be advanced. Situations which

to expand and promote audits concerning special

have been dealt with as matters subject to special

description in January 1981. In this policy, BOA

description, etc. again were the issues of nuclear

clarified that the purpose of setting down special

ship "Mutsu" and production and procurement ofdescription is not limited to serving as reference

leaf tobacco.

to the project management or account execution(6) Other audit cases to be reported in theannual audit report

In

light

of

the

but "is to also raise questions that would bereflected in a higher level of decision making
related to the decision and implementation of

A. Verifying the State final accounts of theexpenditures and revenues

policy and budget enforcement including theUntil the final accounts for FY1967, thoseInthat were unsettled by using payment in advanceaddition, BOA also decided to make efforts toor payment by rough estimate were stated in theraise questions that could contribute to theannual audit report as unverifying amount (seeimprovement of efficiency in budget execution

page 290). However, since it could causefrom a wider and higher perspective in relation to

confusion with the verification under the BOA

budget enforcement.

Act leading to any misunderstanding, the practicecompilation

andallocationofbudget."of using the category of unverifying and stating

As a result, since the FY1980 Annual Audit
368

Section 3 Audit Activities

the unverifying amount was abolished from theReport" was established under the Secretariat as a

final accounts for FY1968.

pre-committee of the Audit Report Coordination

B. Description of the outline of the audit
subject matter

Committee.

ThechairmanoftheSpecialCommittee on Audit Report was served by theThis description had the tenor of a preface

Deputy Secretary General with its members

for the audit results in the part "Chapter 1

including the Assistant Secretary General of theGeneral Remarks" at the beginning of the FY

relevant bureaus.

1946 Annual Audit Report but was set down in
the final chapter from the FY1978 Annual Audit

3. Submission of annual audit reports to thePrime Minister

Report.

Since the enforcement of the BOA Act,

C. Description of the overview of the audit
activities

annual audit reports had been submitted to thegradually

Cabinet in a matter-of-fact style by having the

expanded as follows between the mid-1960s andSenior Director of Management Division of BOA

late 1980s (the numbers in parenthesis of eachhand a letter addressed to the Prime Minister

beginning show the fiscal year for the annualfrom the President of BOA to the Senior Director

audit report in which such description was madeof the Management Division of the Primefor the first time)

Minister's Office (and Chief Counsellor, Cabinet(FY1966) Achievement of field audits (thenumber of units to be audited, theactual number of units audited, fieldaudit implementation rate, andnumber of personnel and days
required for the audit)of the Cabinet Secretariat). Meanwhile, NationalThis

description

has

been

Personnel Authority's recommendation on thereform of the remuneration structure and report ofvarious councils had been directly submitted to
the Prime Minister from the President or(FY1982) Audit objectives (the objectives ofaccuracy,
regularity,
economy,efficiency and effectiveness)

Chairperson, the details of which were largely
dealt with by the media, leading to an expectationof PR effect.
Amid such a situation, BOA made a

2. Deliberation of the annual audit reports
Changes in the deliberation of the annual
audit reports - Establishment of anorganizational structure for deliberation ofcases proposed by the Secretariat (1983)-

suggestion to the Cabinet that the same treatment
be made for annual audit reports which areimportant documents under the Constitution of

In the past, matters of annual audit reportJapan and whose contents are highly important

draft that were proposed as a result of the cross-and should be widely known by the public. As acutting audits conducted by the Special Programs

result, in December 1975, the FY1974 Annual

Division of the Secretariat were required to be

Audit Report was submitted to Prime Minister

directly

ReportTakeo MIKI from President of BOA Saburo

Coordination Committee and be deliberated by

SATO. Since then, this practice has become

said committee in accordance with the mannercommon.

submitted

to

the

Audit

adopted at the Bureau committee. However, in
October 1983, a "Special Committee on Audit
369

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s(2) Major resolutions of the Diet (including
committee decisions) concerning audits
・1967 [House of Councilors] Changes tothe decision method for final accounts
With respect to the final accounts for
FY1965, decision of the relevant proposal
and warning resolution are made separately.
(i) Thefinal

accounts

inquestionisaffirmed.
(ii) Warnings to the Cabinet
・1971 [ HouseofRepresentatives ]Resolution requiring improvement andenhancement of the function of BOA

Submission of the annual audit report to Prime Minister
Takeo MIKI from President of BOA Saburo SATO

Subsection 5

Reflection of audit results

BOA should make efforts to improveand enhance its function while ensuring

1. Operations concerning the Dietfairness in conducting audits.

of・1973 [ HouseofRepresentatives ]Resolution concerning maintenance ofindependence and improvement of audit
function of BOA and re-employment offormer BOA officials with auditees

Representatives is collectively taking votes for a

BOA must pay attention so as to avoid

draft resolution consisting of (i) matters for which

any suspicion on the fairness of audits inspecial attention should be paid, (ii) opinions

relation to the re-employment of its former

regarding BOA's audit findings and (iii) a

officials within the auditees, in addition tostatement to the effect that there are no objections

making efforts to maintain independence andon matters other than those stated above. On the

improvement of the audit function.

(1) Deliberation of the State's final accounts at
the Diet
Following the practice between the mid1940 s

andmid - 1960 s,

the

House

affirm the final accounts" and "warning to the・Between 1977 and 1984 [House ofRepresentative and House of Councilors]
Resolution requesting improvement andenhancement of BOA

Cabinet" since the final accounts for FY1965

Under the current system, BOA's audit

based on the "objective of clarifying the Diet's

is insufficient for the actual audit ofintention

andfinancing or debt guarantee by entities suchstraightforwardly expressing the intention of eachas government-affiliated institutions, coming

parliamentary

warning

short of the expectations of the public. Thus,

resolution" since the final accounts for FY1965

BOA should take all possible and required(the abovementioned warning resolution was notmeasuresmade for the final accounts between FY1986 andimprovement of audits (1977, House of

FY1990 for which the final accounts were not

Representatives).

other hand, the House of Councilors is separately
conducting the "votings of whether or not toregarding
group

the

final

towardaccounts
theaffirmed in the House of Councilors).

to

seek

enhancementand・1978 [House of Representatives and HouseofCouncilors ]Resolution
seeking370

Section 3 Audit Activities

came into question in such examination wasmaintenance of discipline of BOA

whether or not the participants should freely state

It was regrettable to find that thereceiving

opinions, since improper process could lead toentertainment from auditees at the time of

the risk of the audit results being leaked to thefield audits, and as a result, the public's

Ministry of Finance or the media unnoticed by

distrust increased. While it can be found thatthe

BOA has made efforts to recover the

consultation with the Audit Commission, it was

public's

new

decided that, in principle, participants shall freelyorganizational structure in response to thisstate their opinions in the regular meeting andfinding, BOA should further make efforts toreport be made to the Audit Commission as

maintain a strict discipline in the future tonecessary. As a result of consultation with the

respond to the public's trust.

Ministry of Finance, it was confirmed that (i) the

officials

of

trust

BOA

by

were

establishing

a

the

As

a

resultofofficial opinions of BOA but rather are personal
experiences; and (ii) the contents of the meeting

Year
Matters
1976 Issue of amendment of the BOA Act, Lockheed〜 bribery scandals, Douglas-Grumman scandal
1978 Entertainment issue involving officials of BOA at
field audits
1979 Fraud by Nippon Telegraph and Telephone Public
Corporation and Japan Railway Construction Public
Corporation reports made to the Committee on Audit
and Committee on Transport of the House ofCouncilors
1980 Fraud by Kokusai Denshin Denwa Co., Ltd. (KDD)
1984 Field survey by the research office of the Committee
on Audit of the House of Representatives in relation
to the audit findings concerning contracts on demandand supply of electricity
1986 Audit of National Silk Twisters Association
Audit of coarse stone materials at the public project
under Aomori Prefecture
1986 Audits on overseas economic aid〜 Bribery to the high level officials of the Philippine
government in connection to ODA to the Philippines
1988 Recruit Sandal, purchase of super computers

withCommission.

statements made by the Senior Directors are not(3) Major discussions at the Diet related toaudits

2. Regular meetings
authorities

Audit

shall be kept confidential between the two parties
and shall not be leaked to outsiders.
It was decided to hold the regular meetingwith the Budget Bureau twice a year in order tohear the background to the compilation andexecution of budget as well as any requests to
BOA from the Budget Bureau in March and to
discuss subjects that would serve as reference forbudget compilation of the Budget Bureau such as
the experience and results of audits by BOA in
August.
In this way, the first regular meeting
between BOA and the Budget Bureau was held
between mid-August to early September in 1965.
A wide variety of subjects were discussed
including the budget classification based on

financial

years, subsidy unit, excess or deficiency oftransfer from other accounts and assessment of

Around 1959, a round-table conference wasdisaster recovery project.

held between BOA and the Ministry of Finance

When a report on the abovementioned

at the budget examiner and senior director level(see page 297). Later in May 1965, in response

regularto the strong hope of the then President Yasuei

Commission

KOMINE, it was internally examined whether orcommissioners stated their opinions that "it would

not to officially hold a regular meeting. Whatbe effective if we asked the attendance of the371

meeting
in

was

made

October

to

the

Audit

1965,

three

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Financial Bureau with respect to the financecorporations and public corporations related to
FiscalInvestment

and

Loan

Program."In

response to this opinion and as a result of
negotiation with the Ministry of Finance, BOA
held an occasion to exchange opinions with the
Financial Bureau regarding the cases involving
finance corporations and public corporations inthe same month. This led to an official regularmeeting with the Financial Bureau from 1966,
resulting in the exchange of opinions on matterswhich are considered to serve as reference formanagement and operation of government funds,
national government bonds and national property.

372

Section 4 Overview of Audit Results

Section 4 Overview of Audit Results
Subsection 1

point of the project effect.

Audit results between the mid1960s and late 1980s

In addition, with a view to disseminating theaudit effect more widely, BOA decided to set
down

in

annualaudit

reports audit

Between the mid-1960s and mid-1970s, in(measures

taken )

in

which

the

the wake of the Nixon Shock and the oil crises,

government

authorities

took

measures

Japanese economy moved from the high-growth

improvement in line with BOA's audit findings,

period to the stable-growth period.

before hearing BOA's opinions or receiving its

1. Between the mid-1960s and mid-1970s

cases

relevantfordemands for measures under Article 34 or Article

During this period, along with the promotion

36 of the BOA Act.

of the government-led national land development,
typified by the "Plan for Remodeling the

2. Between the mid-1970s and mid-1980s

Japanese Archipelago," BOA further reinforced
audits with the objective of economy of public

Between the mid-1970s and mid-1980s,

work projects, and actively engaged in audits

Japan's economic growth rate slowed down andwith the objective of effectiveness from viewtax revenues were stagnant after recording the

Audit cases reported in the annual audit reports by fiscal year and by reporting category
FY

Improprieties

1965

Cases
372
337
260
182
153
146
199
176
152
86
82
74
93
164
157
180
184
181
157
148
117
129
170
166

1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988

Presented opinions/demanded measures
34
34/36
36
Subtotal
Cases
Cases
Cases
Cases
9
9
4
4
2
2
6
1
7
17
17
27
1
28
14
14
11
11
18
18
12
1
13
11
1
12
16
1
17
8
2
10
14
14
8
1
9
6
1
7
8
8
9
1
4
14
4
3
7
4
8
12
5
4
9
5
2
2
9
6
1
7
2
4
6
373

Measurestaken

Specialdescription

Improper/unreason
able matters total

Cases
2
3
2
7
7
10
13
11
15
10
8
11
15
13
16
19
14
15
18
19
18
31
29

Cases
8
8
6
1
2
5
3
4
3
2
1
1
1

Cases
381
343
265
191
177
181
223
200
181
114
112
107
120
194
181
208
214
213
182
180
146
156
209
202

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

the range of audits.

negative growth rate in 1974 for the first timeafter the end of the war. Along with the issuance

Subsection 2of a large volume of national government bonds,

Taxes

including deficit-financing national government
BOA

bonds issued in FY1975 for the first time after

audits excess anddeficiency

inthe end of the war, the fiscal conditions worsenedcollected taxes, or more specifically, BOA

and the administrative and financial reform for

examines the appropriateness of the taxation

fiscal reconstruction was called for.

processing carried out by tax collection agencies

During this period, with a view to taking asuch as tax offices, focusing on such aspects aspositive stance to raise questions on a wide range

whether these agencies fully identify the personsof audit cases including difficult cases involving

obliged to withhold income tax and the taxpayers

national policy issues, BOA created a newof self-assessed income tax, corporation tax, etc.,

section titled "special description" in annual audit

accurately capture the amount of income subject

reports to express its opinions on audit results.

to taxation, and precisely calculate the amount of

By making use of this new section, BOA

income and amount of tax.

reported audit findings on various problems with

The following table shows the improper

business management, system management, andamounts of excess and deficiency in collected tax

business effect, and thus played a role in theby fiscal year from FY1965 to FY1988.

institutional reforms including the tax reform andprivatization of public corporations.

Improper amounts of excess and deficiency in collected
tax by fiscal year

In audits on government authorities andpublic corporations, BOA found a number ofFYcases of various types of illegal accounting.
At the same time, the Lockheed bribery

1965

scandals provoked a great debate at the Diet

1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

based on the argument that BOA should be given
the audit mandate over borrowers of governmentaffiliated financial institutions.
3. In the late 1980s
From the mid-1980s onward, there was rapid
progress in aging of population, globalization,and digitization. In response to these changes inthecircumstances,BOA

upgradeditsorganizational structure related to audit andstarted working on audit in new fields, such as
medical care, pension, and official development
assistance (ODA). It also adopted a new audit
methodology using computers, which broadened
374

AmountDeficiency in
Excess incollected tax
collected tax (△)
million yen
million yen
533.61△ 1.72539.93△ 0.65540.17△ 2.03725.22△ 1.06641.27△ 1.08851.69△ 17.66
999.6△ 15.74
1,000.22△ 35.53848.97△ 42.91947.08△ 121.79
1,042.02△ 113.03
1,316.6△ 121.32
1,123.03△ 63.53
1,065.79△ 102.75
1,116.5△ 126.87
1,649.15△ 131.85
1,220.43△ 109.17
1,274.98△ 146.42
1,077.36△ 113.31
1,112.34△ 97.79
1,012.01△ 63.99

Section 4 Overview of Audit Results
1986
1987
1988

1,087.43
1,163.56
1,288.05

those for investigation on corporation tax. To△ 51.08△ 33.08△ 32.45solve this problem, it treated withholding income
tax with the same importance as other tax items
in conducting audits, which led to the increase in

1. Audit cases reported in the annual audit
reports between the late 1960s and mid1970s

the number of findings on withholding income

In FY1965, the method of setting down

reformed in FY1969 to drastically change thematters on audit cases of an excess andframework for taxation on capital gains from thedeficiency in collected tax in annual audit reports

transfer of land and buildings, in order to ensure

was changed. The new method required theconsistency between the land policy and the land

tabulation of cases involving the amount of tax oftax system.

100,000 yen or more per improper/unreasonable

The

tax.
On the other hand, the land tax system wastax

systemreformin

FY1973matter. In addition, while audit cases had been

supplemented the land tax system reformed in FY

indicated in an attached table by counting a case1969, by introducing the increased tax for

involving the amount of tax of 500,000 yen or

corporations' capital gains from land transfer inmore per matter as one case, accompanied by aorder to curb speculative investment in land bybrief explanation for each case, after the newcorporations.

method was adopted, cases involving the total

In

view

of

such

circumstances,

BOA

amount of tax of 1 million yen or more per tax

conducted audits on cases of an excess andoffice were counted as one case and indicated in

deficiency in collected tax with a particular

an attached table. As a result of this change, theattention to capital gains. As a result, improper/

number of cases set down in annual audit reports

unreasonable matters on these cases accounted for

sharply dropped from 180 in FY1964 to 112 ina large part of all improper/unreasonable matters

FY1965.

set down in annual audit reports.

During this period, the improper amount ofexcess and deficiency in collected tax was on the

2. Audit cases reported in the annual audit
reports since the mid-1970s

rising trend; in FY1971, the total improperbyThe share of improper/unreasonable matters

approximately 146 million yen year-on-year andset down in annual audit reports with regard to

exceeded 1 billion yen. This trend was caused byland among all such matters regarding an excess

the increase in the number of findings on

and deficiency in collected tax further increased

withholding income tax and the increase in thefrom the late 1970s, and reached 25% in FY

number of findings on capital gains declared in

1978. In addition to findings on capital gains ofself-assessment of income tax.

individuals, BOA began to report findings onamountin

thiscategory

increased

Since BOA investigated both withholding

errors in the taxation processing under the system

income tax and corporation tax at the same time,of imposing an increased land tax on corporations

its resources assigned to the investigation on

introduced in FY1973, and set down an increased

withholding income tax tended to be less thannumber of findings related to corporation tax on
375

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

land, such as increased land tax, special treatment

inheritance tax and consumption tax on as well,in taxation in the case of replacement of specified

on the grounds that these taxes came to hold aassets, and special treatment in taxation in thelarger share in the total national tax revenues, andcase of expropriation of land.

that the respective tax laws governing them arecomplicated and it is difficult to calculate the

Audits on an excess and deficiency inamount of income.

collected tax used to be conducted by paying

The following table shows audit cases

attention to the three major taxes, i.e. withholding
andreported in the annual audit reports from FY1965

corporation tax. Subsequently in the Heisei era

to FY1988, other than those on an excess and(from 1989), BOA began to place emphasis on

deficiency in collected tax.

income tax,

self-assessed

income

tax,

FY
1976

Item
Special provisions for the calculation of income from medical treatment fees under the social insurance system (special
description)
1981 Loss of the opportunity to collect tax due to the failure to take appropriate action to preserve a tax claim (improprieties;
improper amount: 20.72 million yen)
Layout of the output paper for computers (measures taken; improper amount: 38 million yen)
1985 Measures taken to improve the operation of the system for granting a postponement for payment of inheritance tax on
farmland, etc. (measures taken; improper amount: 161.68 million yen)

Subsection 3

charge of audits on medical expenses andSocial security

pension, for example. In the FY1986 Annual
Audit findings on social security

Audit Report, it reported a systematic audit(1) Audits on collection of insurance premiums

conducted on medical expenses, and set down

Every fiscal year, BOA reported findings on

findings on the cases of rectification anddeficiencies in collected insurance premiums for

improvement measures demanded for thehealth insurance, employee's pension insurance,

payment of fees for lifestyle guidance andand mariners insurance, etc., under the title ofmanagement for people admitted to intensive

improprieties.

care

It

also

reported

findings

on

homes

for

the

elderly(demanded

excesses and deficiencies in collected insurance

measures (Article 34 of the BOA Act); see thepremiums for labor insurance such as industrial

table below), and improper burden of medical

accident compensation insurance and employment

expenses imposed on the State (improprieties).

insurance. Since the early 1980s, the amounts of

Improprieties on these audit subject matters were

improprieties increased after BOA applied a more

reported every fiscal year.
With regard to audits on pension as well,

reasonable method for selecting business entities
subject to audits.

BOA set down demanded measures in annual(2) Audits on expenditures of medical expenses
and pension

audit reports after it reported the case ofrectification

andimprovement

measuresits

demanded to streamline the administrative

organizational structure for conducting audits bywork for the extinguished right to receive

establishing an audit division exclusively in

employee's pension and national pension (FY

BOA

upgraded

step

by

step

376

Section 4 Overview of Audit Results

1984; demanded measures (Article 34 of thereported findings of improprieties regarding the

BOA Act); see the table below). Improprieties

cases in which the expenses for the state-of overpayment were reported every fiscal year.

subsidized projects were overstated because theIn the category of insurance benefits otherwelfare service providers underestimated thethan medical and pension benefits, BOA reported

amount of income of support obligors when

improprieties on injury and illness benefits andcalculating the amount of expenses for thechild rearing allowances relatively frequently.

subsidized projects.
With regard to grants for child aid expenses,

Audit cases on injury and illness benefits were
set down in the annual audit reports for FY1965,

thefollowing

cases

were

set

down

as

from FY1982 to FY1989, and for FY1998,

improprieties in the annual audit reports: (i) thewhereas those on child rearing allowances firstcase where the expenses for state subsidies wereappeared in the annual audit report for FY1985

overstated because the child welfare institutions

and were covered in the reports for FY1989

miscalculated the amount of fees to be collected

onward.

from the parents of the children admitted to the

BOA also conducts audits on various types

childcare centers or applied a wrong unit priceof state subsidies for the national health insurance

for childcare services; and (ii) the case where theprogram. Improprieties on the grant of thesechild welfare institutions should have investigatedsubsidies were observed in the annual audit

the income and other financial conditions ofreports frommid-1970s.

support obligors in order to grant reduction or

Subsequently, between the mid-1970s and mid-exemption for childcare fees, but they did not

1980s, the FY1982 Annual Audit Report covered

conduct such investigation and accepted thethe audit

case

of

declaration of the amounts of income and assets

demandedwithregardthe mid-1960s to

improvement

measuresforas claimed, and as a result, they underestimatednational health insurance to ensure the proper

the support obligors' capacity to pay childcare

execution of the state-subsidized programs andfees and granted reduction or exemption even forproper provision of state subsidies (demanded

people who were sufficiently capable to pay themeasures (Article 34 and Article 36 of thefees, such as local government employees,

BOA Act); see the table below).

teachers, medical practitioners, and self-employedtosubsidiesbusiness operators, by erroneously treating themIn the annual audit reports from FY1988 to
FY1994, BOA set down audit findings ofas needy people.

improprieties regarding fiscal adjustment grants.

BOA

reported

findings

other

than

improprieties as well: measures demanded for(3) Audits on social welfare expenses
In this category, audit cases on grants for aid

expenses incurred for protection, etc. under

expenses for welfare facilities for the elderly andthe Child Welfare Act (FY1969; demanded

grants for child aid expenses were continuously

measures (Article 34 of the BOA Act); see theset down in annual audit reports.

table

below);

demanded

As for audit cases on grants for aid expenses

for

and

improvement

subsidiesformeasuresmandatory

for welfare facilities for the elderly, in the annual

admission of children to childcare centers (FYaudit reports from FY1979 to FY1999, BOA

1980; demanded measures (Article 34 of the377

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

BOA Act); see the table below). The latterlatter category, BOA reported improprieties forfindings

mandatory

every fiscal year from the FY1954 Annual Audit

admission of children to childcare centers were

Report, and reported demanded measures andthe outcome of the audit conducted by paying

other audit findings from the FY1977 Annual

attention to the institutional defects, in view ofAudit Reports.

regarding

subsidiesforthe rapid increase in the number of improprieties

With regard to various types of benefits

found with such subsidies, from five cases in FY

under the Employment Insurance Act other than1978 to 17 cases in FY1979.

employment benefits, improprieties, measures(4) Audits on public assistance expenses

taken and other findings were reported from theFY1975 Annual Audit Report.

In this category, BOA set down findings ofpublicOn the other hand, among various types ofassistance under the Public Assistance Act in thebenefits to be paid under the Employment

annual audit reports for FY1947, FY1954 and FY

Insurance Act other than unemployment benefits,1955. Subsequently, in FY1984, it reported thethose covered in annual audit reports include:case of improvement measures demanded to

employment adjustment benefits; benefits for

accurately identify the status of real property

employment development for middle-aged andheld by assistance recipients in the course ofelderly persons; subsidies for specific jobseeker

providing( demanded

employment development; subsidies for extension

measures (Article 36 of the BOA Act); see theof the retirement age; employment adjustment

table below). While BOA used to take into

subsidies ;grantsaccount the recipients' income, it paid attention to

workplace ;specialrecipients' assets in the audit in FY1984.

employment; and subsidies for stable employment

improprieties

regardingpublicexpensesassistance

for

for

developing

subsidiesfor

regional
regional

in the winter time.

The annual audit reports from FY1988 to
FY2008 covered improprieties in this category,

Improprieties regarding payment of thesewhich mainly resulted from the underestimation

benefits and subsidies began to be reported fromof employment income or failure to include

the FY1975 Annual Audit Report; the major

pension income.

findings were related to improper payment to(5) Audits on employment measures expenses

persons disqualified to receive payment due toinsufficient examination of applicants.

Audit findings on employment measuresexpenses are divided into two types: those

The following tables show audit cases

regarding subsidies for measures to deal with

reported in the annual audit reports from FY1965

unemployment, and those regarding various types

to FY1988, other than improprieties and measuresof benefits such as unemployment benefits. In thetaken.

A. Audit cases on medical expenses, pension, etc.
FY
1982

Item
Improvement measures demanded with regard to subsidies for national health insurance to ensure the proper execution of
the state-subsidized programs and proper provision of state subsidies (demanded measures (Article 34 and Article 36 of
the BOA Act); improper amount: 393.44 million yen)378

Section 4 Overview of Audit Results
1983
1984

1985

1986

1987

1988

Rectification and improvement measures demanded to ensure the proper payment of unemployment insurance benefits
for mariners (demanded measures (Article 34 of the BOA Act); improper amount: 59.05 million yen)
Rectification and improvement measures demanded to streamline the administrative work for the extinguishment of theright to receive employee's pension and national pension (demanded measures (Article 34 of the BOA Act); improperamount: 184.68 million yen)
Rectification and improvement measures demanded to streamline the administrative work for the adjustment of double
payment of welfare pension and public pension (demanded measures (Article 34 of the BOA Act); improper amount:996.33 million yen)
Rectification and improvement measures demanded to streamline the administrative work for the exemption fromnational pension insurance premiums (demanded measures (Article 34 of the BOA Act); improper amount: 230.52
million yen)
Rectification and improvement measures demanded for the payment of additional pension benefits of old-age pension
under the employee's pension insurance program (demanded measures (Article 34 of the BOA Act); improper amount:
1,532.21 million yen)
Rectification and improvement measures demanded to properly identify the authorized insurance medical institutions
accepting patients beyond capacity (demanded measures (Article 34 of the BOA Act); improper amount: 300.24 millionyen)

B. Audit cases on social welfare expenses, public assistance expenses, etc.
FY
1969
1980
1984
1986

1987

Item
Measures demanded for expenses incurred for protection, etc. under the Child Welfare Act (demanded measures (Article
34 of the BOA Act))
Improvement measures demanded for subsidies for mandatory admission of children to childcare centers (demandedmeasures (Article 36 of the BOA Act); improper amount: 65.1 million yen)
Improvement measures demanded to accurately identify the status of real property held by assistance recipients in thecourse of providing public assistance (demanded measures (Article 36 of the BOA Act))
Rectification and improvement measures demanded for the payment of fees for lifestyle guidance and management forpeople admitted to intensive care homes for the elderly (demanded measures (Article 34 of the BOA Act); improperamount: 720.67 million yen)
Improvement measures demanded to ensure that support obligors will perform the duty to support the households
receiving assistance in implementing public assistance (demanded measures (Article 36 of the BOA Act))
Rectification and improvement measures demanded to identify geriatrics wards other than those specially authorized in
medical care services for the elderly (demanded measures (Article 34 of the BOA Act); improper amount: 115.75 million
yen)

C. Audit cases on employment measures expenses
FY
1977
1981

1986

1987
1988

Item
Measures demanded for the handling of claims for delinquency charges on claims for return of illegally received
unemployment benefits (demanded measures (Article 34 of the BOA Act))
Measures demanded for the plans to convert comprehensive advanced vocational schools into other types of vocational
schools and implementation thereof (Employment Promotion Organization; demanded measures (Article 34 of the BOA
Act))
Rectification and improvement measures demanded to streamline the administrative work for the adjustment of double
payment of pension benefits of industrial accident compensation insurance and employee's pension benefits, etc.
(demanded measures (Article 34 of the BOA Act); improper amount: 196.21 million yen)
Opinion on the certification of eligible recipients of surviving family compensation pensions under the industrial accident
compensation insurance (presented opinions (Article 36 of the BOA Act))
Rectification and improvement measures demanded to ensure proper payment of re-employment allowances under theemployment insurance (demanded measures (Article 34 of the BOA Act))
Opinion on streamlining the handling of employment insurance for those engaged in racing business (presented opinions(Article 36 of the BOA Act))

379

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

D. Other audit cases
FY
1965
1969
1970
1971
1975

1977
1978
1980
1982
1987

Item
Accounting at Prefectural Labor Standards Bureaus and Labor Standards Offices (presented opinions (Article 36 of the
BOA Act))
Measures demanded for the estimation of expenses for piping work in the small-scale water supply services (demandedmeasures (Article 34 of the BOA Act))
Measures demanded for the implementation of site development work in the development and construction project(Environmental Pollution Control Service Corporation; demanded measures (Article 34 of the BOA Act))
Measures demanded for accounting of loans in the lending business (Environmental Pollution Control Service
Corporation; demanded measures (Article 34 of the BOA Act))
Opinion on improvements in the program for covering the blood costs paid by patients (presented opinions (Article 36 of
the BOA Act))
Measures demanded for proper operation of lending (Pension Welfare Service Public Corporation; demanded measures(Article 34 of the BOA Act); improper amount: 206.6 million yen)
Profit and loss in the Special Account for Employee's Insurance (special description)
Construction plan of large-sized recreational bases (special description)
Measures demanded for the calculation of service commission fees (Medical Care Facilities Financing Corporation;
demanded measures (Article 34 of the BOA Act))
Lodging facilities for transferred workers (special description)
Opinion on appropriate implementation of the establishment of welfare facilities and management thereof (presented
opinions (Article 36 of the BOA Act))
Rectification and improvement measures demanded for the implementation of services for rearing and management ofmonkeys for medical experiments (demanded measures (Article 34 of the BOA Act); improper amount: 176.23 million
yen)

Subsection 4

public works, personnel in charge of estimation

Public works

of costs had worked on estimation according totheir own judgment based on their experience.

Between the mid-1940s and mid-1960s, themajor audit findings were related to individual

However,fortheconstruction works, such as defective construction

estimation operations at government authorities

and overestimation of construction costs. Fromand public organizations, steady steps were taken

the early 1960s, BOA began to conduct audits

from the early 1960s to mid-1970s to develop

with a mind to proactively present opinions andestimation standards. Against this backdrop, fromdemand necessary measures. Accordingly, fromthethe mid-1960s onward, a significant progress was

improprieties on cost estimation found in BOA

made in audit results with a focus on economy,

audits declined.

mid - 1960 s

purposeonward,ofthestreamlining

numberofOn the other hand, from the early 1960s,

efficiency and effectiveness of the construction
projects; in its annual audit reports, BOA

BOA

demandedofappropriateness of estimation standards with theeconomy to improve the estimation standards forobjective of economy, and found many cases in

specific types of construction, and also demanded

which cost estimation did not precisely respondmeasures with the objective of effectiveness toto advancement of construction equipment or

improve the effect of the construction project.

changes in construction techniques. It started tomeasures

with

the

objective

began

to

proactively

audit

the

set down these cases in annual audit reports aspresented opinions, demanded measures, and

1. Audit findings on estimation standards

measures taken.

Until the late 1950s, when placing orders for380Section 4 Overview of Audit Results

By sector, BOA's audit findings coverIn building construction projects operated byalmost all public works sectors including roads,

Japan Housing Corporation, precast piles had

rivers, land improvement, railways, ports andbeen conventionally used. As more high-riseharbors, airports, communications, housing, andbuildings were constructed for housing andwater and sewerage, mainly targeting public

measures to control noise and vibration duringcorporations engaged in implementing large-scaleconstruction work were strengthened, cast-in-

public works and major government ministries inplace reinforced concrete piles had begun to be

charge of public works. In many audit cases inusedwhich BOA found defects in the standards forstandards for this type of construction work had

estimation of construction costs, the relevant

notauthorities revised the standards promptly before

construction projects, the corporation accepted thebeing demanded by BOA to take improvement

amounts of costs quoted by the construction

measures under Article 34 or Article 36 of thecompanies, which were far more expensive than

BOA Act, and many such cases were set down inthe costs estimatedannual audit reports as cases of measures taken.

operated by other organizations. It was necessary

more
yet

frequently.

been

However,developed,

for

and

estimation
inconstruction

actualworks

to investigate and examine the actual situation ofSome audit cases in this category are

the construction field and revise the estimation

presented as examples below.

standards (improper amount: 254 million yen).

Estimation of costs for towing and installingcaissons in the breakwater construction project(FY1973; demanded measures (Article 34 of
the BOA Act); Ministry of Transport)

Estimation of costs for backfilling after
installing sewerage pipes by the cut-and-covermethod in the sewerage work (FY1977;
measures taken; Ministry of Construction)

BOA investigated the operations of towing
and installing caissons and found that the actual

The Ministry of Construction had set the

total numbers of workboats and workers were far

standard productivity unit for backfilling in the

below the numbers based on the estimation

work to install sewage pipes by the cut-and-coverstandards. This inconsistency was due to the fact

method, on the assumption of installation bythat unlike the practice at the time when thehuman power. However, in those days, asestimation standards were established, it became

machines such as small excavators had becomecommon in following years to install a caisson

popular, it became possible to conduct installation

yard for each work site at the harbor, whichbyreduced the towing distance. Therefore, it was

productivity unit no longer matches the actual

necessary to fully investigate and examine thesituation of the work (improper amount: 106

actual situation of the construction field andmillion yen).

machine,andtherefore

thestandard

revise the estimation standards (improper amount:
2. Audit findings on the project effect70 million yen).

One noticeable point in the audits on public

Estimation of costs for installing cast-in-place
reinforced concrete piles in the housing
construction project (FY1975; demandedmeasures (Article 34 of the BOA Act); Japan
Housing Corporation)

works conducted since the mid-1960s onward isthat in addition to the conventional audit
objectives taken into account in the conventional
381

Part 3audits

Chapter 3

on

Audit between the mid-1960s and late 1980s

financialmanagement,

discrepancy with the incidental projects.

namely,regularity, economy, and efficiency, emphasis

Opinion on the construction of a new railway
line (FY1970; presented opinions (Article 36 of
the BOA Act); Ministry of Transport)

was placed on the evaluation of the attainment of
the project effect.
This tendency was created when BOA began

Although the track sections regarding whichto proactively present opinions and demand

the Ministry of Transport had given instructions

measures in annual audit reports from the earlyon construction to Japan Railway Construction

1960s, and it was established mainly in relation

Public Corporation had been completed in wholeto agriculture, forestry, and public work projects

or part, the remaining part of the construction

since the mid-1960s onward. Between the mid-work had been suspended or it seemed to take a

1970s and mid-1980s, along with the introduction

considerable amount of time to complete theof a special description as a new section in anwhole line.

annual audit report, findings on the project effectOpening of the New Tokyo International
Airport (FY1975; special description)

were reported almost every fiscal year.

The opening of the New Tokyo International

Below, examples of audit findings focusing
on the effect of public works projects are

Airport was delayed.

presented in three categories.

Implementation of the state-run reclamation
project (FY1976; special description)(1) A delay in producing the project effect, due
to the considerable delay in the progress of
the work or lack of prospect forresumption after suspension

In the state-run reclamation project, work
had been suspended and there was no prospect
for resumption.

Implementation of the state-run project for
construction of irrigation and drainage
facilities (FY1965; presented opinions (Article
36 of the BOA Act); Ministry of Agriculturaland Forestry)

Construction of the new Yokohama freightline as part of the construction of additional
tracks for the purpose of easing congestion on
the Tokaido Line (FY1976; special description)
In the project for construction of the new

Implementation of the state-run project for
construction of irrigation and drainage
facilities in Seiseian, and two other projects(FY1977; special description)

Yokohama freight line for the purpose of easing
congestion on the Tokaido Line, there had been adelay in opening the new line due to thedifficulty in acquiring part of the project site,

Opinion on ensuring that the project effect willbe
produced
promptly
throughtheimplementation of the state-run project for
construction of irrigation and drainage
facilities, and incidental projects operated by
prefectural governments and organizations(FY1983; presented opinions (Article 36 of the
BOA Act); Ministry of Agriculture, Forestry
and Fisheries)

which made it impossible to put the completed
railway facilities into operation.
Construction of the Otaki Dam and the
Kawabegawa
Dam( FY1977 ;
specialdescription)

The head works, waterways and otherConstruction of multi-purpose dams (FY1983;
special description)

facilities completed remained unused due to a

There was a considerable delay in theconstruction of dams.

considerable delay in the state-run projects or382

Section 4 Overview of Audit Results

Construction of airport station facilities
launched as part of the project for
construction of the Narita Shinkansen line (FY
1982; special description)

Opinion on increasing efficiency in the use of
farmlanddevelopedinthefarmlanddevelopment project (FY1984; presented
opinions (Article 36 of the BOA Act); Ministryof Agriculture, Forestry and Fisheries)

In the project for construction of the Narita

The farmland developed in the farmland

Shinkansen line, although the airport stations,development projects had been left unused withelevated bridges and other facilities located in theno plants or were covered with weeds due to

track section from Narita Airport to Tsuchiya had

inadequate management after planning.

been almost completed, there was no prospect for

Measures demanded for the implementation of
the project for development of waste oiltreatment facilities as part of the measures toprevent pollution at fishing ports (FY1975;
demanded measures (Article 34 of the BOAAct); Ministry of Agriculture, Forestry and
Fisheries)

the completion of construction of such facilities
in the subsequent sections from Tsuchiya toTokyo Terminal, due to which the completed
facilities would have fallen into disuse for a long
period of time.

The waste oil treatment facilities developed

Implementationoftheprojectsfordevelopment of urban facilities (FY1984;
special description)as part of the pollution prevention measures at

The projects for development of streets andparts of these facilities remained completely

sewage systems and

for

land

fishing ports were not fully operated or someunused.

readjustment

implemented by local governments using state

Use of housing sites and facilities (FY1975;
special description)

subsidies had been suspended and there was noprospect for resumption.
(2) Disuse or low operation rate of facilities

Construction and management of housing
facilities using public funds (FY1976; special
description)

Implementation of the state-run reclamationand construction project (FY1965; presented
opinions (Article 36 of the BOA Act); Ministryof Agriculture and Forestry)

Use of housing sites and facilities (FY1980;
special description)
Rectification and improvement measuresdemanded to promote the sale of developed
housing sites held for a long time after thecompletionofdevelopment( FY1984 ;demanded measures (Article 34 of the BOAAct); Housing and Urban Development
Corporation)

Implementation of the state-run reclamation
project FY1976; special description)
Land developed in the state-run reclamation
projects had not been distributed but remained
unused for a long time.

The

Measures demanded for the effect of the landdevelopment pilot project (FY1969; demandedmeasures (Article 34 of the BOA Act);
Ministry of Agriculture and Forestry)land

acquired

by

Japan

Housing

Corporation as sites for constructing housing
facilities had been held by the corporation for along time or the housing facilities constructed,

Use of farmland developed in the state-run
farmland development project ( FY 1979 ;special description)

maintained and managed by the corporation wereunoccupied.
Rectification
383

and

improvement

measuresPart 3

Chapter 3

Audit between the mid-1960s and late 1980s

demandedto
implement
theproject
appropriately, by pointing out
manyunoccupied housing facilities among those
constructed as public housing (FY1985;
demanded measures (Article 34 of the BOAAct); Ministry of Construction)
Housing
governments

facilities
asconstructed

by

local

housing

with

state

publicbelow the planned level and the operation rate of
the machinery and equipment installed there wasconsiderably low.
Use of building sites developed through theimplementation of the state-subsidized land
readjustment projects ( FY 1982 ; special
description)

subsidies were unoccupied.

In

the

land

readjustment

projects

implemented by local governments with state

Implementation of the project for developmentof large-scale forest road networks (FY1979;
special description)

subsidies, the developed buildings sites had notbeen used for housing but had been used as

Forest roads constructed in the project forfarmland or remained unoccupied.

development of large-scale forest road networks

Rectification and improvement measuresdemanded to streamline the planning andimplementationofthefishing
portdevelopment projects (FY1983; demandedmeasures (Article 34 of the BOA Act);
Ministry of Agriculture, Forestry and
Fisheries)

were scarcely put into use due to lack of accessto national or prefectural roads.
Measures demanded for the implementation of
the forest road project (FY1980; demandedmeasures (Article 34 of the BOA Act);
Ministry of Agriculture, Forestry and
Fisheries)

In the fishing port development projects, theIn the forest road projects implemented bydeveloped facilities did not perform the intended

local governments with state subsidies, the usefunctions due to the insufficient coordination with

rate of constructed forest roads was low due tothe related facilities in the course of working out

inappropriate selection of the projects.

long-term plans.

Measures demanded for the resort village
development project (FY1980; demandedmeasures (Article 34 of the BOA Act);
Ministry of Agriculture, Forestry and
Fisheries)

Measures taken to improve the management
and operation of the bicycle parking lots
constructed with state subsidies (FY1988;
measures taken; Ministry of Construction)

In the resort village development project

While part of the bicycle parking lots

implemented by local governments with state

constructed by local governments with statesubsidies, the developed facilities lacked thesubsidies has not been used, many bicycles were

nature of resort village, had scarcely been used,

left on the roads surrounding the parking lots.

or had been sold without permission.

(3) Facilities,
purposes

Measures demanded for the development ofmachinery and equipment of terminal sewage
disposal facilities ( FY 1981 ; demandedmeasures (Article 34 of the BOA Act);
Ministry of Construction)

etc.

not

used

for

intended

At the terminal sewage disposal facilities

Measures demanded for the implementation of
the Kita Awaji development project (FY1971;
demanded measures (Article 34 of the BOAAct); Ministry of Agriculture, Forestry and
Fisheries)

constructed by local governments with state

The land developed in the Kita Awaji

subsidies, the amount of sewage treated fell far

development project had not been used for384

Section 4 Overview of Audit Results

farming.

objectives of regularity, economy and others andMeasures demanded to ensure proper
management of the water and drainage
facilities for agricultural use constructed in thestate-run and prefectural irrigation anddrainage projects ( FY 1982 ; demandedmeasures (Article 34 of the BOA Act);
Ministry of Agriculture, Forestry and
Fisheries)

achieved audit results.
The number of audit findings on the qualityof concrete, which BOA had continued to reportsince the mid-1940s onward, gradually decreased
from the mid-1960s, and findings on this point
finally disappeared from annual audit reports afterforthe mid-1970s. Instead, new types of audit cases

agricultural use constructed in the state-run andregarding the construction of concrete structures

prefectural irrigation and drainage projects werebegan to be set down in the reports.

The

water

and

drainagefacilities

used for taking water for purposes other than

One such type of case is related to theagriculture, such as for a waterworks project, orinsufficient thickness of concrete lining forused as drains for industrial wastewater.

tunnels. The following is the first such audit case.

Opinion on ensuring appropriate management
and operation of public housing facilities inline with the purposes of the public housing
programs (FY1984; presented opinions (Article
36 of the BOA Act); Ministry of Construction)

Inconsistency between the implementation of
the lining work for the tunnel and the tunnel
design (FY1967; improprieties; Japan Railway
Construction Public Corporation)

Public housing facilities constructed by local

In this work, a tunnel of 1,049 meters longgovernments with state subsidies were occupied

was planned to be constructed as part of the planby people whose income exceeded the income

for construction of the Yokaku Line (Takanosu

limit.

Station―Kakunodate Station). Although the tunnel

Improvement measures taken to prevent
people who purchased housing facilities fromthe public corporation for their residence from
renting them to third parties (FY1986;
measures taken ; Housing and Urban
Development Corporation)

was supposed to be constructed with concrete

People who purchased housing facilities

it was found that the concrete lining was far

lining of 30 to 60 centimeters in thickness basedon the design drawing, a number of cracks wereobserved on the surface of the finished lining.
When investigation was conducted by perforating,

Development

inferior in strength to the designed level due toCorporation did not use them for their residence

the defects for some parts of the lining,

but rented or sold these facilities to third parties.

including: the thickness is less than one half offrom

Housing

and

Urban

the designed level; rocks were protruding from
3. Audit findings on individual construction
projects

the lining due to insufficient drilling; hollows of

As reviewed above, in the mid-1960s to late

one of about 1 meter, were observed behind the1980s, significant progress was made in thelining; and the H-shaped supports were about

results of audits conducted with the objectives ofseveral centimeters below the surface of theeconomy, efficiency and effectiveness. BOA

lining.

continued
construction

toconduct
works

auditsandonprojects

about 40 centimeters in average, or the largest

After this audit case, insufficient thickness

individualwithof tunnel lining became an important audit aspect

the
385

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

for construction audits. The same defect was also

designing stage came to be the majority. In this

discovered with tunnels for roads and waterways

area, against the backdrop of the shortage ofand reported continuously from the late 1960s toengineers retained by the clients, outsourcing to

the early 1980s. In consequence of BOA's

professional consultants became popular, and therepeated reporting and the advancement of tunnel

clients are now in the position to examine thedrilling technique, this type of defect has

propriety of the design products submitted by thedisappeared from annual audit reports now.

consultants. However, in reality, the engineers of

Audit findings on individual construction

the clients in charge of examination are too busy

works and projects were more frequently reportedwith supervisory operations to make a sufficientwith regard to subsidized works than works

inspection; therefore, even if there are any errors

implemented by the national government, due toin the design product submitted by the consultant,the difference in terms of the client's supervisory

construction work would be implemented while

structure, the contractor's business size andthe client not noticing the defects, and publiccapability. From the late 1960s to the late 1980s,

structures containing serious defects would becharacteristics of findings on subsidized works

constructed.
The FY1986 Annual Audit Report coveredchanged as follows.

the audit case in
Number and share of findings on subsidized works

whichinappropriate design forConstruction Estimation Design Other Total
1965855
18
26
46
945
1974
cases
cases
cases
cases cases
90%
2%
3%
5% 100%1975107
49
51
28
235
1984
cases
cases
cases
cases cases
45%
21%
22%
12% 100%
19855
5
11
5
26
1989
cases
cases
cases
cases cases
19%
19%
43%
19% 100%(Note) If more than one finding was reported for the samecase, the case is assigned to the category of the major
finding.

BOA

found

reinforced

anconcreteretaining wall. This was the first case followed
by a number of audit cases reporting the samekind of findings on insufficient strength ofreinforced concrete.
Improper implementation and accounting of
the subsidized project (FY1986; improprieties;
Ministry of Construction)
This project is to construct an inverted Tshaped reinforced concrete cantilever wall. In thecourse of preparing a design specification and bar

The tendency of frequent occurrence of
mid-1940s

arrangement drawing with regard to the main

onward had ended between the mid-1960s andreinforcing bars to be arranged at the toe-plate of

mid-1970s, and between the mid-1970s and mid-

the front surface of the wall, the interval of bars

1980s, cases such as the misapplication of

was erroneously

estimation standards and miscalculation began to(correctly 12.5 centimeters based on the design

be reported more frequently. The number of thesecalculation

findings decreased from the mid-1980s, thanks toconstructed using this design specification andthe development of the audit system such as

bar arrangement drawing is instable because thecomputerization of estimation operations. Fromtensile stress applied to the main reinforcing bars

the mid-1980s onward, findings on the structures

is far above the allowable level.

defective

construction

since

the

sheet).

Meanwhile,with insufficient strength due to mistakes in the386

written
As

when

as 25
a

result,centimeterstheimplementing

wall

publicSection 4 Overview of Audit Results

Along with the high-rate economic growth,works projects, it is impossible to avoid theissues of acquisition of land for construction sites

mainlyand compensation for landowners. In response toconcentration of daytime population in urban

the

the

areas progressed and the surrounding areas

compensation standards were established andbecame commuter towns. Coupled with the

BOA reported a number of audit cases involving

second baby boom, these changes caused ancompensation between the mid-1970s and mid-increase in the number of municipalities and1980s.

special wards experiencing the rapid rise in the

call

for

propercompensation,

in

large

metropolitan

cities,theMost audit findings on compensation are

number of school children. Elementary schools

improprieties, such as inappropriate calculation ofand junior high schools in these areas ran shortthe amount of compensation or inappropriate

of classrooms, and were pressed to acquire land

scope

or

to build new school buildings and extensions.

compensation recipients' refusal to move fromThe FY1974 Annual Audit Report covered thetheir land. In the FY1984 Annual Audit Report,case of measures demanded for the grant of

BOA

Water

subsidies to cover expenses for the special

Resources Development Public Corporation paid

projects to construct facilities at municipal

compensationbuilding

elementary schools and junior high schools in

substitute ships for passenger ships in order to

response to the rapid increase of school

adapt to the decline of the water level that could

children (demanded measures (Article 34 ofbethe BOA Act)).

orcontent

discussed

causedtobyofcompensation,

the case in
cover

the

costs

which
for

implementation

of

the

comprehensive development project for Lake

In July 1970, as the successor to the Private

Biwa. In this report, BOA pointed out that the

School Promotion Association, the Japan Private

steamship

ships,

School Promotion Foundation was established.

which did not meet the purpose of compensation,

The audit on the subsidy program operated by theand presented opinions on how compensation

foundation was set down in the FY1970 Annual

should be paid in the future.

Audit Report as the audit case of measurescompanies built

deep-draft

demanded for the accounting of the subsidies
Subsection 5

Education,technology

sciencefor current expenses of private universities

and(Japan Private School Promotion Foundation;
demanded measures (Article 34 of the BOA

1. Audit cases reported in the annual audit
reports between the mid-1960s and mid1970s

Act); see the table below). The improperaccounting of this subsidy program was reported
as improprieties every fiscal year since FY1971.

In the FY1966 Annual Audit Report, BOA
stated that "it is necessary to give consideration"

BOA began to present opinions or demandin relation to the case on subsidies in whichmeasures with regard to audit cases on articles.

expenses for school supplies for aid-requiring

Audit cases reported in the field of science andchildren and students were paid in lump sum

technology include, for example, the case ofat the end of year school year, which wasmeasures demanded for the management ofagainst the purpose of the subsidy.

goods acquired in the commissioned projects
387

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s(FY1973; Science and Technology Agency;

Ministry of Education, Science and Culture;

demanded measures (Article 34 of the BOA

improprieties; improper amount: 615.8 million

Act); see the table below).

yen).

BOA

demandedmeasuresregardingbudgetary accounting in a series of audit cases

3. Audit cases reported in the annual audit
reports in the late 1980s

during this period, stating that income should beproperly

recorded

withinthe

In addition to the conventional type ofbudgetary

framework. These cases include: the case of

improprieties

rectification

measuresexpenses for the improvement of public school

demanded for the handling of commissioned

facilities, in FY1983, BOA started to report audit

research and scholarship donations at national

findings on state contributions to compulsory

schools (FY1968; demanded measures (Article

education

34 of the BOA Act); see the table below); thecombination with the increase in the number ofcase of measures demanded for the accounting

findingsof pathological autopsy (FY1972; demanded

Promotion Foundation, the number of cases inmeasures (Article 34 of the BOA Act); see thewhichtable below); and the case of the handling ofreported increase about three times as large as thecommissioned

National

number between 1965 and 1974. For example,

Institute of Radiological Sciences (FY1974;

the FY1986 Annual Audit Report covered theScience and Technology Agency; measurescasetaken).

accounting

andimprovement

researchattheinvolving

expenses

subsidiesoninvolving

a

Japan

full

improperof( improprieties ;

coverscale.

Privateimproper / unreasonableoftoSchoolmatters

wereimplementation

thesubsidized

improperInandproject

amount :175.1

million yen), in which BOA found a large

2. Audit cases reported in the annual audit
reports between the mid-1970s and mid1980s

amount of improprieties regarding the subsidies
to cover expenses for the special projects toconstruct

From the mid-1970s, the improper amounts

facilities

atmunicipal

elementary

reported as improprieties gradually became large,

schools and junior high schools in response to thepartly due to the inflation caused by the two oil

rapid increase of school children.
From the perspective of whether inspection

crises (in 1973; and between 1979 and 1980).
for

Major audit cases reported in relation toacceptanceofarticlesisconducted

improperappropriately, in FY1987, BOA reported the caseaccounting

of

the

of inappropriate inspection for acceptance of( expenses

for

the

the MRI/CT scanning system, due to which a

improvement of public school facilities) (FY

large part of equipment that should have been

1975; Ministry of Education, Science andadded to the system based on the special

Culture;specification

subsidiesincludeimplementation
subsidized

the

case

and

project

improprieties;of

improperamount:wasnotdelivered

and

the

146.96 million yen) and the case of improper

purpose of purchasing the system was notaccountingofsatisfied (improprieties; improper amount:compulsory

education

state

contributions
expensesto

12.02 million yen).

(FY1983;388

Section 4 Overview of Audit Results

In the category of services, the FY1988

1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988

Annual Audit Report covered the case of
improvement

measures

taken

to

ensureappropriate payment of gas fees at national
universities( measurestaken ;

improperamount: 26.5 million yen). With regard to this
case,

BOA

recommended

theimprovement

measures using the fee schedule of public interest
undertakings, as in the cases regarding electricity
supply contracts which had been frequently
reported in the annual audit reports from FY1975
to FY1984.
The following table shows audit cases
reported in the annual audit reports from FY1965
to FY1988, by fiscal year and by reporting
category.
Audit cases reported in the annual audit reports by fiscal
year and by reporting category (unit: number of cases)

5
4
3
5
11
7
10
11
11
9
11
11
12
7
12
12
19
36
18
15
20
17

1
1
-

1
2
2
1
1
1
1
3
-

1
1
3
1
1
1
1
1
3
2
3

1
1
-

The following tables show audit cases on

Impropri Presented Demanded Measures Special
eties
opinions measurestaken description
1965
5
1966
3
-

education, etc., other than improprieties andFYmeasures taken.

A. Audit cases on education, by fiscal year
FY
1968

1970

1972
1977
1984
1985

1986

Item
Rectification and improvement measures demanded for the handling of commissioned research and scholarship donations
at national schools (demanded measures (Article 34 of the BOA Act))
Opinion on improvements in the management of national property and articles at national universities (presented
opinions (Article 36 of the BOA Act))
Measures demanded for the purchase of reagents for research (demanded measures (Article 34 of the BOA Act))
Measures demanded for the accounting of the subsidies for current expenses of private universities (Japan Private School
Promotion Foundation; demanded measures (Article 34 of the BOA Act))
Measures demanded for the accounting of pathological autopsy (demanded measures (Article 34 of the BOA Act))
Measures demanded for management and operation of the department of neuropsychiatry at the hospital attached to thefaculty of medicine (demanded measures (Article 34 of the BOA Act))
Opinion on application of reasonable standards for the exemption from tuition fees at the national universities (presented
opinions (Article 36 of the BOA Act))
Improvement measures demanded to revise the designation of classes for receiving remote area allowances, etc. which
served as the basis for calculation of the state contributions to compulsory education expenses (demanded measures(Article 36 of the BOA Act))
Rectification and improvement measures demanded to ensure proper payment of electricity tax and gas tax at thehospital attached to the faculty of medicine (Osaka University; demanded measures (Article 34 of the BOA Act);
improper amount: 19.56 million yen)
Rectificaton and improvement measures demanded to ensure proper payment of electricity tax at the hospital attached to
the faculty of medicine (Kobe University; demanded measures (Article 34 of the BOA Act); improper amount: 9.91
million yen)389

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

Improvement measures demanded to rationalize the share of state contributions to mutual aid expenses for personnel
working as substitutes for school teachers and staff members on maternity leave, etc. which served as the basis forcalculation of the state contributions to compulsory education expenses (demanded measures (Article 34 and Article 36of the BOA Act); improper amount: 2,164.36 million yen)

B. Audit cases on science and technology, by fiscal year
FY
1972

Item
Measures demanded for the estimation of the value of the contract for construction and engineering work involved in theconstruction of power reactors (Power Reactor and Nuclear Fuel Development Corporation; demanded measures (Article
34 of the BOA Act))
1973 Measures demanded for the management of articles acquired in the commissioned projects (Science and Technology
Agency; demanded measures (Article 34 of the BOA Act); improper amount: 131.41 million yen).
1975, Development of the nuclear ship, "Mutsu" (special description)
1982

Subsection 6

Agriculture,
fisheries

forestry

onward when designing began to be outsourced

andin more construction projects due to the increase

1. Audit cases reported in the annual audit
reports between the mid-1960s and mid1970sin the number of public works and the reduction

Among audit cases regarding agricultural

From the mid-1960s, BOA began to report a

structure improvement projects, the number of

few audit cases per year as demanded measurescases of improprieties sharply dropped during thisor presented opinions, many of which are related

period, and demanded measures and presented

to the project effect of agricultural infrastructure

opinions became the main approaches for dealing

improvement projects or construction projects.

with audit results. BOA had almost finishedThis is because problems were raised with regard

audits on works implemented by the national

to the implementation process and effect of thegovernment by the late 1960s and rarely reported

irrigation and drainage projects, reclamationthese audit cases thereafter. As for subsidies, theprojects, and development projects which had

number of findings involving public works

been implemented on a large scale from relatively

decreased to become nearly equal to the number

early on.

in personnel through the administrative system
reforms.

In the forestry industry, the Forestry Basicof findings involving non-public works.
A major factor causing the decrease in the

Act was enacted in 1964, and forestry structure

number of findings on public works may be that

improvement projects were launched under thisvarious standards for design, estimation and

Act in the same year. In the category of audits on

construction supervision were developed forworks implemented by the national government,

works implemented by the national government

BOA reported findings on defective construction

and subsidized works. On the other hand, BOA

in flood control works in 16 cases in FY1965,

reported findings on design and estimation

but after that, this topic was covered only in one

relatively more often than before. Estimation wascase in the FY1989 Annual Audit Report. Amongan important audit theme between the mid-1960s

findings of improprieties onand mid-1980s. The number of findings on

number of findings regarding public works was

design started to increase since the mid-1970s

on a declining trend from the mid-1960s. On the390

subsidies,theSection 4 Overview of Audit Results

other

hand,

BOA

reportedotherstructurefindings

improvement.

Duringthisperiod,including demanded measures from the early

demanded measures and presented opinions in

1960s onward. In the early 1970s, it set down

this field were related to the project effect ofthese findings in connection with the issue of

infrastructure improvement projects, subsidies forprotection of domestic timber which was raised

structure improvement projects, and construction

due to the increase in import of foreign timber.

design and cost estimation. In addition to

Fisheries entered the age of globalization inreporting improprieties, demanded measures, andmid-1960s.

claim

presented opinions, BOA began to raise problems

protection of resources and profits in their own

by including special description in annual audit

fishing places and declared their territorial seas. It

reports.

theCountries

began

to

was no longer possible for any country to operate

In the forestry industry, the high-growthfishing unless an international treaty or agreement

period ended, and the industry entered theon fishing was concluded. The age of multilateralstagnant period in the late 1970s. Against thisfishing agreements then moved on to the age

backdrop,

when countries established their own 200 nautical

Concerning National Forestry Improvement was

miles zones.

enacted in 1978, making it possible to secure

the

Act

on

SpecialMeasures

While the number of audit findings onfunds for forestation and forest road development

subsidies for public works projects was declining,projects from the general account for the time

findings on subsidies for other projects werebeing, on condition that those engaged in forestry

reported relatively more frequently since the earlymake self-help effort to streamline management

1980s onward. These findings were related to theand improve productivity. Accordingly, with the

grant of subsidies to projects ineligible as coastal

aim of achieving the balance of revenues andfisheries structure improvement projects, failure

expenditures in 20 years, the national forestry

to achieve the purposes of the subsidies, andimprovement plan was formulated in order tooverestimation of construction costs.

establish the necessary infrastructure in ten years.
The number of findings on public works
projects was on a declining trend in the late 1970

2. Audit cases reported in the annual audit
reports between the mid-1970s and mid1980s
Inauditson

agriculturals. After that, BOA reported findings on subsidies
forforestry

including

structure

structuredefective

improvement projects, the emphasis was placed

design,andfailurenot only on the conventional infrastructure-subsidized projects.

improvement

projects,

construction,

excessive

to

part

implementoffocused projects but also to resources-based

Audit cases in which BOA demanded

projects designed to directly support structure

measures or presented opinions were related to

improvement projects. This change was in

the national forestry projects, the project effect oftandem with the change in the agricultural policy

forest road development projects and constructionthat started to focus on structure improvement

works.

projects in addition to projects for infrastructureIn

improvement

which

was theconditionthefisheries

industry,findings

ofimproprieties on subsidies for projects other than

for
391

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

public works projects were reported relatively

While BOA found no improprieties withmore frequently since early 1980s. These findings

regard to works implemented by the national

were related to the subsidies to projects ineligible

government, it more often reported improper/as

improvement

unreasonable matters on subsidized works, due toprojects, failure to achieve the purposes of thethe increase in simple errors in inputting datasubsidies, and overestimation of construction

along with the computerization of design andcosts. BOA started to demand measures andestimation

present opinions in annual audit reports aroundexamination of the design products submitted bythat time―when the fisheries industry launched

consultants. Meanwhile, BOA still demanded

the improvement and development of coastal

measures or presented opinions as a result offisheries on a full-fledged scale in the 200

audits on infrastructure improvement projects,

nautical miles zone age, and with Japanesealthough the number of such cases was declining.

economy moving from the high-growth phase on

Findings on structure improvement projects wereto the stable-growth phrase, the public began toreported relatively often, suggesting that BOA

pay a particular attention to administrative

shifted the focus of audit to more substantial

efficiency while also becoming concerned about

effects in assessing the project effect.

coastalfisheries

structureoperations,

and

the

insufficient

Matters on livestock industry development

environmental conservation measures.

newly appeared in annual audit reports during
this period. Livestock was one of the categories

3. Audit cases reported in the annual audit
reports in the late 1980s
Audits became more multi-facetedof agricultural products in addition to fruits andhorticultural

andproducts

that

the

government

comprehensive in the late 1980s. In addition to

designated from the perspective of selective

production base and structure, from the late

expansion. Import liberalization of agricultural

1980 simproper /products, such as beef and orange, led to theunreasonable matters on distribution of products

need to take industrial development measures forandall processes from production to consumption.

BOA

began

stabilizationoftoreportproduct

pricesmore

frequently. In the livestock industry, in particular,

Audit findings on forestry were set down asaudits also covered various projects for livestocka special description again in FY1985, after theindustry promotion implemented with subsidies

national forestry improvement plan had beenfrom provisional tariff revenues toward importdeveloped due to the continued deterioration inliberalization.

the operation of the national forestry projects.

A. Agricultural structure improvement projects and infrastructure improvement projects
FY
1965

1967
1968

Item
Implementation of the state-run project for construction of irrigation and drainage facilities (presented opinions (Article
36 of the BOA Act))
Implementation of the state-run reclamation and construction project (presented opinions (Article 36 of the BOA Act))
Estimation of the value of the contract for works implemented by the national government in the land improvement
projects (presented opinions (Article 36 of the BOA Act))
Rectification and improvement measures demanded for the calculation of the indirect labor costs for works implemented
by the national government in the land improvement projects (demanded measures (Article 34 of the BOA Act))

392

Section 4 Overview of Audit Results
1969

1970
1971
1974
1976

1977

1978

1979

1980

1981
1982

1983

1984

1985

Measures demanded for the implementation of construction works using secondary concrete products (demandedmeasures (Article 34 of the BOA Act))
Measures demanded for the implementation of soil improvement in both the grassland improvement project and the landdevelopment pilot project (demanded measures (Article 34 of the BOA Act))
Measures demanded for the project effect of the land development pilot project (demanded measures (Article 34 of the
BOA Act))
Measures demanded for the conversion of farmland developed in the project for field development in the inland waterarea to other purposes (demanded measures (Article 34 of the BOA Act))
Measures demanded for the calculation of the rent for non-self-navigating sand carriers (demanded measures (Article 34of the BOA Act))
Measures demanded for the implementation of the Kita Awaji development project (demanded measures (Article 34 of
the BOA Act))
Measures demanded for the design and cost estimation for the construction of aqueduct tunnels (demanded measures(Article 34 of the BOA Act); improper amount; 245 million yen)
Measures demanded for the grant of state subsidies to cover prefectural subsidies to municipalities (demanded measures(Article 34 of the BOA Act); improper amount: 13,950.32 million yen)
Measures demanded for the accounting of the agricultural land holding rationalization promotion project (demandedmeasures (Article 34 of the BOA Act); improper amount: 160.94 million yen)
Measures demanded for the minimum limit price of contracts for construction and manufacturing of agricultural facilities
implemented by agricultural cooperatives as subsidized projects (demanded measures (Article 34 of the BOA Act);
improper amount: 89.51 million yen)
Measures demanded for the creation of superficies right for the construction of pipe channels (demanded measures(Article 34 of the BOA Act); improper amount: 8.99 million yen)
Implementation of the state-run project for construction of irrigation and drainage facilities in Seiseian, and two otherprojects (special description)
Measures demanded for the size of the agricultural machinery storehouses established in the agricultural structure
improvement projects (demanded measures (Article 34 of the BOA Act); improper amount: 110 million yen)
Measures demanded for the grant of subsidies for the restructuring of the use of paddy fields in the project sites of theland improvement projects implemented along with the concentration of farmland by land category (demanded measures(Article 34 of the BOA Act))
Measures demanded for proper implementation and accounting of subsidized projects (demanded measures (Article 34 of
the BOA Act); improper amount: 41.5 billion yen)
Opinion on improvements in the establishment of living environment facilities for rural areas (presented opinions (Article
36 of the BOA Act))Use of farmland developed in the state-run farmland development projects (special description)
Measures demanded for the resort village development project (demanded measures (Article 34 of the BOA Act);
improper amount: 631.31 million yen)
Implementation of the state-run reclamation project (special description)
Grasslands developed in the cooperatives grasslands development project (special description)
Rectification and improvement measures demanded to ensure proper management of the water and drainage facilities for
agricultural use constructed in the state-run and prefectural irrigation and drainage projects (demanded measures (Article
34 of the BOA Act))
Opinion on undertaking a fundamental review and ensuring proper implementation of the collective farming development
project (presented opinions (Article 36 of the BOA Act))
Opinion on ensuring that the project effect will be produced promptly through the implementation of the state-run projectfor construction of irrigation and drainage facilities, and incidental projects operated by prefectural governments andorganizations (presented opinions (Article 36 of the BOA Act))
Improvement measures demanded for the operation of the project for wide-area adjustment of machine operations infarming (demanded measures (Article 36 of the BOA Act))
Opinion on increasing efficiency in the use of farmland developed in the farmland development project (presented
opinions (Article 36 of the BOA Act))
Rectification and improvement measures demanded to consider the effective use of existing farming machinery owned
by farmers in granting subsidies for the introduction of new machinery (demanded measures (Article 34 of the BOAAct); improper amount: 570.49 million yen)

393

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

B. Use of paddy fields
FY
1970

Item
Measures demanded for the project effect of the project for development of collective wheat cropping areas on paddy
fields (demanded measures (Article 34 of the BOA Act))
1977 Improvement measures demanded for the implementation of the paddy field purchase project and the grant of subsidies
for comprehensive use of paddy fields involving temporarily rented paddy fields (demanded measures (Article 36 of the
BOA Act))
1980 Grant of subsidies for controlled crop diversification in the project for the restructuring of the use of paddy fields(special description)
1981 Measures demanded for the sale of imported wheat (demanded measures (Article 34 of the BOA Act); improper amount:
3,763.77 million yen)
Grasslands developed in the cooperatives grasslands development project (special description)
1982 Measures demanded to ensure effective implementation of the project for the restructuring of the use of paddy fields(demanded measures (Article 36 of the BOA Act))

C. Food management and livestock
FY
1968
1969
1970
1975
1980
1981
1983
1984
1986

Item
Rectification and improvement measures demanded for the tallying upon purchase of foreign wheat (demanded measures(Article 34 of the BOA Act))
Measures demanded for the estimation of ocean freight included in the estimated purchase price of foreign wheat(demanded measures (Article 34 of the BOA Act))
Measures demanded for the calculation of money to be collected by the State for processing of rice (demanded measures(Article 34 of the BOA Act))
Profit and loss in the Special Account for Foodstuff Control (special description)
Treatment of rice involved in environmental pollution induced by cadmium (special description)
Measures demanded for the estimation of the selling price of wheat for animal feed (demanded measures (Article 34 of
the BOA Act); improper amount: 1,990 million yen)
Measures demanded for the sale of imported wheat (demanded measures (Article 34 of the BOA Act); improper amount:
3,763.77 million yen)
Silk thread price stabilization system (special description)
Rectification and improvement measures demanded for proper implementation of the project for introduction of breadingcow (demanded measures (Article 34 of the BOA Act); improper amount: 673.63 million yen)
Improvement measures demanded for proper implementation of the egg price stabilization project (demanded measures(Article 36 of the BOA Act))

D. Forestry
FY
1965
1971

Item
Exchange of national forests (presented opinions (Article 36 of the BOA Act))
Measures demanded for the sale of materials to be displayed at exhibitions (demanded measures (Article 34 of the BOA
Act))1975 Profit and loss in the Special Account for National Forest Service (special description)
1976 Opinion on improvements in implementation of the wood production project (presented opinions (Article 36 of the BOA
Act))1979 Implementation of the project for development of large-scale forest road networks (special description)
1980 Measures demanded for the implementation of the forest road project (demanded measures (Article 34 of the BOA Act);
improper amount: 343.11 million yen)
1982 Rectification and improvement measures demanded for proper lending of forestry improvement fund (demandedmeasures (Article 34 of the BOA Act); improper amount: 508.01 million yen)
1985 Management of the national forestry project (special description)

394

Section 4 Overview of Audit Results
E. Fisheries
FY
1975
1981
1982
1983
1985

Item
Measures demanded for the implementation of the project for development of waste oil treatment facilities as part of themeasures to prevent pollution at fishing ports (demanded measures (Article 34 of the BOA Act))
Measures demanded for the implementation of coastal fisheries structure improvement projects (demanded measures(Article 34 of the BOA Act); improper amount: 1,647.49 million yen)
Rectification and improvement measures demanded for proper lending of coastal fisheries improvement funds (demandedmeasures (Article 34 of the BOA Act); improper amount: 101.28 million yen)
Rectification and improvement measures demanded for proper planning and implementation of the fishing port
development project (demanded measures (Article 34 of the BOA Act); improper amount: 1,521.26 million yen)
Rectification and improvement measures demanded for proper implementation of the breeding and farming area
development project (demanded measures (Article 34 of the BOA Act); improper amount: 1,823.71 million yen)
Opinion on achieving the basic goal of the regional reorganization project for agricultural structure improvement andensuring that the project will produce the effect (presented opinions (Article 36 of the BOA Act))

F. Others
FY
1971
1977
1984
1988

Item
Measures demanded for the lending of funds for land acquisition (Agriculture, Forestry and Fisheries FinanceCorporation; demanded measures (Article 34 of the BOA Act))
Measures demanded for the accounting of subsidies for interest rate compensation for agricultural modernization funds(demanded measures (Article 34 of the BOA Act); improper amount: 55.43 million yen)
Improvement measures demanded for proper payment of management transfer pension in the farmers' pension project(demanded measures (Article 36 of the BOA Act))
Improvement measures demanded for proper operation of lending of agricultural improvement funds (demandedmeasures (Article 36 of the BOA Act); improper amount: 371.2 million yen)

Subsection 7

Defense

1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988

Audit findings on defense
In view of the huge amount of expenditures
and the high level of public concern, BOA has
developed

andenhanceditsorganizational

structure for conducting audits in this field since
the inauguration of the Police Reserve Force inAugust 1950.
The following table shows audit cases
reported in the annual audit reports from FY1965
to FY1988, by fiscal year and by reporting
category.
Audit cases reported in the annual audit reports by fiscal
year and by reporting category (unit: number of cases)
FY

Improprieties

1965
1966
1967
1968

2
1
-

Presented
opinions-

Demandedmeasures-

Measures
taken
-

1
3
1
1
3
2
5
-

1

1
1
1
-

1
2
2
2
2
1
1
1
1
1
-

During this period, both the number of cases
and amount gradually decreased with regard to
improprieties between the mid-1950s and mid-395

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

1960s, and this trend continued until the lateresults started to be reported with broad and1960s. In the early 1970s, the share of cases ofdiversemeasures taken and other categories of cases

tendency in audit findings until the mid-1980s

started to increase in addition to cases ofstill being observed.

objectives,

with

the

characteristic

improprieties. From the mid-1970s, the main

The following tables show audit cases

focus in audit findings shifted to cases ofreported in the annual audit reports from FY1965

measures taken, although the number of cases

to FY1988, by fiscal year and by category.

reported was not large. In the mid-1980s, audit
A. Audit cases on articles
FY
1971

1972

1973

1974
1975
1977
1978

1979

1985
1986
1987

Item
Uneconomical procurement of equipment for autocannon, etc. due to insufficient study of the models of autocannon
work table, etc. (improprieties)
Procurement of torpedoes (measures taken)
Uneconomical procurement of practice ammunitions due to the improper specification (improprieties)
Expensive contract price for the procurement of bolts for aircraft due to insufficient research on the price cost
(improprieties)
Loss arising due to inappropriate management of turbine fuels (improprieties)
Procurement of batteries for submarines (measures taken)
Measures demanded for the management of components for F-86F aircraft (demanded measures (Article 34 of the BOA
Act))
Procurement of T64-engines for aircraft (measures taken)
Procurement of adjustment tools and test devices for ASROC installed in warships (measures taken)
Uneconomical repair of oscilloscopes due to failure to consider purchasing new ones (improprieties; improper amount:
5.5 million yen)
Procurement of liquid oxygen (measures taken)
Specification of fuel cells for P-2J aircraft (measures taken)
Calculation of the number of the main tires necessary for C-1 aircraft (measures taken)
Considerably expensive purchase prices for letter files and other supplies (improprieties; improper amount: 4.8 million
yen)
Expensive contract price for procurement of test stands for jet engines due to the overestimation of the value of thecontract using the wrong number of components (improprieties; improper amount: 2.5 million yen)
Uneconomical procurement of propeller components for P-2J antisubmarine aircraft due to the excessive number ofcomponents procured (improprieties; improper amount: 28.9 million yen)
Uneconomical procurement of tripwire alarms due to improper study of the specification of conductor wires(improprieties; improper amount; 4.5 million yen)
Measures taken to execute the budget more effectively by converting ammunition in stock to a different use (measurestaken; improper amount: 114.4 million yen)
Measures taken to apply a more economical delivery method for replacement parts for tracked vehicles (measures taken;
improper amount: 63.2 million yen)
Measures taken to increase efficiency in the use of the main fuel pumps constituting the engines for F-15 fighterinterceptors (measures taken; improper amount: 89.24 million yen)

B. Audit cases on accounting
FY
1978
1979
1987

Item
Pooling of traveling expenses and other expenses paid for fictitious purposes (improprieties; improper amount: 2.3
million yen)
Omission in reporting the increase and decrease of the number and the current amount of articles (measures taken)
Rectification and improvement measures demanded for the prices of Japan Maritime Self-Defense Force ships recordedin the national property ledger (demanded measures (Article 34 of the BOA Act))

396

Section 4 Overview of Audit Results
1988

Opinion on rationalization of payment of retirement allowances to officer candidates who graduated from the National
Defense Academy (presented opinions (Article 36 of the BOA Act))

C. Audit cases on construction
FY
Item1972 Specification of power cables used for Self-Defense Force facilities (measures taken)
1973 Uneconomical construction costs for lighting facilities due to the inappropriate design of power cables (improprieties;
improper amount: 2.8 million yen)1975 Estimation of the costs for painting the bottoms of ships in the course of the ship inspection (measures taken)
1982 Expensive value of the contract for construction of fueling stations due to the mistake in the estimation of the amount ofexpenses for waterproof mortar (improprieties; improper amount: 7.1 million yen)
1983 Measures taken to correct the design for pavement of tank roads (measures taken; improper amount: 40.5 million yen)

D. Other audit cases
FY
1974
1982

Item
Measures demanded for power supply to escort vessels moored in regular harbors (demanded measures (Article 34 of the
BOA Act))
Improper accounting of the subsidized project for development of areas surrounding defense facilities (improprieties;
improper amount: 19.2 million yen)

Subsection 8

by increasing cooperation for countries in Africa,

Official Development Assistance(ODA) and foreign affairs

Latin America, and Pacific area. In order to
respond to the demand for the enhancement of

1. Development of the organizational structure
for assistanceassistance in terms of amount and quality, theFrom the late 1950s, the organizational

was established in the mid-1970s, in order tostructure for Japan's economic cooperation wasundertake and upgrade the activities of thedeveloped

Overseas Technical Cooperation Agency and thebyestablishingtheJapan International Cooperation Agency (JICA)

relevant

Japan Emigration Service (JEMIS).

organizations including: the Asian Economic
Corporation Office, the Economic Cooperation
Bureau and other divisions in the Ministry of
Economic

2. Establishment of the Foreign Affairs Audit
Division

Cooperation Fund (OECF) as an organ forAlong with the expansion of the scale ofproviding government loans; and the Overseas

Japanese ODA, this topic attracted an increased

Technical Cooperation Agency (OTCA) as an

public interest and was taken up more frequently

organ for providing technical cooperation.

at the Diet and the media. BOA received more

Foreign

Affairs ;theOverseasandrequests for audits and various questions at the

improving its international presence, Japan began

Diet sessions with regard to the status of audit on

to be requested to increase the amount of ODA

ODA

in accordance with its expanded economic

conducting

resources. In addition, in the wake of the oil

conducted audits mainly within the country due

crises, Japan aimed to diversify the assistanceto the limit to its audit mandate. Following thetarget countries, which had been mainly in Asia,

discussions at the Diet, in order to enable BOA

After

achieving

economic

growth

397

and

its

organizational

audits.

Until

then,

structure

for

BOA

had

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

to conduct audits on overseas projects on site, theofficials to the recipient countries when needed toForeign Affairs Audit Division was established as

investigate the circumstances on the spot with theits new organ in December 1987.

attendance of officials of the Japanese ODA
providing agencies and to the existent of

BOA's audit mandate is not effective againstcooperation gained from the recipient countries.

the ODA recipients, such as foreign governments
and private companies or entities in contractual
relationships with foreign governments, but it is
only effective against the Japanese organs in

3. Outline of audit cases reported in annual
audit reports

charge of providing assistance, such as the

The first audit case on ODA reported in

Ministry of Foreign Affairs, JICA, and theannual audit report is the case of implementation

OECF. Because of this limit, BOA conducts in-of ODA (FY1988; special description).

office audits and field audits on these ODA

The projects subject to investigation in thisproviding agencies domestically, and conducts

audit case were the 20 projects financed by loan

field audits on diplomatic missions and overseas

aid, 20 projects financed by grant aid, and 11

offices outside the country.

projects supported by technical cooperation. As a

Unlike the case of audits on Japanese ODA

result of field investigation of these projects,

providing agencies, BOA's audit mandate is not

BOA found that: the equipment and facilities

effective against the ODA recipient countries.

covered by loan aid did not fully operate or part

However, in order to confirm whether the ODA

of such equipment, etc. remained unused for aserves to assist the recipient countries' self-helplong time (four projects); the facilities covered byefforts by providing necessary funds to projects

grant aid were not fully used (one project); andcarried out under the initiative of these countries

the transfer of technology covered by technicaland whether the project has produced effectcooperation was delayed (one project).
The following table shows audit cases, othersufficiently, it is not always sufficient for BOA tothan above-mentioned audit case.

conduct audits only on the Japanese ODA
providing agencies. Therefore, BOA sends its

FY
1979

Item
Uneconomical payment of electricity charges due to the failure to change the contract power which was far larger than
the amount of electricity actually used (improprieties; improper amount: 10.9 million yen)
1987 Measures taken to adopt a more economical method of payment for international airfare (JICA; measures taken;
improper amount: 685.7 million yen).

Subsection 9

State-owned bodies

economic growth.
In the early 1980s, Japanese National

1. Status of State-owned bodies

Railways experienced yearly increase in deficits

Between the mid-1960s and late 1980s, thethreepublicbusiness

corporations

scales29

andexpandedbecameand became nearly bankrupt due to a huge

their
29

enormousorganizations, as if in tandem with Japan's
398

Japan Tobacco and Salt Public Corporation; Nippon
Telegraph and Telephone Public Corporation; Japanese
National Railways

Section 4 Overview of Audit Results

amount of long-term debts. Japan Tobacco andits organizational structure for audits of these

Salt Public Corporation and Nippon TelegraphState-owned

andconducted audits on State-owned bodies with

TelephonedifficultyinPublictaking

Corporation

measures

faced

to

broad

achieveandbodies.
diverseSince then,objectives

of

BOA

has

accuracy,asregularity, economy, efficiency, effectiveness andstreamlining of business, partly due to theirothers, as in the case of auditing ministries andmarket monopoly. There were repeated calls foragencies.

profitability

ascorporate

entities,suchcorrecting this situation. In July 1982, theProvisional

Commissionon

2. Japanese National Railways

Administrative

Reform presented a basic opinion suggesting the

Between the mid-1960s and mid-1970s, thenecessity to carry out a fundamental reform to thenumber of cases of improprieties found in audits

public corporation system and transforming theof Japanese National Railways decreased to 22,

existing

privateone-fifth of the number in the mid-1950s. Most

companies or entities under a scheme similar tocases were related to construction projects, andthe private style. Based on this opinion, thethe majority thereof was reported for findings ofgovernment promoted discussions on the specificwrong estimations. In addition, in the late 1960s,

process of privatization of these corporations. In

BOA began to report demanded measures in

April 1985, Japan Tobacco and Salt Publicannual audit reports. From FY1968 to FY1976, aCorporation

andtotal of 20 cases were reported as demanded

Telephone Public Corporation were privatized,

measures mainly with regard to articles, services

and Japan Tobacco, Inc. and Nippon Telegraphand construction projects.

and Telephone Corporation were established. In
publicMeasures demanded for preliminary requests
for construction supplies (FY1974; demandedmeasures (Article 34 of the BOA Act))

National

The Materials Office of Japanese National

Railways Settlement Corporation, six passenger

Railways and the nine local materials officerailway

includingpubliccorporations

andNipponinto

Telegraph

April 1987, Japanese National Railways was
privatizedandcorporations

dividedincludingcompanies,

companies including

into

three

Japanese

and
Japan

nine

other

Freight

stock

the

one

in

Hokkaido

purchased

construction supplies to be used as materials forRailway

refurbishment of vehicles and electric engineering

Company.
From the mid-1960s onward, other public

work for safety facilities such as railroad crossing

corporations and agencies were established one

etc. (approx. 58.7 billion yen in FY1974).

after another, including: Environment Pollution

However, among these construction supplies,

Control Service Corporation (in 1965); New

those worth approx. 5,119.2 million yen remainedTokyo International Airport Authority (in 1966);

unused because there was no plan to use them asJapan Petroleum Development Corporation (inof September 1975 and the most of them were1967); National Space Development Agency of

supplies designed especially for the respective

Japan (in 1969); and Honshu-Shikoku Bridge

types of construction works and unsuitable to be

Authority (in 1970). In 1962, BOA assigned

applied to other types of works.
When a preliminary request is made for thisSenior Directors to the 5th Bureau and enhanced
399

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

kind of construction supplies, it is necessary tosuch a loss in balance by suspending or

closely contact and coordinate with the bureaus

abolishing the use of the cranes with a low

andimplementing

operating rate, while revising the user fee so that

construction work and accurately identify theit can cover costs for some cranes which aretiming and scale of implementation of the work,

expected to attract users even at a higher user fee.

with the aim of ensuring efficient use of public

Japanese National Railways took measures forfunds.

improvement.

divisionsinchargeofBetween the mid-1970s and mid-1980s,
BOA reported a total of 75 audit cases, including

Handling of bed linens for overnight express
trains (FY1980; measures taken)

27 cases of measures taken, which covered

Bed linens for overnight trains were put into

almost all categories of improper/unreasonable

and picked up from the trains at car bases of thematters found in audits, such as construction,

terminal stations. The station in charge designatedservices, accounting and project effect. Suchfor taking care of linens of each train has theincrease in the number and diversification oflinen providers in its service area wash the linens

content of reported audit cases suggests that the

every time they are used and provide clean

business scale of Japanese National Railways had

linens. Due to the reduction of the number of

become so large that the corporation's businessovernight trains in operation, there was a gap in

could no longer be managed through nationwide

the volume of linens dealt with among linen

centralized operation and that the corporation wasproviders, and therefore the stations taking caresusceptible to problems with its business andof linens were reshuffled. As a result, almost all

financial management. Among the audit cases

overnight trains came to use linens provided byreported in this period, one case on profitability

different linen providers during one cycle ofand one case on services are presented below.

operation (five to 13 days). In order to avoid the

Operation of cranes, etc. for station facilities
and balance of revenues and expenditures
thereof (FY1981; measures taken)

mixing of linens provided by different providers,Japanese National Railways installs cranes at

BOA found this method to be inappropriate. If

the freight handling stations where large freight

unused linens had been put into use without

such as raw wood is carried in and out, andhaving them washed, a cost of approximately 46

makes them available for the convenience of

million yen could have been saved.

Japanese National Railways has all linens, usedor unused, picked up from the trains and washed.

Theloading and unloading of freight by consignors,

businessconditionsofJapanese

etc. However, along with the trend of decrease in

National Railways continued to worsen since it

the volume of freight transport by Japaneserecorded a loss in FY1964 when the Shinkansen

National Railways, the operating rate of thebullet train started operation. BOA had a great

cranes sharply dropped. Revenues from the users

concern about this and reported the results offalls below the direct costs such as repair costs

audits on this corporation as special descriptions

and power costs; 50 cranes installed in 39

in annual audit reports. Five out of the eightstations produced an annual loss of 32 million

special descriptions set down in the annual audit

yen. BOA instructed the corporation to eliminate

reports between the mid-1970s and mid-1980s
400Section 4 Overview of Audit Results

wererelatedconditions

to

and

the

corporation'sbalanceofexpenses and facility expenses. BOA pointed out,business

revenues

if the corporation is to continue the freightandbusiness, it is urgently necessary to reduce costs

expenditures.
specialby downsizing the business scale commensurate

descriptions on the main business sectors ofto the actual amount of transport it handles soJapanese National Railways in the annual audit

that it can take advantage of the characteristics ofreports for the three fiscal years in succession

railway transport, and become more suited forfrom FY1980: freight business (FY1980), cargocompetition with other transport companies.

Specifically,business

BOA( FY 1981 ) ,

set

and

down

revenues

andexpenditures in passengers transport business(FY1982). Japanese National Railways, although

3. Nippon Telegraph and Telephone Public
Corporation

it received a huge amount of government

In the case of Nippon Telegraph andsubsidies, recorded a huge amount of loss in all

Telephone Public Corporation as well, theof the three business sectors mentioned above,

number of cases of improprieties started toand its business conditions continued to worsen

decrease from the mid-1960s, and cases ofevery year. In the special descriptions, BOA

demanded measures and cases of measures taken

posed questions based on its investigation andbegan to be reported in annual audit reports more

analysis as to what brought this corporation intofrequently instead.

the current situation, what basic policy should be

Since the launch of the second five-year

adopted to improve the situation, and whatplan for expansion of telegraph and telephone

hardships the corporation would face in theservices (FY1958 to FY1962), Nippon Telegraphprocess toward improvement. BOA's proposals on

and Telephone Public Corporation had set thethese points had a significant effect on the

two long-term goals of "eliminating the backlog

corporation's

problems,

of applications for subscription for telephone

implementation of measures to streamline its

services" and "providing direct distant dialing

operations, and finally on the management

nationwide" and aimed at achieving these goals

approach after its privatization.

by the end of FY1972. However, due to the

Freight business (FY1980; special description)

demand for telephone services greatly exceeding

The freight business of Japanese National

the expected level, the corporation extended theRailways earned 331.2 billion yen of revenues

limit for achieving the goals by five years andand spent 978.7 billion yen for costs, thus

tried to eliminate the backlog of applications byproducing a loss of as much as 647.5 billion yen.

the end of FY1977, and to this end, it worked toThis huge loss, which puts a significant pressure

install a large amount of new and extended

on the corporation's business management, is

telephone cables in the early 1970s. The audit

caused by the low revenues growth due to thefindings set down by BOA in annual audit

decline in its competitiveness with

reports of this corporation were mostly related tosolutiontovariousprivatetransport companies, coupled with the difficultythe estimation of construction costs.

in curbing expenses arising from the cost-

Measures demanded to remove terminal boxes
used for lead-covered cables for local

producing divisions such as excessive personnel
401Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

telephone services ( FY 1970 ; demandedmeasures (Article 34 of the BOA Act))

Operation of the telegraph business (FY1976;
special description)

During FY1970, Nippon Telegraph andAlong with the spread and growth of

Telephone Public Corporation removed about

telephone services and

260,000 terminal boxes attached to the existing

services, the number of telegraphic messages

lead-covered cables for local telephone services

dropped to 41.89 million messages in FY1976,(costs for removal: approx. 270 million yen).

by half of the number at the peak, 94.6 million

However, while only about 7.2% of the removed

messages in FY1963. In addition, although theboxes were re-used, the corporation adopted themain use of telegraph services had shifted toremoval method subject to the reuse of thesending

removed boxes (this method was more costly

condolences, Nippon Telegraph and Telephonethan the method not subject to the reuse).

Public Corporation was expected to provide the

Because of this, the removal work was not

same content of services as that it had provided

economical even in consideration of the cost forwhen telegraph had played the main role as anpurchasing new boxes. BOA demanded theemergency communication means. Because of

corporation to consider another removal method,

this, the corporation was forced to operate theetc.

telegraph service in an inefficient manner, by
In

FY 1971,

NipponTelegraphmessagesofsubscribedtelegraphcongratulations

or

and

maintaining the service offices and deploying

Telephone Public Corporation earned approx. 1.7

personnel, and thus the operation of the telegraphbillion yen of operating profit but recorded

service is no longer reasonable today whenapprox. 6 billion yen of non-operating loss, thus

telephone and other communication means are

it suffered approx. 4.3 billion yen of loss in total.

widely available. If the corporation continues toThis was the first time that the corporation

operate the telegraph service in this manner, itsrecorded a loss since its foundation. In FY1974,

business conditions will become worse and its

it recorded approx. 167.2 billion yen of operating

losses will keep growing.

loss. In view of such conditions, between the

In FY1982, six years after BOA presented

mid-1970s and mid-1980s, BOA pointed out

opinions on the telegraph business as a special

problems

description in the annual audit report, BOAonmanagement

and

the

corporation'sbalanceofbusiness

revenues

andpresented opinions on this business in the annual

expenditures.

audit report again.
The demand for subscription for telephone

Opinion on increasing efficiency in theoperation of the telephone business (FY1983;
presented opinions (Article 36 of the BOA
Act))

services peaked in FY1972, and started to go
sideways after the backlog of applications forsubscription was eliminated in FY1977. Against
such backdrop, BOA pointed out in the annual

Improvement measures demanded to install
public telephone units more efficiently andmanage them more appropriately in order toimprove the balance of revenues andexpenditures (FY1984; demanded measures(Article 36 of the BOA Act))

audit

reportthat

NipponTelegraphandTelephone Public Corporation had a wrong
demandoutlook

investment.
402

when

makingbusiness

Section 4 Overview of Audit Results

Measures demanded for the installation anduse of local telephone switchboards (FY1980;
demanded measures (Article 34 of the BOA
Act))
Improprieties

Despite the changes in the actual demand for
and Telephone Public Corporation had continued
telephoneswitchboardsinBetweenthe mid1970s
and mid1980s
cases
166

5

Presented
opinions under
Article 36 of
the BOA Act
Demandedmeasures under
Article 34 of
the BOA Act
Measures taken
Total

subscribed telephone services, Nippon Telegraphinstalling

Betweenthe mid1960sand mid1970s
cases
19

the

expectation of the continued robust demand andhad not taken measures to ensure appropriate useof the excessive units. Because of this, many
telephone stations had too many installation

In the
late
1980s

Total

cases
94

cases
279

1

-

6

29

23

-

52

15
68

50
240

34
128

99
436

The following table shows audit cases ofterminals. More than 400,000 terminals were

improprieties by category.

expected to remain unused for not less than ten
years to come, which means that approx. 10.2
billion yen invested in them would not produce
anyinvestment

effect.

Accordingly,

BOA

demanded that the corporation should takemeasurestostreamline

theinstallationofswitchboards and increase the use oftheBudgetary
accounting
Construction
ArticlesServices
Subsidies
Loans
Illegal acts
OthersTotal

excessive units, aiming to achieve efficientinvestment.
4. Other public corporations
The following table shows audit cases on

Betweenthe mid1960sand mid1970s
Cases
7
8
2
2
19

Betweenthe mid1970s
and mid1980s
Cases
1
19
4
6
40
90
2
4
166

In the
late
1980s

Total

Cases
1
25
65
2
1
94

Cases
1
27
4
6
73
155
6
7
279

State-owned bodies reported in the annual audit
reports, other than the three public corporations

The major causes of the increase in the(including the companies formed through their

number of cases of improprieties are: (i) aprivatization) by reporting category (excluding

number of loans provided by public financespecial description). The number of audit cases

institutions, such as the Agriculture, Forestry andincreased following the establishment of otherFisheries

Financepublic corporations and expansion of theirBusiness

Corporation,business scales from the mid-1950s onward, andMedical Service Corporation, and Government

the enhancement of BOA's organization structure

Housing Loan Corporation―which had not been

for audits.

observed between the mid-1960s and mid-1970s

Corporation,
Social

Japan

Small

Welfareand―were set down in annual audit reports; and (ii)subsidies provided by Japan Private School
Promotion Foundation were more frequently
covered403

inreports.

BOA

often

demandedPart 3

Chapter 3

Audit between the mid-1960s and late 1980s

measures to rectify and improve the accounting

Corporation)of subsidies and loans, such as in the following

Investment of surplus operating funds (FY
1981; measures taken; Japan Atomic Energy
Research Institute)cases.
Measures demanded for the accounting ofsubsidies for current expenses of private
universities (FY1970; demanded measures(Article 34 of the BOA Act); Japan Private
School Promotion Foundation)

Improvement measures taken to correct the
number of remittances of expressway tolls
from toll offices to the company's head office(FY1983; measures taken; Japan Highway
Public Corporation)

Measures demanded for the lending of funds
for land acquisition (FY1971; demandedmeasures (Article 34 of the BOA Act);
Agriculture, Forestry and Fisheries FinanceCorporation)

Improvement measures taken to correct thetiming of providing welfare loans (FY1984;
measures taken; Social Welfare and Medical
Service Corporation)

Measures demanded for the proper lending of
small and medium-sized enterprises (SME)
innovation
funds( FY1977 ;demandedmeasures (Article 34 of the BOA Act); Small
Business Promotion Corporation)

From the mid-1970s, BOA began to report
many

audit

cases

on

publiccorporations

established to carry out housing measures, such
as Japan Housing Corporation, and Government

Apart from improprieties on State-ownedfor

Housing Loan Corporation. For example, in the

improvement of the estimation standards applied

FY1975 Annual Audit Report, BOA reported in ato construction projects carried out by Japan

special description that, due to the delay in the

Highway Public Corporation, Housing and Urban

development of public facilities, Japan Housing

Development

Railway

Corporation had held a number of land areas that

Construction Public Corporation, Metropolitan

would not be available for a long time or had

Expressway

Hanshinengaged in maintenance and management ofExpressway Public Corporation, and Regional

many residential buildings yet to be put into use.

Development Corporation. These findings accountIn the FY1976 Annual Audit Report, BOA took

for about half of all findings reported.

up the issue of residential buildings constructedbodies,mostfindings

were

Corporation,
Publicdemands

Japan

Corporation,

In addition, characteristic findings reportedwith public funds provided by the Ministry ofon the accounting of State-owned bodies were

Construction, finance corporations and public

related to the efficient procurement and use of

corporations, and pointed out that many of these

operating funds, such as the following.

buildings had been left unused after construction

Deposits made with entrusted financial
institutions ( FY1969 ; measures taken ;Government Housing Loan Corporation)

because they were "distant, expensive and small"and failed to meet the housing demand. Although
the audits of these auditees were assigned to thefour audit divisions of the two Bureaus at that

Measures demanded for the procurement ofloan funds (FY1980; demanded measures(Article 34 of the BOA Act); Government
Housing Loan Corporation)

time, the audit cases mentioned above werereported through the audits conducted by theefficiency audit team formed beyond the divisionboundaries in the Secretariat of the General

Investment of surplus operating funds (FY
1981; measures taken; Coal Mine Damage

Executive Bureau, and in this respect, they can404Section 4 Overview of Audit Results

be described as the first significant outcome offollowing.

cross-cutting audits.

Development of nuclear ship, "Mutsu" (FY
1975; special description; Japan Nuclear Ship
Development Agency ) ; ( FY 1982 ; special
description; Japan Nuclear Ship Research andDevelopment Agency)

At

the

same

time,

in

view

of

the

circumstances where part of the mid-to-high-risebuildings constructed in urban areas with funds
Loan

Regarding a nuclear ship, "Mutsu," it was

Corporation were used not as residences but for

set down as special description in the annual

other purposes such as stores, BOA demanded

audit reports for FY1975 and FY1982, both ofthat the corporation should take measures towhich

prevent such conversion of use by operating thedevelopment process.

penalty system more strictly (the FY1982 Annual(FY1975) Approx. 17.4 billion yen had beenborrowedfromGovernment

Housing

pointedout

theproblems

with

its

invested in the development of the

Audit Report).
BOA also pointed out the fact that thenuclear ship, "Mutsu," by the end ofoccupancy rate of lodging facilities for transferred

FY1975. However, since the radiation

workers operated by Employment Promotion

leak accident in August 1974, the ship

Corporation was considerably low, and raised an

has continuously been moored alongissue in a special description as to the manner inthe quay. Its new regular harbor has

which the corporation established and operated

not been determined yet, nor is there athese facilities (the FY1980

prospect for completing the removal of

AnnualAudit

the ship from the harbor where it isReport).

currently moored, which is supposed to

In addition, BOA reported the following
findings

in

Manufacturing

the

audit

on

Corporation

Nihon
as

a

be completed by April 1977 based on

Aircraftthelarge-scaleagreement

among

the

partiesinstance involving articles.

concerned. If no measure is taken to

Measures demanded for the purchase andmanagement of materials (FY1971; demandedmeasures (Article 34 of the BOA Act))

address this situation, the State would
have to spend another huge amount offunds, without being able to confirm
the achievement of the development.

BOA audited the stocks of components
necessary for the maintenance and operation of(FY1982) Despite the national spending worth as

YS-11 aircraft, which were to be sold to themuch as approx. 48.4 billion yen since

aircraft purchasers, and materials for producing

FY1963,the aircraft, and found that there was a surplus of

nuclear ship, "Mutsu," has not reachedstock worth 2.8 billion yen. It is necessary to

the stage where the ship can make anpurchase

moreexperimental voyage even after morereasonably and economically and take measuresthan ten years have passed since theto minimize a loss in dealing with a surplus.

launch of its construction. This iscomponents

andmaterials

thedevelopment

of

the

Between the mid-1970s and late 1980s, abecause, due to the radiation leaktotal of 15 audit cases were reported with special

accident in August 1974, the repair

descriptions on State-owned bodies, including thework for the shields at the Sasebo Port
405

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

was initiated in 1980 and the ship wasinvests or lends funds to private companies

forced to change its regular harbor.

engaged in exploration of oil and other mineralThus, there is a considerable delay forresources. Among these companies, while eightthe development project to produce any

companies

effect.

resources and entered the production stage,

project,

developedoiland have suspended corporate activities. If suchdormant companies were to be dissolved andliquidate, a large part of the amount of assets
invested by the corporation in these companies

In the large-sized pensioners' recreational
construction

successfully

eleven companies have failed in the exploration

Plan forconstructionoflarge - sizedrecreational bases for pensioners (FY1977;
special description; Pension Welfare Service
Public Corporation)

base

have

would need to be recorded as losses. The

comprehensivebeinvestments and loans to the oil exploration

constructed in 11 recreational bases at 13

projects held by the corporation seem to include

locations nationwide. However, as a result of thea large amount of non-performing assets.

recreational

facilities

wereplannedtoaudit on the status of implementation of thisSubsection 10

construction project, BOA found that although

Othersbetween FY1973 and FY1977, the project sites of
1. Audits on the postal services

38.89 million square meters in total had been

In the audits on the postal services, since thepurchased at approx. 38 billion yen for 13
planned locations, the progress in the construction

mid-1940s

onwardBOA

hadconsistentlyof facilities was delayed than planned. Amongreported findings of the losses incurred by thethe planned 11 recreational bases, the basic plans

State due to illegal acts of government officials,

for four bases were approved by the Ministry ofand focused on economy and efficiency in the

Health and Welfare, the drafting of basic plans

operations such as collection and delivery of

was completed for another four bases, and with

mail. BOA made considerable achievements inregard to the remaining three bases, even thethese audits, of which those between the mid-process of drafting a basic plan has not been

1970s and mid-1980s covered a wide range oflaunched, nor is there any prospect for thecases. The major achievements are as follows.

progress in the future. As a result, a large part of

Between the mid-1940s and mid-1950s,

the vast area of the project sites, which wasillegal acts had frequently been observed at thepurchased using a huge amount of funds

government

borrowed from the Trust Fund Bureau of theorganizations. The number of such illegal acts

Ministry of Finance, has remained unused, withdramaticallyno prospect for bringing about any benefit.

onward, but illegal acts such as embezzlement ofauthorities
decreased

as
since

well
the

as

relatedmid-1950s

postal savings deposited with postal offices or

Investments and loans to companies engaged
in exploration of oil and other mineral
resources (FY1976; special description; Japan
Petroleum Development Corporation)

premiums paid for postal insurance still occurred
one after another.
In 1962, BOA presented opinions in theannual audit report to demand that the Ministry

Japan Petroleum Development Corporation
406

Section 4 Overview of Audit Resultsof Posts and Telecommunications should takeestimation of the service fee for consigned ships

new measures to prevent the occurrence of(FY1983); and the estimation of the maintenanceembezzlement, such as having depositors fill incost for the conveyance systems at the post

deposit slips in their own hand, and should also

offices where parcels were concentrated (FYtake new measures to ensure early detection of

1984). In 1980, BOA demanded measures toembezzlement, such as notifying the depositors ofdevelop an authorization system for the third-

the current amount of their deposits recorded inclass mail, the category of unsealed mailthe ledger (the FY1961 Annual Audit Report). In

containing

1978, BOA further presented opinions from anewspapers and magazines for which the postage

different perspective to suggest measures thatwas lower than that for ordinary letters, in view

would be conducive to prevention of illegal acts.

of the circumstances where the mails claimed to

At that time, even when salespersons embezzled

be inmoney withdrawn from savings accounts andnumber of publications that failed to meet thecaused a loss to the State, the clerks at cashierstatutory requirements such as being distributed

who delivered cash were not held responsible forto the public for news reporting or debates ofsuch loss. BOA demanded that the scope of

public issues (e.g. local governments' publicduties of the clerks at cashier should be revised

relationsand a new system should be established undermagazines and advertising magazines, and trade

which they would assume responsibility for theirmagazines) (the FY1979 Annual Audit Report).

periodical

this category

magazines,

publications

contained

such

as

considerable

companies'in - house

When post office clerks successfully solicit

duties appropriately (the FY1977 Annual Audit

customers to deposit money as postal savings,

Report).

they

At post offices, there was no end ofreceiveanallowanceasasavings

incidents such as the robbery of cash during theencouragement incentive, in proportion to thedaytime and the theft of cash by invaders during

amount of deposit. In 1975, BOA demanded thatthe nighttime. BOA demanded that measures tomeasures should be taken so that if the amount ofprevent

taken

deposit was later reduced because the depositor's

appropriately (the annual audit reports for FY

total amount of savings exceeded the limit, the1974 and FY1988).

part of the allowance already paid correspondingsuchcrimesshouldbe

In the postal services, the collection andto the reduction should be recovered from thedelivery of mail incur a large amount of costs.

clerks (the FY1974 Annual Audit Report). In the

Between the mid-1970s and mid-1980s, audit

FY1980 Annual Audit Report, BOA reported thefindings (improprieties, demanded measures, ormeasures taken to have the person responsible atmeasures taken) on these operations were set

each post office check the authenticity of thedown rather frequently in annual audit reports:

depositor's registered name and whether thethe estimation of the fee for revising the original

depositor's savings exceed the limit so that no

copy of the delivery map (the FY1976 Annual

allowance would be paid for deposits made under

Audit Report); the model of the postal vans to be

fictitious names. The same kind of allowance isused for the outsourced mail collection service

also paid for the successful solicitation of postal(thelife insurance. In 1976, BOA reported the fact

FY1982

AnnualAudit

Report);the407

Part 3

Chapter 3

Audit between the mid-1960s and late 1980s

that an allowance was paid even for thestrong criticism of the public because at thatsolicitation of insurance contracts under whichtime, the government stressed the necessity tothe payment of death benefits was unavoidable

raise taxes and force heavy burden to the people

because the personnel in charge failed to ask

in order to accomplish fiscal rehabilitation, andabout the policyholders' health conditions andthe media also ran a campaign, accusing thewrite them down in the contract documents

government officials for enjoying "a paradise atproperly, and therefore it was impossible totaxpayers' money."

exercise the right to cancel the contracts due to

In view of the incidents of fraud in 1979,

the breach of the duty of disclosure. BOA

BOA continued to conduct audits in 1980 on

demanded measures to ensure the proper handlingother government agencies, with a particularof insurance contracts and allowance payment

focus on whether they were engaged in this kind(the FY1975 Annual Audit Report).

of fraud. As a result, BOA found that the

BOA also demanded measures related to

Ministry of Labour expended money as wages forcomputers, stating that sheets to be used forfictitious workers and treated it separately in

optical character readers in which data of deposits

accounting in order to cover expenses for dining,and payment of savings was input should beetc., and also found that Nippon Telegraph andpurchased lump-sum for all local savings offices.

Telephone Public Corporation expended moneyas travel and conference expenses for fictitious
purposes and treated it separately in accounting in

2. Fictitious business trips by employees ofJapan
Railway
Construction
PublicCorporation

order to cover expenses for dining, etc. or paid it
to its employees. BOA reported these findings in
the FY1979 Annual Audit Report.

In the FY1978 Annual Audit Report, BOA

In FY1980, BOA found and reported that:reported findings on the incidents in which Japan
Corporation

the Ministry of Justice used the proceeds fromexpended money as travel expenses for fictitious

sale of products made by inmates in penal

purposes and paid it to its employees or treatedinstitutions in order to cover expenses for holding

such money separately in accounting in order toan exhibition to sell these products; and thatcover expenses for other purposes such as dining

Japan Starting System Co., Ltd. conducted

and gifts.

accounting that was not based on the true

Railway

Construction

PublicIn 1979, triggered by this issue of fictitioustransactions by padding the amount of costs forbusiness trips by employees of Japan Railway

components of starting gates, etc. In FY1981,

Construction Public Corporation, it was revealed

BOA reported the finding of the fact that thethat the illegal accounting involving fictitious

Ministry of Education, Science and Culturebusiness trips took place at the Defense Agency,

expended money as travel expenses for fictitious

thepurposes and treated it separately in accounting inEnvironment

Agency,the

Ministryoforder to cover expenses for dining, etc.

International Trade and Industry and Japanese
National Railways. This was also set down in theannual audit report.
The fraud thus revealed was exposed to the408Section 4 Overview of Audit Results

3. Purchase ofgoods
bygovernment
authorities at high prices resulting fromhigh-pressure sellingreceived rebates from the contractors, and then

Triggered by the discussions at the Diet incompanies with fictitious names. The town also

June 1978, BOA launched audits on the purchasesettled the accounts of subsidies or received loansof goods resulting from high-pressure selling. At

for projects including those not eligible forthat time, the media also covered the fact thatsubsidiespressing the government authorities to buy goods

implementation and accounting of the projects by

was widely employed as a common selling

the town to be extremely improper.

included the amounts equivalent to these costs
and receipts in its revenues earned from theorloans.

BOA

found

the

Since the scope of audit on the town

technique.
BOA audited the purchase of goods at all

involved all audit bureaus of BOA, a joint

regional forest offices including the Asahikawa

auditing team was formed with officials from theForest Office that had been discussed in the Diet

relevant divisions of these bureaus. In the annual

session. As a result, it found that eight regional

audit report, this audit case was touched on only

forest offices purchased supplies such as sheetsslightly in the sections concerning the respective

and ropes from persons who implied being

ministries involved, and was fully covered in a

intimate with organizations at far higher prices

separate section under the title of "Minowa Town

than the market prices. This finding was set downcase." Thus, a very unusual approach wasin the FY1977 Annual Audit Report.

employed in dealing with this case.

In the next year, BOA also conducted audits
from the same perspective and found the samekind of incidents involving the Diet, a total of 11
government

authorities

including

the

Prime

Minister's Office, and public corporations. Thisfinding was reported in the FY1978 Annual
Audit Report.
4. Wrongful receipt of subsidies, etc. by
Minowa Town
In the FY1982 Annual Audit Report, BOA
reported the improper payment of subsidies andextension of loans worth 886.57 million yen,which was found in Minowa Town, Ina Country,
Nagano Prefecture.
Minowa Town, by fabricating documents
regarding the subsidy and loan programs operated
by

the

six

ministries

and

two

finance

corporations, recorded fictitious project costs
without implementing part of the projects or
409

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Chapter 4

Audit in the Heisei Era (1989〜)
financial crisis following

One of the notable fiscal topics in the Heisei

Lehman's collapse

era is the introduction of consumption tax.

enormously affected the real economy, and theIntroduction of general consumption tax was firstworld economy plunged.

proposed in 1978 at the time of the first Cabinet

The Japanese government implemented aof Masayoshi OHIRA. After twists and turns, thelargest-ever economic stimulus package against

Consumption Tax Act was established, andthe once-in-a-century economic crisis. The total

consumption tax was introduced at a rate of 3%

amount of general account budget for FY2009,

in April 1989. Further, with the introduction of

combining the FY2009 initial budget, first

local consumption tax in April 1997, the rate ofsupplemental budget, and second supplemental

consumption tax with local consumption tax

budget, exceeded 100 trillion yen for the firstcombined was raised to 5%.

time, and the planned amount of national
government bond issuance exceeded 53 trillion

Taking a look at the situation of the
bubbleyen. As a result, the fiscal condition substantially

economy, which had been supported by a surge

deteriorated, with the outstanding amount ofin real property prices and stock prices caused bynational government bonds, which was about 156

an excessive speculative fever from 1986 totrillion yen at the end of FY1988, expected to1991, collapsed. Land prices and stock prices

reach about 600 trillion yen at the end of FY

started to fall, and the economy drastically

2009.

Japanese

economy,theso - calledslowed down, posting negative growth. With the

In January 2001, legislations including thestable economic growth period also coming to an

Basic Act on Central Government Reform wereend at the same time, the collapse of the bubble

put into effect for the purpose of strengthening

economyHeiseithe Cabinet functions and eliminating the adverse

recession, which was also called the Lost Decade.

effects of the vertically segmented administrative

The Japanese economy slipped back into asystem of the central government. In response,

stagnation period, giving rise to strong calls forthe central government was reorganized from one

revising the postwar system that had supported

Prime Minister's Office and 22 ministries andJapan's reconstruction and growth after World

agencies into

War II. From 1995 to 1996, Japanese financial

ministries

institutions failed successively, holding largeorganizational restructuring in order to establish

amounts of non-performing assets after theancollapse of the bubble economy.

reorganization.

triggeredthesubsequent

one Cabinet

and

audit

agencies.

systemOffice andBOA

underwent

corresponding

BOA

underwent

12

to
a

such
drastic

From 2008 onward, a financial crisis, whichorganizational restructuring again in April 2009

originated from default of a large amount ofso as to adequately respond to changes in the

subprime

environment surrounding BOA.

mortgages

intheUnitedStates,suddenly surfaced with the failure of Lehman

In

Brothers, a leading investment bank in the U.S.

strengthening

securities industry, in September 2008. This

cooperation with the Diet, and submitting annual
410

the

Heiseiits

era,

mandate,BOA

workedmakingonstrongerSection 1

Amendments of the BOA Act and Discussions on BOA's Mandate

audit reports at an earlier timing. As for theamended in January 1998, which enabled BOA tostrengthening of BOA's mandate, the BOA Act

conduct audit on matters requested by the Diet

was amended in November 2005. The revisions

and to report the results to the Diet. Also, sinceincluded expansion of discretionary audit subject

thematters and stipulation of the obligation ofsubmission of the annual audit report for

entities subject to field audits and entities that

deliberating the State's final accounts at an early

have been requested to submit materials, etc. totiming, BOA has sent the FY1998 Annual Audit

accept such audits or respond to such requests,

Report onward to the Cabinet within November,etc. With regard to stronger cooperation with theand has sent most of the FY2003 Annual Audit

Diet, the Diet Act and the BOA Act were

Report onward to the Cabinet in early November.

House

of

Councillors

requested

early

Section 1 Amendments of the BOA Act and Discussions on BOA's Mandate
Subsection 1

Status of amendments

In the Heisei era, the BOA Act has been amended seven times as shown in the following table.
List of amendments to the BOA Act (Heisei era)
Governing Act-Organ introducing the amendment
Committee(s) to which the amendment
was submitted

Contents

Article 2 of the Act Partially Amending The audit objectives were stipulated, and a system was createdthe Diet Act, etc. (Act No. 126 of 1997) to enable BOA to make a report in response to a request for-Introduced
by
the
House
of audit from the Diet (addition of Article 20, paragraph (3) and
Representatives' Committee on Rules and Article 30-2).
Administration
Committee on Rules and Administration(House of Representatives/House ofCouncillors)
Act Partially Amending the Board of The provisions on predominance of the House of
Audit Act (Act No. 36 of 1999)
Representatives in giving consent to appointment of-Introduced
by
the
House
of Commissioners were deleted (deletion of Article 4, paragraphs
Representatives' Committee on Rules and (2) and (5) and Article 6, paragraph (2), etc.).
Administration
Committee on Rules and Administration(House of Representatives/House ofCouncillors)
Article 1 of the Act on Arrangement of In line with the coming into effect of the Act on Access to
Relevant Acts Incidental to Enforcement Information Held by Administrative Organs (hereinafterof the Act on Access to Information referred to as the "Information Disclosure Act"), theHeld by Administrative Organs (Act No. Information Disclosure Review Board of the Board of Audit
43 of 1999)
was established in BOA, and necessary provisions on its-Introduced by the Cabinet
organization, members, etc. were put into place (addition ofCommittee on Cabinet (House of Chapter 1, Section 5, Articles 19-2 to 19-5, etc.).
Representatives)
Committee on General Affairs (House ofCouncillors)

411

Date ofpromulgation(Date on which
the Act came into
effect)December 19, 1997
(January 12, 1998)

May 10, 1999
(May 10, 1999)

May 14, 1999
(April 1, 2001)

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Article 1 of the Act on Arrangement of In line with the coming into effect of the Act on Use of
Relevant Acts Incidental to Enforcement Information
andCommunications
Technology
inof the Act on Use of Information and Administrative Procedure (hereinafter referred to as theCommunications
Technology
in "Online Administrative Procedure Act"), it became possible toAdministrative Procedure (Act No. 152 submit statements of accounts and documentary evidence toof 2002)
BOA in the form of electromagnetic records (revision of-Introduced by the Cabinet
Articles 24 and 26).
Committee on General Affairs (House ofRepresentatives/House of Councillors)
Article 2 of the Act on Arrangement of In line with the coming into effect of the Act on the Protection
Relevant Acts Incidental to Enforcement of Personal Information Held by Administrative Organsof the Act on the Protection of Personal (hereinafter referred to as the "Administrative Organs Personal
Information Held by Administrative Information Protection Act"), revisions were made including
Organs, etc. (Act No. 61 of 2003)
renaming the Information Disclosure Review Board of the-Introduced by the Cabinet
Board of Audit as the Information Disclosure and PersonalSpecial Committee on Protection of Information Protection Review Board of the Board of Audit
Personal
Information( Houseof (revision of Articles 19-2 and 19-5, addition of Article 19-4,
Representatives/House of Councillors)etc.).
Act Partially Amending the Board of With regard to discretionary audit subject matters, the scope of
Audit Act (Act No. 112 of 2005)
the accounts of a contractor subject to audit was expanded to-Introduced by the House of Councillors' accounts of a contractor for construction, goods, or services
Committee on Audit
rendered to the State or to a juridical person to which the State
Committee on Audit ( House of has contributed half or more of the stated capital, which relate
Councillors)
to said contract, the obligation of entities subject to audits to
Committee on Audit and Oversight of accept such audits was stipulated, and a system enabling BOA
Administration(Houseof to make a report to the Diet and the Cabinet at any time was
Representatives)
created (revision of Article 23, paragraph (1), item (vii) and
Articles 25 and 26, addition of Article 11, item (ii)-2 andArticle 30-2, etc.).
Article 17 of the Supplementary In line with the revision of the term "riin" (official) to
Provisions of the Act Partially Amending "shokuin" (official) with the amendment of the Local
the Local Autonomy Act (Act No. 53 of Autonomy Act, the term "riin" (official) in the provisions
2006)
prohibiting a Commissioner from concurrently holding any-Introduced by the Cabinet
other office was revised to "shokuin" (official) (revision ofCommittee on General Affairs (House of Article 9).
Representatives/House of Councillors)

December 13, 2002
(February 3, 2003)

May 30, 2003
(April 1, 2005)

November 7, 2005
(November 7, 2005)

June 7, 2006
(April 1, 2007)

The following part describes the backgroundeither House may request BOA to conduct anand developments of major amendments shown

audit of specific matters and to report theinresults

the

table

above

which

relatetothe(Article

105

of

the

Diet

Act).

Therefore, amendment was made to enableorganization and mandate of BOA.

BOA to conduct an audit of the specificmatters and report the results when so

1. Amendment by Article 2 of the Act Partially
Amending the Diet Act, etc. (Act No. 126 of1997)

requested by the Diet (addition of Article 302).
B. The audit objectives were stipulated in the Act(1) Outline of the amendment(addition of Article 20, paragraph (3)).

The details of the amendment were as

Along with this amendment, the Regulations

follows.

on Enforcement of the Board of Audit Act was

A. In order to strengthen the administrative
oversight function of the Diet, a system waspartially

created by amendment of the Diet Act

stipulating that (i) the conducting of an audit

whereby either House or a committee, etc. ofrequested by the Diet and the reporting of the412

amendedon

January

12,

1998,

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

audit results will be a matter that requires afollowing with regard to the Bill on the

resolution by the Audit Commission (revision of

Administrative Oversight Board: (i) the right toArticle 6, paragraph (1)), and (ii) when BOA

investigate governmental affairs is vested in thereports audit results to the Diet, it must giveHouses and the Diet, and it would not be

notice to that effect to the Cabinet (addition of

permissible under the Constitution to give this

Article 15-2).

right(2) Backgroundamendment

anddevelopments

of

to

a

third - party

organization ;( ii )

establishing an Administrative Oversight Board inthe

spite of the existence of the right to investigate

The Democratic Party of Japan submitted agovernmental affairs would mean self-denial ofBill on the Administrative Oversight Board to thethe Diet and the Houses; and (iii) giving theHouse of Representatives at the 139th session of

Administrative Oversight Board the right tothe Diet in November 1996. This bill was

conduct on-site investigations would run against

intended

Administrative

the separation of the administrative, legislative,

Oversight Board in the Diet as a body thatand judicial powers. Then in April of the same

conducts

evaluation

year, a draft proposal by the chairperson of theconcerning the affairs of the State's administrative

ruling parties' project team was published. The

organs, and state opinions on the necessary

proposal was to establish the Committee on Audit

enactment, amendment, or repeal of laws based

and Oversight of Administration, by expansively

on the results (meanwhile, this bill was shelved

reorganizing the Committee on Audit, as aand discarded at the 140th session of the Diet).

standing

The Administrative Oversight Board was tojurisdiction and functions include requesting

conduct the necessary oversight in response toaudits to BOA and examining BOA's audit

demand by a committee of either House or aactivities. The draft proposal included a statement

research committee of the House of Councillors.

that relevant legislations should be reviewed in

Also, when necessary for oversight, etc., theorder to strengthen BOA's functions, such as

Board could demand an administrative organ ofadministrative evaluation, as a step for preparing

the State, etc. to submit materials, the officer inthe conditions for such establishment. As part ofcharge, etc. could carry out on-site oversight at astrengthening the cooperation with BOA, thepublic agency, etc., and the Board could request

draft proposal presented the following revisions:

BOA to submit materials, give its views, provide

when either House or its committee finds it

explanations,necessary, it would be able to request BOA toforestablishingoversight,oranstudy,

provide

and

other

necessarycommittee

whosematters

underconduct an audit of specific matters, report thecooperation.
In response to the Bill on the Administrative

results, and submit materials; and when so

Oversight Board, the three ruling parties formed arequested by either House or its committee, BOA

Project Team for Establishing an Organization forwould be able to conduct an audit of the specific

Administrative

matters, and report the results and submit

Oversight,

Supervision,andmaterials to the House or committee.

Evaluation in the Diet (the ruling parties' project

In June, the ruling parties' project teamteam) in January 1997. The ruling parties' project
team

pointedout

problems

includingcompiled the Policy Outline for Strengthening the

the
413

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Administrative Oversight Function of the Diet. In(Partial Amendment of the Diet Act)
Article 1 The Diet Act (Act No. 79 of the 1947)
shall be partially amended as follows.
[Part amending Article 41, paragraph (2), item
(xviii) and Article 104: omitted]
Article 105 shall be revised as follows.
Article 105 If necessary for the purpose of
examination or investigation, either House or
any of the Committees of either House may
request the Board of Audit to conduct an auditof specific matters and to report the results.
(Partial Amendment of the Board of Audit
Act)
Article 2 The Board of Audit Act (Act No. 73 of
the 1947) shall be partially amended asfollows.
The following paragraph shall be added to
Article 20.
The Board of Audit shall conduct its audit withthe objectives of accuracy, regularity, economy,
efficiency, effectiveness, or other objectives
necessary for auditing.
The following Article shall be added after
Chapter II, Section 4, Article 30.
Article 30-2 If the Board of Audit receives arequest from either House or any of theCommittees of either House under theprovisions of Article 105 of the Diet Act (ActNo.79 of 1947), it may conduct an audit of thespecific matters requested and report theresults.

accordance with the chairperson's draft proposal,
the policy outline set forth that it will be
stipulated in the BOA Act that BOA will conduct
its audit with the objectives of economy,
efficiency, effectiveness, etc. The project teamrequested the House of Representatives' Council
on the Parliamentary System (the Parliamentary
System Council), which is an advisory body of
the Speaker of the House of Representatives, tostudy the policy outline.
After deliberations at informal gatherings fordiscussions at the Parliamentary System Council
and exchange of opinions between the politicalparties, the Legislative Bureau of the House ofRepresentatives prepared a draft outline of thebill for amending the relevant Acts, etc. On
August6,

the final

draft

outlineoftheamendment bill was explained at an informal
gathering for discussions of the Parliamentary
System Council, and on August 22, the Outlineof the Bill for Amending Relevant Acts for
Implementing

theStrengthening

the

PolicyOutlineAdministrativefor

Oversight

Function of the Diet was distributed at theParliamentary System Council.

On the same day, a Draft Agreement on

On the basis that a large agreement has been

Application of the Bill Partially Amending thereached among the in-house groups for the draft

Diet Act, etc. as well as Draft Agreement Matters

outline of the amendment bill as a result ofConcerning the Board of Audit consisting of two

discussions at the Parliamentary System Council,

items were distributed at the Subcommittee inthe following Bill Partially Amending the Diet

relation to this bill. The Draft Agreement Matters

Act, etc. was distributed by the Subcommittee on

were urgently created in response to a request

Amendment of the Diet Act, etc. of the House ofRepresentatives'

Committee

on

Rules

made by BOA on the previous day for securing

andthe independence of BOA.

Administration on December 5. This bill was

The draft of the Bill Partially Amending the

adopted as the Subcommittee's proposal.

Diet Act, etc., which was adopted at the
Subcommittee, was adopted at the House ofBill Partially Amending the Diet
Act, etc. (Extract)

Representatives'

414

Committee

on

Rules

and

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

House of Councillors.

Administration on December 11 as a bill to be

As a result of the deliberation, a draft

introduced by the Committee. It passed theplenary session of the House of Representatives

amendment

to

also

enabletheResearch

and was sent to the House of Councillors on theCommittees of the House of Councillors tosame day.

request BOA to conduct an audit of specificmatters was decided. The amendment

Also on the same day, an Agreement on

wasApplication of the Bill Partially Amending the

adopted at the plenary session of the House ofDiet Act, etc., which combined the two Draft

Councillors and the bill was forwarded to theAgreement Matters distributed on December 5

House of Representatives on the same day. The

into one, was adopted at the Committee. In thisbill forwarded to the House of Representatives

process, the following item that was included in

was adopted and enacted as-is at the plenary

the original draft was deleted: when requesting an

sessionaudit of specific matters to BOA, it is necessary

promulgated on December 19, and came into

to give consideration to the independence ofeffect on the day the next ordinary session was

BOA and to hold sufficient discussions withconvened (January 12, 1998).

on

the

same

day.

The

Act

was

BOA in advance due to the need to ensure thediscretionary power of BOA.

2. Amendment by the Act Partially Amending
the Board of Audit Act (Act No. 36 of 1999)

Agreement on Application of the Bill
Partially Amending the Diet
Act, etc. (Extract)(1) Outline of the amendment
This was an amendment to delete theprovisions that recognized predominance of the

In drafting the Bill Partially Amending the Diet
Act, etc., the following matters shall be
confirmed and agreed.
(i) to (iv) (omitted)(v) when the same type of requests or many
requests are to be made from multiple
Committees, adjustment shall be made at theCommittee on Rules and Administration so as
not to hinder the smooth implementation of
the audit activities conducted under thecurrent BOA Act;House of Representatives whereby, when theopinion was divided between the two Houses ingiving consent to appointment of CommissionersofDecember

12.

In

consent

of

the

House

of

the two Houses (deletion of Article 4, paragraph(2), etc.).
(2) Backgroundamendment

anddevelopments

of

the

At the time the BOA Act was enacted,
similar provisions on predominance of the Housewas deliberated at the Committee on Rules andontheRepresentatives was regarded as the consent ofThe bill sent to the House of Councillors
Administration

BOA,

of Representatives with regard to personnel

theappointments subject to Diet approval existed fordeliberation, a problem was raised that the parties

Commissioners

that can request BOA to conduct an audit of

of

the

National

Personnel

Authority (personnel committee members at the

specific matters under the bill were "either House

time; Article 5 of the National Public Service

or any of the Committees of either House," andAct) and Commissioners of the National Public

did not include the Research Committees of the

Safety Commission (Article 5 of the former
415

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Police Act). In addition, the consent of the HouseBOA Act with regard to the consent forof Representatives was required for appointment

appointment of Commissioners of BOA. Thisof the chairman and commissioners of the Fair

requested matter was subsequently mentioned aTrade Commission (Article 29 of the Act onnumber of times in interpellation to the Chief

Prohibition

Cabinet Secretary at meetings of the House ofof

PrivateMonopolizationandCouncillors' Committee on Audit. Then, the Chief

Maintenance of Fair Trade).
However,therespective

provisions

Cabinet Secretary proposed this to the House ofon

predominance of the House of Representatives

Representatives'

were deleted or were revised to require theAdministration.

Committee

on

Rules

and

consent of both Houses for the appointment in

Under such circumstances, the in-house

subsequent law amendments. As a result, thegroups of the House of Representatives also

provisions on predominance of the House ofbasically agreed at the Parliamentary System

Representatives

personnel

Council on April 13, 1999, that Article 4,

appointments subject to Diet approval only

paragraph (2) and other relevant provisions of theremained for Commissioners of BOA.

BOA Act should be deleted and that thewithregardtoonCommittee on Rules and Administration should

predominance was taken up at the House of

introduce the bill, based on the proposals madeCouncillors'

Reviewby the House of Councillors and the government.

Meeting, which was formed as an advisory bodyIn this manner, on April 27, the House ofThe

presenceoftheInstitutional

provisions

Reformof the President of the House of Councillors in

Representatives'

Committee

October 1995. Later, deletion of the provisions

Administration

adoptedon predominance of the House of Representatives

Amending the Board of Audit Act as a bill to bewith regard to the consent for appointment of

introduced by the Committee. The bill passed theCommissioners of BOA was included in a reportplenary session of the House of Representatives

submitted

Councillors'

and was sent to the House of Councillors on theInstitutional Reform Review Meeting to thesame day. On April 28, the bill was deliberated at

President of the House of Councillors. In January

the Committee on Rules and Administration, and1997, the Chairman of the House of Councillors'

was adopted and enacted as-is at the plenary

Committee on Audit made a statement at asessionmeeting of the Committee on Audit that thepromulgated on May 10, and came into effect onprovisions on predominance of the House of

the same day.

by

the

House

of

on

the

same

the

day.

on

Rules

Bill

The

and

Partially

Act

was

Representatives should be deleted, and the Prime
Minister responded that he would take this

3. Amendment by Article 1 of the Act on
Arrangement of Relevant Acts Incidental to
Enforcement of the Act on Access toInformation Held by Administrative Organs(Act No. 43 of 1999)

statement seriously as an opinion representing thecommittee members. In March 1997, the HouseofCouncillors'

Administration

Committee
indicatedonmatters

Rules

and

for

which

(1) Outline of the amendment

government cooperation is requested to the Chief

This was an amendment to provide that an

Cabinet Secretary, including amendment of theInformation Disclosure Review Board of the416Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

Board of Audit is to be establish in BOA andperspective,

arrange necessary provisions on its organization

Administrative Information Disclosure Task Forceand committees, etc. (addition of Chapter I,

in March 1995, and investigated the status of

Section 5, Articles 19-2 to 19-5) in line with theoperation of information disclosure systems offact that BOA is included in the administrative

other countries and of local governments as wellorgansas hearing opinions from related bodies including

to

which

the

Act

on

AccesstotheCommittee

formedan

BOA.

Information Held by Administrative Organs(Information Disclosure Act) is applied (former

Based on the results, the Administrative

Article 2, paragraph (1), item (iv) of theInformation Disclosure Task Force compiled andInformation Disclosure Act) and the Information

announced the Draft Outline of the Information

Disclosure Act provides that, when there is an

Disclosure Act as well as the Concept of theobjection to a disclosure decision, etc. on

Draft Outline of the Information Disclosure Act

administrative

thein November 1996. In December of the sameprovisions of the Administrative Appeal Act (Actyear, the Administrative Reform Committee

No. 160 of 1962), the President of BOA must

offered an Opinion on Establishment of an

consult a review board separately provided for by

Information Disclosure Legislation based on thesean Act (Article 18 of the Information Disclosure

documents to the Prime Minister.

documents

pursuantto

The Draft

Act).

Outline oftheInformation

As a step to put such provisions in place,

Disclosure Act provided matters including that

almost the same provisions as those on theadministrative organs under the Information

Information Disclosure Review Board under theDisclosure Act would include BOA, and that

Information Disclosure Act at the time ofwhen there is an objection to a decision ofenactment (Article 21 (Establishment) throughdisclosure, etc. of

Article 24 (Chairperson) and Article 44 (Penalpursuant to the provisions of the Administrative

Provisions)) were added as Articles 19-2 throughAppeal Act, the administrative agency making the19-5 of the BOA Act.

disposition or conducting the review must consult(2) Backgroundamendment

anddevelopmentsofadministrative documents

the Appeal Review Board to be established in thethePrime Minister's Office. Meanwhile, the Concept
Administrativeof the Draft Outline of the Information Disclosure

Reform Committee was established with the

Act included the following statement as a special

coming into effect of the Act for Establishment

measure for an objection to a decision ofof the Administrative Reform Committee (Actdisclosure, etc. made by the head of BOA.

In

December

1994,

the

No. 96 of 1994). The Committee was toinvestigate and deliberate on matters concerning"This Draft Outline requires the Appeal

enactment of an Act for disclosing information

Review Board to be established in the Prime

held by administrative organs and any other

Minister's Office (18. [Establishment of an

institutional arrangements, and to offer an opinion

Appeal Review Board]) to be consulted evento the Prime Minister within two years. In order

for an objection to a decision of disclosure, etc.

to conduct expert study from a legislative

made by the head of BOA (the part in417

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

parentheses is omitted). However, in light ofOrgans (Information Disclosure Bill) and the Billthe character of BOA under the Constitution,

on Arrangement of Relevant Acts Incidental toa possible approach would be to establish an

Enforcement of the Act on Access to Information

Appeal Review Board in BOA as separately

Held by Administrative Organs (Arrangement

provided for by an Act and provide aBill) to the 142nd session of the Diet in Marchprocedure to consult that Appeal Review

1998.

Board instead of the Appeal Review Board in

Article 18 (Consulting the Review Board) of

the Prime Minister's Office. In that case, in

the Information Disclosure Bill provided "Whenlight of the purpose for which this Draft

there is an objection to a Disclosure Decision,

Outline provides for establishment of theetc.

Appeal Review Board as an advisory body, theAdministrative Appeal Act (Act No. 160 ofmembers and investigation authority of the1962), the head of the Administrative Organ who

handling of cases by the Appeal Review Board

is expected to make a determination or decision

to be established in BOA would need to be inon the objection, except the cases that fall underaccordance with what is provided in 19.

any of the following items, shall consult the[Appointment of Members of the Appeal

Information Disclosure Review Board (When the

Review Board] through 21. [Handling of Cases

head of the Administrative Organ who isby the Appeal Review Board] of this Draft

expected to make a determination or decision on

Outline." (Concept of the Draft Outline of thethe objection is the head of the Board of Audit, aInformation Disclosure Act, November 1, 1996,

review board separately provided for by an

Administrative Information Disclosure Task

Act.)," allowing BOA to establish its own

Force)

Review Board. Also, with regard to the Review

pursuant

totheprovisions

of

the

Board to be established in BOA, the provisions
This special measure was provided inof Section 3 (Study and Deliberation Procedures

response to an opinion which BOA submitted toof the Review Board) of the Information

the Administrative Information Disclosure Task

Disclosure Bill were directly applied.

Force indicating the need that, in applying the

Deliberation on the Information Disclosure

Information Disclosure Act to BOA, it should beBill and the Arrangement Bill was carried over toapplied under a framework that complies with thethe following Diet session three times, and in thenature of BOA as an independent organization

145th session of the Diet, the Arrangement Bill

under the Constitution.

was adopted and enacted as-is on April 28, 1999,
and the Information Disclosure Bill was adopted

Based on the opinion offered by the
Administrative

ReformCommittee,

and enacted after partial modification on May 7

thegovernment drafted relevant bills by forming aofPreparation

promulgated on May 14, and came into effect on

Officefor

Enactment

of

the

the

same

April 1, 2001.

Information Disclosure Act in the Administrative
Management Bureau of the Management andCoordination Agency, and submitted the Bill on
Access to Information Held by Administrative
418

year.

The

two

Acts

were

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

4. Amendment by Article 1 of the Act on
Arrangement of Relevant Acts Incidental to
Enforcement of the Act on Use ofInformation
andCommunications
Technology in Administrative Procedure(Act No. 152 of 2002)

possible timing no later than FY2003 based on(1) Outline of the amendment

arrangements

the e-Japan Strategy (adopted by the IT Strategy
Headquarters on January 22, 2001) and e-Japan
Priority Policy Program (adopted by the IT
Strategy Headquarters on March 29, 2001). Legal
necessaryforenabling

onlineWith the enactment of the Act on Use ofadministrative procedures were to be led by the

Information and Communications Technology in

Ministry of Internal Affairs and Communications

Administrative Procedure (Online Administrative(MIC) based on the Basic Policy on Review ofProcedure

Act),

of

Laws and Regulations in Line with Introduction

accounts,""documentaryandof Online Application, Notification, and Other

the

terms

"statements
evidence,"

Procedures compiled by the Cabinet Secretariat.

"documents" in Articles 24 and 26 of the BOA

Study was conducted to also apply the

Act would be regarded to be only indicating
paper

documents,

and

when

the

Online Administrative Procedure Bill to BOA.

OnlineAdministrative Procedure Act comes into effect,Since

it would be possible to submit them online based"documents, etc." for the various terms used foron this Act, but their submission throughreferring to documents in individual laws andelectromagnetic media would not be allowed

regulations

unlessprocedures, and defined it as "paper or other

otherwiseprovided

for

in

law.

the

bill

collectively

thatprovideobject

on

used

for

the

term

administrative

Accordingly, this amendment was intended totangiblewhichallow submitting of such documents throughrecognizable to human perception is stated," theelectromagnetic media as an exception to theterms "statements of accounts," "documentary

Online Administrative Procedure Act (revision ofevidence," and "documents" in Article 24 of the

Articles 24 and 26).

BOA Act and the term "documents" in Article 26
of said Act were to fall under the category ofIn response to this amendment, the Special
Regulations on the Submission of Accounts in"documents,

the Case of

Administrative Procedure Act.

UtilizinganElectronic

information

Data

etc."

However,

Processing System (BOA Regulations No. 4 ofhad

Onlineconventionallyinterpreted

procedures, etc. in the case of submitting"documentary evidence," and "documents" in thestatements of accounts and documentary evidence

provisions of Article 24 and 26 of the BOA Act

onlinetothroughelectromagnetic

media

include"statementsthe2003) were enacted in April 2003, specifying

or

the

BOA

under

electronicof

documents

accounts,"

such

as

including optical disk cartridges (such as MOs) orelectromagnetic media including floppy disks

optical disks (such as CD-Rs).

(FDs) and CD-Rs and online data, and allowed(2) Backgroundamendment

anddevelopmentsofonline submission of materials and submission ofthematerials through electromagnetic media such as

In 2001, the government decided to put

FDs and CD-Rs. As for submission of statements

practically all administrative procedures includingof accounts and documentary evidence, it wasapplications and notifications online at the earliest

sometimes considered to be more appropriate to419

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

submit them through electromagnetic media thanof Chapter I, Section 5 and revision ofthrough an online procedure, considering the

Articles 19-2 and 19-5) in line with the facttechnical

cost - effectiveness.

that BOA is included in the administrative

Therefore, in applying the Online Administrative

organs to which the Act on the Protection ofProcedure Act to BOA, it was necessary to

Personal Information Held by Administrative

amend Articles 24 and 26 of the BOA Act by theOrgans, etc. (Administrative Organs Personal

Act on Arrangement of Relevant Acts Incidental

Information Protection Act) is applied (Article

to Enforcement of the Act on Use of Information

2,

and

Administrative Organs Personal Information

constraints

andCommunications

Technology

inparagraph

(1),

Act),

item

and

(vi)

the

of

the

Administrative Procedure (Online Arrangement

Protection

AdministrativeAct) so as to also allow submission of statements

Organs Personal Information Protection Act

of accounts and documentary evidence throughprovides that, when there is an objection to aelectromagnetic media.

disclosure decision, etc. on retained personal

In June 2002, the government submitted theinformation pursuant to the provisions of theOnline Administrative Procedure Bill, the Online

Administrative Appeal Act, the President of

Arrangement Bill, and the Bill on Certification

BOA must consult a review board separately

Business of Local Governments in Relation toprovided for by an Act (Article 42 of theElectronic Signatures to the 154th session of the

Administrative Organs Personal Information

Diet as three bills on online administrative

Protection Act).
(ii) The

procedures. These three bills were carried over toprovisionsofSectionofInformation

session of the Diet, they were adopted andconventionally been applied to the study andenacted as-is on December 6. The Acts weredeliberation procedures of the Information

promulgated on December 13, and came into

Disclosure Review Board of the Board ofeffect on February 3, 2003.

Audit. However, since the name of theDisclosure

Act

the

the following Diet session, and in the 155th

Information

Disclosure

3

Review

had

Board

5. Amendment by Article 2 of the Act on
Arrangement of Relevant Acts Incidental to
Enforcement of the Act on the Protection of
Personal
Information
HeldbyAdministrative Organs, etc. (Act No. 61 of2003)

established in MIC was to change to the(1) Outline of the amendment

Information Disclosure Act to the newly

Information

Disclosure

andPersonal

Information Protection Review Board, andaccordingly the Act governing establishmentof the Review Board was to change from theenactedThe details of the amendment were as

Act

for

Establishment

of

the

follows.

Information

Disclosure

andPersonal(i) The name "Information Disclosure Review

Information

Protection

Review

Board,

Board of the Board of Audit" was revised toamendment was made to apply the provisions"Information

Personalof Chapter III of the Act for Establishment ofInformation Protection Review Board of thethe Information Disclosure and Personal

Board of Audit" (revision of the section name

Information Protection Review Board to theDisclosure

and

420

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

study and deliberation procedures of theunder the Information Disclosure Act should be

Information

Personal

put in place as an advisory body concerning

Information Protection Review Board of theobjections to decisions on disclosure, correction,

Board of Audit (addition of Article 19-4).

etc., and discontinuance, etc. of data, in which(2) Backgroundamendment

Disclosure

and

and

developmentsofcase, use of the Information Disclosure Review

theBoard under the Information Disclosure Act

In March 2001, the Bill on the Protection of

could be considered. It also included the

Personal Information was submitted to the Diet as

following recommendations for designing thea basic framework on the discipline for handlingframework for BOA to be one that complies withpersonal information in both the public andits nature as an independent organization under

private sectors and as a general law applicable to

the Constitution.

business operators handling personal informationin the private sector. Since it was decided that・As for the prior notice system whereby theseparate legislative measures should be taken for

Ministerthe handling of personal information by theCommunications receives a notice on retention

State's administrative organs and incorporated

of a personal information file in advance,

administrative agencies, etc., meetings of thepersonal information files to be retained byStudy Group on Legislation for Protection of

BOA should not be made subject to the prior

Personal Information Held by Administrative

notice.

Organs hosted by the Parliamentary Vice-Minister・In newly making BOA subject to thefor Internal Affairs and Communications werelegislation, the government needs to conduct

held from April 2001. In October of the sameclose examination so as to ensure that theyear, the Study Group published "Enhancement

provisions on non-disclosure comply with theand Strengthening of Legislation for Protection ofnature of BOA's affairs.

Personal Information Held by Administrative

・In line with the fact that BOA is an

Organs, etc.: Protection of Personal Information

independentby e-Government."

Constitution, the Minister of Internal Affairs

ofInternal

Affairsorganization

under

and

the

fundamental

and Communications should not request BOA

amendment of the Act for Protection of Personal

to submit materials and explanations on the

Information Relating to Computer Processing

implementation status of or state opinions to

Held by Administrative Organs (Act No. 95 of

BOA1988) which was not applicable to BOA, and to

affairs. However, the Minister of Internal

develop a new legislation for incorporated

Affairs and Communications should be able toadministrative agencies, etc. With regard to therequest BOA to report on the implementation

legislation for administrative organs, the reportstatus of overall affairs since it would notrecommended that application of the legislation

impede the nature of BOA and such action isshould be expanded to also cover organs

essential for the Minister of Internal Affairs

established in the Cabinet and BOA, and that an

and Communications who is in the position to

independent Appeal Review Board similar to that

make

This

reportrecommended421

concerning

plans

and

individual

proposals

andonspecific

overallPart 3

Chapter 4

Audit in the Heisei Era (1989〜)

legislation for administrative organs.

6. Amendment by the Act Partially Amending
the Board of Audit Act (Act No. 112 of2005)

・Under the Information Disclosure Act, BOA
istoconsult

withtheReview

Board(1) Outline of the amendment

established in BOA, in light of its nature as anindependent

organization

under

The details of the amendment were astheConstitution, and the same framework can befollows.

considered

A. With regard to discretionary audit subject

for

the

legislationformatters, the scope of the accounts of a contractor

administrative organs.

subject to audit had conventionally been limited
to accounts of a contractor for construction or

The government carried out the drafting ofthese

goods rendered to the State, which relate to said

recommendations, and in March 2002, submitted

contract. However, given that public procurement

the following four bills to the 154th session ofcontracts had diversified due to promotion of

the Diet: the Bill on the Protection of Personaloutsourcing, etc. and the State's organizations had

Information Held by Administrative Organs; thebeen incorporated as a result of administrative

Bill on the Protection of Personal Information

reform, in order to strengthen the audit function

Held by Incorporated Administrative Agencies,of BOA, the scope was expanded to accounts ofetc.; the Bill for Establishment of the Informationa contractor for construction, goods, or services

Disclosure and Personal Information Protection

rendered to the State or to a juridical person to

Review Board; and the Bill on Arrangement of

which the State has contributed half or more of

Relevant Acts Incidental to Enforcement of thethe stated capital, which relate to said contract

Act on the Protection of Personal Information(revision of Article 23, paragraph (1)).

Held by Administrative Organs.

B. In order to ensure that audit is conducted more

relevantbills

accordingto

These four bills and the Bill on thesmoothly, the obligation of entities subject toProtection of Personal Information collectively

audits to accept such audits was stipulated in thestarted to be deliberated at the House of

Act (revision of Articles 25 and 26).

Representatives' Committee on Cabinet, but the

C. Conventionally, BOA could only report on

deliberation was carried over to the following

audit results in respect to audits of matters forDiet session, and in December 2002, the bills

which audit was requested by the Diet and thewere shelved and discarded at the 155th session

annual audits, but in order to contribute toof the Diet. The government corrected these bills

enhancing the deliberation of the State's final

and submitted the new five bills to the 156th

accounts at the Diet, it was made possible forsession of the Diet in March 2003. These five

BOA to report to the Diet and the Cabinet on

bills were deliberated at the Special Committee

audit results concerning matters that it finds

on Protection of Personal Information formed inparticularly necessary at any time, and thisboth Houses, and were adopted and enacted as-isreporting was made a matter that requires aon May 23. The Acts were promulgated on May

resolution by the Audit Commission (addition of

30, and came into effect on April 1, 2005.

Article 30-2 and revision of Article 11).

422

Section 1(2) Backgroundamendment

anddevelopmentsofAmendments of the BOA Act and Discussions on BOA's Mandate

answerthesessioninconnection

with

Prime

Minister's policy speech. In February, informants
were questioned at a meeting of the House of

In 2000, the Commission on the Constitution
The

Councillors' Committee on Audit on the themes

Commissions held active discussions on theof "Regarding Strengthening the Function of theConstitution, and some members opined that theSupreme Audit Institutions (BOA in Other

functions and independence of BOA, which is an

Countries)" and "Regarding Strengthening theorganization whose establishment is required

Function of BOA."

wasestablished

in

both

Houses.

under the Constitution, should be strengthened.

After that, the Democratic Party of Japan

Under such circumstances, at a meeting of theformed a Project Team for Amending the BOA

House of Councillors' Committee on Audit in the

Act and the Liberal Democratic Party of Japan

161st session of the Diet in December 2004, theformed a Project Team for Studying Amendment

following statement was made with regard to theof the BOA Act. These project teams studied

BOA Act in relation to the issue that the Kitami

legal amendments concerning the organization,

Area Police Headquarters of the Hokkaido

officials, mandate, etc. of BOA in the direction ofPrefecturalcontributing to enhancing the deliberation of the

Police presented

false

document

State's final accounts at the Diet.

during a field audit.

Then, as a result of studies on matters"... I feel that, we should at least put in place ...
provisions to the effect that submission of false(documents) or obstruction of audit would
directly constitute a crime or provisions to theeffect that BOA can offer an opinion to the Dietor the Cabinet if it finds it necessary to revise
various systems and that such opinion must be
respected ... such as those provided in respect to
the National Personnel Authority under thisNational Public Service Act ..." ( Eiichi
YAMASHITA member of the House ofCouncillors [Komeito member; director of theCommittee on Audit])

including the strengthening of the function of
BOA within and between the respective politicalparties, an agreement was reached at the board of
directors meeting of the House of Councillors'
Committee on Audit on June 2 to implement thefollowing three items during the current Diet
session (the 162nd session of the Diet) so as tocontribute to enhancing the deliberation of theState's final accounts at the House of Councillors:(i) requesting BOA to conduct an audit under
Article 105 of the Diet Act; (ii) expanding the

Then

party

contents of resolutions of warning to the Cabinet;

Komeito founded a Board of Audit Reformand (iii) amending the BOA Act for required

Project Team, and initiated a study on law

enhancement of the audit function.

amendmentin

January

relating

to

2005,

political

BOA'sorganization,

On June 7, the House of Councillors'

officials, mandate, etc. in the direction ofCommittee

strengthening BOA's independence.

demanding measures in relation to deliberation of

on

Audit

made

a

resolution

Meanwhile, at the House of Councillors'

the State's final accounts, consisting of 36 items,

plenary session of the Diet, questions were asked

and requested the Cabinet and BOA to takeconcerning strengthening of the function of BOA

appropriate measures and to report on the results.

and other related matters in the question-and-The Committee also requested BOA to conduct423

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

audits on nine cases under Article 105 of the Diet

plenary session of the House of Councillors andAct.

was sent to the House of Representatives. Then
The audit items demanded included those foron August 8, the House of Representatives waswhich audit needs to be conducted with regard todissolved, and the bill was shelved and discarded.

accounts of a contractor for services, etc. of the

However, in the next 163rd session of the Diet,

State or a state-owned body or of a person

the momentum for amending the BOA Act grew

entrusted with investigation, experiment, research,

once again, and a Bill Partially Amending theetc. of the State or a state-owned body, in order

Board of Audit Act, with the same content as theto ensure thorough audit.

bill submitted in the previous Diet session, was

On June 8, based on the proposal of the

adopted as a bill to be submitted by theabovementioned matters agreed by the House ofCommittee. On October 21, the bill passed theCouncillors'an

plenary session of the House of Councillors andadvisory body of the President of the House of

was sent to the House of Representatives. In theCouncillors, it was decided that specific measures

House of Representatives, the bill was deliberated

including legal amendments be discussed again

at the Committee on Audit and Oversight ofafter a study by the House of Councillors'

Administration on October 26, and was adopted

Committee on Audit. As a result of adjustments

and enacted as-is at the plenary session of theled by the Committee on Audit, a Bill PartiallyHouse of Representatives on October 28. The Act

Amending the Board of Audit Act, consisting of

was promulgated on November 7, and came into

the following amendments, was drafted at theeffect on the same day.

ReformCouncil,

which

is

board of directors meeting of the Committee, andSubsection 2

was approved at the House of Councillors'
Reform Council:(i) Add a contractor for services other than

Enactment of an Act that
includes BOA in the definition
provisions of "administrative
organ"

construction and a person entrusted with
In public law, the dominant view is toadministrative work or services to the bodies

regardsubject to audit;

the portion

of

the

national

power(ii) Make contractors of juridical persons toremaining excluding the legislative power and thewhich the State has contributed half or morejudicial power to be the administrative power (theof the stated capital also bodies subject toso-called "passive theory"). Thus, BOA is often

audit, similar to contractors of the State;classified as an administrative organ in the broad(iii) Stipulate the obligation of entities subject tosense. Some Acts that have been enacted in

BOA audits to accept such audits; andrecent years include BOA in their definition(iv) Establish provisions that enable BOA toprovisions of "administrative organ" as shown

report on audit results at any time.

below. This is considered to be due to a strong

At the meeting of the House of Councillors'

influence of public law where the passive theory

Committee on Audit on August 2, 2005, thisis dominant.

draft was adopted as a bill to be submitted by the(i) Article 1, paragraph (2) of the Act on

Committee. On August 3, the bill passed theHolidays of Administrative Organs (Act No.
424

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

below.

91 of 1988)(ii) Article 2, paragraph (1), item (vi) of the Acton

Accessto

Information

Held

1. Outline of the law amendment

byAdministrative Organs (Act No. 42 of 1999)

The part of this law amendment which(iii) Article 2, item (ii), (a) of the Act on Use of

relates to BOA was as follows. While theCommunications

Administrative Procedure Act was to include

Technology in Administrative Procedure (ActBOA in its definition provisions of administrative

No. 152 of 2002)

organ (revision of Article 2, item (v), (a)) and to

Information

and(iv) Article 2, paragraph (1), item (vi) of the Act

make BOA subject to the public commenton the Protection of Personal Information

procedure under Chapter VI of said Act andHeld by Administrative Organs (Act No. 58

administrative guidance under Chapter IV of saidof 2003)

Act, the amendment was to exclude acts toestablish "administrative orders, etc. to provide(v) Article 2, item (v), (a) of the Administrative
Procedure Act (Act No. 88 of 1993) as

for

the

audit

conducted

by

BOA"

from

amended by the Act Partially Amending theapplication of the provisions of Chapter VI of

Administrative Procedure Act (Act No. 73 ofsaid Act (addition of Article 4, paragraph (4))2005)

and to exclude "administrative guidance during

However, BOA differs from administration

audit conducted by BOA" from application of thein the narrow sense that is under the control ofprovisions of Chapter IV of said Act (revision of

the Cabinet. BOA has an independent status other

Article 3, paragraph (1), item (iv)).

than administration, and has a special status that
does not fall under any of legislation, judiciary,

2. Backgroundamendment

and administration. Accordingly, when definition

anddevelopments

of

the

provisions of "administrative organ" are to be

The Three-year Plan for the Promotion ofplaced in an Act, BOA has examined theRegulatory Reform, which was approved by thelegislative measure to check whether it infringes

Cabinet in March 2004, included studies foron the independence of BOA or affects BOA in

reviewing the Administrative Procedure Act andconducting rigorous and fair audit. If it has anlegislating

objection to the contents of the legislative

Therefore, a Panel on Administrative Procedures

measure, it has requested the ministry or agency

hosted by the Minister of Internal Affairs andin charge of the drafting to not include BOA in

Communications started the study from April

the "administrative organ" or to revise the2004, and published the Report of the Panel oncontents of the legislative measure.

Administrative Procedures in December of theOf the above provisions, the background andsame year.

developments of the provisions set forth in (ii),

Based

the

on

publiccomment

this report,

procedure.

the government(iii), and (iv) are already described in page 416-

decided to partially amend the Administrative

420. Thus, the background and developments ofProcedure Act and to obligate administrative

the partial amendment of the Administrative

organsProcedure Act set forth in (v) are described

procedure, etc. to seek comments and information
425

toimplementapubliccomment

Part 3

Chapter 4

widelyfrom

Audit in the Heisei Era (1989〜)

establishing

the relationship with private individuals toadministrative orders, etc. such as a cabinet order"administrative orders, etc. to provide for theor ministerial ordinance, in order to further

audit conducted by BOA."

thepublicwhen

advance the guarantee of fairness and progress
towards transparency in administrative operations,

Subsection 3

thereby promoting the protection of the rights andDiscussions on amendment of
the Constitution

interests of citizens. In drafting the bill, however,after consultation with BOA, it was decided that

With 50 years having passed from enactment

BOA will be positioned under the Act as beingof the Constitution, there were growing calls for

subject to the public opinion procedure because

establishing

there are such provisions as the Regulations on

research organization in the Diet. Therefore,

the Information Disclosure Review Board of thebased on the Act for Partially Amending the Diet

Board of Audit that make BOA subject to the

Act (Act No. 118 of 1999) enacted in July 1999,

procedure, and that BOA will be added to thethedefinition provisions of administrative organ

established in both Houses starting from the 147

under the Administrative Procedure Act, while atth session of the Diet that was convened in

the same time, provisions will be established to

January 2000, and carried out extensive andexclude application of Chapters IV and VI ofcomprehensive research and discussions on thesaid Act as mentioned above due to the following

Constitution. Also, each party formed the party's

reasons:

Constitution research committee or project team,aCommission

comprehensive

on

the

Constitution

Constitution

was

audit

etc. for studying amendment of the Constitution,

conducted by BOA" is conducted within thewhich held active discussions and publishedextent of the purpose of audit in order todocuments including summaries of issues andhave a government ministry or agency, or an

reports.

(i) "Administrative

entitywhich

guidancehasaduringcertainfinancialrelationship with the State, such as an

1. Discussions at the House of Representatives'
Commission on the Constitution

incorporated administrative agency or privateorganization

to

which

contribution

At

or

the

House

of

Representatives'

financial assistance is provided by the State,

Commission on the Constitution, a Subcommittee

fulfill accountability, and is different in nature

on Ideal Governance and Organizations wasfrom the administrative guidance to theformed in January 2003,

general public that is normally assumed byresearch on ideal governing system by hearing

the Administrative Procedure Act; andopinions widely from informants, etc.

which

conducted(ii) An entity subject to audit has some form of

In May 2004, the Subcommittee heard

financial relationship with the State, which

explanation from BOA on "Matters concerning

differs from the normal relationship between

ideal government and organizations (bicameralism

administration and general private individuals,

and the audit system)."so it is not appropriate to apply the same

Then in April 2005, the final report of theprocedural regulation as that for regulating

House of Representatives' Commission on the426Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

Constitution was submitted to the Speaker of theof the budget and final accounts (omitted);others expressed caution towards this idea.
(Comments by Informants and Others)
・In light of the stipulation in Article 90,
Paragraph 1, that statements of audit besubmitted to the Diet through the Cabinet, it
seems that the present Constitution does notforesee making the Board of Audit anorganization attached to the Diet. (Mitsuaki
USUI, Informant)
・If the Board of Audit were in close contact
with the political arena―for instance, if it wereattached to the Diet―its neutrality would most
likely be affected to some extent. (Nobuaki
MORISHITA, President, Board of Audit)
・Perhaps we should consider attaching theBoard of Audit to the Diet, as its counterpartsin various countries are attached to theirnational assemblies. (Hiroaki SHINOHARA,
Speaker)
・I suggest the following division of roles
between the Diet and the Board of Audit: theBoard of Audit should check the final accounts
for basic accuracy and so on, and the Diet
should investigate the results of policy
measures in order to evaluate the policies.
(Yoshio KUBOTA, Informant)

House of Representatives. The report included an
item called "Control of Public Finances by theDiet" and stated that the following discussions
took place with regard to BOA.
Subsection 2. Control of Public Finances by the
Diet
Members discussed improving the control of
public finances by the Diet, and how the two
Houses should review the budget and final
accounts.
1. Improving the Control of Public Finances by
the Diet
The following were among the views
expressed regarding the control of publicfinances by the Diet: (omitted)
Further, the following concrete measures toimprove the control of public finances by theDiet were suggested.
a.- d. (omitted)
e. We should establish a new Board of
Administrative Oversight in the Diet andstipulate in the Constitution that it willoversee,investigate,
andmakerecommendations on the state of executionof the budget and administrative affairs.
f. The Board of Audit should be attached to
the Diet on the model of the U.S.
Government Accountability Office (GAO),
after taking steps to ensure its impartiality
and to clarify where responsibility lies.
g. Either House should be able to request an
audit by the Board of Audit if the request is
made by a certain number of members.
h. To strengthen cooperation between the
Board of Audit and the Diet, we should
require the statement of audit of final
accounts specified in Article 90, Paragraph
1, to be submitted to the Diet directly
instead of via the Cabinet, thus ensuringcloser liaison with the administrative
oversight committee in each House.
i. (omitted)
2. Review of the Budget and Final Accounts by
the Two Houses
Some members favored a clear division ofroles between the two Houses in their review

Also, the report included an item called"The Board of Audit" and stated that thefollowing discussions took place.
Subsection 5. The Board of Audit
In addition to the topics of attaching the Board
of Audit to the Diet or strengthening liaison
between them, which were mentioned under"Control of Public Finances by the Diet,"discussion of the Board of Audit focused mainlyon the proper form of the Board of Audit systemand on how to strengthen the Board of Audit'sfunctions and increase its independence, etc.
1. The Proper Form of the Board of Audit
SystemThe following views were expressed regarding
the proper form of the Board of Audit system.
a. The Board of Audit is a stabilizer built into
the system, and it helps give substance topopular sovereignty. However, it is427

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

which includes detailed examination ofpolicies. Perhaps Japan's Board of Audit should
establishasimilarsystem.
( Fukashi
UTSUNOMIYA, Informant)

questionable whether it has been functioning
adequately, and there are calls for the Board
of Audit to fulfill its expected functions.
b. We should set the relevant constitutional
items in order after considering the whole
picture, including the need for a mechanism
by which the public can request audits by
the Board of Audit.
2. Strengthening the Board of Audit's Functions,
Increasing Its Independence, and Related
Matters
The following views were expressed withregard to strengthening the Board of Audit'sfunctions, increasing its independence, andrelated matters.
a. We need to take bold measures toemphasize the Diet's function of oversightand control "after the fact," which has been
neglected until now. For example, whenwaste or fraud occurs, the budget for the
next fiscal year could be automatically cutby the amount involved. To achieve thesegoals, we need to strengthen the functions of
the Board of Audit still further.
b. We should empower the Board of Audit torecommend corrective actions to the Cabinetor the prime minister.
c. The Board of Audit should employ certified
public accountants and other specialists bymaking them officials with fixed term ofoffice.
d. The right to decide the Board of Audit's
personnel and assess its draft budget should
be taken away from the executive branch.
e. Exchanges of personnel between the Board
of Audit and other government departments
should be banned, and we should also
prohibit retiring or former employees of theBoard of Audit from accepting employment
with auditee.
(Comments by Informants and Others)
・If the Board of Audit's role as a kind of court
is to be strengthened further in such areas asadjudication on the liability of indemnity orreview and judgment at the request ofinterested parties, its powers should be set out
expressly in the Constitution. (Mitsuaki USUI,Informant)
・In the United States, the GAO has a broad role

2. Discussions at the House of Councillors'
Commission on the Constitution
At the House of Councillors' Commission ontheConstitution,aSubcommittee

on

the

Bicameral System and the House of Councillors
was formed in February 2004, which conducted
research on an ideal bicameral system and Houseof Councillors by hearing opinions widely frominformants, etc.
Then in March 9, 2005, the research reportof the Subcommittee was submitted to the Houseof Councillors' Commission on the Constitution.
The report included an item called "the Final
Account and the Board of Audit" as one of thespecific areas in which the House of Councillors
should demonstrate its originality, and stated thatsome Commission members expressed views suchas that it is desirable to attach BOA to the Dietor the House of Councillors or and that functions
similar to that of BOA should be incorporated
into the House of Councillors, in order toreinforce the effectiveness of deliberation of theState's final accounts.
Moreover, in response to this research reportoftheSubcommittee,

etc.,

the

House

of

Councillors' Commission on the Constitution
submitted a Research Report on the Constitutionof Japan to the President of the House ofCouncillors on April 20, 2005. The report
included an item called "Ideal Budget/Final
Account and the Board of Audit" and statedunder the heading of "The Board of Audit" thatthe following discussions took place.

428

Section 1

Amendments of the BOA Act and Discussions on BOA's Mandate

be strengthened with focus on the fact that it
has a power that can be regarded as the fourth
power as an organization whose establishment
is required under the Constitution.
・It should be expressly provided in theConstitution that, in response to a report by the
Board of Audit, the Diet must make necessary
recommendations to the Cabinet, and in
response to the recommendations, the Prime
Minister must take necessary measures.
・Guarantee of the status of the Board of Audit
Commissioners is worth stipulating in theConstitution. While the Board of Audit Act
provides that the Board of Audit has a statusindependent from the Cabinet, it actually has
too many restrictions due to its connection withadministration.
・Although the Board of Audit is an organization
under the Constitution, its audit mandate is
actually extremely weak. Amending the Board
of Audit Act for strengthening the mandate isconsidered to be a role of the legislature.
・The Board of Audit's audit has substantial
restrictions such as exclusion of police
expenditures and secret funds. It is necessary,and also possible, to fundamentally strengthen
the system and function of the Board of Audit
so that it can fulfill a role that matches up to
the provisions of the Constitution.
・The Board of Audit' findings of improper
expenditures are small in amount compared tothose in the United States, etc. and many ofthem are findings of detailed items. The Board
of Audit's level of oversight of the three
powers is too low in comparison to its statusunder the Constitution.

The Board of Audit
The Commission also discussed the positioning
and functions of the Board of Audit from theviewpoint of the House of Councillors' attachingweight to the deliberation of the State's final
accounts.
The Commission members were divided on
attribution of the Board of Audit, the Board ofAudit's relation with the House of Councillors,
and whether the Board of Audit should be
attached to the Diet or to the House ofCouncillors. The views expressed include thefollowing.
・In the study by the party's Subcommittee for
Drafting a New Constitution ( 2005 ) ,discussions were also held on placing theBoard of Audit in the House of Councillors,
but the subcommittee concluded that thecurrent system should be maintained for
securing independence of the Board of Audit.
(Liberal Democratic Party of Japan)
・The House of Councillors should make further
coordination with the Board of Audit in orderto fulfill its role of controlling public finances
under the bicameral system.
・Attaching the Board of Audit to the House ofCouncillors for making the House ofCouncillors more responsible for deliberationof the State's final accounts would not be thevery best measure, but would be worth
implementing.
・I strongly support the idea to have the Board
of Audit attached to the House of Councillors
and properly check administration.
・The positioning of the Board of Audit as anorganization whose establishment is required
under the Constitution can stay as it is, but it
may be better to place it under the national
assembly, as in the case of the United
Kingdom and Sweden, and strengthen its
functions particularly in relation to the ideal
form of the House of Councillors.
Also, the following views were expressed withregard to strengthening of the mandate and statusof the Board of Audit.
・While there is also an approach to consider the
Board of Audit as a type of independentadministrative organization, its mandate should

3. Explanation by BOA
Whereas the final report of the House ofRepresentatives' Commission on the Constitution
and the Research Report on the Constitution ofJapan submitted by the House of Councillors'
Commission

on

the

Constitution

were

as

mentioned above, the main contents of the
explanation given by President of BOA Nobuaki429

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

MORISHITA at the meeting of the Subcommittee
on Ideal Governance and Organizations of theHouse of Representatives' Commission on theConstitution on May 27, 2004, are as follows.
(i) Independence

is

the

key

to

BOA's

performing its duties rigorously and fairly.
The BOA's independence is guaranteed by its
right of independent personnel management,
its possession of rule-making powers, andspecial budget process.
(ii) BOA is an independent agency, but has aclose relationship with the Diet in several
respects, such as that appointments ofCommissioners require the Diet's consent, theannual audit report is presented to the Diet,and either House or any of the Committeesof either House, etc. may request BOA toconduct an audit of specific matters andreport the results.
(iii) In order to reflect audit results in institutions,the budget, and other areas, the results of
BOA's audit are reported to the Diet, thestatus of subsequent measures taken for items
for which BOA has demanded measures, etc.
are identified and reported to the Diet, andregular meetings are held with the Ministryof Finance's Budget Bureau and otherrelevant departments.
(iv) The status of the supreme audit institutionsof other major countries

430

Section 2 Changes in BOA's Organization

Section 2 Changes in BOA's Organization
This section describes the major changes indivisions of the Secretariat and the respective

BOA's organization, the structure of positions, thebureaus (including senior director class such as

fixed number of officials, and the personnel system

Audit Manager) through organizational reform

during the period from 1989 to December 2009.

after the new BOA Act came into effect on May
3, 1947.
As of the end of December 2009, there are

1. Changes in BOA's organization

the five bureaus comprised five Coordination(1) Changes in the number of divisions (May1947 to 2009)

Divisions and 36 audit divisions, and theSecretariat comprised 13 divisions.

Table 1 shows the changes in the number ofTable 1 Changes in the number of divisions
Date of
Numberorganizational
Outline of organizational reformofreformdivisions
May 3,1947 Starting with an organizational 23(19)structure of 19 divisions in fourbureaus and four divisions in the
Secretariat.
March
8, Adding four audit divisions, and 27(22)1948transferring
the
Legal
Affairs
Division of the 4th Bureau to theSecretariat
December 20, Establishing the Personnel Division, 26(22)1948
and abolishing the Documents andCoordination Division and the Legal
Affairs Division
June 1,1949 Adding two audit divisions
28(24)
January 21, Transferringthe
Adjudication 28(22)1950
Division and the Claims Settlement
Division of the 4th Bureau to theSecretariat
June 8, 1950 Adding one division to the 29(22)Secretariat.
August24, Adding one audit division30(23)
1950
January 16, Establishing a Coordination Division 31(26)1952
in each bureau, reducing two
divisions of the Secretariat, andreducing one audit division
January 8,
Adding one audit division32(27)
1955
August1, Establishing the 5th Bureau, adding 35(30)1955
one Coordination Division, andadding two audit divisions
April 1, 1959 Establishingthe
Adjudication 38(30)Division (three Senior Directors)
April 1, 1961 Establishing the Special Program 39(30)Division (one Senior Director)
April 1, 1962 Establishing five audit divisions in 42(33)the 5th Bureau, and reducing two
audit divisions

Date of
Numberorganizational
Outline of organizational reformofreformdivisions
April 1, 1963 Establishing one Health and Welfare 43(33)Service Division
April 1, 1964 Adding five divisions to the 5th 48(38)BureauApril 1, 1965 Adding one Senior Director of the 49(38)Special Programs Division
April 1, 1967 Adding one audit division
51(39)
April 1, 1968 Establishing one Training Division
52(39)
April 1, 1969 Setting up one Technical Specialist
53(39)
January 20, Transferring six divisions to outside 53(39)1971
the 5th Bureau
April28, Adding one Senior Director of the 53(39)1972Special Programs Division, andreducing one Senior Director of the
Adjudication Division
April
11, Adding one Technical Specialist
54(39)
1974
May 10, 1976 Adding one Technical Specialist
55(39)
April
18, Adding one Technical Specialist
56(39)
1977
January
7, Restructuring the organization
56(39)
1978
April 4, 1978 Adding one Technical Specialist
57(39)
January
1, Reducing one Technical Counselor 56(39)1980(changing the name from Technical
Specialist in April 1979)
April
11, Establishing one Information & 56(39)1984Communication Technology Division,and abolishing the Training DivisionDecember 17, Restructuring the organization
56(39)
1984
December 18, Establishing the Foreign Affairs 56(39)1987
Audit Division, and abolishing the
National Property Audit DivisionDecember 17, Restructuring the organization
56(39)
1991

431

Part 3
April
1992

Chapter 4

Audit in the Heisei Era (1989〜)

10, Establishing one Training Division,and reducing one Senior Director of
the Special Programs Division
6, Restructuring the organization

56(39)

April 1, 2005 Establishing the Special Issues Audit
Division for Ministries, abolishing theRailways Audit Division, etc.
April 1, 2009 Restructuring the organization

55(41)

January
56(40)
54(41)
2001
Note: Figures in parentheses in the "Number of divisions" column indicate the number of divisions of bureaus as included in the
total number of divisions shown on the left.

(2) ReformonDecember
17,(restructuring of the organization)

Audit Division and were transferred to the

1991

Health & Welfare Audit Division.

The organization was restructured according(D) Since the 4th Bureau was bearing a heavier

to the following basic policies: (i) forming an

workload than other bureaus due to anorganizational structure that corresponds to anincrease in the work volume of audits ofincrease in expenses of social security andsocial security, the 4th Bureau's divisions in

expenses of public works; and (ii) leveling thecharge of social security audit and labor audit

amount of work among the bureaus. The major

were transferred to the 2nd Bureau. In line

revisions were as follows.

with this, the Judicial Affairs Audit Division

A. Reorganization of the organizational
structure for social security auditsof the 2nd Bureau was transferred to the 1st(A) In order to further strengthen public pension

Divisions of the 2nd Bureau were transferred

audits, the Public Pension Audit Division

to the 4th Bureau, the Science & Technology

which has jurisdiction over audits of the

Audit Division of the 2nd Bureau was

Pension Bureau and the War Victims' Relief

transferred to the 5th Bureau, and the Postal

Bureau and audits of the Social Insurance

Services Audit Division of the 5th Bureau

Agency (excluding accounting concerning

was transferred to the 4th Bureau.

Bureau, the 1st and 2nd Education Audit

medical care benefits of the governmentmanaged health insurance program, etc.) was

B. Reorganization of the organizational
structure for public works audits

newly established, forming a three-division(A) In order to correspond to the expansion oforganizational structure for social security

public investment based on the Basic Plan

audits.

for Public Investment formulated in June

(B) In order to further strengthen medical care

1990, particularly to the expansion of publicaudits, the Secretariat's Division of the Healthinvestment in the living environment andand Welfare for the Elderly (accounting

cultural functions, the Urban Development

concerning medical care, etc. under the

Audit Division which has jurisdiction overHealth and Medical Service Act for theurban-related audits that had been mainlyAged) and the Special Account for National

handled by the 1st and 2nd Construction

Hospitals were separated from the Health &Audit Divisions was newly established in the

Welfare Audit Division and were transferred

3rd

Bureau,formingafour - division

to the Medical Care Audit Division.

organizational

structureforconstruction

audits.

(C) Audits of the Environment Agency were(B) In line with the new establishment of theseparated from the Science & Technology
432

Section 2 Changes in BOA's Organization

Urban Development Audit Division, theabolished for streamlining the affairs.

Rural Development Audit Division(4) Reform on January 6, 2001 (restructuringof the organization)was

abolished, and audits of the Hokkaido
Okinawa

In addition to changing the names of audit

Development Agency, and the National Landdivisions in correspondence with the change of

Agency1 st

the names of ministries and agencies with theConstruction Audit Division, audits of thereorganization of government ministries andWater

Publicagencies on January 6, 2001, the organization

Corporation were transferred to the 2nd

was restructured according to the following six

Construction Audit Division, and audits ofbasic policies:

the Japan Regional Development Corporation(i) Enhancing the organizational structure forwere transferred to the Urban Development

responding to effectiveness audits and policy

Audit Division.

evaluation and analysis;

Development

Agency,werethetransferred

Resources

C. Reorganization
structuretotheDevelopment

of

other

(ii) Enhancing the organizational structure fororganizational

responding to prompt audits and audits
requested by the Diet;

The National Properties Audit Division was
abolished, and audits of Japan Tobacco Inc. (JT)(iii) Enhancing the organizational structure forwere transferred to the Railways Audit Division,

responding to the State's final accounts

and audits of entities other than JT to the Financeanalysis and analysis of financial statements;

Audit

Division,

forminga(iv) Building an organizational structure that can

one-divisionorganizational structure for finance audits.

respond to the reorganization of government(3) Reform on April 10, 1992 (re-establishmentof the Training Division, etc.)

ministries and agencies, etc.;

In

order

to

furtherstrengthen(v) Establishing an organizational structure that
responds to deregulation and privatization;

theorganizational structure for training in line with(vi) Strengthening the bureaus' audit activities

the new construction of a training facility, thethrough consolidation and streamlining ofOffice of Training in the Personnel Division was

activities of the Secretariat.

abolished,

The major revisions were as follows.

and

the

Training

Divisionwas

re-established in the Secretariat for the first time(A) In the Secretariat, audit activities includingin eight years since 1984. Also, the Office ofcross-cutting audits that had been conductedTraining which has jurisdiction over affairs ofby the Special Programs Division for special

implementation

was

issues on which the Secretary General ofestablished as an organization attached to the

BOA required such audits were transferred toTraining Division. The officials of the Office of

bureaus. In line with this, one Senior

Training were ordered to work at Annaka City,

Director of the Special Programs Division

Gunma Prefecture, from October 1992 when

was reduced in place of newly establishing

BOA's

opened.

the National Property Audit Division in the

Moreover, in line with this reform, one Senior

1st Bureau. The names of the remaining two

Director of the Special Programs Division was

Senior Directors of the Special Programs

Annakaoftraining

Training

sessions

Center433

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Divisions werechangedtotheDivision was transferred to the 5th Bureau.

SeniorDirector of Audit Policy Planning Division(E) In the 5th Bureau, the Special Issues Audit

and the Senior Director of Audit Technique

Division was newly established to conduct

and Methodology Study Division, and theaudits of not predetermined audit subject

Special Programs Division was abolished.

matters but special issues for which audits(B) In the 1st Bureau, the new National Property

were requested by the Secretary General of

Audit Division was established for enhancing

BOA, so as to be able to promptly conduct

the State's final accounts analysis, etc. It has

audits of matters of special public concern

jurisdiction over audits of the Ministry of

and audits requested by the Diet. The

Finance's national property, the Japan Mint,

division was also to conduct analysis, etc. of

the National Printing Bureau, etc. that had

policy evaluation and financial statements.

been handled by the Finance Audit Division

These efforts were aimed at enhancing theand audits of JT that had been handled byorganizational structure for responding to

the Railways Audit Division of the 5th

prompt audits, audits requested by the Diet,

Bureau. This resulted in forming a two-anddivision organizational structure for financefinancial statements, etc. In addition, due toaudits once again. Additionally, a team for

expectation of a decrease in work volume in

exclusively handling the State's final accounts

line with the full privatization of the three

analysis was established under the Director ofJapan Railway (JR) companies in Honshu,

Final Accounts Verification of the Financethe Railways Construction Audit Division

Audit Division.

was abolished, and the division's work was(C) Inthe

2 ndestablishment

Bureau,
of

the

with
Ministry

exclusively

handling

auditsofpolicyevaluation

and

the

new

transferred to the Railways Audit Division,

of

the

formingofaone - divisionorganizational

structure for railways audits.

Environment, a Director for Special Audits
for

analysisthe

Ministry of the Environment was introduced(5) Reform on April 1, 2005 (establishment of
the Special Issues Audit Division, etc.)

in the Health & Welfare Audit Division and

In order to appropriately respond to various

a team in charge of the Ministry ofdevelopments such as a review of existing

Environment

systemswasestablished

under

the

Director for Special Audits.

andactivities

in

the

fieldsadministration,

financeandpublicofsectornew

accounting, the organization was restructured by,establishment of the Ministry of Education,for example, reallocating affairs of audit among

Culture, Sports, Science and Technology

the respective divisions. The major revisions were

(MEXT),

organizational

as follows. Among these, the change in the

structure was formed for education, science

distribution of activities among the respective

and technology audits by, for example,

divisions was implemented in the previous year,

transferring the Science & Technology Audit

in December 2004.

Division of the 5th Bureau to the 4th Bureau.

A. Expansion of special issues audits

In line with this, the Postal Services Audit(A) In order to expand audits of special issues(D) In

the

4 th

a

Bureau,withthree-division

the

434

Section 2 Changes in BOA's Organization

requested by the Secretary General of BOA(special issues audits) and enhance theD. Response to changes in the organizational
forms of auditees

framework for responding to cross-cutting(A) In order to form an organizational structure

audits, prompt audits, policy evaluation andfor conducting consistent audits for national

analysis, etc., the Special Issues Audit

university

Division for Ministries was newly establisheduniversities from the viewpoint of corporatein the 5th Bureau, forming a two-division

management, audits of subsidies for privateorganizational structure for special issues

universities

audits.

Education Audit Division of the 4th Bureau
and(B) One Assistant Secretary General was added

corporations

were

were

and

separatedtransferredtoprivate

from
the

the

National

to the Secretariat to exclusively engage in

University Audit Division of the 4th Bureau.

collective coordination of the special issues(B) In order to make a single division responsible

audits that are to be expanded, forming an

for the audits of the Nippon Telegraph andorganizational

Telephone Corporation (NTT) Group and thestructureof

12

Assistantcompetent ministry which has jurisdiction

Secretaries General.
B. Expansion of the State's final accounts
analysis and response to issues of public
sector accounting

over NTT, only audits of the Japan Post wereIn order to expand the State's final accounts

transferred to the Telecommunications Audit

analysis,thedistributionofactivities

left with the Postal Services Audit Divisionof the 5th Bureau and the rest were
Division of the 5th Bureau, whose name waswasreviewed by, for example, separating activities

changedtothe

Information

related to the former Ministry of Home Affairs

Communication Audit Division.

&from the Finance Audit Division of the 1st(C) Given a decrease in the work volume in line

Bureau and transferring them to the Nationalwith the full privatization of East JR and

Property Audit Division of the 1st Bureau. Also,West JR, one Director for Consolidated Audit

one Director for Special Audits was set up in theof the Railways Audit Division of the 5th

Finance Audit Division so as to respond to issues

Bureau was abolished. Also, the division wasof public sector accounting such as introducing

abolished and its work was transferred to theapproaches and methods adopted by corporate

new Railways Construction Audit Division of

accounting.

the 5th Bureau.

C. Efforts fordiscipline

improvingtheE. Review of activities of the Secretariat

accounting(A) In April 2003, the Postal Services Agency
becameIn an effort to efficiently conduct activities

Japan

Post,

and

post

officefor supporting government ministries to enhance

employees in charge of cash handling wereand strengthen their internal audits, etc., one

no longer subject to adjudication of liability

Director of Audit Policy Planning for such workfor

was added as a director attached to the Audit

expected to reduce the work volume of

Policy Planning Division of the Secretariat.

adjudication, etc., one of the Senior Director

indemnity.

Since

this

changewasposts of Adjudication Division was abolished.
435

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)(B) By reviewing the technical fields to be

Bureau were integrated to form the Environment

covered, Technical Counselor was reduced& Regional Development Audit Division of thethe number of from four to three-person

3rd Bureau.

organizational structure, in exchange for(C) Expansion of the organizational structure forestablishing the new Railways Construction

auditsofthe

Audit Division in the 5th Bureau.

communications field

information

andThe Information & Communication Audit(6) Reform on April 1, 2009 (restructuring of
the organization)

Division of the 5th Bureau, which was in charge

Restructuring of the organization includingof audits of the Ministry of Internal Affairs andthe Secretariat was carried out in order toCommunications (the part relating to the former

appropriately

the

Ministry of Posts and Telecommunications) thatenvironment surrounding BOA, such as changes

coordinates policy concerning information andincommunications, was to also take charge oftherespondwork

tovolume,changes

workincontents

andorganizational management forms of auditees andcross-cutting

growing calls for cross-cutting audits and prompt

technology projects. In addition, for leveling theand flexible audits (see the figure on page 437).

work volume, the Japan Broadcasting Corporation

The major revisions were as follows.

(Nippon Hoso Kyokai) (NHK) & NTT Audit

A. Response to changes in the work volume,
work
contents,
andorganizational
management forms of auditees

Division was established in the 5th Bureau to(A) Establishment

of

the

Grant

for

auditsconcerning

information

conduct audits of corporations including NHK.
(D) Restructuring of the organizational structure
for audits of the transportation field

Local

In order to secure consistency between

Government Audit Division

audits of policy planning and audits of policy

In order to carry out the affairs of audit ofandimplementation of the Railway Bureau of theCommunications more efficiently and effectively

Ministry of Land, Infrastructure, Transport andby consolidating such affairs that had been

Tourism

divided among three divisions into one and toConstruction Audit Division of the 5th Bureau

enhance and strengthen cross-cutting audits of

was abolished, and the works handled by the

grants to local governments, etc., the Grant fordivision was transferred to the 3rd Bureau. At the

Localsame time, the works handled by the Port &theMinistryofGovernment

Internal

Audit

Affairs

Division

was

of

etc.,

the

new

Railways

Aviation Audit Division and the Aviation Audit

established in the 1st Bureau.
(B) Establishment(MLIT),

theEnvironment

Division of the 3rd Bureau were reorganized due

andRegional Development Audit Division

to the divisions' growing work volume, and those

In order to expand audits that respond to theworks were to be divided between the Port &growing

importanceofAviationenvironment- related

Audit

DivisionandtheSurfaceofTransportation Audit Division of the 3rd Bureau.

Environment Audit in the Health & Welfare
Audit Division of the 2nd Bureau and the Urban

B. Response to calls for cross-cutting audits
and prompt and flexible audits& Rural Development Audit Division of the 3rd(A) Expansion of the organizational structure forpolicyinthegovernment,

theOffice436Section 2 Changes in BOA's Organization

conducting cross-cutting audits

collective coordination of related affairs.

In order to expand audits of fields that have
local

C. Response to call for improving theefficiency of organizational management
and the audit quality

and(A) Consolidation of the Research & International

communications, the audit divisions that audit

Division and the Audit Technique andmatters deeply related to these fields were given

Methodology Study Division

responsibility to conduct cross-cutting audits ofIn order to form an organizational structure

the respective fields when specially required byfor carrying out the work of research and study

the Secretary General. Specifically, this enabledof the Audit Technique and Methodology Study

the Finance Audit Division (Office of Final

Division and the international work of the

Accounts Verification) of the 1st Bureau to

Research

conduct cross-cutting audits of special accounts,

integrated manner, the Audit Technique and

the Grant for Local Government Audit Division

Methodology Study Division was abolished, andof the 1st Bureau to conduct such audits of grants

the division's work was consolidated with the

to local governments, and the Information &work of the Research & International Division.

Communication Audit Division of the 5th Bureau(B) Conversion of the Training Division into thedrawn special public concern in recent years,
such

as

specialgovernments,

accounts,
andgrantsinformation

to&International

Division

to conduct such audits of information andCapacity Development Division, etc.

communications.

In(B) Establishment

of

a

new

order

to

respond

to

the

in

an

growing

importance of maintaining or improving the level

Coordination

Division in each bureauof BOA's audit by raising its audit capabilities to

In order to expand the prompt and flexible

deal with diverse and technical fields and theaudits specially required by the bureau's Director

importance of carrying out work to improve theGeneral relating to matters under the jurisdictionlevel of internal audits conducted by ministriesof the respective bureaus, a new Coordination

andDivision was established in each bureau in place

convertedof each bureau's former Coordination Division.

Division, and the Office of Public Sector(C) Introduction

Accounting

of

the

Assistant

Secretaryagencies,
into
and

the

TrainingtheCapacity

Auditing

Divisionwas

Development

Cooperation

wasGeneral for General Audit Affairs

established as an office attached to the division,

One Assistant Secretary General was added

forming a comprehensive organizational structure
for capacity development.

to exclusively engage in the participation in theplanning and proposal of general audit affairs andOutline of the organizational restructuring in April 2009
New organizational structure
Secretariat Management
Division

Formerorganizational Outline of transfer of affairs
structure
Management Division
Affairs other than those transferred to the Legal Affairs Divisionand the Capacity Development Division
Audit Policy
Planning Organization and coordination of the planning and conducting of
Division
audits437

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Research
International
Division& Research & International All affairs
Division
Audit
Techniqueand Research activities concerning audits
Methodology
Study
Division
Legal
Affairs Legal Affairs Division
Affairs other than those transferred to the Audit Policy Planning
Division
DivisionManagement Division
Information disclosure; personal information protection; sending,receiving, and keeping of documents; publication of documents inofficial gazettes; printing
Audit
Policy Audit Policy
Planning Affairs other than those transferred to the Management Division and
Planning Division Division
the Capacity Development Division
Legal Affairs Division
Administration of the Information Disclosure and Personal
Information Protection Review Board
Capacity
Training Division
All affairs
Development
Management Division
The briefing of annual audit reports to deputy vice-ministers, senior
Division
directors of accounts divisions, auditors, etc. of auditees; dispatch of
lecturers to auditees
Audit Policy
Planning Research on internal audits, etc. of auditees
Division
1st Bureau Coordination
Coordination Division of All affairs and audits conducted on receiving a special mission from
Division of the the 1st Bureau
the bureau's Director General
1st Bureau
Finance
Audit Finance Audit Division
Affairs other than those transferred to the National Property Audit
Division
Division
Construction Planning
Cabinet Office's accounting concerning development of Okinawa;& Housing Audit Division Okinawa Institute of Science and Technology Promotion
Corporation.
(New)
Cross-cutting audits of accounting concerning special accounts
National Property National Property Audit Affairs other than those transferred to the Grant for Local
Audit Division
Division
Government Audit Division
Finance Audit Division
BOA; National Personnel Authority; Imperial Household Agency;
Fair Trade Commission
Judicial Affairs Judicial
Affairs
Audit Affairs other than those transferred to the Grant for Local
Audit Division
Division
Government Audit Division
Grant for Local National Property Audit Local Administration Bureau, Local Public Finance Bureau, andGovernment
Division
Local Tax Bureau of the Ministry of Internal Affairs andAudit Division
Communications (MIC); Local Autonomy College; MIC's
accounting concerning the Special Account for the Allotment ofLocal Allocation Tax and Local Transfer Tax; Fire and Disaster
Management Agency; Fiscal Loan Fund's accounting concerning
local government bonds and loans to local governments; Japan
Finance Organization for Municipal Enterprises
Judicial
Affairs
Audit National Public Safety Commission; Japan Safe Driving Center
Division
Foreign
Affairs
Audit The Minister's Secretariat, Administrative Management Bureau,
Division
Administrative Evaluation Bureau, Statistics Bureau, and DirectorGeneral for Policy Planning (Statistical Standards) of MIC; PublicFoundation for Peace and Consolation
PublicPensionAudit Personnel and Pension Bureau of MIC (accounting concerning
Divisionpublic service pensions)(New)
Cross-cutting audits of accounting concerning grants to local
governments, etc.
Foreign Affairs Foreign
Affairs
Audit Affairs other than those transferred to the Grant for Local
Audit Division
Division
Government Audit Division
1st Tax Audit 1st Tax Audit Division
All affairs
Division
2nd Tax Audit Division
Kanazawa Regional Taxation Bureau

438Section 2 Changes in BOA's Organization
2nd Tax
Division
2nd
Bureau3rd
BureauAudit 2nd Tax Audit Division
Affairs other than those transferred to the 1st Tax Audit Division
3rd Tax Audit Division
All affairs
Coordination
Coordination Division of All affairs and audits conducted on receiving a special mission from
Division of the the 2nd Bureau
the bureau's Director General
2nd Bureau
Health & Welfare Health & Welfare Audit Affairs other than those transferred to the Medical Care Audit
Audit Division
Division
Division and the Environment & Regional Development Audit
DivisionLabor Audit Division
Japan Labour Health and Welfare Organization
MedicalCare
Audit Special Account for the National Center for Advanced andDivision
Specialized Medical Care; National Hospital Organization
PublicPensionAudit Social Welfare and War Victims' Relief Bureau of the Ministry ofDivision
Health, Labour and Welfare (MHLW)Labor
Audit Labor Audit Division
Affairs other than those transferred to the Health & Welfare Audit
Division
Division
MedicalCare Medical
Care
Audit Affairs other than those transferred to the Health & Welfare Audit
Audit Division
Division
Division
Health & Welfare Audit Health and Welfare Bureau for the Elderly of MHLWDivision
PublicPension Public
PensionAudit Pension Bureau of MHLW; Social Insurance Agency (excluding
Audit Division
Divisionaffairs under the jurisdiction of other divisions); Readjustment ofFacilities for Insured Persons and Beneficiaries Organization;
Government Pension Investment Fund; Japan Health Insurance
Association (excluding affairs under the jurisdiction of otherdivisions)
Coordination
Coordination Division of All affairs and audits conducted on receiving a special mission from
Division of the the 3rd Bureau
the bureau's Director General
3rd Bureau
Construction
Construction Planning
Affairs other than those transferred to the Finance Audit Division
Planning& & Housing Audit Division and the Government Financial Institutions Audit Division
Housing
Audit (Respective divisions)(Accounting concerning the construction and maintenance ofDivisiongovernment buildings entrusted by the respective ministries andagencies to the Government Buildings Department of the Minister's
Secretariat of MLIT')Port & Aviation Port & Aviation Audit Affairs other than those transferred to the Surface Transportation
Audit Division
Division
Audit Division
Aviation Audit Division
Civil Aviation Bureau of MLIT; Aeronautical Safety College;
Kansai International Airport Co., Ltd.; Electronic Navigation
Research Institute; Civil Aviation College; Organization forEnvironment Improvement Around International Airport; Narita
International Airport Corporation; Central Japan International
Airport Co., Ltd.
Surface
Aviation Audit Division
Affairs other than those transferred to the Port & Aviation Audit
Transportation
Division
Audit Division
Port & Aviation Audit Railway Bureau, Road Transport Bureau, and Maritime Bureau of
MLIT; Japan Tourism Agency; National Traffic Safety andDivision
Environment Laboratory; National Maritime Research Institute;
National Institute for Sea Training; Japan Agency of Maritime
Education and Training for Seafarers; National Agency of Vehicle
Inspection; Japan National Tourism Organization; National Agency
for Automotive Safety & Victims' Aid
Railways
Construction All affairs
Audit Division
Environment & Health & Welfare Audit Ministry of the Environment; National Institute for Environmental
Regional
Division(Officeof Studies; Environmental Restoration and Conservation Agency; Japan
Development
Environment Audit)
Environmental Safety Corporation
Audit Division
Urban&
Rural All affairs
Development
Audit
Division
439

Part 34th
Bureau5th
BureauChapter 4

Audit in the Heisei Era (1989〜)

Coordination
Coordination Division of All affairs and audits conducted on receiving a special mission from
Division of the the 4th Bureau
the bureau's Director General
4th Bureau
Education,
Education Audit Division
MEXT (excluding affairs under the jurisdiction of other divisions
Science&and accounting concerning grants to local governments, etc.)
Technology Audit Science & Technology Science and Technology Policy Bureau, Research Promotion Bureau
Divisionfor Audit Divisionof MEXT (excluding affairs under the jurisdiction of other
General Issues
divisions), and Research and Development Bureau; Japan Scienceand Technology Agency
National University Audit Department of Facilities Planning and Administration of MEXT's
Division
Minister's Secretariat (national university corporations, etc.); Higher
Education Bureau (national university corporations, etc.) andResearch Promotion Bureau (Grants-in-Aid for Scientific Research,etc.) of MEXT; Promotion and Mutual Aid Corporation for Private
Schools of Japan; Japan Society for the Promotion of Science;national university corporations; inter-university research institutecorporations; Center for National University Finance andManagement
Education,
Education Audit Division
MEXT's accounting concerning grants to local governments, etc.
Science&(excluding affairs under the jurisdiction of other divisions); National
Technology Audit
Institute of Special Needs Education; National Women's Education
Division forCenter of Japan; National Institute for Japanese Language and
Education
Linguistics; National Museum of Nature and Science; National
Museum of Art; National Center for Teachers' Development; JapanSport Council; Japan Arts Council; Japan Student Services
Organization; National Institution for Youth Education; National
Institutes for Cultural Heritage; The Open University of Japan
Science & Technology Accounting concerning grants to local governments, etc. under the
Audit Division
jurisdiction of Science and Technology Policy Bureau, Research
Promotion Bureau (excluding affairs under the jurisdiction of otherdivisions), and Research and Development Bureau of MEXT
National University Audit National Center for University Entrance Examinations; National
Division
Institute of Technology; National Institution for Academic Degrees
and University Evaluation
Science& Science & Technology National Institute for Materials Science; National Research InstituteTechnology Audit Audit Division
for Earth Science and Disaster Resilience; National Institute ofDivisionRadiological Sciences; Institute of Physical and Chemical Research(RIKEN); Japan Aerospace Exploration Agency; Japan Agency for
Marine-Earth Science and Technology; Japan Atomic Energy
AgencyAgriculture Audit Agriculture Audit Division Affairs other than those transferred to the Forestry Audit Division
Divisionand the Government Financial Institutions Audit Division
PublicPensionAudit Farmers Pension Fund
Division
Forestry
Audit Forestry Audit Division
All affairs
Division
Agriculture Audit Division Agriculture, Forestry and Fisheries Research Council of the Ministryof Agriculture, Forestry and Fisheries; National Agriculture andFood Research Organization; National Institute of Agrobiological
Sciences; National Institute for Agro-Environmental Sciences; Japan
International Research Center for Agricultural Sciences
Coordination
Coordination Division of All affairs and audits conducted on receiving a special mission from
Division of the the 5th Bureau
the bureau's Director General
5th Bureau
Information& Information& Affairs other than those transferred to the NHK & NTT Audit
Communication
Communication
Audit Division
Audit Division
Division(New)
Cross-cutting audits of accounting concerning information andcommunications

440Section 2 Changes in BOA's Organization
NHK & NTT Information
and NHK, NTT Group
Audit Division
Communication
Audit
Division
Trade & Industry Trade & Industry Audit All affairs
Audit Division
Division
Government
Financial Organization for Small and Medium Enterprises and Regional
Institutions Audit Division Innovation
NaturalNaturalResources& All affairs
Resources& Energy Audit Division
EnergyAudit
Division
Government
Government
Financial Affairs other than those transferred to the Trade & Industry Audit
Financial
Institutions Audit Division Division
Institutions Audit Construction Planning & Japan Housing Finance Agency
Division
Housing Audit Division
Agriculture Audit Division Agriculture, Forestry and Fisheries Credit Foundations
PostalServices Postal
Services
Audit All affairs
Audit Division
Division
Note: There were no changes to the names and affairs of the divisions that are absent in this table.

Ministry

2. Changes in the structure of positionsofInternal

Affairs

andThe structure of positions in the General

Communications), which was newly established

Executive Bureau under the new BOA Act

in line with the reorganization of government

initially started out as follows: Secretary General;ministries and agencies.

Deputy Secretary General; Directors General;

The Senior Assistant Secretary General was

Senior Directors; Deputy Directors; Chiefs; andinitially in charge of collective coordination of

Officials. Then in the Heisei era, the system

the planning and coordination of audits, cross-underwent the following changes.

cutting audits conducted by the Special Programs
Division of the Secretariat, etc., public relations,(1) Senior Assistant Secretary General (from1989; the name changed from Senior
Assistant
Secretary
GeneralforManagement in 2001)

and exchange of opinions concerning public
sector auditing. The matters to be collectively
coordinated by the Senior Assistant Secretary

In May 1989, one Senior Assistant Secretary

General have changed in line with subsequent

General for Management of the Director Generalorganizational restructuring, etc. Today, cross-class was introduced in the Secretariat to

cutting audits have been excluded from amongcollectively coordinate affairs concerning thethe initial duties, while administration of theplanning,

comprehensive

Information Disclosure and Personal Information

coordination of important matters of the affairs

Protection Review Board of BOA has been added

under the jurisdiction of the General Executive

to the duties.

Bureau. In January 2001, the name was changed(2) Professional staff (from 2008)

proposalandto the Senior Assistant Secretary General in order

In April 2008, professional staff wereto distinguish the position name (in Japanese)

introduced to BOA for the first time, and three

from the Vice-Minister for Policy Coordination

Senior Directors for Performance Audit Planningof the Ministry of Public Management, Home

were set up in the respective Coordination

Affairs, Posts and Telecommunications (currently

Divisions of the 2nd, 3rd and 4th Bureaus.
441

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Furthermore, in April 2009, one Senior Director

up, revised and abolished as shown in Table 2,

for Performance Audit Planning was added to be

and as of the end of December 2009, there wereattached to the Coordination Division of the 5th

17 Directors for Special Audits in total.

Bureau. The professional staff system was first
introduced in FY2008 as part of the effort toTable 2 Setup, revision and abolishment of Directors forSpecial Audit

improve the environment in preparation for
introducing the multi-track personnel promotion

Date of
Setup

system from the viewpoint of utilizing the highly
professional

knowledge

andApril 1,
1993

experience

accumulated by officials through their public

July 1,
1994

service and responding to their prolonged tenure.
At BOA, professional staff were introduced forsupporting the planning and proposal, etc. ofaudits that particularly focus on the audit
objectivesofeconomy,efficiency

April 1,1995

andeffectiveness by conducting research, study andinformation

analysis,

etc.

based

on

May 11,1996

highlyprofessional knowledge and experience in specific
April 1,
1997

fields of audit.
(3) Director class positions (from 1984)
BOA

started

to

set

up

Director-classpositions such as Directors of Offices andDirectors for Special Audits from April 1984
when the Director of the Office of Training of
the Personnel Division was set up (abolished in
April 1992). Director-class positions set up in the
Heisei era was as follows.
A. Directors for Special Audits (from 1993)
At

audit

divisions which

wereApril 9,1998

facingincreasing complication and sophistication ofaffairs and activities, etc. of auditees, there was aneed to set up positions for exclusively taking

April 1,
1999

charge of audits of audit subject matters whichhave a highly specific nature. For this purpose,
Directors for Special Audits were set up in 1993

April 1,2000

as director class positions for planning andcoordinating specialized matters and conducting
necessary audits therefor.
Directors for Special Audits have been set
442

Audit divisions in
Status of revision
which a Director foror abolishment
Special Audit wasafter the setup
set up
The former Foreign Converted into the
Affairs Audit Division new Director of anof the 1st Bureau
Office in April 1, 2004
The former
Government Financial
Institutions
Audit
Division of the 5th
BureauThe former Labor The new Labor Audit
Audit Division of the Division of the 2nd
2nd Bureau
BureauThe former Postal The
new
PostalServices
Audit Services
Audit
Division of the 4th Division of the 5th
BureauBureauThe former Science & The new Education,
Technology
Science & Technology
Audit Division of the Audit Division for
5th Bureau
Education of the 4th
BureauThe former
Converted from the
Telecommunications
former Information &Audit Division of the Communication
5th Bureau
Audit Division of the
5th Bureau into thenew
DirectorforSpecial Audits of the
NHK & NTT Audit
Division of the 5th
Bureau on April 1,
2009
The former Judicial
Affairs Audit Divisionof the 1st Bureau
The former Highway
Audit Division of the
3rd Bureau
The former Public The
new
PublicPensionAudit Pension
Audit
Division of the 2nd Division of the 2nd
BureauBureauThe former Ground Converted into the
DefenseAudit new Director of an
Division of the 2nd Office in April 1, 2003
BureauSection 2 Changes in BOA's Organization

As shown in Table 3, there were 10

January 6, The former Health & Converted into the2001
WelfareAudit new Director of an
Division of the 2nd Office in April 1, 2002
BureauJanuary 1, The former Special
2003
Issues Audit Divisionof the 5th Bureau
April 1, The former Medical
2003
Care Audit Division of
the 2nd Bureau
The former Fisheries& Livestock Audit
Division of the 4th
BureauApril 1, The former Special Converted into the
2004
Issues Audit Division new
Directorforof the 5th Bureau
Special Audits of theSpecial Issues Audit
Division for Ministriesof the 5th Bureau on
April 1, 2005
April 1, The former Finance The
new
Finance
2005
Audit Division of the Audit Division of the
1st Bureau
1st Bureau
April 1, The former Aviation Converted into the2007
Audit Division of the new
Directorfor
3rd Bureau
Special Audits of thePort & Aviation Audit
Division of the 3rd
Bureau on April 1,
2009
April 1, The former National The new National
2008
Property
Audit Property
Audit
Division of the 1st Division of the 1st
BureauBureauThe former Maritime
Defense
Audit
Division of the 2nd
BureauApril 1, The former
2009
Environment&
Regional Development
Audit Division of the
3rd Bureau

Directors of Offices within audit divisions as ofthe end of December 2009.
Table 3 Setup, revision, and abolishment of Directors of
Offices within Audit Divisions

have jurisdiction over extensive audit subject

Audit division in
Director of Office
which an office was
set upestablished
April 1, Finance
Audit Director of the Office
2001
Division of the 1st of Final Accounts
BureauVerification (Note)
April 1, Health & Welfare Director of the Office
2002
Audit Division of the of Environment Audit
2nd Bureau(abolished in April 1,
2009)
January 1, Construction Planning Director of the Office
2003&
Housing
Audit of Consolidated Audit
Division of the 3rd of Land, Infrastructure
Bureauand Transport
April 1, Ground Defense Audit Director of the Office
2003
Division of the 2nd of Cost Audit
BureauAgriculture
Audit Director of the Office
Division of the 4th of Consolidated Audit
Bureauof
Agriculture,
Forestry and Fisheries
April 1, Finance
Audit Director of the Office
2004
Division of the 1st of Audit on Financial
BureauServices
Foreign Affairs Audit Director of the Office
Division of the 1st of Audit on Economic
BureauCooperation
Education
Audit Director of the Office
Division of the 4th of Consolidated Audit
Bureauof Education, Scienceand Technology
April 1, 1st Tax Audit Division Director of the Office2005
of the 1st Bureauof Consolidated Audit
of TaxApril 1, Health & Welfare Director of the Office
2006
Audit Division of the of Consolidated Audit
2nd Bureau
of Health & Welfare
April 1, Trade&
Industry Director of the Office
2007
Audit Division of the of Consolidated Audit
5th Bureauof Trade and Industry
Note: The Director of the Office of Final Accounts Verification
was converted from the Director of Final Accounts
Verification that had been set up in the Finance Audit
Division of the 1st Bureau on April 12, 1991.

matters, offices to which auditors, etc. have been

C. Other positions of director class

Date of
setup

B. Directors of Offices within Audit Divisions(from 2001)
In

order

to

further

improvetheorganizational structure of audit divisions thatassigned were established within those divisions

The status of setup revision and abolishmentfrom 2001, and the Director of the Office was setof director-class positions other than thoseup to each such office as a director class position

mentioned in A. and B. above is as shown into deal with the affairs of the office.

Table 4. As of the end of December 2009, there
443

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

were 14 officials in such positions in theof Management Division that had been set up in theManagement Division of the Secretariat on April 1,
2001.
3. The Director of the Office of Information Disclosureand Personal Information Protection Review Board of
BOA was converted from the Director of the Office of
the Information Disclosure Review Board of BOA thatwas set up in the Legal Affairs Division on April 1,
2001, and it was further converted to a positionattached to the Audit Policy Planning Division of theSecretariat on April 1, 2009.
4. The Director of the Office of Public Sector Accounting
and Auditing Cooperation was converted from the
Director of Audit Policy Planning for Secretariat thatwas set up as a position attached to the Audit Policy
Planning Division on April 1, 2005.

respective divisions of the Secretariat (see page349).
Table 4 Setup, revision, anddirector-class positions

abolishment

of

other

Division inwhich aJob title ofDate ofdirector-classthe director-class position
setup
position was
set upManagement Director of the Office of Public May 21,
Division
Relations1987
Director of the Management April 1,
Division (abolished on April 1, 20012009)
Director of the Management April 1,
Division
2006
Personnel
Director of the Personnel Division June 8,
Division
1990
Director for Staff Inspection, April 1,
Personnel Division
2009
Research & Director of the Office of Data and May 21,
International Information
1987
Division
Director of the Office of May 29,
International Affairs
1989
Director for Audit Technique and July 1,
Methodology Study (Note 1)
1994
Accounts
Director of Accounts Division
April 5,
Division
1986
Legal Affairs Director
forInformation April 1,
Division
Disclosure
andPersonal 2009
Information Protection, Legal
Affairs Division (Note 2)
Audit Policy Director of the Office of April 1,
Planning
Information
Disclosureand 2005
Division
Personal Information Protection
Review Board of BOA (Note 3)
Capacity
Director of the Office of Training April 10,
Development
1992
Division
Director of Training Division
April 1,
(Training
1995
Division
Director of Training Division
May 11,
until March
1996
31, 2009)
Director of the Office of Public April 1,
Sector Accounting and Auditing 2009
Cooperation (Note 4)
Note: 1. The Director for Audit Technique and Methodology
Study was set up as a position attached to the Special
Programs Division of the Secretariat on July 1, 1994. It
was converted to a position attached to the Audit
Technique and Methodology Study Division of theSecretariat on January 6, 2001, and further converted toa position in the Research & International Division on
April 1, 2009.
2. The Director for Information Disclosure and Personal
Information Protection was converted from the Director

3. Changes in the fixed number of officials(1) Changes in the fixed number of officials in
the Heisei era
A net increase of a few persons has been
observed in the fixed number of BOA officials
every fiscal year since FY1975 in order toenhance and strengthen its audit function. In FY
2004, a substantial increase was observed in thenumber of officials so as to respond to earlysubmission of the final accounts. The fixed
number of BOA officials in FY2009 was 1,284
persons.
(2) The 40-person increase in FY2004
In May 2003, the House of Councillors
requested the government to submit the final
accounts to the Diet on around November 20 of
the year following the fiscal year, starting from
FY2003, in order to achieve early deliberation of
the State's final accounts. In response, at theplenary session of the House of Councillors on
June

16,

2003,

Prime

Minister

Junichiro

KOIZUMI stated that, with regard to earlysubmission of the final accounts, efforts will bemade in cooperation with BOA to be able tosubmit them on around November 20, startingfrom the final accounts for FY2003.
BOA also decided to send the annual audit
report to the Cabinet at an earlier timing in
444

Section 2 Changes in BOA's Organizationconsideration of the purport of the House ofgovernment, the government set forth in the Key

Councillors' request, but it was necessary to

Policies for Administrative Reforms (adopted byaccelerate the audit cycle. In particular, thethe Cabinet on December 24, 2005) that it will

projects in the fiscal year for verification of thedrastically reduce the total personnel expenditures

final accounts could only be audited on a fullof public employees by strongly promoting ascale in April onward; in addition, BOA needed

drastic net decrease in the fixed number of

to finish the field audits about one month earlier

officials and reform of their remuneration system,

than before by June, and start compiling the audit

and that it will formulate an Action Plan on the

results. As a result, conducting audit during theReform of Total Personnel Expenditures thatconventional audit period in July is difficult.

covers both national and local public employees

Therefore, in order to send the annual audit

and gradually apply it to budgets starting from

report to the Cabinet at an earlier timing and to

the FY2006 budget. Specifically, the government

secure sufficient audit performance, BOA wasaimed to decrease, on a net basis, the number ofrequired to make utmost efforts to further

national public employees, excluding employees

improve

activities

of Japan Post (687,000 persons in terms of the

including acceleration of the field audits andfixed number of officials) by more than 5% over

improvement of the organizational structure, as

the next five years. To achieve this goal, it

well as to strengthen the organizational structure

decided to decrease, on a net basis, the fixed

by securing the minimum number of officials

number of national government administrativeneeded for the audits in the July period byorgans (332,000 persons) by more than 5% overincreasing the number of BOA officials. To thisthe next five years, and also to request the Diet,

end, in its budget request for FY2004, BOA

courts,requested an addition of 58 officials as the

Authority to take a similar measure as that ofnumber necessary for responding to the earlynational government administrative organs withsubmission of the final accounts. As a result,regard to their fixed number of officials (32,000

addition of 44 auditors was allowed.

persons) while giving consideration to theirtheefficiency

of

audit

BOA

and

the

National

Personnel

Accordingly, under the FY2004 budget, therespective characteristics, etc. Further, the Chief

fixed number of BOA officials became 1,297

Cabinet Secretary requested the Secretary Generalwith a net increase of 40 persons, as a result ofof BOA to cooperate in the Reform of Total

reducing 13 officials and adding 44 auditors as

Personnel Expenditures.

above, as well as being allowed to add nine

In May 2006, the Act on Promotion of

officials as the number necessary for improving

Administrative Reform for Realization of Smallthe organizational structure to appropriately andand Efficient Government was adopted andpromptly cope with the trends of administrative

enacted at the Diet, and the Reform of Total

and financial reform and requests from the Diet.

Personnel Expenditures became a statutory matter(3) Reduction of officials due to the Reform of
Total Personnel Expenditures implemented
from FY2006 onward

provided in Chapter II, Section 4 of said Act.

For

realizing

a

small

and

Also, Article 43, paragraph (1) of the Act
provided that the government is to aim to
decrease the year-end total number of national

efficient445

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

public employees in FY2010 by a number

demonstrate the skills and experience they haveequivalent to 5% of the year-end total number ofaccumulated over many years.

national public employees in FY2005 on a net

The reappointment system is a system ofbasis, and that it is to take necessary measures forappointing a person who has mandatorily retired,achieving this aim. The year-end total number of

etc. by means of selection based on the work

national public employees set forth in said

performance before retirement, etc., with a term

paragraph was to also include the fixed number

of office not exceeding one year. The term ofof BOA officials. After that, the Chief Cabinet

office may be renewed within a limit not

Secretary requested BOA to cooperate in theexceeding one year by obtaining the consent of

Reform of Total Personnel Expenditures oncethe person in question in advance, if said person

again. Consequently, the fixed number of BOA

has performed his/her duties satisfactorily during

officials was also reduced.

his/her immediately preceding term of office. The

While securing personnel engaged in audits

last day of the term of office is to be no laterin correspondence with the increasing amount ofthan the first March 31 that comes after theaudit activities, BOA decided to reduce the fixedreappointed official reached 65 years old, but the

numberinternal

upper age limit for the term of office is to be

management affairs (317 persons) by 32 persons

raised in stages from 61 years old to 65 years oldover a period from FY2006 to FY2010.

over the period until April 2013 in line with theofpersonnel

engagedinraising of the age at which people start receiving
retirement mutual aid pension.

4. Changes in the personnel system

There(1) Employment of elderly people

are

two

work

patternsforreappointment: full-time work (38 hours and 45

A. Reappointment (from 2002)
Amid the arrival of a full-fledged aging

minutes, per week; until FY2008, 40 hours per

society, the age at which people start receivingweek); and part-time work (from 15 hours and 30

retirement mutual aid pension (the fixed amountminutes to 31 hours per week; until FY2008, 16

corresponding to the basic pension plus thehours to 32 hours per week). BOA started

amount of additional pension) was to be raised inoperating the system by reappointing one full-stages by one year of age every three years fromtime press operator and two part-time automobile

60 years old to 65 years old over the period fromdrivers (working 20 hours per week) from

April 2001 to April 2013, as part of the reform

FY2002.
As for part-time work, budgetary means areof the entire public pension system.
In light of such a situation, the system ofrequired concerning the fixed number of officials,

reappointment of persons who have mandatorily

and in FY2002, three skilled work officials (20retired, etc. has been implemented in stages fromhours per week) were approved for the first time.

April 2001 in order to achieve coordination

Then, with regard to officials in the regular

between employment and pension so that officials

service, five auditors (working 24 hours per

can devote themselves to their duties withoutweek) were approved in FY2007, 13 auditors

feeling anxious about their lives after mandatory

were approved in FY2008, and a total of 27

retirement,

auditors, specifically, 22 auditors (working 23

and

in

order

to

effectively
446

Section 2 Changes in BOA's Organization

hours and 15 minutes per week) and five auditors

audit activities including field audits, and to(working 31 hours per week) were approved in

expand their promotion in the ranks.
Also, in order to contribute to their smooth

FY2009.
(2) Appointment of female officials

participation in audit activities, BOA decided to

A. Appointment to a Senior Deputy Director,
etc.

have all officials in positions up to Chiefs take

Notable appointments of female officials in

had been taken by officials specialized in audit,

the Junior Auditors Training Course (I), which

the Heisei era include the following.

or the newly established Basic Training Course(A) On December 18, 1989, a female official wasof Audit Activities, and conducted these training
courses for these officials from FY2006.

appointed as the Senior Deputy Director of
the Secretariat for the first time. Then on

In line with the expansion of duties ofDecember 15, 2000, a female official was

officials specialized in administration to include

appointed as the Senior Deputy Director of

audit activities, the framework for engaging in

the Coordination Division of a bureau for thefield audits was improved by making effort tofirst time.

review how duties should be divided within theaudit division to which such officer belongs and(B) As for Specialist positions which are higher
than Chiefs, a female official was appointed

how work should be allocated and carried out.

as the Health and Welfare Service Officer(3) Utilization of external human resourcesfrom the private sector, etc. withprofessional knowledge and experiencethat was set up as a position attached to the
Health and Welfare Service Division of thethe

In order to utilize capable external human

Coordination Officer that was set up in eachresources from the private sector, etc. with

Coordination Division of Bureaus 1 to 3

expertise and diverse experience which cannot befrom FY1993 to FY1995. Further, in April

acquired through training in the public sector for

1994, a female official was appointed as theenhancingTraining Planning Officer of the Office of

employs university professors, etc. as part-timeTraining attached to the Training Division ofVisiting Research Fellows, employs certified

the Secretariat.

public accountants, tax accountants, think tank

Secretariat

in

April

1992

and

as

and

strengthening

audits,BOA

B. Expansion of duties of officials specialized
in administration to include audit activities

employees, etc. as part-time Special Researchers,

Due in part to the national policy to expand

auditors in the position of full-time officials withand employs certified public accountants as

employment and promotion in ranks of female

a fixed term of office.

officials in order to achieve a gender-equal

A. Special Researchers (from 1999)

society, as set forth in the Second Basic Plan for

Prompted by the issue of manufacturers'

Gender Equality (adopted by the Cabinet on

overcharging for defense equipment throughDecember 27, 2005), BOA decided to expand theoverstating

duties of female officials, particularly officials

working hours in which workers directly engaged

specialized in administration, by increasing theirin manufacturing, etc.), BOA decided to utilize

opportunities to experience diverse duties such as

the advanced knowledge and experience of
447

the

man-hours(thenumberofPart 3

Chapter 4

Audit in the Heisei Era (1989〜)

certified public accountants who are well-versed

SpecialMeasuresof

Employment

andin corporate cost accounting in audits, in order toRemuneration of Officials with Fixed Term of

improve and enhance the organizational structure

Office in the Regular Service whereby BOA canfor cost accounting of defense equipment. In

employ those who have professional knowledge

addition, BOA decided to utilize external humanand experience that are useful for public service,resources from the private sector, etc. withby specifying the term of office, and pay

professional knowledge and experience also inremuneration suitable for the high expertise.

fields other than defense audits, according to the

As a result, on April 1, 2004, BOA

needs in audit, so as to further enhance andemployed two certified public accountants asstrengthen audits.

officials with a fixed term of office for the firstAs a result, in May 1999, BOA started totime, and further employed five additional

employ external human resources from thecertified public accountants as officials with a

privateSpecialfixed term of office by July of the same year.

Researchers who are hired only for the necessary

These seven certified public accountants wereperiod in each fiscal year. To date, certified

assigned to audit divisions in charge of auditees

public accountants, tax accountants, full-time

includinguniversity instructors, think tank employees, etc.

government financial institutions, expressway

have been employed as Special Researchers, andcompanies

they have supported audits in the fields including

agencies. Further, from April to July 2009, BOA

cost accounting, consumption tax, public sector

employed five certified public accountants as

accounting, information technology (IT), housing

officials with a fixed term of office and assigned

policy and hospital management, etc.

them to positions attached to the Audit Policy

B. Officials with fixed term of office (from2004)

Planning

sector,etc.

aspart-time

accounting principles, due to privatization ofaffiliatedinstitutions,institutions

etc.,

becoming

thestate's

incorporated

administrative agencies, and national universities
becoming national university corporations, andthe like. Accordingly, BOA decided to utilize theadvanced professional knowledge and experienceof certified public accountants who are wellversed in corporate accounting in audits, so as tofurtherenhanceandstrengthen

audits.

Division,

university
incorporated

etc.

for

structurewithtechniques and viewpoints.

conduct accounting in accordance with corporate
publicandorganizational

There was an increase in auditees thatspecialnationalIn

employing such certified public accountants,
BOA decided to utilize the system of officials
with a fixed term of office under the Act on
448

corporations,administrative

establishinganprivate - sector

Section 3 Audit Activities

Section 3 Audit Activities
Subsection 1

the State or said juridical person, as well. This

Audit subject matters

has expanded the scope of audit of contractors.
1. Scope of audit
The scope of audit is largely divided into
mandatory

audit

subject

matters under

2. Establishment, revision, and abolition of
bodies subject to mandatory audit

theOverview

provisions of Article 22 of the BOA Act and

of

audit

organizations
and

major

subject

todiscretionary audit subject matters under the

mandatory

developments

provisions of Article 23, paragraph (1) of theconcerning their establishment, revision, and

BOA Act (see page. 271)

abolishment in the Heisei era are as described
below.

After the privatization of the three public
corporations (Japanese National Railways, Japan
Tobacco and Salt Public Corporation, and Nippon(1) Overview of bodies subject to mandatory
audit

Telegraph and Telephone Public Corporation),

As a result of the conversion of the State's

the scope of discretionary audit subject mattersresearch institutes, etc. and special accounts into

continued to be accounts of a contractor forincorporated administrative agencies from April

construction rendered to the State or accounts of

2001

a supplier of goods to the State, which relate touniversities, etc. in April 2004, there was a total

the contract with the State, as provided underof 213 organizations subject to mandatory audit

Article 23, paragraph (1), item (vii) of the BOA

as of the end of September 2009 as follows: (i)Act at the time of the enactment. However, the212 juridical persons to which the State has

amounts and proportions of contracts concluded

contributed half or more of the stated capital,

withincludingcontractors

forservices

other

than

and

the

incorporation

government - affiliatedofnational

institutions,construction and with persons entrusted withincorporated administrative agencies, national

administrative work or services, rendered to theuniversity corporations, and the Bank of Japan;

State,and (ii) one organization that was specially madewereexpanding

and

their

financialmanagement came to raise an issue. Thus, thesubject to BOA's audit under law(Japanamendment of the BOA Act in November 2005

Broadcasting

Hosoenabled BOA to conduct audit of accounts of (i)Kyokai) ).

a contractor for services other than construction,
or a person entrusted with administrative work or(2) Current situation of the three former
public corporations

services, rendered to the State, and (ii) a

With regard to Japan Tobacco Inc. (JT;Tobacco( Nipponcontractor for construction or other services, or aformerperson entrusted with administrative work or

Corporation )services, rendered to a juridical person to which

Telephone Corporation (NTT; former Nippon

the State has contributed half or more of the

Telegraph and Telephone Public Corporation),stated capital, or a supplier of goods to said

their state-owned shares have been graduallyjuridical person, which relate to the contract withsold. The proportion of NTT shares held by the
449

Japan

Corporation

and

and

NipponSalt

PublicTelegraphandPart 3

Chapter 4

Audit in the Heisei Era (1989〜)State became less than a half of the total number

Bureau, Japan Mint, and National Hospitals, etc.

of shares in 2000, and NTT was excluded fromwere changed into incorporated administrative

organizations

agencies. Also, many public corporations andsubjecttomandatory

audit.

However, since the State still holds more than aagencieswerechangedinto

incorporated

half of JT shares, JT is subject to mandatory

administrative agencies successively as part ofaudit.

special public institutions reform. Furthermore,
Railwaysnational universities, etc. which were accounted

Settlement Corporation, which was subject tofor under the Special Account for National

mandatory audit (see page 353), was dissolved in

Schools were changed into national university

October 1998, and its rights and obligations were

corporations, etc. in April 2004.

Meanwhile,

Japanese

National

Subsequently,

assumed by Japan Railway Construction Publicthenumberofjuridical

Corporation (JRCC). Further, the JRCC was also

persons to which the State has contributed half or

dissolved in October 2003, and its rights andmore of the stated capital slightly decreased due

obligations were assumed by Japan Railway

to implementation of measures to consolidate or

Construction, Transport and Technology Agency,

abolishwhich was established on the same date. The

agencies, etc., but as mentioned above, thestatus of the respective Japan Railway (JR)number was as high as 212 as of the end ofcompanies will be discussed later.

September 2009.

(3) Establishmentofincorporated
administrative agencies, conversion of
special public institutions into incorporated
administrative agencies, and incorporationof national universities(4) Privatization of Japan Post
In

some

Octoberincorporated

2005,

the

administrative

PostalService

Privatization Act (Act No. 97 of 2005) was
enacted

under

the

Cabinetof

Junichirou

The Administrative Reform Council, which

KOIZUMI, which achieved an overwhelming

held meetings from 1996 to 1997, recommended

victory in the immediately preceding House of

in its final report that, as a measure for

Representatives election. Under this Act, postal

streamlining

outsourcing

services which had been run by the State sinceincorporated

the Meiji era (the late 19th century) were to beadministration

administrativeandservices,

privatized.

administrative agencies should be established tosecurely and properly implement the types of

The privatization was a large-scale reformState projects and programs which do not need tothat divided Japan Post into six corporations: one

be directly implemented by the State itself, but

holding company, four business companies, andwhose

one incorporated administrative agency. Thus, it

secureimplementation

cannotbe

was to be carried out in steps.

guaranteed if entrusted to private entities, and thefailure of whose implementation would cause

First, Japan Post Holdings Co., Ltd., wholly

substantial detriment to the stability of the lives

owned by Japan Post, was established inof the people, society and the economy.

February 2006 as a to-be holding company, andIn response, starting with the establishment

the management committee function was assignedof 57 incorporated administrative agencies in

to it. In October 2007, Japan Post was abolished,

April 2001, special accounts for the Printing

and the Management Organization for Postal
450

Section 3 Audit Activities

Savings

andPostalLife

Insurance

subject to audit as a result of their shares held by

wasJapaneseestablished.

National

Railways

Settlement

Japan Post Holdings and the Management

Corporation being sold off successively and their

Organization for Postal Savings and Postal Life

being fully privatized in June 2002, March 2004,

Insurance are State-wholly-owned bodies, and are

and April 2006, respectively.

organizations subject to mandatory audit under(3) Determination of NTT and its subsidiarycompanies as audit subjects

the provisions of Article 22, item (v) of the BOA
Act.

Developments

of

the

four

business

A. Determination of the audit subject for NTT
DOCOMO

companies will be discussed later.

With regard to Nippon Telegraph and3. Determination of the audit subject fordiscretionary audit subject matters

Telephone Public Corporation, it was decided

Among the determination of the audit

on Administrative Reform to incorporate a new

subjects, etc. made in the Heisei era, those thatcompany and to separate and transfer a part of its

are considered to be deeply related to theexisting business, in order to realize fair andsocioeconomic situation are explained below.

effective(1) Current situation of oil storage companies

telecommunications carriers (see page 355). In

Eight oil storage companies had been

August 1991, NTT Mobile Communications

determined, over the period from 1983 to 1990,

Network, Inc. (currently NTT DOCOMO Inc.;

to be bodies subject to audit from their

hereinafter referred to as "NTT DOCOMO") wasestablishment onward as entities that have further

incorporated, and businesses including mobile

been contributed to by an entity to whose statedcommunications business, which is a type I

capital the State has contributed (hereinafter

telecommunications business, were transferred toreferred to as "bodies indirectly owned by theit.

based on a report by the Provisional Commission

competition

with

other

Since it was found necessary to ensure

State") as set forth in Article 23, paragraph (1),item (v) of the BOA Act, and were to be madeadequate

subject to annual audits. However, they wereconducting audit on a continuous basis, NTT

excluded from bodies subject to audit as a result

DOCOMO was determined in March 1993 to beof their shares held by Japan National Oila body subject to audit from its establishment

Corporation being sold off completely in January

onward as a body indirectly owned by the State

2004. Then, Japan National Oil Corporation

as set forth in Article 23, paragraph (1), item (v)which had contributed capital to these companiesof the BOA Act, and was to be made subject towas also dissolved in April 2005.

annual audits.

(2) Current situation of JR companies
April 1987 to be bodies subject to audit from

B. Restructuring of NTT and determination of
its three subsidiary companies as audit
subjects

their establishment onward and which were to be

In July 1999, NTT was restructured, andmade subject to annual audits, East JR, West JR,

split its businesses into three companies: NTT

and Central JR were excluded from bodies

East Corporation; NTT West Corporation; andAmong JRs which had been determined in

451

financialmanagement,

etc.

by

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

NTT Communications Corporation. At the same

sold on several occasions, etc. after that, thetime, NTT became the shareholder of these three

State's shareholding ratio in NTT and NTT's

companies, and became the holding company ofshareholding

the NTT Group. Because all of these threedeclined, which decreased the State's indirectcompanies were to engage in telecommunications

ownership in the two companies, and nobusiness stipulated under law, which had been the

additional contribution was planned. In addition,

core business of NTT, and because their statedthe business management of the two companies

capital was large in amount and was entirely

was becoming stable, and both fields were

contributed by NTT, it was found necessary to

gradually

ensure adequate financial management, etc. by

Therefore, the need to conduct audit on a

conducting audit on a continuous basis. Thus, thecontinuous basis was found to have lessened.

three companies were determined in July 1999 to

Accordingly, in January 2007, determination wasbemade to conduct audits of the two companies

bodiessubject

to

audit

from

their

ratiosinsubjected

the

to

two

companies

marketcompetition.

establishment onward as bodies indirectly owned

only up to the accounting for FY2006.

by the State as set forth in Article 23, paragraph(4) Determination of audit subjects byapplying Article 23, paragraph (1), item(vii) of the BOA Act(1), item (v) of the BOA Act, and were to bemade subject to annual audits.

In November 2005, Article 23, paragraph

C. Determination of NTT as an audit subject
NTT shares held by the State were sold off(1), item (vii) of the BOA Act was revised, andsuccessively from 1987. The proportion of NTT

the scope of audit of contractors was expanded.

shares held by the State became less than a half

There were some cases in which contractors wereof the total number of shares in 2000, and NTT

determined as audit subjects under this provision

was excluded from organizations subject toafter World War II, such as a case of a contract

mandatory audit. However, because it was foundtonecessaryfinancial

Nevertheless, the provision had been appliedmanagement, etc. by continuously conducting

carefully in consideration of the exercise ofaudit, NTT was determined in November 2000 to

public authority on the private sector, by for

be a body subject to audit from its establishment

example limiting the application to cases where

onward as an entity to which the State has

the situation cannot be clarified unless said

contributed less than half of the stated capital asprovision is applied.

toensureadequate

scrap

naval

vessels

(see

page

274).

The first time the revised provision wasset forth in Article 23, paragraph (1), item (iv) of
the BOA Act.

applied was when two private companies, which

D. Review of the determination of NTT DATA
and NTT DOCOMO as audit subjects

were

counterparties

ofservicecontracts

concerning operation of the town meeting project,

NTT

were determined to be audit subjects in June

DOCOMO had been determined as bodies subject

2007 in an audit requested by the House of

to audit from their establishment onward, andCouncillors in February 2007. This was the result

were made subject to annual audits, as mentionedofabove. However, as a result of NTT shares being

considering that it was an important case where

NTT

DATA

Corporation

and

452

carefuljudgment

after

comprehensively

Section 3 Audit Activities

the audit was requested by the Diet and it was

corporation contributing capital to the fournecessarybusiness companies of current Japan Post, Japan

to

carry

out

the

audit

without

Post Network, Japan Post Bank, and Japan Posthindrance, etc.
After this determination of audit subjects, inInsurance. However, because these companies'

cases where it has been found necessary based onstated capital and succeeded assets/obligations

comprehensive consideration for judging thewere large in amount and their businesses wereappropriateness of a contract with the State, etc.,large

the counterparty to the contract has been

management of all six of them needed to be

determined as an audit subject under Article 23,

conducted appropriately in order to realize theparagraph (1), item (vii) of the BOA Act and abenefits that the postal service privatization was

field

such

to bring to citizens, it was found necessary tocounterparty. As a result, a large number of such

ensure adequate financial management, etc. bycases are set down in the annual audit report for

conducting audit on a continuous basis. Thus, alleach fiscal year.

of these companies were determined in October(5) Determination of audit subjects in line withpostal service privatization2007 to be bodies subject to audit from their

In line with the privatization of postal

by the State as set forth in Article 23, paragraphservices, two preparatory business companies,(1), item (v) of the BOA Act, and were to benamely Yucho Co., Ltd. (currently Japan Post

made subject to annual audits.

audit

has

been

conducted

for

in

scale

and

becausethebusiness

establishment onward as bodies indirectly owned

Bank Co., Ltd.; hereinafter referred to as "Japan
Subsection 2

Post Bank") and Kampo Co., Ltd. (currently

Audit objectives

Japan Post Insurance Co., Ltd.; hereinafter
In Japan, BOA has conducted audit with fivereferred to as "Japan Post Insurance") were
established in advance in September 2006 as

objectives

Japan Post Holdings' subsidiary companies. Then,efficiency, and effectiveness) or other objectives

in October 2007, two business companies,

necessary for auditing. The emphasis which BOA

namely Japan Post Service Co., Ltd. (hereinafter

has placed on the respective objectives hasreferred to as "current Japan Post") and Japanchanged

Post Network Co., Ltd. (hereinafter referred to associoeconomic situation of the times. Looking"Japan Post Network") were also established asback at the Heisei era to date, a large trend canJapan Post Holdings' subsidiary companies.

be observed whereby emphasis is placed on 3E
audit

Privatization was carried out with the( accuracy,

considerably(auditonregularity,

accordingeconomy,economy,toefficiency,

the

and

establishment of Japan Post Holdings, the four

effectiveness) in addition to the conventional

business companies above, and the Management

audit on accuracy and regularity. The major

Organization for Postal Savings and Postal Lifesituation of the trend in the Heisei era is outlined

Insurance, and with transfer of the savings andbelow.

insurance contracts thatexistedbeforetheprivatization to these organizations.
Japan

Post

Holdings

was

to

be

1. Diversification of audit objectives andexpansion of 3E audit in the Heisei era

the
453

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Meanwhile, in recent years, the closedness(1) New fields of auditing and audit objectives
for those areasof public procurement and the problem of

The fields of auditing have expanded sincecollusive bidding at the initiative of government

the late 1980s in response to rapid progress inbodies have been

population

anddetriments such as wasteful procurement costs,

informatization. Since the characteristics of theand there have been strong calls for securing

audit objectives differ by the fields of auditing,transparency

audits were widely conducted with diverse

procurement. Under such circumstances, full-scale

objectives.

audit has been conducted from around 1998 withaging,

globalization,

andpointedout

competitivenessas causinginpublicSpecifically, with regard to population aging,the objective of regularity to see whether the

full-scale audit was commenced for the social

bidding and contract procedures involve effective

security benefits of medical care and pensioncompetition

around 1985. In 2000, full-scale audit was also

procurement.

started for long-term care benefits in line with theintroduction of the long-term care insurance(2) Development of audit conducted with theobjective of effectivenesssystem. Since the main purpose of social security

In the Heisei era, audit conducted with the

and

of

contribute

effectivenesstoeconomical

is to ensure appropriate and fair burdens andobjective

showedfurtherbenefits, audit is mainly conducted with thedevelopment. Specifically, in the presentation of

objective of regularity.

opinions under Article 36 of the BOA Act inregard to the Kisosaki reclamation project in theWith regard to globalization, full-scale audit
of official development assistance (ODA) was

FY1989AnnualAudit

Report,BOA

gavecommenced in 1987. Since the audit mandate

opinions from the viewpoint of ensuring that thedoes not extend to ODA recipient countries, audit

invested funds produce effects by also eyeing theis conducted by normally using the method of

possibility of shifting from the agricultural

field examination, mainly with the objective of

purpose. Moreover, in the special descriptions on

effectiveness, such as whether a facility, etc. built

the Yokaku Bay land improvement project in thethrough ODA is used effectively.

FY1993 Annual Audit Report and on the projectfor constructing a multipurpose dam, etc. in the

As for information technology (IT), thetheFY1994 Annual Audit Report, BOA took a step

introduction of IT, including promotion of e-even further, and pointed out problems from

Government, and its IT-related budget has

viewpoints including possible review of theexceeded 1 trillion yen every fiscal year recently.

projects so as not to worsen the situation where

Therefore, audit is conducted in a prioritized

the projects are failing to produce effects.

Japanesegovernmenthas

prioritizedmanner with the objectives of regularity andAfter the full-scale introduction of theeconomy, etc. as well as effectiveness, including

evaluation system, BOA has not only directly

the appropriateness of contracts and procedures

evaluated projects and programs, but has also

for procuring and maintaining IT hardware andconducted audits from the perspective of whether

software and the cost-effectiveness and necessity

the authorities are appropriately implementing theof IT systems.

system for evaluating the projects and programs.
454

Section 3 Audit Activitiesof the BOA Act).

In recent years, BOA has conducted audits byalso considering whether or not the system itself

Subsection 3

is required, if necessary. There have been some

Procedures of audit

cases where the system or projects have been
1. Audit cycle

downsized or abolished as a result of BOA'sSince the preparation of the FY2003 Annual

audit findings.
(3) Accuracy and regularity audit, and 3E
audit

Audit Report, the ordinary audit cycle has beenWith regard to accuracy and regularity audit,

year, BOA conducts field audit by visiting offices

BOA focuses on examining basic accountancy,of auditees located in regional areas; in June andalso in consideration of the fact that there was aJuly, it conducts field audit of the head office ofseriessomeministries, etc.; in September and October, it

ministries, etc. in recent years. Furthermore,compiles the annual audit report; and in earlygiven the recent severe economic and fiscal

November, it sends the created annual audit

conditions, BOA also places importance on 3E

report to the Cabinet (see the figure below).

of

fraud

or

improprietiesinas follows: from October to June of the following

audit. Particularly in effectiveness audit, BOA
Audit cycle
Month Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun Jul. Aug. Sep. Oct. Nov.

actively looks into the effects of projects,

Basic Policy on
Audit/audit plans
In-office audit
Field audit
Inquiry letters, etc.
Presentation of
opinions/demand formeasures
Special report to theDiet and the Cabinet
Special report on audit
requested by the Diet
Preparation of theannual audit reportand its submission
to the Diet

programs, and budget execution and the status ofassets and surplus, etc. such as funds, etc. createdthrough subsidies, etc.
In

this

manner,today,

accuracy

andregularity audit, and 3E audit are conductedconcurrently with far more extensiveness anddepth than in the past.

The schedule above has been accelerated by

2. Relationship between audit objectives andthe BOA Act

about one month compared to the past in order tocooperate

For the purpose of stipulating the basis of 3

in

the

Diet'srequest

for

early

submission of the final accounts (see page 471).

E audit including effectiveness audit in law so as
to strengthen BOA's functions, the BOA Act wasamended by Article 2 of the Act Partially

2. Audit plan

Amending the Diet Act, etc., which was enacted
in December 1997. From January 1998, the(1) Outline of preparation of the audit plan foreach audit division in charge

amended BOA Act clearly set out the audit

An audit plan for each audit division in

objectives, with inclusion of a provision reading

charge sets out the plan of the audit activities to"The Board of Audit shall conduct its audit withbe conducted each year by, for example,

the objectives of accuracy, regularity, economy,

identifying the priority audit items for each

efficiency, effectiveness, or other objectives

division, and it is prepared as part of the affairs

necessary for auditing" (Article 20, paragraph (3)of audit under the jurisdiction of the General
455

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Executive Bureau (Article 12, paragraph (1) ofconsulted the Audit Commission about the audit

the BOA Act).

policy usually in late March together with

The current procedure for preparing the plan

consultation about the draft audit plans. However,is as follows. First, at around the time when thefrom the audit in 1999, the General Executive

annual audit report is sent to the Cabinet and the

Bureau came to consult the Audit Commission inaudit of the final accounts for the fiscal year

October of the preceding year, ahead of theends, each audit division in charge prepares a

preparation of the draft plans by the audit

draft plan by identifying the priority audit items,

divisions in charge. Further, from the audit inetc. after sufficiently taking into consideration the2005, which is after the acceleration of the timescale and contents of the budget of auditees,for sending the annual audit report to the Cabinet

measures, projects, and programs, the conditions

to early November, this has been conducted in

of internal control such as internal audit and

September of the preceding year.

internal checks, and the circumstances and results

B. Changes in preparation of the audit policyof previous audits. Then, after deliberation by thebureau in charge and deliberationtheIn the audit in 1999, due in part to some

Secretary General, it becomes a draft plan at theoverlapping statements in the Basic Policy on

General Executive Bureau level. Next, theAudit Plans and the Guidelines on Preparation ofGeneral Executive Bureau consults the Audit

Audit Plans, it was decided to simplify andCommission to gain its approval under therationalize the affairs by changing the name of

direction

Audit

the audit policy to Basic Policy on Audit andCommission (Article 12, paragraph (1) of theconsulting and gaining approval of the Audit

BOA Act).

Commission about the policy ahead of theandsupervision

of

the

by

―Basic Policy on Audit (from audit in 1999)―

Until the audit in 2003, the draft plan had

preparation of the draft plans by the audit

usually been submitted for the deliberation by thedivisions in charge, while no longer preparing theSecretary General in January and the General

Guidelines on Preparation of Audit Plans.

Executive Bureau had consulted the Audit

The Basic Policy on Audit set forth theCommission in late March. However, from thepolicy areas of public administration on which

audit in 2005, which is after the acceleration of

BOA is to focus its audit activities that year

the time for sending the annual audit report to thebased on BOA's mission and social and economic

Cabinet to early November, the Secretary Generaltrends, etc., as well as setting forth the basic

has deliberated the draft plan in late November

policy for conducting audit such as audit withand the General Executive Bureau has consulted

broad and diverse objectives, improvement of

the Audit Commission in December of theaudit capability, and preparation of appropriate

previous year.

audit plans. In order to properly fulfill its(2) Audit policy

accountability with regard to audit activities,

A. Outline of preparation of the audit policy

BOA decided to publish the entire Basic Policy

With regard to the procedure for preparation

on its website and in the annual audit reportof the audit policy (see page 358), until the audit

prepared after conducting audit of the final

in 1998, the General Executive Bureau had

accounts. The contents of the Basic Policy on
456Section 3 Audit Activities

Audit have been reviewed every year since then,B. Digitizationoftheprocedure
Verification of the Final Accounts

but there have been no substantial changes in theforIn the procedure for Verification of the Finalabovementioned approach to formulating the

Accounts, collation of three related data sets (seeBasic Policy to date.

page 280) for verifying the amounts of the State's
3. Conduct of audit

final accounts had been conducted manually(1) In-office audit

every fiscal year. However, the introduction of aA. Submission of accounts

Final Accounts Verification System (A-ACCeSS)

The system of submission of accounts wasin FY2003 made it possible to collate datarevised four times after enactment of the BOA

electronically (see page 592). After that, a new

Act (once in 1999 in the Heisei era) forfinal accounts verification system (Certification of

simplifying

account

the final accounts computer system, CEFIAN)

circumstances including the administrative burden

was introduced in FY2008 in place of A-

on auditees and the rise in the price level, while

ACCeSS. As a result, the series of work fromalso considering the need for the submission in

acceptance of statements of accounts to collation

BOA audit.

of three related data sets have been further

affairs,

takingintoautomated and improvements were made in

From the late 1990s, in 1999, the scope of
documentary evidence subject to the requirement

various other aspects as well.

that original documents shall be submitted to

C. Problems relating to submission of accounts

BOA was revised for simplifying affairs, and in
2003, the Special Regulations on the Submission―Special treatment for submission of
accounts of expenses for remuneration―of Accounts in the case of utilizing an electronic

In 2001, problems relating to use of

data

processing

system(Boardof

Audit

expenses forremuneration

by

the

CabinetRegulations No. 4 of 2003) were established for

Secretariat and the Ministry of Foreign Affairs

responding to digitization of auditees' statements

were discussed at the Diet, etc. and the method ofof accounts and documentary evidence. The

auditing expenses for remuneration was argued.

regulations enabled auditees to submit statements

Expenses for remuneration are expenses toof accounts and documentary evidence, etc. to

be used flexibly by the method that is deemed to

BOA online or by electromagnetic recordingbemedia as long as they obtain the approval ofdetermination made in each case according to the

BOA in advance. In 2007, said Regulations, etc.

immediate duties and situation, for implementing

were amended, and the scope of application of

the State's projects and programs smoothly andthe requirement that original documents shall beeffectively. They include, for example, payments

submitted to BOA to documentary evidence

made as a reward or compensation to external

prepared in the form of electronic data wascollaborators such as information providers. In

reorganized. As a result, rules on the method forsome cases, when auditees submit accounts ofsubmitting documentary evidence prepared in thesuchform of electronic data were put in place.

expenses for crime investigation and expenses for

the

most

appropriate

expenses for

based

remuneration

on

or

the

certainintelligence and inspection that are used in a457

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

similar form, it is not necessarily appropriate forB. Special form of field audit

them to provide data with recipients of expenses
clearly indicated therein due to the nature of such(A) Overseas
projects―

expenses. Therefore, under the provisions of

Since

audit

― Auditexpendituresofoverseastooverseas

related

Article 11 of the Regulations on the Submission

project/business activities of the State and State-of Accounts, BOA approves auditees that haveowned bodies became high, and there werefiled an application to keep the documentary

growing needs for conducting the field audit ofevidence to the auditee instead of sending it tosuch expenses, BOA began to conduct field audit

BOA, and submit them only when so required byof Japan's projects overseas in 1994.

BOA. This treatment only allows auditees to(B) Extraordinary/emergency audit

exclude specific documentary evidence from theThefollowing

are

two

examplesofregularly submitted statements of accounts andextraordinary/emergency audit.

documentary evidence, and required documentary
evidence, etc. are presented and audited at thea. Audit of food expenses under the categoryof public works administrative expenses

time of field audit. Thus, in that sense, audit of

In 1995, the problem of use of foodsuch expenses does not differ from that of otherexpenses under the category of public works

items.

administrative expenses became a big topic in

This special treatment for submission ofmass media, etc. in relation to the issue ofaccounts of expenses for remuneration, etc. wasbureaucrats entertaining bureaucrats using public

originally to be applied until otherwise provided.

funds. While this problem was highlighted at the

However, due in part to the abovementioned

end of July, the time when regional field audit

arguments on the method of auditing expenses

was ending, a special issues audit team wasfor remuneration, from FY2001, BOA is toorganized

review the need for approving such treatment

Programs Division (Cross-Cutting Audit Team)every fiscal year by taking into account the statusasof management and execution of expenses forselecting Auditors from audit divisions related toremuneration at the auditees, and to approve theagriculture, forestry, fisheries, transport, andtreatment on an annual basis.

construction,(2) Field audit

prefectures from the end of August to September.

an

under

the

Secretariat's

emergency/extraordinaryandconducted

Specialmeasure

audit

of

by

five

As a result, improvement measures were

A. Organizational structure for conducting
field audit

taken in relevant ministries and agencies to

The number of days auditors visit an auditee

exclude expenses of informal gatherings fromin a single trip for field audit has gradually been

expenses eligible for subsidies.

shortened after World War II. From May 1992,

b. Audit requested by the Diet

the basic number of days became five days from

With the partial amendment of the Diet Act,

Monday to Friday with the introduction of theetc. in January 1998, the system of request forcomplete five-day workweek system. The number

audit by the Diet was established (see page 412).

of "Auditors," who play the central role in field

In April 22 of the same year, based on

audit, was 801 persons as of December 2009.

discussions and decisions of the House of458

Section 3 Audit Activities

andin performing their duties, based on an agreement

Oversight of Administration, the House ofat the meeting of administrative vice-ministers,

Representatives requested audit on operation of

etc. on December 19 of the same year for

public accommodation facilities, which was thepreventing

first time the system was applied, and BOA

scandals. BOA also established the General

accepted this request on the same day.

Executive Bureau

of

Personnel

Code

Representatives'

Committee

on

Audit

The subjects of this requested audit wererecurrence

Ethicsofpublicthe Boardinemployeeof

Audit

January

1997,

accommodation facilities established and operated

stipulating rules to be observed in regard toby the Ministry of Health and Welfare (Social

contact with auditees, etc. Notwithstanding theInsurance Agency),

Ministry

above

Telecommunications,

Employment

of

Posts

and

scandals

Promotionmeasures,however,

occurred

publicsuccessively

employeein1998.

Organization, Postal Life Insurance Welfare

Therefore, it was concluded that legislation is

Corporation, and Pension and Welfare Service

required for dealing with the public employee

Corporation.

ofethics problem, and the National Public Service

special

Ethics Act (Act No. 129 of 1999) was enacted inorganizational structure was formed with one

August 1999 through legislation introduced byAssistant Secretary General as the leader, twoHouse members.

different

Becausebureauswere

severaldivisionsinvolved,aDirectors of Audit Policy Planning as sub-leaders,

Said Act came into effect in April 2000. As

and 12 other members who were Auditors, etc.

a result, BOA officials in the regular service (i.e.

from audit divisions related to postal services,

those who are not the BOA Commissioners orlabor, and welfare. From May to July 1998, theother BOA officials in the special service)

requested audit was performed by, for example,

becameconducting field audit for 65 accommodation

treatment such as prohibition of dining withfacilities, which corresponded to 17.5% of all

auditees, but also to application of said Act andaudit subject matters.

the National Public Service Ethics Code (Cabinetofsubject

not

only

to

conventional

The audit results were compiled as Results

Order No. 101 of 2000) established under said

Audit

Act.

on

OperationofPublicAccommodation Facilities, and were reported to(3) Cross-cutting audit

the House of Representatives on September 28 of

A. Cross-cutting audit until 2000
Due to the increased complication andthe same year.
C. Problems relating to field audit ―Public
employee ethics problem―

diversification of administration, full-scale cross-

From January 1978, BOA was to directly

by concretely specifying cross-cutting audit items

arrange accommodation facilities for field audit

in the Basic Policy on Audit Plans and thevisits, etc. (see page 360). After that, since a

Guidelines Concerning Preparation of Audit Plansseries of public employee scandals occurred in(see page 361).

1996, ministries and agencies successively issued
official directives on ethics to be followed by(A) Cross-cutting audit by the Cross-Cutting
Audit Team

officials of the respective ministries and agencies

Cross-cutting audit was to be conducted by

cutting audit came to be conducted since 1986,

459

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

basically dividing work between the Audit

Execution of travel expenses, etc. relating toPlanning and Coordination Team of the Special

State-subsidized projects

Programs

Division,which

plannedand(B) Cross-cutting audit by the Information &Communication Technology Division

coordinated cross-cutting audit, and relevant audit

The

divisions, which conducted cross-cutting audit

Information&

Communication

and analyzed and reviewed the audit findings.

Technology Division supports audit according to

However, it was not necessarily the best plan torequests by audit divisions, and also prepares anhave relevant audit divisions conduct audit, etc.

audit plan for itself and conducts cross-cutting

for some themes. Thus, in 1988, the Cross-audit of computer-related expenses as needed.
Items set down in the annual audit report as

Cutting Audit Team was established in theSpecial Programs Division as an actual workingaresultofunit specializing in cross-cutting audit. At first,

Communication Technology Division include

the Cross-Cutting Audit Team conducted cross-demanding Housing and Urban Development

cutting audit according to audit plans developed

Corporationby the Audit Planning and Coordination Team,

specification for data entry work in a contract

but from 1990, it began to prepare the audit plansfor entrusting the service of entering data into

for itself, strengthening its character as ancomputers (FY1993; Measures taken).

independent auditing unit.

B. Cross-cutting audit until 2008
In orderThe following are some examples of items

audit

to

to

by

the

make

Information

appropriate

develop

an

&

its

organizationalset down in the annual audit report as a result ofstructure that can also promptly respond to audits

audit by the Cross-Cutting Audit Team.

requested by the Diet, the Special Issues Audit[FY1988; Presented opinions (Article 36 of theDivision was established in the 5th Bureau in

BOA Act)]

January 2001 to conduct audit of special issues

Billing of medical treatment fees for medical

on which the Secretary General of BOA orders

oxygenaudits (special issues audit) instead of taking
charge of a specific ministry. In line with this,[FY1992-1994; Report on specific matters]
Procurement of printed matter ordered bycross-cutting audits that had been conducted byministries and agencies

the Cross-Cutting Audit Team of the Special[FY1994; Measures taken]

Programs Division, etc. were to be conducted by
the Special Issues Audit Division, in principle.

Food expenses relating to State-subsidized

The following are some examples of items

projects

set down in the annual audit report as a result of[FY1994; Report on specific matters]
Audit of public civil engineering facilities

cross-cutting audit by the Special Issues Audit

conducted following the Great Hanshin-

Division.

Awaji Earthquake[FY2000; Report on specific matters]
Funds[FY1995/1996; Report on specific matters]
Executionofadministrative

establishedbypublicinterest

corporations with State subsidies

expenses[FY2000; Report on specific matters]

relating to State-subsidized projects

The[FY1997; Report on specific matters]
460

final

accounts

analysisofFiscalSection 3 Audit Activities

to recent trends, etc. of administrative andInvestment and Loan Program agencies

financial reform appropriately and promptly and[FY2001; Report on specific matters]
The status of auditing conducted by national

audits that require advanced and professional

government organs as internal audit

knowledge.
In this process, the Finance Audit Division[FY2001; Report on specific matters]
The final

accounts

analysisof(Office of Final Accounts Verification) of the 1st

specialBureau newly came to handle cross-cutting audits

accounts

specially ordered by Secretary General in the[FY2002; Report on specific matters]
Contracts for procurement of the State's

field of special accounts, the Grant for Local

information systems and the framework for

Government Audit Division of the 1st Bureau

promoting informatization of administration

came to handle such audits in the field of
subsidies[FY2002; Report on specific matters]
The

flow

of

fiscal

funds

to

to

local

governments,

and

the

Information and Communication Audit Division

localof the 5th Bureau came to handle such audits ingovernments

the field of information and communications. As[FY2003; Report on specific matters]
Research and study projects ordered by thea result, an organizational structure was put inStateplace to conduct cross-cutting audits not only by
the two special issues audit divisions, but also by[FY2003; Report on specific matters]
The execution status of general accountthe three divisions above.

expenditure budget(4) Audit using computers
A. History of audit using computers

Then, in April 2005, the Special Issues
Audit Division for Ministries was established in

The history of audit using computers can be

the 5th Bureau and one Assistant Secretary

largely divided into four periods. In the Heisei

General in charge of special issues audit wasera, there are the following two periods.

added in order to further promote special issues

・Third period (from 1986 to 1999)
Period in which personal computers wereaudit.

installed in each division along with general-In this way, an organizational structure oftwo special issues audit divisions was put inpurposeplace whereby cross-cutting audits specially

Communication Technology Division, and theordered by the Secretary General are handled by

two types of computers were put to diversified

the Special Issues Audit Division for Ministries ifusethey mainly concern ministries, and by the・Fourth period (from 2000)
PeriodSpecial Issues Audit Division for Agencies iftheymainlyconcerncorporations

suchcomputers

in

in

which

the

audit

Information

using

&

personalcomputers is conducted widely due to suchasincorporated administrative agencies.

factors as that a personal computer is assigned for

C. Cross-cutting audit from 2009each official and general-purpose computers were
removedA large-scale organizational reform wascarried out in April 2009 for the purpose of(Note) See page 361 for the first period and theenhancing and strengthening audits that respondsecond period.
461

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

accountants, etc. as part-time Special Researchers

B. Status of use in audit

from 1999. From 2004, BOA has also employed

The actual use of computers in audit
classified by major purpose of use is as follows.

them as officials with a fixed term of office and(A) Development of new audit aspects

has utilized their highly professional knowledge
and experience in audits by, for example,

There are cases where, in order to develop
new audit aspects in fields such as social security

assigning them to the respective audit divisions.

that mainly target routine accounting of a vast

B. Formation of a teamspecially ordered audits

number of cases, computers are used to analyze aforconducting

In addition to A. above, in order to further

large amount of data from various angles andexplore the state of distribution and regularity ofenhanceandstrengthen

data.

structure for audit with private-sector techniques(B) Selection of sites to be further investigatedandviewpoints

by

the

receivingorganizational
private-sector

There are cases where, in order to achieve

experts, etc., BOA formed a team for conducting

more efficient and accurate selection of sites tospecially ordered audits, mainly consisting of

be further investigated, data files created frompractitioners from private companies, etc. andaudit materials are processed by a program toexperts, in the Audit Policy Planning Division in

extract data that does not match the program's

April 2009.

preset conditions and preferentially conduct audit(6) Audit of financial documents of special
accounts

of sites that correspond to such data.

As a measure to promote the matters(C) Processing including analysis of collected
data and aggregation of improper amounts

specified in the Key Policies for Administrative

Besides the above, computers are widely

Reforms (adopted by the Cabinet on December

used for analyzing collected data and aggregating

24, 2005), which was adopted by the Cabinet as

improper amounts, etc. when compiling audit

a result of study on review of special accounts,

results.

the Act on Promotion of Administrative Reform(5) Audit with private-sector techniques andviewpoints

forRealization

of

Small

and

Efficient

Government (Act No. 47 of 2006) and the Act on

Due to calls for BOA to further strengthen

Special Accounts (Act No. 23 of 2007) wereaudit from citizens' viewpoint in light of theenacted, providing for (i) abolishment andrecentconsolidation

severefiscalconditions,

BOA

has

of

specialaccounts,( ii )

increased the number of audit personnel bystreamlining of treatment that differs from generalemploying private-sector experts, etc. and has

account,

enhanced its structure.

documents of special accounts that follows the

A. Employment of Special Researchers andofficials with fixed term of office

example of corporate accounting practice, among

In order to utilize private-sector humanWith regard to (iii), it was provided that a

and

(iii)

disclosureoffinancialother matters.

andcompetent minister must prepare documents forstrengthening

disclosing the position of assets and liabilities andaudits, BOA has employed certified public

other financial information concerning the final

resources

withexperience forprofessional
enhancingknowledgeand462

Section 3 Audit Activities(2) Technical Counselors

accounts for the special accounts the minister
specialTechnical Counselors were set up in April

accounts) every fiscal year by using corporate

1969 as positions in the senior director class toaccounting practice as a reference, and send themprovide support in studying and determining

to the Minister of Finance (Article 19, paragraphtechnical issues by using their highly professional(1) of the Act on Special Accounts), and that theknowledge. The number of Technical Counselors

Cabinet must submit said documents to the Diet

had increased to four persons by 1980.

manages( financial

documentsofafter audit by BOA (Article 19, paragraph (2) of

Later, one Technical Counselor position was

said Act). Thus, audit of financial documents ofabolished in 2005, and as of the end of December

special accounts was added to BOA's missions

2009, there are three Technical Counselors infrom the final accounts for FY2007.

charge of civil engineering, construction, andThe

Financial

Documentsofelectronics, respectively.

Special

Accounts for FY2007, which were the first
financial documents of special accounts to beaudited, were sent from the Cabinet to BOA on
November 14, 2008, and after audit, they weresent back to the Cabinet on December 25 of thesame year. Then, on January 20, 2009, theCabinet submitted said documents as well as theresults of BOA audit to the Diet.
BOA published the audit results of said
documents on the BOA website on the same day.
Field audit

4. Analysis and review of the audit findings
Subsection 4(1) Inquiry letters to the auditees

Annual audit reports

If financial management is found likely to
be inappropriate or unreasonable or the like as aresult of field audit, etc., BOA sends an inquiry

1. Audit cases reported in the annual audit
reports

letter to those who are responsible in each auditee

The major situation of description of "othermatters found necessary," which is the third(Article 26 of the BOA Act).
Looking at changes in the number of inquiry

category of optional reporting matters underletters from the time of enactment of the BOA

Article 15 of Regulations on Enforcement of the

Act to the present, the number has been on a

Board of Audit Act (see page 285), in the Heisei

decline in line with a decrease in improperera is as follows.

accounting, etc., but it can be viewed that the・Report on specific matters (from the FY1990
Annual Audit Report)

weight of each letter has increased due to the・Audit requested by the Diet (from the FY1997

growing emphasis on audit oriented towards
presentationofopinions

anddemandAnnual Audit Report)

for・Special report to the Diet and the Cabinet

measures, etc.
463

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

accident compensation insurance began to be(from the FY2005 Annual Audit Report)

reported from FY1989.

・Audit results of the remedial measures taken
against improprieties (from the FY2007 Annual

B. Changes in the method of counting thenumber of impropriety cases

Audit Report)
・Audit results on matters of special publicWith regard to "medical expenses," which

concern (from the FY2007 Annual Audit

was one of the categories of improprieties, theReport)number

of

cases

of

overcharges

andspecialoverpayments of medical expenses under theaccounts (from the FY2008 Annual Audit

jurisdiction of the Ministry of Health and Welfare

Report)had been counted for each medical institution, but

・Auditoffinancial

documents offrom the FY1994 Annual Audit Report, it has

The main matters set down in the annual

been counted for overall medical institutions.

audit report are the four matters referred to as
improper/unreasonable matters (improprieties andAlthough the number of impropriety cases ispresented opinions/demanded measures, whichcounted for each financial management, inare mandatory reporting matters, and measuresprinciple, sometimes this counting method causes

taken and special description, which are optional

an imbalance in the gravity among cases whenreporting matters), report on specific matters,

the cause, the degree of responsibility of theaudit requested by the Diet, and special report toauthorities, and the amount of money involved in

the Diet and the Cabinet.

the cases vary. The above change in the counting

The audit cases reported in the annual audit

method was a measure taken to address thereports shall be explained blew by mainly

increased and broadened imbalance between

focusing on these matters.

items caused by an increase or decrease in the(1) Improprieties

number of cases.

A. Establishment and abolition of categories(2) Presented
measures

The categories "medical expenses" wasintroduced in the FY1990 Annual Audit Report.

opinions

anddemanded

A. Result of the follow-up on presented
opinions and demanded measures

As a result of enhancing audit of medical careofWhen BOA sets down presentation of an

medical treatment fees were continuously pointed

opinion or demand for a measure in an annualout from the FY1986 Annual Audit Report. Since

audit report, it usually sets down the result of thepayment of medical treatment fees by eachfollow-up on such opinion or measure in theinsurer is a combination of insurance benefits,

immediately following annual audit report.

benefits,

overcharges

andoverpayments

subsidies, and general expenditures from theIf the measures are lagging or incomplete,

viewpoint of the State's accounting, it was

BOA conducts audit every year until appropriate

originally included in the "others" category ofmeasures are taken, and the status of theaudit findings. However, it was set up as a newmeasures is set down in the annual audit reportcategory because the number of cases hadfor each fiscal year. In the Heisei era, there haveincreased, and audit findings concerning medical

been cases where the status of measures was

examination

followed up and set down in annual audit reports

feescoveredunderindustrial
464Section 3 Audit Activities

over a long time.

a need to have the auditee promptly rectify theB. Amendment of Acts in response topresentation of opinions and demand formeasuresfinancial management or take measures to prevent
recurrence, it may present its opinions to or
demand appropriate measures from the relevant
minister, etc.

Measures taken by authorities in response toforDuring the period from 1989 to 2008,

measures are varied. Here are some examples

opinions were presented or measures were

where amendment of Acts was prompted bydemanded (under Article 34 or 36 of the BOA

presentation

forAct) by August in only six cases in total, but themeasures under Article 36 of the BOA Act in thenumber increased to seven cases in total in 2009,

Heisei era (the year indicated before the caseshowing a tendency of early presentation ofname denotes the year in which the opinion was

opinions and demand for measures.

presented or the measure was demanded; and the(3) Special description

presentationofof

opinions

opinions

andanddemanddemandyear in parentheses after the case name denotes

The number of special description cases

the year of enactment of the amended Act, andreported decreased substantially particularly in thethe Act name denotes the Act that was amended).

annual audit reports from FY1985 to FY1994,(i) 1989: Regarding payment of retirement
allowance to officer candidates who
graduated from the National
Defense Academy (1989 Act on
Remuneration, etc. of Personnel of
the Japan Defense Agency)with only one such case being reported at themost. However, in the annual audit reports from
FY2002 to FY2005, four or more such cases
were reported each year, with eight cases for the
FY2003 Annual Audit Report being the highest.

(ii) 1990: Regarding operation of the project
for lending welfare funds formothers with dependent children
and welfare funds for widows (1993
Act on Welfare of Mothers with
Dependents and Widows)

Looking at the contents, many issues of serious
public concern have been reported, such as issues
related to public works including the status of
implementation of measures against large-scale(iii) 1991: Regarding operation of the thirdclass mail system (1992 Postal Act)

earthquakes for bridges, etc. and issues related to(iv) 2003: Regarding implementation of thewholesalemarketfacility
development
project( 2004Wholesale Market Act)

(4) Report on specific matters(v) 2006: Regarding the retirement allowancesystem of fixed-term Self-Defense
Force officials ( 2007 Act on
Remuneration, etc. of Ministry of
Defense Personnel)

BOA had only described matters for which it had

C. Early presentation of opinions and demand
for measureseven if the public had strong interest in BOA's

Article 34 of the BOA Act provides that if

However, this was as if the public were

BOA

finds

illegalor

improperpolicy-based finance.
A. Background of the reporting
Until the FY1989 Annual Audit Report,
given a critical opinion and which it had pointed
out as an impropriety, etc. in the annual audit
report, and had not described any other matters
audit efforts and results on those matters.

financialbreathlessly waiting for the audit result, but weremanagement in the course of its audit and there is

let down by not being able to learn the result.
465

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Thus, voices of dissatisfaction came to be heard

be reported as an improper/unreasonable matter,from the Diet and mass media, etc. At the same

it should be set down as an impropriety, etc.

time, in a situation where transparency of

Even when no such situation is observed, if there

administrative activities was sought in society,is a need to report on the subsequent status of

BOA considered it necessary to report on theaudit, it may be set down again as a report on

status or results of its audit activities on issues of

specific matters.

extremely high public concern, even when no

C. Status of the reporting
A total of 175 cases were set down in

improper/unreasonable matters are reported withannual audit reports from FY1990 to FY2008 as

regard to those issues.

reports on specific matters.

As a result of studying the reporting method,

In particular, in the annual audit reports"report on specific matters" was introduced fromthe FY1990 Annual Audit Report.

from FY1998 to 2005, 10 or more cases were set

B. "Issue of extremely high public concern"

down every year, with 20 cases in the annual

The requirements for reporting a matter as a

audit reports for FY2003 and FY2004 being thereport on specific matters are that the matter is anhighest. This is because application of theissue of extremely high public concern and it isrequirement of "issues of extremely high public

found necessary to report the matter for gaining

concern" was relaxed in 1999 to also include

citizens' understanding of and trust in audit.

issues that should be of extremely high public

Matters that were assumed to satisfy theseconcern,requirements were, for example, issues whichapplication to issues that are currently of

were discussed repeatedly at the Diet and on

extremely high public concern. It is also because

which BOA was asked to conduct audit andsome cases were reported for two years or more.

issues that were taken up by mass media

As a matter of course, all matters reported as

repeatedly and on which public attention wasreports on specific matters are issues that were ofpaid to how BOA would respond.

public concern at the time or over many years.

insteadofstrictly

limiting

theIssues to be set down in the annual audit

For example, the status of implementation ofreport as a report on specific matters were limited

ODA was set down every year in annual audit

to "issues of extremely high public concern,"reports from FY1990 to FY2006. In recent years,

because the target and degree of public concern

the status of implementation of emergency

were diverse, and it was impossible to covermeasures to stabilize the financial system, thethem exhaustively. Also, in order for BOA tostatus of implementation of the special guarantee

efficiently and effectively perform its duties tosystem for financial stabilization of small andsuperviseits

medium-sized companies which had relaxed theadequacy, and rectify any defects, it was

guarantee requirements for small and medium-

inevitable to considerably limit the processing of

sized companies, and the status of surplus, etc. ofsituations that

the State's special accounts have been reported

financialdomanagement,

notconstituteensureimproper/unreasonable matters. Termination of the audit isfor two years or more.

not a requirement. If, as a result of the audit in(5) Audit requested by the Diet

the following year, there is a situation that should

A. Background of the reporting466

Section 3 Audit Activities

With the partial amendment of the Diet Act,

requested by the Diet," and not only the outline

etc. in January 1998, the system of request forof the reported audit results, but also the track

audit by the Diet was established (see page 412).

record of acceptance of the audit request andThen in April of the same year, the House ofreporting of the audit results were to be set down.

Representatives made the first request for audit

C. Recent status
In the FY2007 Annual Audit Report, theunder the provisions of Article 105 of the Diet
Act("operation

facilities"). BOAof

publicaccepted"progress report on audit requested by the Diet"

accommodation
the request

was set down in addition to the abovementioned

andconducted the audit. In September of the same

"Summaryofthe special

reporton

audit

year, it reported the audit results to the House of

requested by the Diet." The progress report

Representatives. In line with this, the item of

related to the status of the audit on "Procurement"progress report on audit requested by the Diet"of defense equipment through importation by

was newly established in the FY1997 Annual

trading companies" which was requested in June

Audit Report to set down the outline of the2008.
It was set down in the annual audit report inreported audit results.

spite of the fact that the audit was still ongoing,

B. Increase in audit requests by the Diet
After that, one audit request was made bybecause it was considered to be significant to

the House of Councillors based on discussions

clarify what has been revealed in the course of

and a decision of the House of Councillors'

audit as a progress report due to the high level ofCommittee on Oversight of Administration in

public concern in this matter.

March 2000, but thereafter, no audit request was(6) Special report to the Diet and the Cabinet

made until June 2005. In 2005, however, theWith the amendment of the BOA Act inHouse of Councillors decided to utilize audit

November 2005, it was provided that "the Board

requests to BOA as one of the measures forof Audit may, at any time, report to the Diet andenhancing

final

the Cabinet on matters regarding which the Board

accounts, and in June of the same year, theof Audit has presented its opinions or demanded

House of Councillors made audit requests formeasures pursuant to the provisions of Article 34

nine cases based on discussions and decisions ofor 36, or regarding other matters that the Board

the House of Councillors' Committee on Audit.

of Audit finds it particularly necessary to report"

After that, the House of Councillors began to(Article 30-2 of the BOA Act) (see page 422).

deliberation

of

the

State'syear.

Conventionally, BOA was only able toAdditionally, in 2006, the later-discussed special

report on its audit results by the annual audit

report to the Diet and the Cabinet started to bereport prepared under the provisions of Article 29

made.

of the BOA Act, in principle. However, the

make

some

audit

requests

every

Thus, the reporting methods of the two

introduction of the abovementioned provision

reports were adjusted. From the FY2005 Annual

enabled BOA to report to the Diet and the

Audit Report onward, the title for the audit

Cabinet on matters that it finds it particularly

requested by the Diet was to be changed tonecessary to report at any time, separately from

"Summary

the annual audit report.

ofthe special

report

on

audit
467

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)This report is commonly called the "special

this request, BOA started to set down from thereport to the Diet and the Cabinet," and from

FY2007 Annual Audit Report the results of audit

November 2005 to October 2006, five cases ofon the status of remedial measures taken against

special reports to the Diet and the Cabinet were

the improprieties set down in previous annual

made under the provisions of Article 30-2 of theaudit reports.

BOA Act. In line with this, the item of "special(B) Status of the reporting

report to the Diet and the Cabinet" wasThis reporting item describes the status

introduced in the FY2005 Annual Audit Reportconcerning improprieties set down in the annual

to set down the track record of special reports toaudit reports from FY1946 to the immediately

the Diet and the Cabinet as well as the outline ofprecedingany reporting matters that do not correspond tomeasures have not been completed, etc.

improper/unreasonable matters.

B. Implementation
statusofconcerning measures taken(7) Audit results of the remedial measures, etc.
taken against improprieties

fiscal

year

for

which

remedial
measures(A) Background of the reporting

BOA conducts a follow-up of audit findings

There are strong calls for securing the(see page 294). With regard to the status ofeffectiveness of the audit findings in the follow-

remedial measures taken against improprieties

up procedure, as shown by a request being madeand the implementation status of measures

to BOA to set down in the audit report the statusconcerning measures taken, the item of "auditof remedial measures taken against improprieties

results of the remedial measures, etc. taken

as mentioned above.

against improprieties" was introduced in the FY

The same was considered to apply for2007 Annual Audit Report, and the status of

measures taken, because they only become

measures was to be set down.

effective when improvement measures taken by

A. Status of remedial measures taken against
improprieties

ministries and agencies, etc. based on BOA's(A) Background of the reporting

Accordingly, in order to ensure appropriate

audit

findings

arereliably

implemented.

Since the time when the current BOA Act

implementation of improvement measures, anbecame effective in 1947, BOA had audited casesorganizational structure was set up to audit thethat were pointed out as improprieties, until theimplementation status of improvement measures

remedial measures were completed. Nevertheless,concerning measures taken, and the results started

there were many cases where remedial measures

to be set down from the FY2007 Annual Audit

were incomplete or remedial measures took aReport.

relatively long time to be completed.

(B) Status of the reportingThis

Under such circumstances, the Minister ofreportingitem

describes

theFinance requested the President of BOA on

implementation status concerning the measures

January 21, 2008, to consider setting down in thetaken set down in the annual audit reports fromannual audit report the status of return of funds

FY2002 to the immediately preceding fiscal year

to the treasury with regard to cases indicated asforimproprieties. After receiving and considering

implementation
468

which

BOA

decidedstatus

of

to
the

audit

the

improvement

Section 3 Audit Activities

measures taken by ministries and agencies on asent by the Cabinet, and sends the documents

continuous basis.

back to the Cabinet, notifying the Cabinet of(8) Audit results on matters of special publicconcernhaving completed the audit of said documents. It

A. Background of the reporting

documents on the BOA website (see page 463).

also publishes the results of the audit of said

Since BOA considered it necessary to report

Given that the audit of said documents is anon the status or results of its audit activities onimportant process provided under the Act on

issues of extremely high public concern, even

Special Accounts, and that an annual audit reportwhen no audit findings are reported with regard

not only has the characteristics of a report on theto those issues, report on specific matters was

results of audit for a specific fiscal year, but also

introduced from the FY1990 Annual Audit

has the characteristics of an annual report that

Report. However, given that much importanceclarifies BOA's audit achievements throughout

was being placed on fulfilling accountability, it

the year, as a result of study, BOA decided to set

was considered insufficient to only set down thedown the results of audit of said documents instatus of audit of issues of extremely high public

the FY2008 Annual Audit Report as "audit ofconcern in the annual audit report as reports onfinancial documents of special accounts."

specific matters, and that it was necessary to

B. Status of the reporting

explain to citizens that BOA was responding to

Audit of financial documents of special

matters discussed at the Diet, etc., mattersaccounts is conducted after the annual audit

reported in newspapers, etc., and other matters ofreport for the relevant fiscal year is sent to thehigh public concern in a timely and appropriate

Cabinet. Therefore, this reporting item describes

manner.

the results of the audit of said documents for theimmediately

As a result of studying the reporting method,

precedingfiscal

year

by,

for

"audit results on matters of special public

example, summarizing the report to the Cabinet.

concern" was introduced from the FY2007(10) Other reporting items

Annual Audit Report.

A. Description of the outline of audit subject
matters

B. Status of the reporting
This reporting item describes the main

In the FY1946 Annual Audit Report, thismatters set down in items such as "individual

description only served as a preamble to the audit

audit results" in the annual audit report by

results in "Chapter 1 Review" with a volume ofclassifying them and sorting them out by each

only few pages (A5-size document in verticalissue of high public concern, etc. In addition, thewriting at the time) (see page 290). After that, themain matters of special public concern which

scope and contents of description gradually

BOA continues to audit are also described.

expanded and developed, while being divided or(9) Audit of financial documents of special
accounts

moved to another section in the report during that

A. Background of the reporting

size document in horizontal writing; total ofcourse. In the FY2008 Annual Audit Report (A4-

Based on the Act on Special Accounts, BOA

1,097 pages), the description took up 201 pages

audits the financial documents of special accounts

as "Chapter 6 Outline of the final accounts of469

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

year to which the annual audit
report pertains)revenue and expenditure and other audit subject
matters."

In the FY1998 Annual Audit Report, theWhile it had been set down as the final
chapter since the FY1978 Annual Audit Report,

fact

there was only the description corresponding to

introduction of an evaluation system in eachcurrent Chapter 6, Section 2 until the FY1994

ministry and agency, etc. was described in

Annual Audit Report. However, in order to help

" Overview

citizens gain a more precise understanding of theinvestigation results were set down at the end ofcurrent status of the State's finances, etc., thethe annual audit report in the form of "Annex."

scope and contents of the description were

C. Description of the summary of audit results

expanded and developed. In the FY1995 Annual

This description relates to the overall outline

Audit Report, the conventional description wasof the audit results. One of the parts that changed

moved to Section 2, and Section 1 "Overview ofsignificantly was the description of the amounts

revenue and expenditure, etc." which gave anof improper/unreasonable matters. Specifically,

overall description of the State's fiscal conditions

until the FY1993 Annual Audit Report, only thewas newly added. Then, in the FY1996 Annual

improper

Audit

government

indicated. Although the amounts of improper/andfiscalunreasonable matters other than improprieties

investment and loans, etc. was added in the same

came to be indicated in the parts of individual

section, and the section name was changed todescriptions from the FY1973 Annual Audit"Overview

Report, they were not indicated at all in theReport,investments,

description

delinquent

of

the

on

claims,State'sfinances,

etc. "

that

BOA

of

investigatedaudit

amounts

theactivities, "ofstatusandimproprieties

of

the

were

outline of the audit results.

Furthermore, from the FY1998 Annual Audit
Report, Section 1, Subsection 4 "Individual final

However, the description took a great turn inaccounts, etc." came to be set down every year

the FY1994 Annual Audit Report, and thefor the purpose of helping citizens gain a more

improper amount of each item and their total

precise understanding of the State's accounting,amount were described. Some amounts relating toetc. by analytically describing the status ofpresented opinions and demanded measures andindividual final accounts of special accounts, etc.

to special descriptions could not be immediately

B. Description
activities

of

the

overviewofconcluded as being improper amounts, so they

audit

were reported as background amounts.

This description was gradually expanded as

In the past, citizens were unlikely to be able

follows in the Heisei era (the figures in

to gain a correct understanding of BOA's audit

parentheses preceding each item denote the fiscal

results since only a part of the amounts wereyear of the annual audit report in which theindicated. Thus, BOA determined that it was

description was first introduced).

necessary to indicate the overall amounts and(FY1994) Audit plan (preparation of the basic
policy on audit and audit plans)

help promote a correct understanding that fitted(FY1998) Audit policy (the entire text of the
Basic Policy on Audit for the audit

After going through these changes, thethe reality.
matters described at present include the number
470

Section 3 Audit Activities

Commissioners where minutes are taken.

of cases and the amounts of improprieties,
presented opinions and demanded measures,

In the Heisei era, the reporting items inmeasures taken, special description, special reportannual audit reports have diversified, and cases

to the Diet and the Cabinet, special report onwith lengthy and complicated contents haveaudit requested by the Diet, and report onincreased. In order for the Commissioners tospecific matters, as well as their overview by the

discuss such cases in the course of audit, the freematter subject to accounting, by the mode oftalking sessions came to be held many times.

audit findings, or by audit objective, and theSince 2004 when the audit cycle was accelerated

summary of each item.

by about one month, the free talking sessions
have been intensively held around July whenfield audits end.

2. Deliberation on annual audit reports(1) Changes in the deliberation on annual
audit reports
There were slight changes in the system fordeliberating on annual audit reports, etc. in the
Heisei era. The major changes are as follows.
A. Developmentofaframeworkfordeliberating on cases proposed by the
Secretariat
The Special Committee on Audit Report,

Special meeting room of the former BOA office building
which was also used for free talking sessions

which was formed in the Secretariat prior to the
Audit

ReportCoordination

Committee,

wasconverted into the Secretariat's Audit Report
Secretary General for Management (currently

3. Time for submission of the final accounts
and the annual audit report to the Cabinet
and the Diet

Senior Assistant Secretary General) in July 1989,

With the amendment of the Diet Act inin line with the introduction of the position of the1991, the ordinary session of the Diet came to be

Seniorconvened in January every year. Therefore, from

Committee chaired by the Senior Assistant

Assistant

Secretary

GeneralforManagement.

the final accounts for FY1990, the State's final

B. Holding the Commissioners' free talking
sessions

accounts came to be submitted by the Cabinet to

From 1989, meetings came to be held forconvened in January every year. Later, in 1999,

the Diet at the beginning of the ordinary session

the three Commissioners to discuss overall audit

theactivities including the issues facing BOA and thesubmission of the annual audit report in order tostatus of progress of audits. This meeting, which

achieve early deliberation of the final accounts.

is an occasion for the Commissioners to exchange

Accordingly, the FY1998 Annual Audit Report

opinions from their respective standings, is called

was sent to the Cabinet on November 29, 1999,

the Commissioners' free talking

toabout two weeks earlier than in the past. The

distinguish it from an official meeting of theannual audit reports from FY1999 to FY2002

session

471

House

of

Councillors

requested

earlyPart 3

Chapter 4

Audit in the Heisei Era (1989〜)

Subsection 5

were also sent to the Cabinet in late November,

Reflection of audit results

but the final accounts were submitted by the
1. Activities between BOA and the Diet

Cabinet to the Diet in January every year.
In May 2003, the House of Councillors

Cooperation between BOA and the Diet hasrequested the government to accelerate the time

been further strengthened particularly from 1997

for submission of the final accounts and to

onward, as legislations proposed by Housesubmit them to the Diet around November 20 ofmembers for amending the BOA Act to create

the year following the fiscal year, starting fromsystems allowing audit requests by the Diet andthe final accounts for FY2003, in order toSpecial reports to the Diet and the Cabinet passed

achieve early deliberation of the final accounts.

both Houses.
Institutional

In response, at the plenary session of the House

developments

included

theof Councillors in June 2003, Prime Minister

following: (i) it became possible for either House

Junichiro KOIZUMI stated that, with regard toor any of the Committees of either House, etc. toearly submission of the final accounts, efforts

request BOA to conduct an audit of specificwould be made in cooperation with BOA to bematters (Article 105 of the Diet Act; Article 30-3

able to submit them around November 20,of the BOA Act) with the 1998 amendment ofstarting from the final accounts for FY2003.

the Diet Act and the BOA Act; and (ii) it became

In line with this development, BOA decided

possible for BOA to report matters to the Diet

to send the annual audit report to the Cabinet atand the Cabinet at any time (Article 30-2 of thean earlier timing by accelerating the audit cycle

BOA Act) with the 2005 amendment of the BOA

including the time for conducting field audits byAct.
Meanwhile, in the House of Representatives,

about one month, in consideration of the purportof the House of Councillors' request, because if

matters

concerning

the Diet can deliberate on the final accounts at an

jurisdiction of the Committee on Audit, but since

early timing and promptly reflect the results in

the Committee on Audit was reorganized into thethe future budget, it will also comply with theCommittee

purpose of the audit of the final accounts.

Administration

on

audit

Audit
by

were

and
the

under

Oversight

theofabovementioned

Accordingly, the FY2003 Annual Audit

amendment of the Diet Act in order to strengthen

Report was sent to the Cabinet on November 9,

the administrative oversight function of the Diet,

2004, by further accelerating the timing by about

the matters came under the jurisdiction of thethree weeks, and the final accounts for FY2003

Committee

were submitted to the Diet on November 19 of

Administration. In the House of Councillors, suchthe same year during an extraordinary session ofmatters

the Diet. Thereafter, the annual audit report forCommittee on Audit.

each fiscal year has been sent to the Cabinet inearly November, and the final accounts for each(1) Deliberation on the State's final accounts at
the Dietfiscal year have been submitted to the Diet

A. Vote on the final accounts

are

on

Audit

under

the

and

Oversight

jurisdiction

of

of
the

At present, the House of Representatives

around November 20 if an extraordinary Diet

votes on a "proposal on the final accounts"

session in autumn is being held.
472

Section 3 Audit Activities

consisting of the following: (i) matters that

ministers. The final accounts were deliberated inrequire special attention; (ii) opinions on BOA'san accelerated manner, and were approved by aaudit findings; and (iii) an indication that there is

resolution in June of the same year. It was theno objection to matters other than the above. The

first time in 35 years that the final accounts wereHouse of Councillors conducts a "vote on

resolved during the term of the same ordinary

whether or not to endorse the final accounts" andDiet session in which they were submitted. Ever

issues a "warning to the Cabinet." From thesince, the same practice has been followed

deliberation of the State's final accounts for FY

whereby, after briefing on the final accounts at

2003

the

(2005),

the

House

of

Councillors'

plenary

session,aquestion-and-answer

Committee on Audit has adopted a resolution

session is held in the presence of the PrimerequiringandMinister and all other ministers in the general

agencies to take appropriate measures and to

discussions at the Committee on Audit, and thereport on the results, in addition to issuing a

final accounts are resolved during the term of thewarning to the Cabinet (the abovementioned

same ordinary session.

resolution on warning and resolution requiring

C. Briefing on the audit requested by the Dietand the special report to the Diet and the
Cabinetmeasures,seekingministries

measures were not adopted for the final accounts
for FY2006, which failed to be endorsed at theWith amendment of the Diet Act in January

House of Councillors).

1998, either House or a committee, etc. of either

B. Deliberation on the State's final accounts at
the Committee on Audit (and Oversight ofAdministration)

House came to be able to request BOA to

At present, the President of BOA attends

the results (see page 412). At the House of

meetings of the Committee on Audit (andRepresentatives, the first audit request was madeOversight of Administration) when required, andby the Committee on Audit and Oversight of

the relevant bureaus' Directors General attend theAdministration for a case on operation of public

meetings at all times (see page 296).

accommodation facilities in April of the same

conduct an audit of specific matters and to report

At the House of Councillors in particular, inyear, and the audit results were reported onorder to be able to reflect the results of

September 28 of the same year. At the House ofdeliberation of the State's final accounts in theCouncillors, the first audit request was made bybudget request when compiling the budget for the

the Committee on Oversight of Administrationnext fiscal year, the House received briefing onforthe final accounts for FY2001 at the plenary

implementation of resolutions on ODA in Marchsession at the beginning of the ordinary Diet

2000, and the audit results were reported on

session in 2003 in which said final accounts were

November 10 of the same year.

matters

relating

tothestatusofsubmitted. Then, simultaneously with the period

Later, at the House of Councillors, thefor general budget deliberation at the Committee

Committee on Audit decided to actively request

on Budget, a general question-and-answer session

auditswas held at the Committee on Audit in the

deliberation of the State's final accounts, startingpresence of the Prime Minister and all otherfrom review of the final accounts for FY2003,
473

from

the

viewpointofenhancingPart 3

Chapter 4

Audit in the Heisei Era (1989〜)

and in June 2005, the Committee on Audit madedeliberation of the State's final accounts

audit requests for nine cases for the first time.

(Implementationofdeliberationbyasubcommittee)

The numbers of cases for which audit was

In order to verify the State's measures

requested by the Committee on Audit from 2005

through deliberation of its final accounts andto 2009 are as follows.

to reflect the results in the immediately
Number of cases for which audit was requested by theHouse of Councillors' Committee on Audit
Month/year of request
Jun. 2005
Jun. 2006
Feb. 2007
Jun. 2007
Jan. 2008
Jun. 2008
Apr. 2009
Jun. 2009

following budget compilation, the period fordeliberation on each ministry is to be

Number of cases
9
3
1
2
1
4
1
2

shortenedthroughdeliberationbysubcommittees, and overall deliberation onmatters of special public concern is to be
conducted at the committee.
・1996 [HouseofRepresentatives ]Resolution seeking enhancement of BOA's
functionsAlso, with the amendment of the BOA Act

In order have BOA fully demonstrate its

in November 2005, it became possible for BOA

functions, measures required for enhancing

to report matters to the Diet and the Cabinet atits functions should be studied.

any time. BOA made a special report to the Diet
regarding a demand for measures made based on・1997 [ HouseofRepresentatives ]Resolution seeking enhancement of BOA's
audit function

Article 36 of the BOA Act in relation to the

Extensive study should be carried out toand the Cabinet for the first time in July 2006

amount of funds for land improvement liability

furtherenhance

BOA'sauditsandunder the comprehensive repayment measures forinvestigations and to have BOA demonstrate

land improvement burden expense.

its expected function.

question-and-answer sessions were held on the・2000 [ HouseofRepresentatives ]Resolution seeking enhancement andstrengthening of BOA's audit function

results of audit requested by the Diet as well as

In order to deal with the repeatedon the special report to the Diet and the Cabinet

public employee scandals and the recent

at the House of Councillors' Committee on Audit,

fiscalahead of submission of the final accounts forshould be taken to smoothly introduce the

FY2005. Since then, briefing and question-and-policy evaluation system and effort should

answer sessions have been held on both the

be made to further enhance and strengthen

results of audit requested by the Diet and the

BOA's audit function.

In November of the same year, briefing andspecial report to the Diet and the Cabinet at theconditions,allpossible measures

・2000 [House of Councilors] Resolution forenhancing and strengthening BOA's
organizational structure

Committee on Audit.
(2) Major resolutions of the Diet (including
committee decisions) concerning audits

BOA should strive to enhance andstrengthen

・1994 [House of Representatives] Changeofoperation
policyconcerningits

organizational

structureincluding budget and personnel so as to be474Section 3 Audit Activities

able to sufficiently respond to audit requests

1995 Audit of administrative expenses (food expenses) of
public works
1996 Issue of appointment of a former public employee as
BOA's Commissioner
1997 Partial amendment of the Diet Act, etc.
(introduction, etc. of a system enabling the Diet torequest audit)
1998 Issue of procurement of equipment by the Defense
Agency1999 Partial amendment of the BOA Act (deletion of theprovision on predominance of the House ofRepresentatives in giving consent to appointment ofCommissioners)
2000 Audit of the police
2001 Cabinet Secretariat's expenses for remuneration anda scandal of the Ministry of Foreign Affairs
2002 Audit of international organizations such as the
Cooperation Committee
2003 Early submission of the final accounts
2004 Issue of fraud of expenses for crime investigation by
the police (Hokkaido Prefectural Police, etc.)
Negotiated contracts of the Social Insurance Agency(cash registers, etc.)
Issue of fraud by Prefectural Labour Bureaus of the
Ministry of Health, Labour and Welfare
2005 Strengthening of BOA's functions (expansion ofaudit subject matters, introduction of the system of
special report to the Diet and the Cabinet, etc.)2006 Issue of reemployment of BOA's retirees by otherorganizations and negotiated contracts of BOA
2007 Liability for indemnity, disciplinary action, andnotification to the Public Prosecutors Officeconcerning the issue of fraud by Prefectural Labour
Bureaus of the Ministry of Health, Labour andWelfare2008 Issue of inappropriate accounting of administrative
expenses in State-subsidized projects of 12
prefectures
Reporting the status of remedial measures taken
against improprieties in the annual audit report
2009 Strengthening BOA's functions and mandate (followup of matters reported in the annual audit report,
reporting the results of the follow-up in the annual
audit report, and strengthening the system of
demanding disciplinary action)from the Diet, while the government also
needs to give full consideration to thismatter.
・2002 [ HouseofRepresentatives ]Resolution seeking further enhancement
and strengthening of BOA's audit
function
In order to further enhance BOA's
independence and ex post financial oversightfunction in the future, thereby contributing
to effective audit of public expenditures,
effort should be made to enhance andstrengthen BOA's budget, personnel, andorganization.
・2003 [House of Councilors] Resolution formaking a request to the Cabinet forstrengthening BOA's audit function
Necessary measures are to be taken forstrengthening BOA's audit function with theobjectives of

economy,efficiency,andeffectiveness・2006 [House of Councilors] Resolution for
securing
BOA's
independence
andreviewing its negotiated contracts
In order to secure further independence,
BOA should reconsider its treatment ofofficials, including encouragement of early
retirement and reemployment of BOA's
retirees. Also, BOA should take the initiative
to review its negotiated contracts from theviewpoint of securing transparency andfairness of contracts.

2. Regular meetings
authorities(3) Major discussions at the Diet relating to
audit

with

the

financial

From the past, regular meetings have been

Year
Matters
1990 Chemical grouting work of JR Okachimachi Tunnel,etc.
1991 Contribution of funds to the Gulf Peace Fund
Compensation for loss on securities
1993 Sticker bid-rigging casePublic works bid-rigging case
Audit of subsidies to political parties

held with the Budget Bureau and Financial
Bureau of the Ministry of Finance at the Budget
Examiner level and the senior director level (seepage 371). Furthermore, since 2003, opinion
exchange meetings have been held
475

among

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

executive-class officials headed by BOA's Deputy

etc. (as of 2009) in every February since 1988 in

Secretary General and the Director-General of theorder to further enhance internal audit andBudget Bureau of the Ministry of Finance. At theprevent recurrence of the same type of matters bymeetings, opinions are exchanged once a year on

explaining the latest annual audit report. Since

the status of audit conducted by BOA and budget

2007, BOA has improved the contents of theexecution surveys conducted by the Ministry ofbriefings by for example dividing the session into

Finance from a broad perspective.

two parts.
(3) Briefings on the annual audit report for
prefectural accounting managers, etc.

3. Briefings on the annual audit report forauditees

BOA has held briefings on the annual audit

Briefings have been held for auditees from

report for prefectural accounting managers, etc.

1988. The briefings were decided to be held

every fiscal year since 2007, in order to ensure

because discussions took place at the Diet and inprevention of recurrence of the same type ofmass media on matters such as that thematters as well as appropriate and efficient

government

preventive

budget execution by thoroughly disseminating

measures to stop the recurrence of situations

within their organization the matters pointed out

similar to the matters set down in annual audit

by BOA.

shouldtakeactivereports, and BOA recognized a need to cooperate
in such effort.
The contents of and changes in the briefings
are as follows.
(1) Briefings on the annual audit report for
deputy vice ministers, directors of accounts
divisions, and other relevant officials of
ministries, etc.
BOA has held briefings for directors of
President of BOA Keiichi TSUJI delivering an address at
the first briefing on the annual audit report for auditorsof State-owned bodies, etc.

accounts divisions of 21 national governmentorgans (as of 2009) such as ministries every
fiscal year since 1989, in order to prevent
recurrence of the same type of matters and toachieveappropriate

budgetexecution

4. Estimation of the financial impact of audit
work

and

When financial management is pointed out

enhancement of the internal audit function.
Since 2008, it has also held briefings for

by BOA as being inappropriate or unreasonable,

deputy vice ministers and those in charge of

etc. in the annual audit report, etc., the auditeeaccounting practice in ministries, etc.

takes measures to rectify the inappropriate or(2) Briefings on the annual audit report forauditors of State-owned bodies, etc.

unreasonable financial management and improve

BOA has held briefings on the annual audit

have brought positive financial benefits to thereport for auditors of 230 State-owned bodies,State and other auditees, such as increasing or

subsequent management. Some of such measures476

Section 3 Audit Activities

avoiding a decrease of revenues, profits, andassets, reducing or avoiding growth of expenses
and liabilities, and utilizing funds that have notbeen used effectively.
With an aim to accurately identify theeffects of audit activities and to use the resultsfor improving its future audit activities as well as
demonstrating BOA's activities to the public in aneasy-to-understand manner, BOA has estimatedthe abovementioned positive financial benefits
which were brought by the measures taken byauditees each year in relation to the annual audit
report and of which the scale and extent can bepresented in monetary amounts, based on certain
preconditions and identification methods, and has
published the results as "financial impact of audit
work" since 2007.
The estimated amounts of financial impactof audit work to date are as follows.
[2006 estimate] 113.1 billion yen[2007 estimate] 336.7 billion yen[2008 estimate] 175.7 billion yen

477

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Section 4 Overview of Audit Results
Subsection 1

findings are reported with regard to those issues

Characteristics of audit results
between the late 1980s and mid2000s

as improprieties, etc.
2. Between the mid-1990s and mid-2000s

1. Between the late 1980s and mid-1990s

Between the mid-1990s and mid-2000s, theBetween the late 1980s and mid-1990s, theeconomyJapanese economy experienced a financial crisis

triggered calls for review of the postwar systemand the first deflationary recession after World

that had supported Japan's reconstruction and

War II. At the same time, the amount ofgrowth after World War II. Also, the Greatoutstanding national government bonds continued

Hanshin-Awaji

occurred

to increase every year as a result of issuingexactly 50 years after the war, threw doubt on

national government bonds year after year, andJapan's "safety myth."

the State's fiscal management faced difficulty.

collapseoftheso-called

Earthquake,bubblewhich

BOA steadily progressed its audit in suchThus, it was a time when fiscal reform was

new areas as medical care, pension, and Official

proactively pushed forward by reviewing andDevelopment

restructuring the postwar system.

Assistance(ODA),

andmade

Under such circumstances, BOA played

notable achievements.
Furthermore, amid increased demand forsome role in institutional reform by proactivelytransparency of administration, BOA considered

covering even the situations that involve theit necessary to actively make public the progressState's policy issues in the sections of specialof audit on issues of extremely high public

description, report on specific matters, etc., inconcern, and created a section called "report onorder to provide information or raise concerns

specific matters" in the annual audit report towith regard to those issues.

provide audit information even when no audit
Number of audit cases by reporting category
Special report on audit
requested by the Diet*1

Report on specific matters

Grand total*2

Subtotal
cases
11
9
8
6
3
4
3

Special report to the Dietand the Cabinet

36
cases
3
7
5
1
2
1
3

Total ofimproper/unreasonable
matters

34/36
cases
1
―
―
―
―
1
―

Special description

34
cases
7
2
3
5
1
2
―

Measures taken

Presented
opinions/
demandedmeasures

Improprieties

FY
1989
1990
1991
1992
1993
1994
1995

cases
192
240
224
252
235
217
238

cases
―
14
18
14
18
27
29

cases
―
―
―
―
1
1
2

cases
220
263
250
272
257
249
272

cases
―
―
―
―
―
―
―

cases
―
―
―
―
―
―
―

cases
―
2
2
3
2
6
4

cases
220
265
252
275
259
255
276

478

Section 4 Overview of Audit Results
1996
314
1
―
2
3
33
―
350
―
―
6
356
1997
304
4
―
2
6
30
1
341
―
1
8
350
1998
229
2
―
4
6
32
2
269
―
―
10
279
1999
252
1
1
4
6
37
1
296
―
1
11
308
2000
226
2
2
5
9
23
2
260
―
―
15
275
2001
248
28
―
4
32
31
1
312
―
―
17
329
2002
272
2
1
2
5
38
4
319
―
―
18
337
2003
219
1
―
10
11
47
8
285
―
―
20
305
2004
296
2
―
2
4
59
5
364
―
2
20
386
2005
390
8
1
5
14
41
4
449
5
7
14
473
2006
361
6
―
5
11
65
―
437
2
5
8
451
2007
859
29
1
23
53
55
―
967
7
7
5
981
2008
593
18
4
47
69
46
―
708
23
5
4
717
*1 The number of cases reported in "special report on audit requested by the Diet" includes the number of cases reported in"progress report on audit requested by the Diet."*2 The number of cases in "grand total" excludes the overlap between the number of cases reported in "special report to the Dietand the Cabinet" and the number of cases reported as presented opinions and demanded measures, etc.

matters of taxation.

BOA also positively engaged in conductingAs

audits with particular focus on whether any

for

the

organizational

structure

fraudulent accounting has been conducted andconcerning taxes, BOA had adopted a three-whether the administration

anddivision organizational structure of 1st, 2nd andcontracts has been reasonable, given that a series

3rd Tax Audit Divisions of the 1st Bureau sinceof fraud or improprieties took place in some

1951, dividing the work of audit of Regional Tax

ministries, as well as audits that contribute to

Bureaus, Tax Offices, and Customs nationwide

effective use of funds created through subsidies,among the three divisions mainly by region of

etc., and assets such as land, buildings, andthesurplus held by special accounts and incorporated

reorganizedadministrative agencies, etc., as well as to further

structure

reduction of administrative expenses, and to

structure of 1st and 2nd Tax Audit Divisions ofeffective and efficient execution of projects. BOA

the 1st Bureau on April 1, 2009.

ofbidding

auditees'

locations.

this

into

a

However,

BOA

three-divisionorganizational

two-divisionorganizational

also steadily worked on and made achievements
in regard to special reports on audit requested by

1. Audit of excess and deficiency in collectedtax

the Diet (Article 30-3 of the BOA Act) andBOA

special reports to the Diet and the Cabinet

conducts

audit

of

excessand(Article 30-2 of the BOA Act), which were

deficiency in collected tax by placing emphasis

introduced by the 1998 and 2005 amendment ofon

the BOA Act.

income tax, corporation tax, inheritance tax/gift

withholding

incometax,

self-assessment

tax, and consumption tax, and focusing on
Subsection 2

whether or not taxes are imposed appropriately

Taxes

based on laws and regulations, with the objective
When looking at tax audit in the Heisei era,of regularity, etc. BOA conducts such audit by

there were audit findings of not only matters ofusing documentary evidence, etc. submitted toexcess and deficiency in collected tax, but also

BOA in accordance with the Regulations on the479

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Submission of Accounts and also documents such

Improper amounts of excess and deficiency in collected
tax by fiscal year

as the tax returns filed with the Regional Tax
Bureaus and Tax Offices nationwide. When BOA

FYfinds a matter that is not considered to beappropriate, it conducts audit by for example

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

requesting the Regional Tax Bureau or Tax
Office to examine the matter, and checking theresults of the examination.
In this audit, BOA does not directly audit
taxpayers and withholding agents, but audits theappropriateness of the taxation processing carriedout by tax collection agencies such as Tax
Offices. In other words, BOA audits the collected
taxes after they have been processed by thenational tax authorities, and if it finds any
inappropriate tax amount that has not beencorrected, it criticizes the authorities' processing
as being improper.
BOA has put emphasis on so-called audit on

AmountDeficiency in
Excess in collectedcollected tax
tax (△)
million yen
million yen
1,420.61△ 29.54
1,385.43△ 5.42
1,456.42△ 48.15
1,580.96△ 29.6
1,604.2△ 15.51
1,375.52△ 18.77
1,312.51△ 28.41
1,395.08△ 3.58
1,345.12△ 26.65
1,271.3△ 0.51
1,249.42△ 11.15
1,118.1△ 3.62964.32△ 50.38
1,230.83△ 15.6813.29△ 35.72593.58△ 34.18
485.58△ 30.16805.18△ 16.12671.05△ 6.77967.89△ 56.77

specific subject recently, and cases of excess anddeficiency in collected tax have been reported as

Characteristics of audit findings

measures taken or reports on specific matters.

(i) Inheritance tax

As mentioned above, BOA has conductedAudit findings concerning inheritance tax

audit on excess and deficiency in collected tax byhave been reported almost every fiscal year fromplacing emphasis on the major three taxes of

FY1948. In FY1959 when improper amounts

withholding income tax, self-assessment income

started to be described by tax item, audit findings

tax and corporation tax, and in the Heisei era,of excess and deficiency in the collected tax

also on inheritance tax and consumption tax. This

amount of inheritance tax and gift tax wereis because inheritance tax and consumption tax

categorized as under the "others" section, buthave come to account for a large share infrom FY1989 onward, they have been categorizednational tax revenues, and also because their tax

under the "inheritance tax/gift tax" section.

laws are complicated and their income calculation

From FY1989 to FY2008, audit findings

is difficult.

concerning inheritance tax/gift tax continued to

The following table shows the improper

increase both in terms of the amount of excess

amounts of excess and deficiency in collected tax

and deficiency in collected tax and the number ofby fiscal year from FY1989 to FY2008.

cases reported. One of the underlying factors wasthat the number of taxable inheritance cases
increased due to the land price hike in the bubble
economy period and this pushed up the tax
480Section 4 Overview of Audit Results

amount per heir, causing a sharp rise in thethe 1950 tax system revision based on the Reportinheritance tax revenues, and BOA began toon Japanese Taxation by the Shoup Mission, theplace emphasis also

taxation

system of aggregation of the household's income

processing of inheritance tax. Later, however, thefrom assets was introduced as its exceptional

audit findings turned to a decrease due in part tomeasure. It was a system to aggregate incomechanges in asset values caused by the collapse offrom assets (including interests, dividends, andthe bubble economy and other factors.

real property) of the minimum household unit,(ii) Consumption tax

such as a couple and a minor who share their

on

audit

of

The Consumption Tax Act came into effectcosts of living, in calculating income tax. The

on April 1, 1989. In line with this, the Tax Audit

system was once abolished in 1951, but was later

Divisions considered the audit items, the audit

revived in 1957, and existed until 1988.

period, and other matters for auditing the taxation

Audit findings concerning aggregation of theprocessing of consumption tax, and began tohousehold's income from assets were the main

conduct audit on a full scale in January 1993.

type of audit findings relating to self-assessment

Audit findings concerning simplified tax and tax

income tax. From the mid-1960s onward, BOA

credit for consumption tax on purchase (sevenreported around 20 to 130 cases in the annual

cases of deficiency in collected tax) wereaudit report each fiscal year, and in FY1989,

reported for the first time in the FY1992 Annual

BOA reported 104 cases involving 125.83 million

Audit Report. In April 1997, the national

yen. However, this system was decided to be

consumption tax was raised from 3% to 4%, andabolished for income tax for 1989 onward whena local consumption tax of 1% was introduced,

the income tax rate was changed to a five-tierresulting in a total consumption tax rate of 5%.

progressive tax structure ranging from 10% toWith regard to consumption tax, BOA has

50% and the progression became considerablyreported not only improprieties concerning excess

less steep as part of the tax system reformand deficiency in collected tax, but also measures

including the introduction of consumption tax inthat have been taken for preventing erroneous

December 1988. As a result, audit findings

collection of consumption tax from taxpayers. In

concerning aggregation of the household's income

the FY1999 Annual Audit Report, BOA reported

from assets ceased to be reported.

that tax authorities took improvement measures in(iv) Transfer of land

response to BOA's audit findings, as measures

In the latter half of the 1980s, speculative

taken. This was an achievement made by BOA toland transactions originating in the central part ofnot merely report the individual audit results ofTokyo caused a surge in land prices. In

excess and deficiency in collected tax

asparticular, the official land prices of commercial

improprieties, but also lead the auditees toareas in Tokyo rose sharply, marking a 61.6%

improve the system based on the audit results.

increase over the previous year in 1988. In order(iii) Aggregation of the household's income
from assets in calculating self-assessment
income tax

to deal with such a situation, a number ofWhen individual taxation was adopted upontaken to promote supply of land by changing themeasures were taken through tax system revisions
from 1987 onward. For example, measures were481

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

categorization of "long term" and "short term" fortax that are most frequently found in audit ofindividuals' income tax on land transfer andwithholding income tax are cases where thecorporations' system of additional tax on capital

withholding agent has not paid the payable tax

gains

Specifically,

amount or has underpaid the amount due tocategorization of "long term" was changed fromerroneous calculation of the tax amount but thetransfer of land owned for more than ten years tonational tax authorities has not notified thethat of land owned for more than five years. In

withholding agent of the tax due. These are types

addition, in order to restrain speculative landof errors can be reduced if the national tax

transactions, a system was created to impose

authorities constantly identify and manage theadditional tax on transfer of land owned bystatus of tax payment by using computers. The

corporations for a very short term (imposing acomputerization of the work for managing

tax rate of 30% of the capital gains in addition tocollection of withholding income tax, which

the ordinary corporation tax rate), and measures

started in 1974, has covered all Tax Offices sincewere introduced to restrict inclusion of interest on

1987 (514 Tax Offices in 1987). This measureborrowings for acquisition of land in deductible

strengthened the national tax authorities' ability toexpenses.

manage the work of collecting withholding

from

land

transfer.

When the Ministry of Finance implemented

income tax and give instructions to withholding

regulations on loans to the real estate industry inagents (particularly instructions to pay tax by the

March 1990, the soar in land prices wasdue date). However, BOA still reports a slightstabilized, and the prices turned to a decline in

number of audit findings of matters that are not

FY1992.

suitable to be processed by computer, such as a(v) Withholding income tax

failure to withhold income tax on "deemed

In FY1947, the improper amounts reported

dividends" that arise when, for example, awith regard to withholding income tax totaled

corporation acquires its own shares at a price104.95 million yen, accounting for 92% of theexceeding the amount of its stated capital, etc., or

total improper amounts of excess and deficiency

an error in the service period category to be

in collected tax, but the percentage has shifted

applied for the deduction of retirement income

between 1% to 12% in the Heisei era. Suchfrom the amount of income.

declining

trend

of

the

improperamounts

associated with withholding income tax has beencaused by such factors as that national tax

2. Audit of matters other than excess anddeficiency in collected tax

authorities became able to better capture the

As for audit of matters other than excess andstatus of tax payment due to computerization of

deficiency in collected tax, BOA has reported

their work of managing the collection ofaudit findings on refund, overpayment of interest

withholding income tax and that tax cuts wereon refund, preservation of tax claims, and illegal

introduced as a measure to mitigate the impact ofacts as improprieties from the past. Meanwhile, inthe collapse of the bubble economy and to

the Heisei era, BOA also reported such audit

stimulate the economy.

findings as presentation of opinions in both FY
1998 and 2007, as special description in FY1998,

Cases of excess and deficiency in collected482

Section 4 Overview of Audit Results

and as report on specific matters from FY2002 to

the measures were enacted spreads sufficiently or

FY2007.

ceases to be effective later on, the measures need

In audit subject matters of excess andto be revised as needed. As a result of conducting

deficiency in collected tax, BOA mainly focusesaudit with such audit objective, BOA presented,

on the taxation processing of the respective taxes,

as a report on specific matters, that some mattersbut in connection to this, BOA also audits such

were found not to be compliant with thework as management and preservation of tax

legislative purpose of the special measures onclaims. BOA conducted audit of the tax affairs

taxation, and that competent organizations needed

system and execution framework relating to suchtowork from a broad perspective, and included thecontinuing to implement the special measures.

verifytheeffectsandsignificanceof

audit results in the presented opinions, which was

The audit of said measures is conducted

described pursuant to Article 36 of the BOA Act,with the following two objectives: evaluation ofin the FY1998 Annual Audit Report. After that,the policy "special measures on taxation"; and themeasures taken have been reported almost every

fairness and equity sought in tax. It meetsfiscal year.

citizens' concern over tax, which has been
growing since the introduction of consumption

From the FY2002 Annual Audit Reporttax.

onward, BOA has reported specific mattersconcerning special measures on taxation every

The following table shows audit cases

fiscal year. Special measures on taxation arereported in the annual audit reports from FY1989

policy means for achieving specific policy

to FY2008, other than improprieties and measures

objectives by reducing the tax burden. However,taken.

if a policy which had been effective at the time
FY
Item1998 Opinion on appropriate measures for preventing consumption tax delinquency (presented opinions (Article 36 of the BOAAct); background amount: 20,858.09 million yen)Registration and license tax on registering the transfer of real property ownership rights (special description); backgroundamount: 1,444.56 million yen)
2002 Implementation of Act on special measures on taxation concerning corporation tax (report on specific matters)
2003 Implementation of special measures on taxation (exception to calculation of income from social insurance medical feesfor medical corporations) (report on specific matters)
2004 Special measures on taxation (exception to the taxation on income from the sale of beef cattle and special postponementof the payment of inheritance tax on farmland) (report on specific matters)
2005 Special measures on taxation (exceptions to calculation of inheritance tax assessed value for small-scale housing lots)(report on specific matters)
Assessment of corporation tax on profit-making business managed by public interest corporation (report on specificmatters)
2006 Application of special measures on taxation (life insurances) (report on specific matters)
2007 Opinion on improvements in the operation of the 'One-Stop Service' for the procedures related to ownership of cars since
it has been seldom used (presented opinions (Article 36 of the BOA Act); improper amount: 40.73 million yen (Ministryof Land, Infrastructure, Transport and Tourism); background amounts: 5,272.35 million yen (Ministry of Land,
Infrastructure, Transport and Tourism): 521.6 million yen (Cabinet office, and the National Police Agency): 528.43
million yen (Ministry of Internal Affairs and Communications): 197.27 million yen (Ministry of Finance))
Application of special measures on taxation (special deduction for blue returns) (report on specific matters)
2008 Improvement in shortening refund payment procedures by distinguishing the high-priced refund from others in order toreduce interest on refund (demanded measures (Article 36 of the BOA Act); improper amount: 2,789.42 million yen)483

Part 3

Chapter 4

Subsection 3

Audit in the Heisei Era (1989〜)

rates have beenSocial security

increasing

every

year

in

accordance with the increase in the spending of
The

rapid

changesinJapan's

medical expenses and pensions.

socialLooking at the amounts of improprieties ofconditions such as population aging and declining
birth rate in recent years have made the social

deficiency

incollected

premiumsofsuch

security system more advanced and complicated.

insurance reported during the period from FY

In order to respond to such social conditions, the1989 to FY2008, from FY1992, BOA has

government has substantially increased the social

selectively conducted prioritized audit of businesssecurity budget.

types and fields where there tended to be a riskfor erroneous collection of premiums. The

In FY2008, the expenses for social securityof the general account (initial budget basis)

establishment ofapproximately doubled from the level in FY1989

Division in the 2nd Bureau, as an organizational

at 21,782.4 billion yen, accounting for 26% ofstructure

the amount of appropriation (initial budget basis).

restructuring of the organization of BOA in

Moreover, the FY2008 initial budget amount

December 1991 made such prioritized auditof the Special Account for Pension, which has

possible. The improper amounts have been

consolidated the former Special Account forincreasing, amounting to over 140.4 million yen

Employee's Insurance and the Special Accountin the FY1991 Annual Audit Report, overfor National Pension, was as high as 73,253.4

1,251.44 million yen in the FY1992 Annual

billion yen.

Audit Report, and about 2,175.03 million yen inforthe Public Pension

pensionaudit,

through

Audit
theAccordingly, the Basic Policy on Audit has

the FY1993 Annual Audit Report. This iscited "social security" at the top of the priority

because, in the process of audit of pension

policy area of audit.

benefits, BOA found many recipients of speciallypaid old-age employees' pension who were

1. Audit findings on social insurance

employed by a place of business covered by(1) Audits on collection of insurance premiums

employees' pension insurance, but whose written

BOA has reported audit findings relating to

notice of acquisition of the qualification for

deficiency in collected premiums of healthemployees' pension insurance had not been

insurance and employees' pension insurance andsubmitted, and BOA required that the overpaid

excess and deficiency in collected labor insurance

portion of the pension be collected and also thepremiums as improprieties in the annual audit

unpaid portion of premiums be collected byreport every fiscal year. Characteristics of matters

having the relevant places of business submit thereported

written notice of acquisition of the insuranceoncollection

of

such

insurance

qualification for such pension recipients.

premiums are as follows.

The improper amounts relating to deficiency(i) Health insurance, employees' pension, etc.
Premiums of health insurance, employees'

in collected premiums in FY1994 was overpension, etc. serve as the financial source of

11,365.59 million yen, 5.2 times the amount inmedical expenses paid to medical institutions or

the previous fiscal year. This was because BOA

pensions paid to pension recipients. The premium

investigated employers belonging to a national484

Section 4 Overview of Audit Results

health insurance society for civil engineering andemployed by ship owners. Regarding audit ofbuilding contractors as well as local public

collection

entities

employing

improprieties were reported every fiscal year

employees

and

many

temporarycommissioned
employees,ofmariners

insurance

premiums,

from FY1961 to FY1990.

and(ii) Labor insurance

because BOA mainly reported about a large

Labor insurance is a collective term for

number of employees who were still not covered

industrial accident compensation insurance andby employees' pension insurance, etc.
situation

employment

insurance.

Industrial

accident

included the following. In respect to civil

compensation

insurance

providesmedicalengineering and building contractors, national

compensation benefits, etc. to workers for theirhealth insurance societies had not treated workers

occupationalof such contractors as full-time workers, andEmployment insurance provides unemployment

most social insurance offices had accepted such

benefits, etc. to unemployed persons, and it camepractice. With regard to local public entities,

into effect by incorporating the conventional

many of them had not understood the social

unemployment insurance system.

The

factors

underlying

such

injuriesordiseases,etc.

insurance system, or had been affected by aDuring the period from FY1989 to FY2008,

notion to reduce the amount of the part of thethe improper amounts of improprieties on excess

premium payment borne by the employer or toand deficiency in collected premiums of labor

avoid the downward adjustment of the amount of

insurance showed an increase due to such reasons

workers' pension.

as rationalizing the selection of on-site audit inthethe audit of excess and deficiency in collected

employment patterns, BOA has increasingly

premiums of labor insurance since the earlyreported audit findings of deficiency in collected

1980s.

Recently,

due tothechangesin

The following table shows audit cases onpremiums relating to part-time workers, such ascollection of premiums reported in the annual

dispatched workers.
Meanwhile,
benefits

mariners

includinginsurance

providesaudit reports from FY1989 to FY2008, other than

medicalbenefits,

improprieties and measures taken.

unemployment benefits, and pensions to mariners
FY
Item
1991 Rectification and improvement in collection of national pension by grasping accurately participants who are delinquent intheir payments and encouraging their payments (demanded measures (Article 34 of the BOA Act); improper amount:
3,801.73 million yen)
1997 Improvement in promoting participation in the farmers pension, promoting the collection of unpaid premiums, andchecking the requirements of pensioners (demanded measures (Article 36 of the BOA Act); background amount: 2,963.37
million yen (Farmers Pension Fund))1999 Opinion on proper submission of application for changing the category of insured person from category III (presented
opinions (Article 36 of the BOA Act); improper amount: 254.11 million yen)
2000 Improvement in withdrawal procedures from government-managed health insurance and employees' pension insurance(demanded measures (Article 36 of the BOA Act); background amount: 107.78 million yen)2008 Rectification and improvement in establishing a system for managing the claim for unpaid arrears and accurately
demanding payment of labor insurance premiums in arrears (demanded measures (Article 34 of the BOA Act); improperamount: 4,219.05 million yen)

485

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

statements of medical expenses included any(2) Audits on expenditures of medical expenses
and pension

erroneous orinconsistent

medicalinsurance

claims.

In line with an aging society, expendituresof medical expenses and pension have been

In this audit technique, however, evenincreasing every fiscal year. The national medical

though BOA casted doubt as to the breakdown ofexpenses were 19,729 billion yen (1.601 million

the medical expenses of individual patients, it

yen per capita) in FY1989, then they rose to

was difficult to overturn the view of the medical

34,136 billion yen (2.672 million yen per capita)

institution holding non-disclosed information suchin FY2007. Both the total medical expenses andas medical records, and even if a situation was

the medical expenses per capita grew by 1.7

determined to be inappropriate, the patient-by-

times over the 19 years. With regard to pension,

patient inspection made it difficult to gather the

the

and

individual audit findings and to compile them

employees' pension were 26,146.2 billion yen in

into a scale that can be reported in the annual

FY1989, then they reached 58,286.6 billion yen

audit report.

expendituresofnational

pensionThus, in order to address this situation, BOA

in FY2006, growing by 2.2 times over the 18

adopted a new way of thinking that, because

years.

inappropriate claims are

Since medical expenses and pension are

made

by

medicalclosely related with the lives of citizens in thisinstitutions, audit should also be conducted for

aging

of

each medical institution, instead of for each

expenditures of these social insurance expenses ispatient, and decided to examine the statement of

an issue of increasing public concern.

medical expenses for each medical institution and(i) Medical treatment fees, etc.

identify whether the claims tended to include

society,ensuring

appropriatenessImproprieties concerning medical treatment

outliers. This made it possible for BOA to avoid

fees, etc. have been reported every fiscal year

going into the contents of medical practice and tosince FY1986 as improper medical expenses

only report obvious audit findings at the medicalborn by the State. The audit technique of

expense claims level.

medical expenses at the time when matters started

The following table shows audit cases on

to be reported as improprieties was in line withmedical treatment fees, etc. reported in the annual

inspection technique carried out by the Ministry

audit reports from FY1989 to FY2008, other thanof Health and Welfare. In other words, the audit

improprieties and measures taken.

method was to check whether each patient's
FY
Item
1989 Rectification and improvement in grasping hospitals with woefully insufficient number of doctors and nurses against thestandard (demanded measures (Article 34 of the BOA Act); improper amount: 1,228.05 million yen)
1991 Rectification and improvement in the claim for medical treatment fees of physical disabilities who are residents ofcustodial care facilities (demanded measures (Article 34 of the BOA Act); improper amount: 624.85 million yen)
1992 Rectification and improvement in payment of medical expenses concerning a judo therapist (demanded measures (Article
34 of the BOA Act); improper amount: 30.22 million yen)
Rectification and improvement in budget execution of pharmaceutical expenses at national university hospitals (demandedmeasures (Article 34 of the BOA Act); background amount: 8,179.15 million yen)

486

Section 4 Overview of Audit Results
1999 Rectification and improvement in calculating appropriately charges for food service at the national university hospitals
and opinion on shifting the outsourcing from negotiated contract to general competitive contract (demanded measures(Article 34 & 36 of the BOA Act); improper amount: 131.5 million yen; background amount: 4,872.39 million yen)
Rectification and improvement in the claim for medical treatment fees for medical oxygen (demanded measures (Article
34 of the BOA Act); improper amount: 395.38 million yen)
2002 Rectification and improvement in accepting the notification of basic medical service fees in order to claim medical
treatment fees properly (demanded measures (Article 34 of the BOA Act); improper amount: 3,462.1 million yen)

Meanwhile, the audit of medical expenses

fees. The following table shows audit cases on

also covered audit of revenues of national

revenues from medical expenses reported in thegovernment

annual audit reports from FY1989 to FY2008,

organs fromtheviewpointofother than improprieties and measures taken.

identifying any failure to claim medical treatment

FY
Item
1989 Rectification and improvement in the claim for medical treatment fees concerning emergency care provided by thenational university hospital (demanded measures (Article 34 of the BOA Act); improper amount: 76 million yen)
1998 Rectification and improvement in the claim for additional medical treatment fees of nursing care on night duty at thenational university hospital (demanded measures (Article 34 of the BOA Act); improper amount: 69 million yen)
2000 Opinion on establishing a system for medical treatment fees claims by the national university hospitals (presented
opinions (Article 36 of the BOA Act); background amount: 70.81 million yen)issuance of grants for medical treatment(ii) National health insurance, etc.

benefit expenses relating to national health

BOA reported audit findings concerning

insurance.

state subsidies to national health insurance
programs run by municipalities and national

The following table shows audit cases on

health insurance societies as improprieties every

national health insurance, etc. reported in thefiscalannual audit reports from FY1989 to FY2008,year.

Notable audit

findings

includeother than improprieties and measures.

improper issuance of fiscal equalization grants
for national health insurance and improper

FY
Item
2004 Improvement in procedures that excluding people of national health insurance who have eligibility for health insurance
from health insurance, in order to appropriately calculate the subsidy for medical treatment benefit expenses (demandedmeasures (Article 36 of the BOA Act); improper amount: 59.01 million yen)2006 Opinion on promoting effective utilization of the national health insurance fund, and reviewing on the fund projects in
response to insurers' situations in each prefecture (presented opinions (Article 36 of the BOA Act); background amount:
14,372.26 million yen)(iii) Medical examination fees covered underindustrial
accident
compensation
insurance

under industrial accident compensation insurance

In the annual audit reports for every fiscal

systems. Characteristic viewpoints of audit ofyear from FY1989 onward, BOA has reported

medical examination fees covered under industrial

improprieties concerning medical examination

accident compensation insurance are that BOA

fees

particularly focuses on charges for surgicalcoveredunderindustrial

is similar to the abovementioned audit of medical
expenses in terms of the audit of medical expense

accident

operations, hospital charges, treatment charges,

compensation insurance.

etc. because the insurance benefits are mostly

Audit of medical examination fees covered487

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

provided for surgical medical examination ofthat differ from those for auditing systems of

injuries, and that BOA adopts an audit technique

national health insurance point tables.

to audit a large number of medical institutions

The following table shows audit cases on

and aggregate their improper amounts. Also,

medical examination fees covered under industrial

BOA

auditsexamination

systems
fees

tomedicalaccident compensation insurance reported in theunderindustrial

annual audit reports from FY1989 to FY2008,

uniquecoveredother than improprieties and measures.

accident compensation insurance from viewpoints

FY
Item
1989 Improvement in calculating appropriately the medical examination fees covered under the industrial accident
compensation insurance (demanded measures (Article 36 of the BOA Act); improper amount: 350 million yen)
1992 Rectification and improvement in calculation and screening of additional hospital room charges for the medical treatment
provided under the industrial accident compensation insurance (demanded measures (Article 34 of the BOA Act);
improper amount: 138.87 million yen)pension(iv) Pensionfortransferring

management

to

BOA has reported improprieties relating tosuccessors in the farmers' pension project

pension in the annual audit reports for every(from FY1993 to FY1995) and inappropriate

fiscalpayment of the pension for dependent families

year

from

FY1989onward.

Mainunder the national pension (FY1989).

improprieties include inappropriate payment of
the old-age employees' pension under the

The following table shows audit cases on

employees' pension insurance or the old-age

pension reported in the annual audit reports frombasic pension under the national pension.

FY1989 to FY2008, other than improprieties andOther examples are improper payments ofmeasures.

FY
Item1991 Rectification and improvement in collection of national pension premium by grasping accurately participants who aredelinquent in their payments and encouraging their payments (demanded measures (Article 34 of the BOA Act);
improper amount: 3,801.73 million yen)
1993 Improvement in preventing the pension benefits from error or excess (demanded measures (Article 36 of the BOA Act);background amount: 2,850 million yen)
1997 Improvement in promoting participation in the farmers pension, promoting the collection of unpaid premiums, andscreening the requirements of pensioners (demanded measures (Article 36 of the BOA Act); background amount:
2,963.37 million yen (Farmers Pension Fund))1999 Opinion on proper submission of application for changing the category of insured person from category III of national
pension (presented opinions (Article 36 of the BOA Act); improper amount: 254.11 million yen)Management and operation of the Pension Welfare Service Public Corporation (report on specific matters)
2000 Improvement in withdrawal procedures from government-managed health insurance and employees' pension insurance(demanded measures (Article 36 of the BOA Act); improper amount: 107.78 million yen)
2001 Opinion on grasping and utilizing the working information properly from current situation reports of specially paid oldage employees' pension recipients (presented opinions (Article 36 of the BOA Act); improper amount: 490.07 million
yen)
Disposition progress of land succeeded for the payment of pensions (report on specific matters)
2002 Administration of both nursing homes under the employees' pension and recreational facilities under the governmentmanaged health insurance system established by the Social Insurance Agency (report on specific matters)
2003 Management of national pension programs (report on specific matters)
2004 Rectification and improvement in calculating properly the interest on the charges for using the software under the data
communications services contract (demanded measures (Article 34 of the BOA Act); improper amount: 3,395.94 million
yen)
Promotion of the enrollment in health insurance and employee pension insurance (report on specific matters)

488

Section 4 Overview of Audit Results2005 Rectification and improvement in calculation of the current market value of state-owned goods invested in the
Readjustment of Facilities for Insured Persons and Beneficiaries Organization (demanded measures (Article 34 of the
BOA Act); improper amount: 134.16 million yen)
Exemption of national pension premiums payments due to poverty (report on specific matters)
Streamlining of pension and health insurance welfare facilities established by the Social Insurance Agency (report on
specific matters)
2006 Rectification and improvement in estimation of target prices of outsourcing contracts for operations including data entry
concerning application forms of health insurance and employees' pension insurance (demanded measures (Article 34 of
the BOA Act); improper amount: 37.19 million yen)
Applying entitlement of the insured person and collecting insurance premiums under the national pension programs(report on specific matters)
2008 Pension record issues (special report on audit requested by the Diet)

From 2002, BOA has also conducted full-(v) Long-term care insuranceWith regard to the long-term care insurance,scale audit on the long-term care benefit expenses

which was introduced in 2000, BOA conducted

themselves, and has reported audit findings

audit of subsidies and loans that were provided

relating to long-term care benefit expenses andfor promoting the introduction of the system. As

financial adjustment grants for long-term carea result, BOA reported the following cases as

insurance as improprieties every fiscal year.

improprieties: receipt of an excessive amount ofFurthermore, BOA reported the current

subsidies that are provided to cover projectstatus of the long-term care insurance system

expensescare(FY2003; report on specific matters) andframework for the elderly due to including

improvement measures demanded to revise thenon-subsidizable expenses in the amount ofsystem so that the prefecture is able to return

subsidizable

impropera part of the fiscal stability fund for long term

amount: 5.36 million yen) and impropercare insurance to the contributors if it finds it

provision

appropriate so as to keep the size of the fundtodevelopexpensesalong-term(FY2000;ofbridgeloans

administrative

funds

necessary

to

cover
in

reasonable

the(FY2007;

demandedmeasurestransition to the long-term care insurance(Article 36 of the BOA Act); backgroundsystemamounts: 57.5 billion yen).

(FY2000;

improperamount:6.06

million yen). In addition, BOA also audited the(vi) Industrial
insurance

benefits provided to municipalities for mitigating

accident

compensation

Regarding industrial accident compensation

the effects of a decline in the rate of receipt ofnational pension premiums due to a risk that theinsurance,

rate of receipt of national pension premiums may

overpayment of medical examination fees todecline by collecting them together with long-designated medical institutions, etc. for theterm care insurance premiums, and then BOA

medicalreported

accident compensation insurance as improprieties

improvement

measures

taken

to

BOA

treatment

reportedprovided

cases

under

such

as

industrial

every fiscal year.

adjust the benefits based on the rate of receipt

The following table shows audit cases onof national pension premiums as of the time ofthe settlement of the accounts (FY2000;

industrial

measures taken; improper amount: 1,898.44

reported in the annual audit reports from FY1989

million yen).

to FY2008, other than improprieties and measures489

accident

compensation

insurance

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

taken.
FY
Item
1989 Improvement in calculating appropriately the medical examination fees covered under the industrial accident
compensation insurance (demanded measures (Article 36 of the BOA Act); improper amount: 350 million yen)
1990 Improvement in the collection system of expenses under the industrial accident compensation insurance (demandedmeasures (Article 36 of the BOA Act); background amount: 6,685.89 million yen)
1992 Rectification and improvement in calculation and screening of additional hospital room charges for the medical treatment
provided under industrial accident compensation insurance (demanded measures (Article 34 of the BOA Act); improperamount: 138.87 million yen)
2000 Rectification and improvement in utilizing the information about compensation benefits for temporary absence from work
under the industrial accident compensation insurance in order to pay properly jobseeker benefits from employment
insurance (demanded measures (Article 34 of the BOA Act); improper amount: 15.91 million yen)subsidies for developing regional workplace,(vii) Employment insuranceWith regard to employment insurance, BOA

employment adjustment subsidies and subsidies

reported cases where payment of unemployment

for new employment of small and medium-sized

benefits or subsidies for specific jobseeker

companies, over a span of a few years, andemployment development was not appropriate asreported their inappropriate payment over several

improprieties every fiscal year. BOA audited

fiscal years.

FY
Item
1995 Opinion on effective payment of financial incentives for introducing retirement age extension system under theemployment insurance (presented opinions (Article 36 of the BOA Act); background amount: 2,022 million yen)
2000 Rectification and improvement in utilizing the information about compensation benefits for temporary absence from work
under the industrial accident compensation insurance in order to pay properly jobseeker benefits from employment
insurance (demanded measures (Article 34 of the BOA Act); improper amount: 15.91 million yen)
2001 Rectification and improvement in coordinating both the subsidies for specific jobseeker employment development andsubsidies for new employment of small and medium-sized companies in order to avoid applying both subsidies to thesame employee (demanded measures (Article 34 of the BOA Act); improper amount: 42.1 million yen)

2. Audit findings on social welfare

and accounting of projects for improvement of(i) Welfare for the elderly

social welfare facilities, and excessive provisionof subsidies for the improvement of social

As regards subsidies relating to welfare
facilities for the elderly, BOA reported improper

welfarefacilities

have

been

reportedaccounting of grants for assistance expenses ofimproprieties over several fiscal years.

asas

The following table shows audit cases on

improprieties. In addition, improper accounting

welfare for the elderly reported in the annualof subsidies for the improvement of social

audit reports from FY1989 to FY2008, other thanwelfare facilities, improper implementation

improprieties and measures taken.

welfarefacilities

for

the

elderly

FY
Item
1996 Improvement projects of welfare facilities for the elderly (report on specific matters)
1998 Improvement projects of welfare facilities for the elderly established by social welfare juridical persons (report on
specific matters)
2001 Opinion on utilizing the special cumulative deposits owned by intensive care homes for the elderly to enhance the stable
management bases and improve the service qualities (presented opinions (Article 36 of the BOA Act); backgroundamount: 51.8 billion yen)
2002 Administration of both nursing homes under the employees' pension and recreational facilities under the governmentmanaged health insurance system established by the Social Insurance Agency (report on specific matters)

490

Section 4 Overview of Audit Results

expenses has been reported as improprieties(ii) Child welfare
In respect of child welfare, as audit findings

every fiscal year since FY1990. As for State

relating to the State's grant to municipalities forcontributions to public assistance, BOA reported

the operating expenses of their nursery centers,

their improper accounting as well as receipt of

BOA has reported improper accounting ofan excessive amount of State contributions togrants for child aid expense as improprieties

public assistance due to reporting the planned

every fiscal year since FY1990. From FY2006,

amount of expenses as the actual expenses (FY

improper accounting of grants for measures to2000; improprieties; improper amount: 3.01

supportmillionthedevelopment

of

the

next

yen).

Furthermore,

BOA

reported

generation of children has also been reported as

appropriate measures demanded and measures

improprieties.

requested for rectification and improvement to

The following are audit cases on childprovide the public assistance expenses properly

welfare reported in the annual audit reports fromby making the internal controls in the welfare

FY1989 to FY2008, other than improprieties andoffices function properly in order to prevent

measuresmeasuresfraudulent acts, and to also implement a

demanded for reasonable bracketing of eligible

system to monitor cases such as fraudulent

children's households in calculating the grants

acts and clearly define the rules regarding thefor child aid expenses (earmarked for nursery

settlement of subsidies (FY2007; demanded

centers) (FY1993; demanded measures (Article

measures (Article 34 of the BOA Act);36 of the BOA Act); background amounts:

improper amount: 142.37 million yen).

taken :

improvement411.46 million yen) and improvement measuresdemanded for appropriate daycare services atnursery centers (FY2001; demanded measures

3. Audit findings on social security projects ingeneral(Article 36 of the BOA Act); background

The following table shows audit cases onamounts: 4,721.88 million yen).

social security projects in general, other than the(iii) Public assistanceindividual audit cases on various social security
projects discussed above.

In regard to public assistance, improperaccounting of grants for public assistance

FY
Item1999 Management and operation of the Pension Welfare Service Public Corporation (report on specific matters)
2002 Administration of both nursing homes under the employees' pension established by the Social Insurance Agency andrecreational facilities under the government-managed health insurance system (report on specific matters)
2005 Audit results of current social security expenditures (special reports on audit requested by the Diet)
Streamlining of pension and health insurance welfare facilities established by the Social Insurance Agency (report on
specific matters)
2007 Rectification and improvement in payment of the commuting allowance based on an economical commuter pass toemployees who use public transportation (demanded measures (Article 34 of the BOA Act); improper amount: 38.56
million yen (Japan Labour Health and Welfare Organization))
2008 Rectification and improvement in reduction in state contributions to public assistance programs by utilizing independence
support benefits based on the Services and Supports for Persons with Disabilities Act (demanded measures (Article 34 of
the BOA Act); improper amount: 1,033.24 million yen)491

Part 3

Chapter 4

Subsection 4

Audit in the Heisei Era (1989〜)

government recognized the need to continue

Public works

efforts to steadily develop social infrastructureEver since public works expenses wereeven under the severe fiscal conditions, andincluded in the FY1946 budget for the first time

started to implement measures for streamlining

after World War II, large amounts of public

the costs of public works from 1997. Moreover,works expenses have been budgeted to date, andin order to further enhance the efficiency andJapan's social infrastructure has been developed

transparency of public works, the government

to a considerable extent. However, on the basis

introduced

that the level of development was not necessarily

effectiveness, etc. of projects after they have been

sufficient in some fields as compared to the levellaunched (re-evaluation system) in 1998, ahead ofin western countries, the government formulated

the introduction of the policy evaluation system

the Basic Plan for Public Investment in Junein 2001.

1990 as guidelines for social infrastructureIndevelopment. This plan set forth that theincidents

government will make public investment of 430

continued to occur even in the Heisei era.

trillion yen over the ten years from FY1991, andAccordingly, various measures to reform theincrease the percentage of investment in fields

bidding and contract systems for public works,that contribute to enhancing the quality ofincluding the enactment of the Act for Promoting

citizens' lives. Later, the plan was revised toProper Tendering and Contracting for Public

make total public investment of 630 trillion yen

Works (Act No. 127 of 2000) were implemented.

during the period of the plan until FY2007.

Also, the Act on Elimination and Prevention of

While the economy slowed down and tax revenue

Involvement

showed little growth, the budget for public works

Punishments for Acts by Employees that Harm

indicated a sharp rise every year until around FYFairness of Bidding, etc. (Act No. 101 of 2002)

1998.

was put into effect as a measure to preventathesystempublic

such

in

as

for

evaluating

the

works

sector,unlawful

briberyandbid-rigging

Bid

Rigging,

etc.

and

recurrence of collusive bidding at the initiative ofFrom the late 1990s, the growth of public

government agencies.

works budget was suppressed under the severe
fiscal conditions. In 2002, the Cabinet adopted

In January 1995, the Great Hanshin-Awaji

the Structural Reform and the Medium-term

Earthquake caused damage to many public

Economic and Fiscal Perspectives. It illustrated

structures. The earthquake has raised publicthat public investment will be concentrated inconcerns about safety and disaster management.

fields where investment is truly necessary inThus, the government has implemented measuresconsideration of the medium- to long-termfor developing disaster-resilient communities,changes in the economy and society and changes

including development of safe and secure urban

in the needs of citizens. In line with this, theareas and improvement of the safety of public

Basic Plan for Public Investment was abolished.

facilities and buildings, for minimizing damage

Since then, public works-related budget had beenand preventing destructive damage.
In

reduced every fiscal year, until it reached a level

light

of

the

abovementioned

circumstances of public works and other factors,

below half the peak level in the FY2008. The
492

Section 4 Overview of Audit Results

BOA proactively conducted audit of public works

policy sectors than before. BOA has reportedwith various audit objectives, including economy,

many audit findings on effectiveness in the public

efficiency, effectiveness, safety, security, andworks sector, as well. Reports on specific matters

optimization of their bidding and contract work.

began to be reported from the FY1990 Annual
Audit Report. These included many cases ofeffectiveness audit, etc. of public works.

1. Audit findings on effectiveness of publicworks

The following are lists of examples of audit
reports focusing on the effectiveness of public

In the Heisei era, BOA came to report audit

works categorized by their pattern.

findings of effectiveness audit in more extensive(1) Audit cases with focus on the progress status of the project in which the project has yet to
produce the expected effect due to a project delay
FY
Item
1993 State-run Yokaku Bay land improvement project (special description; background amount: 10,904.2 million yen)
1994 Multipurpose dam construction project (special description; background amount: 85,117.74 million yen)
1997 Measures taken to grasp the schedule of supplementary projects of state-run irrigation and drainage project and to reflect
the schedule in the evaluation of project (measures taken; background amount: 696.7 billion yen (Ministry of Agriculture,
Forestry and Fisheries))
1998 River improvement project (special description; background amount: 35,988.47 million yen)
2000 Comprehensive flood control measures carried out in urban areas (special description; background amount: 380.9 billion
yen)
2002 Measures taken to examine thoroughly the basic plan of the project for coordination of fishing port utilization and to
grasp the progress situation in order to effect the projects' performance (measures taken; background amount: 2,484.73
million yen (Ministry of Agriculture, Forestry and Fisheries))
Construction and administration of countermeasure facilities against large-scale earthquakes at ports and harbors (special
description; background amount: 150.9 billion yen)
2003 Projects for earthquake-resistant bridges (special description; background amount: 233.4 billion yen)
Project for constructing high-standard embankments (special description; background amount: 496.5 billion yen)
State-run irrigation drainage projects and supplementary projects (special description; background amount: 711.2 billion
yen)
2004 Measures for strengthening the earthquake resistance of government facilities that will function as disastercountermeasure bases in the event of an earthquake (special description; background amount: 42.3 billion yen)Counter-measures to tsunamis and high tides within coastal projects (report on specific matters)
2006 Measures taken to grasp the situation of land acquisition for the tunnel construction and maintenance project (measurestaken; background amount: 8,993.66 million yen (Ministry of Land, Infrastructure and Transport))(2) Audit cases where the effect of the project has yet to be produced sufficiently due to sluggish
utilization of the social infrastructure developed through public works or the like
FY
Item1995 Improvement in use and management of the land developed for fishing ports (demanded measures (Article 36 of the
BOA Act); background amount: 1,108.28 million yen (Ministry of Agriculture, Forestry and Fisheries))
Measures taken to manage public marina appropriately and to utilize it (measures taken; improper amount: 1,141.07
million yen (Ministry of Transport))
1996 Measures taken to operate dam flexibly so as to utilize existing dam further (measures taken; background amount: 1.1
billion yen (Ministry of Construction))
1998 Planning and achievements of the Honshu-Shikoku connection road (report on specific matters)
1999 Construction and operation of airports managed by local governments (report on specific matters)
Management of the Tokyo Bay Aqua-Line road (report on specific matters)
2000 Measures taken to ensure continuity of underground pipes beneath the National Highways to accommodate the opticalfiber cables so as to support the private telecommunication companies (measures taken; background amount: 239,709.3

493

Part 3

2002

2004
2005

2007

2008

Chapter 4

Audit in the Heisei Era (1989〜)

million yen (Ministry of Land, Infrastructure, and Transport))
Establishment of Kansai International Airport and financial position of Kansai International Airport Co., Ltd (report on
specific matters)
Measures taken to improve examination and approval for parking lot fees at airports established by the government andtaken to select subcontractors appropriately for the sake of convenience to the users (measures taken; backgroundamount: 34.3 billion yen (Ministry of Land, Infrastructure, and Transport))
Measures to deal with residents of public housing who have revenues exceeding the eligibility limits or are high-income
earners (special description; background amount: 897.2 billion yen)
Project for constructing common underground duct for electric cables (special description; background amount: 171.6
billion yen)
Improvement in little-used toll parking lots constructed by road management entities (special description; backgroundamount: 83.5 billion yen)
Measures taken to maintain and preserve the agricultural land improved by farmland maintenance project in goodcondition, resulting in effective utilization (measures taken; improper amount: 1,291.61 million yen (Ministry ofAgriculture, Forestry and Fisheries))
Improvement in management of Kansai International Airport to steadily redeem long-term interest-bearing debt and toestablish a stable management base (special description; background amount: 1,032.2 billion yen)
Opinion on utilization of the elderly's life advisor offices and housing for Life Support Advisors (LSA) established toprovide the elderly with welfare services in public housing built for supporting lifestyles of the elderly (presented
opinions (Article 36 of the BOA Act); improper amount: 505.04 million yen (Ministry of Land, Infrastructure, Transport
and Tourism))
Rectification and improvement in management of land acquired to carry out a river improvement project, and Opinion on
facilitating use of the land until the beginning of works on the project (demanded measures (Article 34 of the BOA Act);
presented opinions (Article 36 of the BOA Act); improper amount: 2,330.22 million yen; background amount: 40,953.3
million yen (Ministry of Land, Infrastructure, Transport and Tourism))
Opinion on effective use of the revitalization facilities constructed by the project for comprehensive development of hilly
and mountainous areas by deregulation on the establishment of sales space in the facilities, resulting in further
revitalization of farming business and villages in hilly and mountainous area (presented opinions (Article 36 of the BOAAct); improper amount: 6,903.84 million yen (Ministry of Agriculture, Forestry and Fisheries))(3) Audit cases in which BOA evaluated or predicted the effect of the project by studying thecontents and the achievement status of the project plan, etc.
FY
Item
1989 Opinion on utilization of the land reclaimed by the state-run Kisosaki reclamation project (presented opinions (Article 36of the BOA Act); (Ministry of Agriculture, Forestry and Fisheries))
1998 Improvement in developing project plan for common fish reef mounting and in managing and utilizing the fish reef(demanded measures (Article 36 of the BOA Act); background amount: 1,383.36 million yen (Ministry of Agriculture,
Forestry and Fisheries))
2006 Measures taken to recognize the importance of appropriate guidance, calculating investment efficiency and understandingachievement status of the project plan regarding a farm road improvement project and a land readjustment project(measures taken; background amount: 166.7 billion yen (Ministry of Agriculture, Forestry and Fisheries))

2. Audit findings on safety and security

safety and security in the public works sector and

The following table shows audit cases

audit cases on public works particularly focusing

focusing on the effects of projects for ensuring

on safety and security.

FY
Item1994 Audit of public civil engineering facilities conducted following the Great Hanshin-Awaji Earthquake (report on specificmatters)
1998 Measures taken to improve the structural design of sections for vehicles to ride up onto walkways, resulting in the safety
and smooth passage of pedestrians, and especially persons utilizing wheelchairs (measures taken; background amount:574.64 million yen (Ministry of Construction))
River improvement project (special description; background amount: 35,988.47 million yen)
1999 Tunnels, elevated bridges and other concrete structures for Sanyo-Shinkansen bullet train railroad (report on specific494Section 4 Overview of Audit Results
matters)
2000 Comprehensive flood control measures carried out in urban areas (special description; background amount: 380.9 billion
yen)
2002 Construction and administration of countermeasure facilities against large-scale earthquakes at ports and harbors (special
description; background amount: 150.9 billion yen)
2003 Measures for earthquake-resistant bridges (special description; background amount: 233.4 billion yen)
2004 Countermeasures to tsunamis and high tides in coastal projects (report on specific matters)
Measures for strengthening the earthquake resistance of government facilities that will function as disastercountermeasure bases in the event of an earthquake (special description; background amount: 42.3 billion yen)2006 Measures taken to improve the preparation of flood hazard maps for the purpose of immediate evacuation and preventing
casualty by conducting flood analysis and other surveys based on actual river conditions (measures taken; improperamount: 13.21 million yen (Ministry of Land, Infrastructure and Transport))

3. Audit findings on bidding and contact work

construction works, etc. placed by auditees. In

With regard to public works, the government

light of such incidents, BOA has conducted

has promoted reform to carry out bidding andprompt audit by focusing on whether the auditees'

contracts with high transparency, fairness, andbidding and contract work are carried out

competitiveness,

expandingappropriately, whether review of bidding andimplementation of general competitive bidding.

contract systems for preventing recurrence of

BOA has conducted audit of these measures fromsuch incidents has produced sufficient effects andthe viewpoint on progress of the measures. In thethe transparency and competitiveness of contract

meantime, incidents of bid rigging and collusive

have been improved, whether measures forbidding at the initiative of government agencies

damage recovery are implemented appropriately,

surfaced

and so on.

one

such

after

anotherasinorders

for

FY
Item
1994 Electrical equipment construction bidding at Japan Sewerage Works Agency (report on specific matters)
1997 Bidding and contract for public works (report on specific matters)
2000 Bidding and contract for public works under projects for improving agriculture and farming villages (report on specificmatters)
2003 Introduction of various methods of bidding and contract for public works, especially methods by which orders takeadvantage of the private sector's superior techniques, such as comprehensive evaluation bid system (report on specificmatters)2005 Revision of the bidding and contract of expressway construction project (special report to the Diet and the Cabinet)
Implementation of bidding and contract for construction projects such as airport facilities at Narita International Airport
Corporation (special report to the Diet and the Cabinet)
2006 Execution of bidding and contract of floodgate equipment works at the Ministry of Land, Infrastructure and Transport
and the Japan Water Agency (report on specific matters)
Bidding and contract of the state subsidized projects in Fukushima, Wakayama and Miyazaki prefectures under thejurisdiction of the Ministry of Land, Infrastructure and Transport (report on specific matters)
2007 Measures taken to enable to impose penalty on the business operators exempted from paying surcharges by reviewing
penalty clause related to bid-rigging (measures taken; background amount: 1,155.35 million yen (Japan Water Agency))
Adoption status of penalty clauses related to bid-rigging in the State and juridical persons more than half of whose
capitals are owned by the State (special report to the Diet and the Cabinet)

late 1980s and mid-2000s. Many of them were

4. Individual improprieties
While audit findings relating to design ofabout an unstable state of a completed structure

structures had increased since the late 1980s,

resulting from inappropriate design, such as

such audit findings further increased between theerroneous reinforcing bar diameter or intervals in
495

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

a reinforced concrete structure or erroneous

facilities, and subsidies for current expenses ofstability computation for earth retaining walls.

private universities, etc., shifted its emphasis toMoreover, in the Heisei era, BOA started toperformance audit with the audit objectives ofreport many cases where bridge-structures wereeffectiveness, etc.; as a result, from the FY2001

in an unstable state as a result of the bearing

Annual Audit Report onward, the number ofmembers supporting the bridge beam or thecases reported as improprieties decreased and thestructures for preventing the bridge from fallingnumber of cases reported as measures taken, etc.

in the event of an earthquake having been

increased.

constructed differently from the intended design.

BOA presented opinions on the declining

Audit of such design or construction isbirth rate in recent years under the provisions ofconsidered to be extremely meaningful for

Article 36 of the BOA Act in FY1991, andensuring the safety of citizens' lives and property,

reported this matter as report on specific mattersgiven that many structures collapsed in the Greatin FY1998.
BOA had reported few matters on subsidies

Hanshin-Awaji Earthquake.

of the Agency of Cultural Affairs in the annual
Subsection 5

Education,technology

scienceaudit reports, but it reported such matters as

andmeasures taken in the annual audit reports for FY
2001 and FY2004.
The following table shows audit cases

1. Audit findings on education, etc.

reported in the annual audit reports from FY1989

BOA had conventionally reported audit
findings

concerning

expensesforto FY2008.

theimprovement of public school facilities under thejurisdiction of the Ministry of Education, Science

Audit cases reported in the annual audit reports by fiscal
year and by reporting category(unit: number of cases)

and Culture, and from FY1983, it also started tothejurisdiction of said Ministry in a full-fledgedmanner. As a result of this and an increase in thenumber of audit findings on Japan Private School
Promotion Foundation, BOA has reported about
three

times

as

many

audit

findings

ofimproprieties relating to education, etc. in the
Heisei era as compared to those in the late 1960s.
Such tendency was observed until the FY2000
Annual Audit Report. However, BOA, which had
focused on audit with the objectives of accuracy
and regularity of accounting concerning State
contributions to compulsory education expenses,
grants for the improvement of public school
496

FY

Report on
specific matters

under

Measurestaken

expenses

Demandedmeasureseducation

Presented
opinions

compulsory

Improprieties

report audit findings on State contributions to

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004

24
32
23
25
13
44
42
42
63
40
38
22
2
1
7
12

1
―
1
―
―
―
1
1
―
―
―
2
―
1
1
1

2
―
―
1
―
―
―
―
1
1
2
―
12
1
9
―

1
―
1
1
1
2
2
2
1
―
1
―
5
5
3
12

―
―
―
―
―
―
1
1
―
1
1
1
1
―
3
―

Section 4 Overview of Audit Results
2005
2006

3
35

1
―

1
―

4
5

2007
2008

―
―

29
14

1
―

7
―

7
―

―
―

The following table shows audit cases on education, etc. reported in the annual audit reports, otherthan improprieties and measures taken.
FY
Item
1989 Rectification and improvement in estimating the cost of reinforcing bars processing and assembly in actual proportion to
the diameter of reinforcing bars, for the construction of clinical service building and ward building at national university
hospitals (demanded measures (Article 34 of the BOA Act); improper amount: 56 million yen)
Opinion on improvements in the project for providing textbooks and supper allowances to part-time high school students(presented opinions (Article 36 of the BOA Act))
1991 Opinion on calculation of the area covered by subsidies for the construction of public elementary and junior high school
facilities, under condition of declining number of classes (presented opinions (Article 36 of the BOA Act); backgroundamount: 2,040.49 million yen)
1992 Rectification and improvement in budget execution of pharmaceutical expenses at national university hospitals (demandedmeasures (Article 34 of the BOA Act); background amount: 8,179.15 million yen)
1995 Opinion on appropriate collection of scholarships repayment (presented opinions (Article 36 of the BOA Act);background amount: 20 billion yen)
1996 Opinion on utilizing facilities of public elementary and junior high schools considering declining birth rate (presented
opinions (Article 36 of the BOA Act); background amount: 185.6 billion yen)
1998 Declining birth rate and State contributions to compulsory education expenses (report on specific matters)
1999 Improvement in calculation of the area covered by subsidies for the construction of public school lunch facilities, undercondition of declining number of students (demanded measures (Article 36 of the BOA Act); background amount: 170.02
million yen)
Rectification and improvement in calculating appropriately charges for food service at the national university hospitals
and opinion on shifting the outsourcing from negotiated contract to general competitive contract (demanded measures(Article 34 of the BOA Act); presented opinions (Article 36 of the BOA Act); improper amount: 131.5 million yen;background amount: 4,872.39 million yen)
2000 Opinion on utilizing the computer labs at public elementary and junior high schools (presented opinions (Article 36 of
the BOA Act); background amount: 17,407.91 million yen)
2002 Opinion on taking appropriate measures against delinquent receivables of Japan Scholarship Foundation on the occasionof establishment of the Japan Student Services Organization which take over the scholarship program from theFoundation (presented opinions (Article 36 of the BOA Act); background amount: 156.2 billion yen (Japan ScholarshipFoundation))
2003 Improvement in establishing internal rules to conduct proper accounting of donation money to individuals, such asteachers, for the purpose of scholarship (demanded measures (Article 36 of the BOA Act); background amounts: 351.12
million yen (8 national university corporations including Hokkaido University))
2004 Opinion on uniform administration of accounting procedures of national university corporations concerning leased goods
and receivables of medical fees (presented opinions (Article 36 of the BOA Act); background amount: 119,306.85
million yen)2005 Opinion on uniform administration of the segmented information regarding affiliated hospitals that is disclosed as
financial statements of national university corporations (presented opinions (Article 36 of the BOA Act); backgroundamount: 1,875,546.8 million yen)
Opinion on and rectification and improvement in reconsidering negotiated contract for purchasing goods and outsourcing
services so as to ensure the fairness, transparency and benefits by competition (demanded measures (Article 34 of the
BOA Act); presented opinions (Article 36 of the BOA Act); background amount: 1,511.85 million yen (National
Museum of Art))
2007 Opinion on appropriate measures to function the internal control system of Tohoku University for contract procedures(presented opinions (Article 36 of the BOA Act); improper amount: 23.1 million yen (Tohoku University))
Rectification and improvement in payment of the commuting allowance based on an economical commuter pass toemployees who use public transportation (demanded measures (Article 34 of the BOA Act); improper amounts: 220.46
million yen (University of Tsukuba; Tokyo Medical and Dental University; Research Organization of Information and
Systems))
2008 Improvement in collection of amortization payment and guidance on the application for postponement of repayment
deadline in a school fund loan by grasp of debtors' addresses and situations (demanded measures (Article 36 of the BOAAct); improper amount: 13,282.82 million yen; background amount: 225,254.66 million yen (Japan Student Services
Organization))

497

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

the table below)); improvement to ensure that

2. Audit findings on science and technology
With regard to audit findings on science andany principal researcher who ceases to satisfy

technology, BOA has shifted its emphasis of

the eligibility requirements in conducting a

audit from reports on specific matters to reporting

project funded by grants-in-aid for scientificof improprieties and demanded measures in

research appropriately follows the procedurerecent years.

for declining the unofficial grant offer (FY

For example, BOA reported the following

2002; measures taken; improper amount:matters concerning grants-in-aid for scientific249.92 million yen); and improper accounting

research: improvement measures demanded toof grants-in-aid for scientific research (FY2004

ensureand FY2006 onward; improprieties).

achievementofobjectiveandeffectiveness of projects funded by grants-in-

The following table shows audit cases on

aid for scientific research (FY1997; demanded

science and technology reported in the annual

measures (Article 36 of the BOA Act);audit reports, otherbackground amounts: 2,273.6 million yen (seemeasures taken.

than

improprieties andFY
Item1995 Natrium leakage in the fast breeder nuclear reactor "Monju" (report on specific matters)
1996 Budget for outside waste storage pits and its execution (report on specific matters)
1997 Improvement measures demanded to ensure achievement of objective and effectiveness of projects funded by grants-inaid for scientific research (demanded measures (Article 36 of the BOA Act); background amount: 2,273.6 million yen)
1999 Development of H-II and M-V rockets (report on specific matters)
2000 Budget execution by the Japan Nuclear Cycle Development Institute (report on specific matters)
2002 Rectification and improvement in management of goods and equipment (demanded measures (Article 34 of the BOAAct); improper amount: 891.62 million yen (Institute of Physical and Chemical Research))
2003 Opinion on appropriate reexamination of the revenues and expenditures improvement plan regarding the supply of
information on documents at the Japan Science and Technology Agency in order to improve the profitability (presented
opinions (Article 36 of the BOA Act); background amount: 69,469.56 million yen (Japan Science and Technology
Agency))Development of H-IIA rocket (report on specific matters)
2008 Opinion on clarifying the role of public and private sectors in development of GX rocket and the perspective of thedevelopment of LNG engine, promoting development in aerospace exploration with consideration of public burden(presented opinions (Article 36 of the BOA Act); background amount: 12,348.77 million yen (Japan Aerospace
Exploration Agency))

In addition to the above, cases including thedemanded measures (Article 34); improper

following were reported in relation to theamounts: 2,602.18 million yen); and accounting

accounting of various audit subject matters:of government-entrusted projects undertaken

measures demanded

by incorporated administrative agencies (FYforrectification

and2001; report on specific matters).

improvement to ensure that incorporated
administrative agencies recognize and reportassets and expenses appropriately and prepare

Subsection 6

accurate financial statements, etc. (FY2001; 25

Agriculture,
fisheries

forestry

andincorporated administrative agencies including
the National Institute of Special Education (ofIn the sector of agriculture, forestry andwhich 12 incorporated administrative agencies

fisheries, BOA has conducted audit of financial

weremanagement of subsidized projects and loans

relatedtoscienceandtechnology);
498Section 4 Overview of Audit Resultswith the objective of regularity. BOA has

reported in the annual audit reports from FY1989

addressed audit of project operation, management

to FY2008, other than improprieties and measuresof systems, and the achievement of projecttaken, which are categorized under the following

effectiveness with the objectives of economy,

groups: A. agricultural structural improvement

efficiency and effectiveness, as well. BOA has

project

extended the scope of its audit to the necessity of

improvement project; B. utilization of paddy

systems,

fields; C. food management and livestock; D.

andrecommended

downsizing

or

and

agricultural

infrastructure

forestry; E. fisheries; F. mutual aid activities; andabolishing projects.

G. others.

The following tables show audit cases

A. Agricultural structural improvement project and agricultural infrastructure improvement project
FY
Item1989 Opinion on utilization of the land reclaimed by the state-run Kisosaki reclamation project (presented opinions (Article 36of the BOA Act))
1990 Opinion on promoting disposition of the national agricultural land located in urbanization promotion areas (presented
opinions (Article 36 of the BOA Act); background amount: 35,004.04 million yen)
1991 Rectification and improvement in establishment and management of facilities for new agricultural structural improvement
project (demanded measures (Article 34 of the BOA Act); improper amount: 3,302.02 million yen)
1993 State-run Yokaku Bay land improvement project (special description; background amount: 10,904.2 million yen)
2000 Opinion on increasing the liquidity of farmland effectively in order to promote the use of agricultural land (presented
opinions (Article 36 of the BOA Act); background amount: 463.02 million yen)Management of bidding and contract procedures for public works under projects for improving agriculture and farming
villages (report on specific matters)
2001 Compensation for losses from the construction of the Yubari Shuparo Dam (report on specific matters)
Scheme for the payment of subsidies directly to farmers in hilly and mountainous areas (report on specific matters)
2002 Opinion on constructing wholesale market facility development project efficiently and effectively (presented opinions(Article 36 of the BOA Act); background amount: 48,726.71 million yen)
Implementation of the state-run Isahaya Bay reclamation project (report on specific matters)
2003 State-run irrigation drainage projects and supplementary projects (special description; background amount: 711.2 billion yen)2005 Improvement in readjusting the amount of funds for land improvement burden expense under the comprehensive
repayment measures for land improvement burden expense in order to correspond to fund needs (demanded measures(Article 36 of the BOA Act); background amount: 165.8 billion yen)2007 Improvement in reflecting the result of the function tests of the agricultural water utilization facilities to the agricultural
water utilization system maintenance plan for the system reconstruction (demanded measures (Article 36 of the BOAAct); improper amount: 835.26 million yen)
Improvement in economic evaluation for comparison of rural community sewage facilities with sewage treatment
facilities under the jurisdiction of other ministries by applying expected lifetime based on actual condition to develop therural community sewage project plan (demanded measures (Article 36 of the BOA Act); background amount: 19,423.41
million yen)2008 Rectification and improvement in collecting long-term delinquency and managing cancellation for violation of leaseconditions for the national agricultural land (demanded measures (Article 34 of the BOA Act); improper amount: 329.15
million yen)
Opinion on effective use of the revitalization facilities constructed by the project for comprehensive development of hilly
and mountainous areas by deregulation on the establishment of sales space in the facilities, resulting in further
revitalization of farming business and villages in hilly and mountainous area (presented opinions (Article 36 of the BOAAct); improper amount: 6,903.84 million yen)
Opinion on taking measures such as establishing a concrete method for exceptional permission for conversion of farming
field, consulting after conversion and notifying the significance of conversion, regarding conversion of farming fields thatreceive benefits from land improvement projects (presented opinions (Article 36 of the BOA Act); improper amount:90.69 million yen)
Improvement in establishing concrete rules about how to treat profits from the funds managed by the National Federationof Land Improvement Associations for the land improvement facilities maintenance optimization project, resulting in
payment to the national treasure of the amount equivalent to the portion of the remaining profits related to state-subsidies

499

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)(demanded measures (Article 36 of the BOA Act); improper amount: 17.01 million yen)
Improvement in clarifying the case in which registration is required concerning government buildings newly constructedin leased land, resulting in appropriate management of national property by offices for state-run land improvement project(demanded measures (Article 36 of the BOA Act); improper amount: 857.79 million yen)

B. Utilization of paddy fields
FY
Item
1991 Opinion on securing effectiveness of special grants for improvement of rice paddy field farming (presented opinions(Article 36 of the BOA Act); background amount: 3,718.62 million yen)
1992 Rectification and improvement in granting additional subsidy for areal project of the rice paddy field farming
improvement project (demanded measures (Article 34 of the BOA Act); improper amount: 2,692.96 million yen)2008 Opinion on grant for less favored area as measures for stabilizing income from rice and crop fields, so as to foster land
crop producers (presented opinions (Article 36 of the BOA Act); improper amount: 725.61 million yen)

C. Food management and livestock
FY
Item1993 Rectification and improvement in yield of wheat bran by selling foreign feed wheat in domestic market (demandedmeasures (Article 34 of the BOA Act); improper amount: 1,655.83 million yen)
2001 Rectification in subsidy for compensation of the difference of the sales price between fresh meat and frozen meat(demanded measures (Article 34 of the BOA Act); improper amount: 46.58 million yen)
2004 Measures for beef calves financed from the customs duties on imported beef (report on specific matters)
2005 Inventory of foreign rice and its profits/ loss (report on specific matters)
2008 Improvement in collecting fees based on the sale of the frozen semen produced from lent bulls for semen collection andin competitive bidding to choose borrowers (demanded measures (Article 36 of the BOA Act); improper amount:
3,375.79 million yen (National Livestock Breeding Center))D. Forestry
FY
Item
1994 Rectification and improvement in estimating the social insurance premiums to outsource logging and afforestation on
national forestry projects and Opinion on promoting the participation in the social insurance (demanded measures (Article
34 of the BOA Act); presented opinions (Article 36 of the BOA Act); improper amount: 109.37 million yen; backgroundamount: 177.32 million yen)
1995 Management of national forestry projects (special description; background amount: 1,507,592.75 million yen)
1997 Rectification and improvement in establishment and management of facilities for forestry structure improvement project(demanded measures (Article 34 of the BOA Act); improper amount: 3,328.11 million yen)
2002 Rectification and improvement in transferring immediately jurisdiction over national forest land used for site of nationalroad for value (demanded measures (Article 34&36 of the BOA Act); improper amount: 2,955.5 million yen; backgroundamount: 1,013.68 million yen)
2003 Drastic reform of national forestry projects (report on specific matters)
2004 Rectification and improvement in immediate establishment of a national property ledger for state forests and fields in
Okinawa (demanded measures (Article 34 of the BOA Act); improper amount: 187.69 million yen)2007 Opinion on voluntarily returning the funds so as to maintain the appropriate amount of funds for loans corresponding to
the demand regarding the projects to loan the funds for the improvement of forestry and lumber industries (presented
opinions (Article 36 of the BOA Act); improper amount: 965.28 million yen)2008 Improvement in clarifying the case in which registration is required concerning government buildings newly constructedin leased land, resulting in appropriate management of national property by District Forest Offices for national forestry
projects (demanded measures (Article 36 of the BOA Act); improper amount: 1,204.79 million yen)

E. Fisheries
FY
Item
1994 Rectification and improvement in establishment and management of facilities for coastal fishery structure improvement
project (demanded measures (Article 34 of the BOA Act); improper amount: 498.83 million yen)
1995 Improvement in use and management of the land developed for fishing ports (demanded measures (Article 36 of the
BOA Act); background amount: 1,108.28 million yen)

500

Section 4 Overview of Audit Results1998 Improvement in developing project plan for common fish reef mounting and in managing and utilizing the fish reef(demanded measures (Article 36 of the BOA Act); background amount: 1,383.36 million yen)

F. Mutual aid activities
FY
Item
1994 Improvement in management of swine livestock industry mutual aid project (demanded measures (Article 36 of the BOAAct); background amount: 1,450.01 million yen)
1996 Improvement in management of fishing industry mutual aid project (demanded measures (Article 36 of the BOA Act);background amount: 1,838.41 million yen)2006 Opinion on appropriate management of the agricultural disaster compensation system (agricultural crops mutual aid) suchas preventing substantial surpluses generated from mutual aid premiums (presented opinions (Article 36 of the BOAAct); background amount: 175.2 billion yen)

G. Others
FY
Item
1997 Rectification and improvement in establishment and management of agricultural processing facilities and collection andshipment facilities for innovative agriculture promotion project (demanded measures (Article 34 of the BOA Act);
improper amount: 2,017.95 million yen)
1998 Opinion on promoting use of the fund for the improvement of agricultural management and on utilizing the national low
interest deposit fund (presented opinions (Article 36 of the BOA Act); background amount: 11,671 million yen)
2000 Re-evaluation of public works (report on specific matters)
2001 Rectification and improvement in ensuring that incorporated administrative agencies recognize and report assets andexpenses appropriately and prepare accurate financial statements, etc. (demanded measures (Article 34 of the BOA Act);
improper amounts: 2,602.18 million yen (25 incorporated administrative agencies including the National Institute ofSpecial Education (of which 14 incorporated administrative agencies were related to Agriculture, Forestry and Fisheries)))Accounting of government-entrusted projects undertaken by incorporated administrative agencies (report on specificmatters)
2002 Improvement of the supervision and inspection systems for the quality assurance of public works (report on specificmatters)
Loans and the financial condition of the Agriculture, Forestry and Fisheries Finance Corporation (report on specificmatters)
2003 Introduction of various methods of bidding and contracts for public works, especially methods by which orders takeadvantage of the private sector's superior techniques, such as comprehensive evaluation bid system (report on specificmatters)
2004 Surplus in the Special Account for Improvement the Agricultural Management Foundation (report on specific matters)
Countermeasures to tsunamis and high tides in coastal projects (report on specific matters)
2005 Loans to profit-sharing forestry projects by forestry public corporations at the Agriculture Forestry and Fisheries FinanceCorporation (report on specific matters)
2006 Rectification and improvement in reconsidering contract method of service contracts which would not pose any particular
problems in ensuring the fairness of horse racing so as to enjoy the benefits of competition (demanded measures (Article
34 of the BOA Act); background amount: 16,575.09 million yen (Japan Racing Association))
2007 Rectification and improvement in sharing the information regarding vacant housing for efficient use of the housing at theJapan Finance Corporation formed by the merger of three finance corporations (demanded measures (Article 34 of the
BOA Act); improper amounts: 56.68 million yen (National Life Finance Corporation; Agriculture, Forestry and Fisheries
Finance Corporation; Japan Finance Corporation for Small and Medium Enterprises))
Improvement in full understanding and promoting joint research facilities and joint research equipment developed to
conduct joint researches, which are operated through the industry-academia-government coalition (demanded measures(Article 36 of the BOA Act); improper amount: 1,290.25 million yen (National Agriculture and Food Research
Organization))
Rectification and improvement in calculating the labor expenses of the support service for operation of the integrated
database system for agriculture, forestry and fisheries genome information based on the actual condition (demandedmeasures (Article 34 of the BOA Act); improper amount: 20.93 million yen (National Institute for Agro-Environmental
Sciences))2008 Improvement in effective use of funds created with subsidies granted by the Ministry of Agriculture, Forestry and
Fisheries to public interest corporations (demanded measures (Article 36 of the BOA Act); improper amount: 35,337.37
million yen)

501

Part 3

Chapter 4

Subsection 7

Audit in the Heisei Era (1989〜)

DefenseAudit cases reported in the annual audit reports by fiscal
year and by reporting category(unit: number of cases)

FY

Presented
opinions

Demandedmeasures

Measurestaken

Specialdescription

Report on
specificmatters

As a reform of equipment procurement

Improprieties

1. Outline

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

2
―
1
―
―
―
―
―
―
1
3
1
4
2
1
4
9
1
1
1

―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
―
1
―
―
―

―
―
―
―
―
―
―
―
―
1
―
―
―
―
―
―
―
2
4
3

―
1
―
1
―
1
1
1
2
2
2
1
2
1
2
3
3
5
5
4

―
―
―
―
―
―
―
―
1
―
―
―
―
1
1
―
―
―
―
―

―
―
―
―
―
―
―
―
1
―
1
1
―
―
―
1
1
―
―
―

system, the Defense Agency dissolved the Central
Procurement Office, which was its procurement
organ, in January 2001, and established theCentral Contract Office. Later, the Central
Contract Office was reorganized into the Center
for Equipment in July 2006. Then, with theenactment of the Act Partially Amending the Act
for Establishment of the Defense Agency (ActNo. 118 of 2006) in December 2006, the Defense
Agency was reorganized into the Ministry of
Defense on January 9, 2007. Meanwhile, theDefense Facilities Administration Agency wasabolished on September 1, 2007. In line with
this,

the

Regional

DefenseBureauwasestablished and the Center for Equipment was
reorganized into the Center for Equipment andFacilities.
The national defense budget has constituted

BOA reported a total of 49 matters asaround 6% of the general account of the State

presented

from FY1989 to FY2008.

measures taken, special description, and report on

opinions,

demandedmeasures,specific matters in the annual audit reports from
2. Reporting categories

FY1989 to FY2008. While BOA reported 33

Since national defense expenditures are amatters as measures taken, 19 of them werelarge sum, BOA has conducted audit of expenses

concentrated in the six years from the FY2002

for purchasing equipment, etc., expenses for

Annual Audit Report onward. The number ofconsumables and utilities such as fuel, personnel

audit cases reported in annual audit reports tends

expenses, facility improvement expenses, etc.

to increase every fiscal year.

with broad and diverse audit objectives.

The following tables show main audit cases

The following table shows audit cases

reported in the annual audit reports from FY1989

reported in the annual audit reports from FY1989

to FY2008.

to FY2008.

502

Section 4 Overview of Audit Results(i) Audit cases on articles
FY
Item
1992 Measures taken to streamline procedures of destroyer gun overhaul (measures taken; improper amount: 75.2 million yen)
1995 Measures taken to estimate appropriately for optical fiber cable used for its transmission device at Air Self-Defense
Force's radar sites (measures taken; improper amount: 39 million yen)
1997 Measures taken to improve the procurement of fuel (JP-4) or the aerial turbine engines (measures taken; backgroundamount: 48,506.98 million yen)
Procurement of equipment through the US Government's Foreign Military Sales (FMS) (special description; backgroundamount: 145.4 billion yen)
BOA's audit of the Defense Agency's equipment procurement (report on specific matters)
1999 Measures taken to calculate the number of parts for the Model 81 ground equipment for short-range surface-to-air
missiles, based on the past replacement data (measures taken; improper amount: 72.9 million yen)Counter measures to overpayment for equipment procurement (report on specific matters)
2000 Measures taken to improve the annual inspection of telecommunications equipment in destroyers (measures taken;
improper amount: 27 million yen)
Procurement of new training airplanes for Air Self-Defense Force (report on specific matters)
2001 Measures taken to improve the treatment of aircrafts in accordance with national property low, stored for years whose
engines had been removed (measures taken; improper amount: 3,329.64 million yen)
2002 Measures taken to use existing personal computers for data input instead of leasing input-output device (measures taken;
improper amount: 27.2 million yen)
Procurement of equipment through the US Government's FMS (special description; background amount: 159.6 billion
yen)
2003 Utilization of Maritime Self-Defense Force's Maizuru Air Base and SH-60J patrol helicopters (special description;
background amount: 66.3 billion yen)
2004 Measures taken to procure spare gas turbine power sections for the main generator of a destroyer separately from thecontract for the construction of the destroyer, resulting in economical procurement (measures taken; improper amount:
29.5 million yen)2005 Measures taken to centralize the procurement of eating utensils for Ground, Maritime and Air Self-Defense Forces by
unifying the specifications, resulting in reduction of price (measures taken; improper amount: 58.81 million yen)2006 Measures taken to unify method for recording heavy machine guns in the inventory administration book so that all
machine would be recorded, and to prepare the inventory administration documents based on the method (measurestaken; improper amount: 665.7 million yen)
Measures taken to improve custody of sonobuoys procured by the Maritime Self-Defense Force considering quality
warranty period (measures taken; improper amount: 443.16 million yen)2007 Appropriate measures to develop disposition plan for waste batteries exceeding the amount required for supply and to
dispose them (demanded measures (Article 34 of the BOA Act); improper amount: 980.6 million yen)
Measures taken to utilize effectively expired rescue signal products for rescue aircraft of Air Self-Defense Force's Supply
Depot (measures taken; improper amount: 29.01 million yen)2008 Improvement in establishing a system for giving priority to the inspection and correction of defects in a stock of theequipment within the period of warranty against defects (demanded measures (Article 36 of the BOA Act); improperamount: 136.88 million yen)
Measures taken to stipulate the procedures for reserving decisions on disposition of goods of Air Self-Defense Forcewhich was expected to be usable after repairing, resulting in thoroughly reuse of goods (measures taken; improperamount: 31.98 million yen)
Procurement of defense equipment through importation by trading companies (special report on audit requested by theDiet)(ii) Audit cases on services
FY
Item
1996 Measures taken to grasp the amount of sewage discharged into public sewerage systems, resulting in economical payment
for sewerage charges at Ground Self-Defense base (measures taken; improper amount: 79.2 million yen)
1998 Improvement in taking advantage of competitive bidding and contract for the inspection and repair of self-defense ships(demanded measures (Article 36 of the BOA Act); background amount: 50,615.65 million yen)
Measures taken to improve the calculation of overall profit ratios applied to the estimated value of the contract forworker dispatch (measures taken; improper amount: 36.5 million yen)503

Part 3

2001
2004

2005
2006
2007

2008

Chapter 4

Audit in the Heisei Era (1989〜)

Measures taken to improve the calculation of the estimated value of outsourcing of steam supply work (measures taken;
improper amount: 55.3 million yen)
Measures taken to apply discount plan for long-term contractors to the contract of the leased line for data
communication, resulting in reduction of price (measures taken; improper amount: 17.3 million yen)
Measures taken to set contract price of outsourcing the regular physical examination for U.S. Force Japan employees
considering not medical fee tariff but market price (measures taken; improper amount: 64.8 million yen)Technical research and development of defense equipment (report on specific matters)
Measures taken to apply discount service for telephone calls of the INMARSAT service used by the Maritime SelfDefense Force escort ship, resulting in reduction of price (measures taken; improper amount: 14.82 million yen)
Measures taken to decide the unit cost of crane operation charges considering the relevant market price, resulting in
reduction of charge for the annual service contract (measures taken; improper amount: 80.7 million yen)
Rectification and improvement in categorizing every dedicated circuit into a common dedicated circuit to enjoy highdiscounts rate (demanded measures (Article 34 of the BOA Act); improper amount: 57.8 million yen)
Rectification and improvement in specifying the accounting transactions required to be performed by the accounting
transactions system (demanded measures (Article 34 of the BOA Act); improper amount: 114 million yen)
Measures taken to clarify the rule in the food services of the Ground Self-Defense Force within fixed food expenses foreach army (measures taken; improper amount: 511.21 million yen)
Measures taken to adopt the system to settle the procurement of ship fuel to be delivered overseas, at the appropriate
exchange rate in accordance with the actual transaction of the contractors (measures taken; improper amount: 241.9
million yen; background amount: 39,113.6 million yen)
Rectification and improvement in promoting the use of general competitive bidding for outsourcing contract for securing
competitiveness and transparency, and calculating the estimated value of contract in consideration of actual examples(demanded measures (Article 34 of the BOA Act); improper amount: 157.4 million yen; background amount: 525.13
million yen)
Measures taken to improve cyclic inspection of light armored vehicles by minimizing the number of vehicles inspected
and reducing the number of inspection items (measures taken; improper amount: 13 million yen)
Measures taken to improve procurement of parts under a service contract on periodical repair of airplane bodies andengines by purchasing parts from trading companies and supplying them to the repairing company (measures taken;
improper amount: 10.7 million yen)(iii) Audit cases on accounting
FY
Item
1994 Measures taken to calculate battleship building insurance premium cost with accurate insurance-covered amount of
battleships (measures taken; improper amount: 61.8 million yen)
2003 Measures taken to establish a system for receiving the redemption money from the UN peace keeping operations asrevenue without delay (measures taken; improper amount: 2,021.79 million yen)2005 Opinion on calculating retirement allowance of fixed-term Self-Defense Force officials taking account of periods when
they are not engaged in their assignment (presented opinions (Article 36 of the BOA Act); improper amount: 16.1
million yen)
Measures taken to improve the inappropriate budget management condition concerning purchase and use of the travel
coupons used for military unit transportation (measures taken; improper amount: 60.61 million yen)
Execution of bids and contracts concerning construction works and outsourced activities at the Defense Facilities
Administration Agency (report on specific matters)
2006 Rectification and improvement in imposing payment for electricity charges on electric appliances used by Self-Defense
Force officials in their private rooms at their quarters (demanded measures (Article 34 of the BOA Act); improperamount: 40.15 million yen)
Rectification and improvement in reducing the amount of installation allowances as part of travel expenses (demandedmeasures (Article 34 of the BOA Act); improper amount: 35.9 million yen)2007 Appropriate measures to record accurately properties acquired through the construction works ordered by units in the
National Property Ledger and rectification and improvement in establishing a system for the record to manage properties
appropriately (demanded measures (Article 34 of the BOA Act); improper amount: 1,297.59 million yen)
Measures taken to reconsider the system to reexamine the subsidized project procedure for noise-control construction
works on housing which covered the persons who had moved in the houses just before beginning of the works (measurestaken; background amount: 728.1 million yen)2008 Improvement in establishing a system for checking items mentioned in pass certificates to examine whether US forces
use them for "public purposes" regarding the payment of compensation for losses to toll roads (demanded measures(Article 36 of the BOA Act); background amount: 441.71 million yen)504

Section 4 Overview of Audit Results
Measures taken to improve Ground Self-Defense Force's provision of rapid-response reserve allowance by appropriately
calling them for training (measures taken; improper amount: 43.92 million yen)(iv) Other audit cases
FY
Item1990 Measures taken to improve subsidy for maintenance of noise prevention facilities in accordance with the actual utilization(measures taken; improper amount: 36.8 million yen)
1997 Measures taken to estimate for the concrete demolition work in accordance with the actual cost of the work (measurestaken; improper amount: 23 million yen)
1999 Measures taken to procure appropriately providing meals to medical students in accordance with actual needs (measurestaken; improper amount: 29.8 million yen)
2003 Measures taken to establish a system for accepting as revenue promptly the money left after the procurement ofequipment through the US Government's FMS (measures taken; improper amount: 546.86 million yen)
2004 Measures taken to improve medical compensation for public service accidents by checking the condition of recovery(measures taken; background amount: 50.85 million yen)2006 Measures taken to improve the claim for medical fees related to basic fees for hospitalization at hospitals of Self-Defense
Forces so that the medical fees could be calculated on the basis of the classification which reflects the actual nursing
conditions (measures taken; improper amount: 60.41 million yen)
Measures taken to assign flexibly the nap rooms to crews in the waiting station at the harbor for naval vessel crew
(measures taken; background amount: 2,855.1 million yen)2007 Measures taken to review project for construction works of transmission stations which have no prospects for progress(measures taken; improper amount: 3,626.61 million yen)

Subsection 8

repayment), technical cooperation and loan aid

Official Development Assistanceand foreign affairs(government loan).
(2) Audit of ODA
BOA has conducted audit of grant aid

1. Official Development Assistanceprovided by the Ministry of Foreign Affairs, yen(1) Outline of Official Development AssistanceOn

entering

Development

theAssistance

Heisei

era,

(ODA)

loans provided by JBIC, etc., and technical

Official

had

cooperation, etc. provided by JICA, etc., among

been

implemented by the Ministry of Foreign Affairs,otherJapan International Cooperation Agency (JICA),

organizations with the objectives of regularity,

Overseas Economic Cooperation Fund (OECF),

economy, efficiency, effectiveness, etc., whileetc. In October 1999, Export-Import Bank offocusing on such aspects as whether projects are

Japan and OECF were consolidated to form

making steady progress as planned and whether

Japan Bank for International Cooperation (JBIC).

facilities, etc. subject to assistance are being

In 2003, JICA changed from a special public

sufficiently used according to the initial plan.

Further,

JICA

and

JBIC

BOA

has

auditedthese

In auditing such ODA, BOA has conducted

institution into an incorporated administrative
agency.

subjects.

field audits at the head office of the Ministry of

were

Foreign Affairs, the head office of former JBIC,

consolidated to form the current new JICA.
ODA is classified into bilateral aid andand JICA headquarters, as well as overseas

multilateral aid (capital subscription and financial

diplomatic establishments and overseas offices ofcontributionsorganizations).

JICA and JBIC, etc. Also, BOA has dispatched

Bilateral aid is further divided into grant aid

its officials to the recipient countries. The(financial assistance without an obligation for

officials have received explanations from the staff

tointernational

505

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

responsible for the project implementation, etc. inWith regard to reports on specific matters

the recipient countries or have observed theuntil FY2006 and presented opinions from FY

conditions of the project sites in the presence of2007, many of them were audit cases where theofficials

implementation

assistance had not produced sufficient effects.

organizations to the extent that cooperation could

Others include audit cases where the progress of

be gained from the recipient countries.

the assistance was not found to be appropriate

of

the

ODA

and where the assistance was producing effects

The track record of field examinations

slower than planned. BOA also reported the

conducted in the Heisei era is as follows.

following cases: presentation of an opinion that
the Ministry of Foreign Affairs and JICA

Subjects of field examinations

Project-type
technical
cooperation

Yen loanassistance produces sufficient effects when
Total

27
33
35
17
38
38
35
54
72
49
54
84
63
69
81
19
58
65
74

21
14
17
18
20
23
15
15
15
16
10
16
23
22
19
11
16
19
44

28
20
20
30
19
21
23
27
14
24
17
13
28
11
6
2
14
17
35

76
67
72
65
77
82
73
96
101
89
81
113
114
102
106
32
88
101
153

make

implementing
opinioneffortODA(Article36

toensure( FY 2007 ;
of

the

that

the

presented

BOA

Act);

background amount: 27,072.79 million yen);and presentation of an opinion to ensure thatthe assistance produces sufficient effects when
implementing
opinionODA(Article

36( FY 2008 ;ofthepresented

BOA

Act);

background amount: 8,203.69 million yen).
The following table shows the numbers ofprojects which were reported as report on specificmatters in the Heisei era by fiscal year and by
ODA type.
Numbers of projects by fiscal year and by ODA type
(unit: number of cases)

every fiscal year in the annual audit report asreport on specific matters, but from FY2007
onward, it has reported as presented opinions. In
addition, BOA has also reported audit cases on
ODA as special reports on audit requested by theDiet, improprieties, etc. in the annual audit
reports.
506

Follow-up

BOA has reported audit cases on ODA

Yen loan(i) Reports on specific matters, etc.

Project-type
technical
cooperation(3) Audit cases on ODA

FYGrant aid

5
5
5
5
6
6
7
7
8
8
10
13
12
13
12
6
11
10
12

shouldGrant aid

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Number ofcountries
examined

FY

Number of projects

1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001

2
1
1
2
2
3
1
5
2
―
1
3

1
2(Note)
―
1
1
―
1
―
1
1
―
―

2
2
3
2
3
3
2
―
1
2
3
1

―
―
―
―
―
―
―
―
―
―
―
―

Section 4 Overview of Audit Results
2002
4
1
2003
3
1
2004
4
1
2005
―
3
2006
3
―
2007
2
―
2008
1
3
(Note) Figure includes grant aid.

―
1
―
―
4
2
1

report on specific matters in the past, BOA

21
―
―
―
―
―
4

conducted follow-up audit by carrying out field
examinations once again, and reported the resultsin the annual audit reports for FY2002 and FY
2004. Further, in the FY2008 Annual Audit
Report, BOA reported on the achievement of
ODA effectiveness in the section "Result of thefollow-up on presented opinions and demanded

These projects classified by fiscal year andmeasures in the FY2007 Annual Audit Report."

by ODA type are shown in A to C below.
For ODA projects which were reported as
A. Grant aid
FY
1990
1991
1992
1993
1994
1995
1996
1997

1998
1999
2000
2001

2002
2003
2004

2006
2007
2008

Item
Public sanitary promotion project ; water supply project
Medical equipment procurement project ; college of nursing and medical technology construction project
Fishing harbor construction project
Irrigation project ; fishing harbor construction project
Fish net machine supply project ; retail market renewal project
Fishing research boat building project ; petty fishermen training center building project ; small-scale dam construction
equipment procurement project
Improvement of the fire fighting services project
Fish landing, preservation and distribution facilities construction project ; rice seed and genetic resources laboratory(breed and germplasm resources laboratory) project ; coastal fisheries development project ; plant genetic resources
construction project ; water supply project
Improvement of dairy plant project ; microfilm equipment project
Improvement of rice storage center project
Sewerage system construction and rehabilitation project
Fishing vessels repair and maintenance facilities construction project ; improvement project of fishing vessels repair andmaintenance facilities ; water supply project in Mt. Pinatubo resettlement areas ; sound and lighting equipment supply
project ; food production increase project
Improvement project of medical equipment at Osmania general hospital ; Afghan female refugee association cooking andsewing shop improvement project ; knitting machine for female vocational training supply project ; debt relief program
Integrated agricultural rural development project in Savannakhet Province ; Bwanje Valley irrigation development
project : non-project grant aid
Vocational center improvement and equipment procurement project ; Tonga female nurture center construction andequipment procurement project ; female vocational center improvement and equipment procurement project ; schools
construction project
Coastal fisheries development project ; waste processing facility in San Juan La Laguna construction project ; abusedchildren shelter construction project
Small and medium scale bridges construction project ; rehabilitation of Chokwe irrigation scheme project
Improvement of water quality in local areas project

B. Project-type technical cooperation
FY
1990
1991
1993
1994
1996

Item
Mountain logging practice projectNursing education project
Railway service modernization project
Recovery of valuable minerals from unutilized pyrite-rich polymetallic ores project
Packaging technology project507

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

1998
1999
2002
2003
2004
2005

Improvement of rice cultivation technology project
Strengthening of artificial insemination center projectIndustrial waste management project
Mine pollution control research center project
Quality control for textile industry project
National training center for mine pollution control project ; urban transport human resources development project in〜Brazil ; forest and environment conservation research project in the State of Sao
Paulo
2008 Development design scheme (cooperative D/D)

C. Yen loan
FY
1990
1991
1992
1993
1994
1995
1996
1998
1999
2000
2001
2003
2006
2007
2008

Item
Pumped storage project ; water pipeline system project
Export processing zone project ; fertilizer plant projectPower plant construction project ; telecommunication expansion project ; trunk road construction project
Subway construction project ; hydro-power plant construction project
Barge-mounted power plant project ; power cable construction project ; irrigation projectPower transformer substation building project ; diesel electric locomotives purchase project ; north irrigated agriculture
development projectHydroelectric project ; cement project
Revitalization of main line south project
Railway project ; water pipeline project
Barge-mounted power plant rehabilitation project ; caustic soda plant rehabilitation project ; energy saving andimprovement of fertilizer factory project
The Mexico City sulfur dioxide emission reduction project
Agricultural sector investment project
Bili-bili multi-purpose dam project ; Wonorejo multipurpose dam construction project ; disaster prevention ships
procurement project ; horticultural produce handling facilities project
Basin bridge gas turbine project ; Udyogamandal ammonia plant replacement project
Revitalization of main line south projectIn addition to the abovementioned audit(ii) Special reports on audit requested by theDiet, etc.

cases reported as report on specific matters, thefollowingprocurement

audit
of

cases

were

equipment

Withreported :which

Councillors'

JICA

regardto

ODA,

Committee

the

on

House

of

Oversightoftechnical

Administration discussed and decided on Marchspecific27, 2000, to request BOA to conduct audit andmatters); procedures and contracts of facility

report the results in order to utilize the results forconstruction and materials and equipment

researchprocurement in grant aid for general projects

administrative inspection, and complaints against

and grant aid for fisheries (FY2002; report on

administration, and on the same day, the House

specific matters); preparatory surveys forof Councillors requested BOA to conduct thetechnical cooperation projects (FY2004; report

audit. This was the first request made by theon specific matters); and the accident in which

House ofbridge beams fell during road construction

provisions of Article 105 of the Diet Act. BOA

under a yen loan project in Vietnam (FY2007;

was requested to conduct audit of the following

report on specific matters).

five matters of the "resolution on ODA" adopted

providesfor

implementing

cooperation(FY1994;

reportononadministrative

Councillors to

BOA

oversight,

under

the

by the Committee: "preparation of country508Section 4 Overview of Audit Results

assistance programs that suit the actual conditions

improprieties; improper amount: 1,050 millionof the recipient countries"; "prioritization ofyen); and receiving the non-governmental

projects

organization

andstrongercoordination

betweenproject

subsidyforanevaluation

afforestation project that was not implemented

system"; "prevention of ODA fraud"; and "debt(FY2002; improprieties; improper amount:relief for heavily indebted poor countries." BOA

2.53 million yen).

projects";"enhancement

of

the

Also, audit cases reported in the annual audit

reported the audit results to the House ofreport concerning ODA other than those underCouncillors on November 10 of the same year.
On June 7, 2005, the House of Councillors'

the jurisdiction of the Ministry of Foreign

Committee on Audit decided to request, andAffairs, etc. include the following: overstatement

formally requested, BOA to conduct audit of theof the expenses of State-subsidized projects

implementation status of ODA and to report thedue to including unexpended amounts in the

results. The request was to conduct audit of the

project expenses when implementing a project

following three matters: outsourcing contracts

forconcluded with development consultants and non-instructors (FY1998; Ministry of Agriculture,

profit organizations; implementation of the grant

Forestry and Fisheries (MAFF); improprieties;

assistance for grass-roots human security projects;

improperand implementation of emergency assistance foroverpayment of the outsourcing fee under athe earthquake off Sumatra. BOA reported thecontract

audit results to the House of Councillors on

including the number of days the staff were

September 21, 2006. BOA stated that it will

engaged in other duties when calculating thecontinue its audit on the two matters concerning

personnel

expensesdevelopment consultants and the earthquake off

Economy,Trade

Sumatra, and will report the results as soon as

improprieties; improper amount: 33.98 million

they are compiled. It reported the results of thisyen); and implementation status of and effects

audit on September 12, 2007.

of assistance in technical cooperation withtraining

young

Chineseamount :52.73

millionfor outsourcing

surveys(FY2004;
andagricultural

yen ) ;
due

Ministry

Industry

toof(METI);

regard to ODA under the jurisdiction of theMoreover, on June 7, 2006, the Committee
decided to request BOA to conduct audit of

Ministryof

Education,

Culture,contracts including those for construction of

Science and Technology (MEXT), the Ministry

facilities and procurement of materials andof Health, Labour and Welfare (MHLW),

equipment to be implemented by the recipient

MAFF, METI, and the Ministry of Land,countries under grant aid or technical cooperation

Infrastructure,of Japan's ODA, and to report the results, and(MLIT) (FY2007; MEXT, MHLW, MAFF,

such request was made by the House of

METI, and MLIT; special report on audit

Councillors to BOA. BOA reported the results onrequested by the Diet).

Transport

andSports,Tourism

October 17, 2007.
2. Foreign affairs

Besides these, the following audit cases werereported :improperdevelopment

project

loan

relating( FY 1996 ;toOutline of audit findings, etc.

a

Audit findings of budget execution by the

OECF ;
509

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Ministry of Foreign Affairs had not been reported

revealed a reserve of pooled funds, which wasfor 20 years since the FY1979 Annual Audit

the difference between the amount recorded asReport, but six audit cases were reported in thepaid to transaction partners and the actual

FY2000 Annual Audit Report.

expenses required. Therefore, BOA audited thepayment

In 2001, there was an incident where aofexpensesrequiredforholding

former Director of the Overseas Visit Support

international conferences, etc. and clarified theDivision of the Ministry of Foreign Affairs

details of the pooled funds at the Ministry of

misappropriated public funds from the Cabinet

Foreign Affairs. BOA reported the results of thisSecretariat's expenses for remuneration. This

audit in the FY2001 Annual Audit Report.

incident increased public concerns about expenses

Meanwhile, because problems in the usage

for remuneration of the Ministry of Foreign

and accounting procedures of contributions at the

Affairs as well, and various arguments took place

Cooperation Committee, which is an internationalin the Diet, etc. about the significance of theorganization, raised an argument at the Diet, etc.,

expenses for remuneration and so on. Thus, BOA

BOA made effort to clarify the problems argued,

conducted audit by focusing on whether or not

and it also conducted audit of contributions, etc.

accounting of the expenses for remuneration is

to 11 international organizations whose activities

appropriately carried out in the Ministry of

are fully financed by contributions made byForeign Affairs, and reported the results in theJapan. As a result of the audit, BOA found aannual audit report.

numberofCommittee

In addition, improper financial management

problems

inthe

Cooperation

and

other

organizations

some

diplomatic

receiving the contributions. For example, some ofestablishments, including overpayment of housing

them had not been operated in accordance withallowance and use of lump sum expenses fortheprivate purposes. Therefore, BOA conductedorganization, etc., some had implemented projects

audit of such improper financial management andwithout following the procedure under suchreported the results.

agreement, and some had a large amount of funds

was

also

found

at

overseasagreementforestablishment

of

the

pooled. Accordingly, BOA reported the results in

In 2002, an investigation conducted by thethe FY2001 Annual Audit Report.

Ministry of Foreign Affairs in the previous year
A. Audit cases on accounting

FY
Item
1991; Contribution to the Gulf Peace Fund (report on specific matters)
1992
2000 Rectification and improvement in the Cabinet Secretariat and the Ministry of Foreign Affairs to appropriately execute theCabinet Secretariat's expenses for remuneration (demanded measures (Article 34&36 of the BOA Act); improper amount:
377 million yen; background amount: 6,509.44 million yen)
Improper financial management in overseas diplomatic establishments (Embassies of Japan in Palau and Kenya,
Consulate General of Japan in Denver) (improprieties; improper amount: 9.81 million yen)
Rectification and improvement in competitive contracts for the purchase of goods and services and in checking theirdelivery (demanded measures (Article 34 of the BOA Act); background amount: 35,500.75 million yen)
Rectification and improvement in executing expenses for remuneration properly (demanded measures (Article 34&36 of
the BOA Act); background amount: 4,957.54 million yen)
2001 Improper financial management in overcharging the cost of international conferences in excess of the actual cost andretaining the balance at contractors (improprieties; improper amount: 313.91 million yen)

510

Section 4 Overview of Audit Results
Financial management in overseas diplomatic establishments (report on specific matters)
2002 Improper financial management in overseas diplomatic establishments (improprieties; improper amount: 28.94 million
yen)
2003 Improper financial management in overseas diplomatic establishments (Embassy of Japan in Laos, and Consulate Generalof Japan in Edmonton) (improprieties; improper amounts: 11.11 million yen)
Rectification and improvement in internal control over the receipt and payment of overseas diplomatic establishments(demanded measures (Article 34 of the BOA Act); background amount: 12,217.39 million yen)
Measures taken to use adequately the bomb detector placed at overseas diplomatic establishments to increase theirsecurity (measures taken; improper amount: 222.49 million yen)
2004 Measures taken to calculate appropriately the amount of aid for the construction of Japanese school buildings and to
grant the aid in accordance with the amount of repayment to financial institutions (measures taken; improper amount:
1,605 million yen)2006 Measures taken to improve reminder to repay loans to finance return-home expenses by establishing detailed loancollection methods (measures taken; improper amount: 174.47 million yen)2007 Measures taken to define specific acceptance procedures regarding the remaining fund supposed to refund to Japan in theclosed trust funds for the international organization (measures taken; improper amount: 397.51 million yen)
Improper payment of subsidy for the project of Japan Foundation Center for Global Partnership due to insufficient review
in determination of expense (improprieties; improper amount: 4 million yen (Japan Foundation))
2008 Measures taken to repay aid money for construction of Japanese school buildings equivalent to the residual value when
the buildings are sold (measures taken; improper amount: 544.02 million yen)
Measures taken to conserve air fares provided for health control leave (measures taken; improper amount: 31.98 millionyen)

B. Audit cases on service contracts, etc.
FY
Item1994 Measures taken to estimate cleaning works cost in accordance with actual conditions of operations at international
training centers (measures taken; improper amount: 51 million yen (Japan Foundation))
1995 Measures taken to send Japan-related books and Japanese language text books to overseas by economical sea mail(measures taken; improper amount: 32.6 million yen (Japan International Cooperation Agency))
1999 Measures taken to conserve international telephone call fee by applying discount system (measures taken; improperamount: 35.8 million yen)
2000 Measures taken to compensate the personal expenses for dispatch of experts directly paid by the companies to the experts
in accordance with actual payment (measures taken; improper amount: 169.3 million yen (Japan Foundation))
2001 Opinion on appropriate contributions to international organizations for efficient use and administration of contributions(presented opinions (Article 36 of the BOA Act); background amount: 106,110.14 million yen)
2002 Receiving the non-governmental organization project subsidy for an afforestation project that was not implemented(improprieties; improper amount: 2.53 million yen)2007 Measures taken to confirm the basic design specification for development of the system for dispatching experts so as to
avoid additional or new development expenses (measures taken; improper amount: 97.74 million yen (Japan International
Cooperation Agency))

Subsection 9

respond to such severe financial and economic

Financeconditions, the government took

emergency

After the collapse of the bubble economy,

measures to stabilize the financial system forfinancial institutions successively failed as afinancial institutions, including injection of a

result of an increase of non-performing loans due

large amount of public funds. At the same time,to the financial crisis, deflationary recession, etc.

the government took measures against credit

At the same time, small and medium-sized

crunch for SMEs, including expansion of loans

enterprises

by(SMEs)

hadseverecash - flow

government - affiliatedinstitutions

andproblems due to private financial institutions

introduction of a special guarantee system withsharply curbing their new loans. In order torelaxed guarantee requirements.
511

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

The financial crisis which broke out inestablished for mid-sized enterprises: (i) the

September 2008 put the world financial markets

system of loans for responding to the financial

in an extremely unstable state. Japan's financial

environment

system was regarded to be relatively stable

Development Bank and Hokkaido and Tohoku

compared to U.S. and European systems, but theDevelopment Corporation in December 1997 as afinancialfinancial

temporary measure until March 2001; and (ii) the

institutions deteriorated as the situation grewsystems of special insurance relating to failed

seriously worse due to the effect of the global

financialeconomic slowdown. The government amended

insurance relating to failed financial institutions

the Act on Special Measures for Strengthening

were established in December 1998 to be

Financial Functions in order to strengthen Japan's

implemented within the framework of the credit

financial functions, and capital reinforcement

enhancement system.

conditionsofJapanesewasestablishedinstitutions

and

at

the

specialJapan

unsecured

measures were taken against financial institutions.

In light of this situation, BOA reported audit

In response to these developments, BOA

cases on the special guarantee system forproactively conducted audit on project operation,

financial stabilization of SMEs four times frometc. in the finance sector, as well.

the FY1998 Annual Audit Report as report on
specific matters (the annual audit reports for FY
1998, FY1999, FY2000 and FY2005).

1. Policy-based finance

Government - affiliatedAmid the economic slump following theinstitutions'non -financialperforming loans were reaching high amounts as

instability surfaced, including successive failurea result of having expanded loans to SMEs. Withof financial institutions, from the autumn ofregard to this matter, BOA reported audit

1997, and companies' cash flows deteriorated

findings including the following: the actual

notably since financial institutions began toconditions and management of non-performingtighten their lending attitude also to soundloans at National Life Finance Corporation andborrowers (so-called credit crunch).

Japancollapse ofthebubbleeconomy,Finance

Corporation

for

Small

and

In order to respond to this situation, aMedium Enterprise reported as report on specificspecial guarantee system was introduced as amatters (the FY2001 Annual Audit Report); andtemporary extraordinary measure for financial

thestabilization of SMEs from October 1998 to

management system for eliminating the non-March 2000. This system was to be implemented

performing

within the framework of a credit enhancement

advancement programs at Organization for Smallsystem consisting of credit guarantee provided by& Medium Enterprises and Regional Innovationcredit guarantee corporations and credit insurance

reported as special description (the FY2004

provided by the credit insurance department of

Annual Audit Report).

need

to

furtherloans

improveassociated

the
with

creditSMEs

Small

In addition, BOA reported the following

Enterprises (Small Business Credit Insurance

audit cases as report on specific matters: (i) the

Corporation until June 1999).

land development projects of Tomakomai Eastern

GeneralBusiness

Corporation

for

Area Development Incorporated and Mutsu-

Meanwhile, the following systems were512

Section 4 Overview of Audit Results

Ogawara Development Inc. in which Hokkaido

FY1995 and on injection of public funds for

and Tohoku Development Corporation invested

processing claims and debts of housing loanor provided financing (the FY1997 Annual Audit

companies in the FY1996 Annual Audit Report

Report);as report on specific matters. Then, BOA

(ii)

loans

for

promotingsocialinfrastructure development extended to the semi-

conducted

audit

of

the

overallemergency

public sector (the annual audit reports for FY

measures for stabilizing the financial system and1999 and FY2004); and (iii) actual conditions

reported on the status of the audit in the annual

and management of non-performing loans ofaudit reports from FY1997 to FY2001. At theGovernment Housing Loan Corporation (the FY

end of 2001, the special measure to protect the2004 Annual Audit Report).

full amount of deposits, etc. of failed financial
institutions ended. Therefore, BOA decided to
end its audit of overall measures in 2002, and to

2. Financial system stabilization measures
BOA started to audit the implementation

audit the implementation status of specificstatus of emergency measures for stabilizing themeasures from 2003 onward. The audit cases on

financial system, etc. in 1995. BOA reported on

measures for stabilizing the financial system wereBank of Japan's contributions to Tokyo Kyodo

as follows.

Bank in the annual audit reports for FY1994 and
FY
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006

2007

2008

Item
Bank of Japan's contributions to Tokyo Kyodo Bank (report on specific matters)
Bank of Japan's contributions to Tokyo Kyodo Bank (report on specific matters)
Injection of public funds for processing claims and debts of housing loan companies (report on specific matters)
Implementation status of emergency measures for stabilizing the financial system (report on specific matters)
Implementation status of emergency measures for stabilizing the financial system (report on specific matters)
Implementation status of emergency measures for stabilizing the financial system (report on specific matters)
Implementation status of emergency measures for stabilizing the financial system (report on specific matters)
Implementation status of emergency measures for stabilizing the financial system (report on specific matters)
Collection of claims taken over concerning specific housing loan companies (report on specific matters)
Measures for the financial emergencies in the Resona Bank and the Ashikaga Bank (report on specific matters)
Measures for the termination of the temporary government control over the Long-Term Credit Bank of Japan and the
Nippon Credit Bank, and the financial conditions of the Deposit Insurance Corporation of Japan (report on specific matters)
Execution of business revitalization support by the Industrial Revitalization Corporation of Japan (report on specificmatters)
Collection of assets acquired from specified housing loan companies by the Resolution and Collection Corporation andassets acquired by Deposit Insurance Corporation of Japan in association with the termination of state control to LongTerm Credit Bank of Japan and the Nippon Credit Bank (report on specific matters)
Progress in capital injection measures through public funds for financial institutions to stabilize financial system,
repayment status of public funds and financial condition of the Deposit Insurance Corporation of Japan (report on
specific matters)
Financial conditions of financial institutions, including banks that have still not completed to repay public funds, and theprogress in implementation status of measures for stabilizing financial systems in the recent financial situation (report on
specific matters)

Subsection 10

organizational reviews of State-owned bodies

State-owned bodies

were carried out as follows.
In the final report of the Administrative

1. Reform of State-owned bodies

Reform Council released in December 1997, theIn the Heisei era, institutional reforms and513

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

council made a recommendation to introduce thebut this obligation was abolished, shifting to asystem of incorporated administrative agencies. In

system to invest the funds discretionarily. In

response to this, the Basic Act on Central

addition, special public institutions, etc. became

Government Reform (Act No. 103 of 1998)

required to conduct public offering of FILP

provided for introduction of the system ofagency bonds by themselves and to improve theirincorporated administrative agencies. Incorporated

operations by being evaluated by the markets.
Furthermore, the government

administrative agencies are corporations withconsideredsufficient autonomy, initiative, and transparency

reviewing the projects of all special public

to efficiently and effectively implement projects

institutions and authorized corporations pursuant

andsecurelyto the Basic Act on Special Public Institutions

implemented from the viewpoint of public

Reform (Act No. 58 of 2001) based on criteriainterest (such as achieving stability in the lives ofincludingthe citizenry as well as society and the economy),significance of the project has declined; (ii)which do not have to be directly implemented bywhetherthe State but may not necessarily be implemented

inefficient; and (iii) whether the project can be

if left to the private sector or which need to be

implemented

more

exclusively implemented by a single body. As a

privatization.

Then,

result, 57 incorporated administrative agencies

Rationalization Plan of Special Public Institutions

were first established in April 2001, centering on

was formulated in December 2001. The plan set

State's affiliated institutions.

forth

programs

that

need

to

be

the
the

that,

institutions

With regard to the fiscal investment andfollowing:project

among
and

(i)

is

whetherconsiderably
efficiently

the

the
cost-

through

Reorganization

the

163

authorized

specialandpubliccorporations,17loan program (FILP30), some problems arose. For

should be abolished, 45 should be privatized, andexample, funds such as postal savings and38

pension reserves were required to be deposited

administrative agencies. In line with this plan,with the Trust Fund Bureau. This requirement

many institutions and corporations were to bemade special public institutions, etc. subject toabolished,

FILP

Accordingly,

incorporated administrative agencies based on

fundamental reform of the FILP was stipulated inlegislative and other necessary measures by thethe Basic Act on Central Government Reform.

end of the intensive reform period at the end ofThen, in April 2001, a series of reforms were

FY2005.

-bloatedandinefficient.

shouldbeconvertedprivatized,

and

into

incorporated

converted

intoWith regard to policy-based finance, theexecuted. For example, there had been an
obligation to deposit all funds of postal savings

Reorganizationand pension reserves with the Trust Fund Bureau,

Special Public Institutions set out a policy toreview

30

FILP (Fiscal Investment and Loan Program) represents thegovernment's investment and lending operations byprocuring capital through the issuance of FILP bonds (akind of national government bonds) and other means. The
program provides long-term, fixed- and low-interest loans
and long-term risk money for projects that are required
politically and for which reliable payment is expected but
which are difficult for the private sector to handle.

the

and

Rationalization

fields,

scale

of

Plan

funds,

ofandorganizations subject to public finance under the
principles of (i) complementing the private sector,(ii)

minimizing

policycosts,

and(iii)

consolidating and rationalizing organizations andoperations. Then, the basic policy of reform was514

Section 4 Overview of Audit Results

stipulated

in

the

Act

on

Promotion(FY2005; special report to the Diet and theofCabinet).

Administrative Reform for Realization of Smalland Efficient Government (Act No. 118 of 2006).

Meanwhile, BOA conducted cross-cutting

Based on this policy, the reform of policy-based

audit of operational management of incorporated

finance was promoted, such as consolidation ofadministrative agencies in response to a request

four government-affiliated institutions including

by the House of Councillors' Committee on Audit

People's Finance Corporation into Japan Financein June 2005. BOA audited the state ofCorporation.

organizational management, finance, operational

Regarding postal services, Japan Post was

performance, and information disclosure of 45

established in April 2003, which followed aincorporated administrative agencies that became

policy indicated in the Basic Act on Central

independent from national government organs inGovernment Reform to establish a new State-run

April 2001, and reported the results (results ofpublic corporation for executing affairs under theaudit concerning operational management, etc.

jurisdiction of the Postal Services Agency in anof incorporated administrative agencies (FY

integrated manner. After that, Japan Post was

2004; progress report on audit requested bydissolved in October 2007, and five stock

the Diet)).

companies including Japan Post Holdings Co.,

In 2006, BOA focused on internal audit, etc.

Ltd. and one incorporated administrative agencyof State-owned bodies, and reported on internal

took over its functions pursuant to the Postal

audit, etc. of State-owned bodies (FY2005;

Service Privatization Act (Act No. 58 of 2007).

report on specific matters). In this report on

In light of such situation of reform of State-

specific matters, BOA analyzed and clarified

owned bodies, etc., BOA conducted audit withproblems in the current internal audit, etc. of

broad and diverse objectives.

State-owned bodies from the standpoint ofpromoting objective, efficient,andeffective

internal audit.

2. Cross-cutting audit on State-owned bodies
In the Heisei era, BOA enhanced its

In 2007, BOA conducted audit of 25

organizational structure for conducting cross-incorporated administrative agencies that were

cutting audit of State-owned bodies and madeestablished in FY2003 and whose medium-term

considerable achievements.

objectives period was to end in FY2007. The

With regard to the final accounts analysis

audit focused on how their financial conditionsof FILP agencies (FY2000; report on specificwere changing, whether the desired operational

matters), BOA conducted audit with particular

results had been achieved, and whether thefocus on the status of fund procurement andmethod of contracts concluded with related

fiscal burden from FY1989 to FY2000 in light ofcompanies, etc. was appropriate. BOA reported

the FILP reform in April 2001. Subsequently,

the audit results as operational management of

BOA conducted audit of financial conditions ofincorporated administrative agencies that were

FILP agencies after the FILP reform and theformerly special public institutions, etc. (FYstatus of financial processing associated with

2006; special report to the Diet and thethe reform of special public institutions, etc.

Cabinet).
515

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

On receiving a request from the House ofagencies and national university corporations

Councillors' Committee on Audit in June 2007,(FY2008, report on specific matters), with

BOA conducted audit of (i) operations andfocus on whether the calculation of the usage fee

finance and (ii) each agency's contract system,and the bearing of costs by the agency or

bidding such as the successful bid rate, andcorporation were appropriate, whether facilities,

contracts,

administrative

etc. to be sold or otherwise disposed of under theagencies in 2008. BOA reported the following as

Reorganization and Rationalization Plan were

the status of operations, finance, bidding, andappropriately disposed of, and the status ofcontracts

administrative

disposition of other facilities, etc.. In addition,agencies (FY2007; special report on audit

BOA reported the following as individual audit

requested by the Diet): (i) BOA concluded thatfindings :it is necessary to examine more strictly whether

disposition of the Kugayama Ground, which isthe projects and programs carried out by eachregardedagency are truly essential for citizens, to consider

preparing a disposition plan for actively

appropriate

treatment

whose

promoting arrangement toward its appropriate

operational

expense subsidies

retained

disposition,

of

all

of

incorporated

incorporatedofagencies
weremeasures
as

an

taken

to

unnecessary

includingitsfacilitate
asset,

transfer,byandinternally, and to promptly take legislative

returning it to the National Treasury if

measures for capital reduction so as to enable

arrangement

agencies to pay funds, etc. obtained throughmeasures taken; National Printing Bureau;disposition of assets, etc. to the treasury; and (ii)

improper

BOA indicated that it is necessary to enhancemeasures taken to rectify the usage fees oftransparency

expandinggovernment official housing by ceasing tocompetitive contracts, and to give particular

apply a discount rate for the government

consideration to securing transparency of an

official housing for single-person households

agency's negotiated contracts with another agency

that has dedicated plumbing systems and thefor which its retiree works. In 2009, with regard

same facilities as the housing for family

to the status of operations, finance, bidding,households (FY2008; measures taken; Japanand contracts of incorporated administrative

Railway

agencies (FY2008; special report on audit

Technology Agency; improper amount: 56.71

requested by the Diet), BOA conducted audit

million yen / Japan Water Agency; improper

centering on verification of the status of review

amount: 34.05 million yen); and measuresof individual negotiated contracts based on thetaken to rent government official housing withplan for reviewing such contracts as formulated

low occupancy rates individually instead of inby each incorporated administrative agency, andblock so as not to pay rent, etc. for vacant

reported the results.

governmentofcontracts

bycannotamount:be

3,771.86

Construction,

official

made(FY2008;

millionTransport

housing

yen);

and

( FY 2008 ;Also in 2009, BOA conducted cross-cutting

measures taken; Japan Oil, Gas and Metals

audit, and reported the audit results, of the

National Corporation (JOGMEC); impropercondition of welfare facilities managed andamount: 32.69 million yen).

operatedbyincorporated

Furthermore, BOA made special reports toadministrative
516

Section 4 Overview of Audit Results

the Diet and the Cabinet that incorporated

measures (Article 36 of the BOA Act);

administrative agencies were making monthly

National Consumer Affairs Center of Japan;

cash

meal

improper amount: 49.47 million yen / Japan

allowance, etc. in addition to monthly salaries.

Science and Technology Agency; improper

For five incorporated administrative agencies, itamount:reported measures taken to abolish payment ofRenaissance Agency; improper amount: 137.2

cash including meal allowance in paying

million yen).

payments

salaries to

to

their

employees

officials(FY2008;

as

11.21

million

yen;

and

Urban

measurestaken; Agriculture & Livestock Industries
Corporation; improper amount: 59.74 million

3. Audit of State-owned bodies focusing mainlyon their operation and administration

yen / New Energy and Industrial Technology

BOA has audited issues of State-owned

Development Organization; improper amount:bodies'298.39 million yen / Japan External Trademanagement,

Organization ;325.07

including the characteristics of projects and themillion yen / JOGMEC; improper amount:managerial environment, and reported the audit

136.64 million yen / Organization for Small &results as report on specific matters, etc. In some

Medium Enterprises and Regional Innovation;cases,

improper amount: 279.82 million yen). For

auditees to improve their project operation, etc.,

three incorporated administrative agencies, itsuch as in the case of three Japan Railway

reported measures demanded to stop making

companies' project of directly managed stores andcash payments as allowance, etc. in paying

Japan Science and Technology Agency's literaturesalaries to employees (FY2008; demanded

information service project.

improperamount :project

BOA

operationwhich

involvepresented

andcorporatevariousopinionstofactors

requireFY
Item1990 Opinion on improvements in the balance of payments and the management of directly managed stores (presented
opinions (Article 36 of the BOA Act); background amounts: 6,389.83 million yen (East Japan Railway Company; Central
Japan Railway Company; Kyushu Railway Company))
1995 Opinion on appropriate collection of scholarships (presented opinions (Article 36 of the BOA Act); background amount:
20 billion yen (Japan Scholarship Foundation))
1999 Development of H-II and M-V rockets (report on specific matters)
2000 Management of public telephone business (special description; background amount: 38.9 billion yen)
Development projects of coal mining areas by the Japan Regional Development Corporation (report on specific matters)
Establishment and management of Kansai International Airport and financial position of Kansai International Airport Co.,Ltd (report on specific matters)
Budget execution by the Japan Nuclear Cycle Development Institute (report on specific matters)
2002 Business conditions of Japan Railways Hokkaido, Shikoku and Kyushu (report on specific matters)
Business conditions of the Japan Freight Railway Company (report on specific matters)
2003 Opinion on reexamination of improvement plan for the balance of payment in the literature information service project at
the Japan Science and Technology Agency (presented opinions (Article 36 of the BOA Act); background amount:
69,469.56 million yen (Japan Science and Technology Agency))
Development of H-IIA rocket (report on specific matters)
2005 Necessity for improvement in management of Kansai International Airport to steadily redeem long-term interest-bearing
debt and to establish a stable management base (special description; background amount: 1,032.2 billion yen)2008 Opinion on clarifying the role of public and private sectors in development of GX rocket and the perspective of thedevelopment of LNG engine, promoting development in aerospace exploration with consideration of public burden

517

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)(presented opinions (Article 36 of the BOA Act); background amount: 12,348.77 million yen (Japan Aerospace
Exploration Agency)
Financial condition of the Bank of Japan and its development (report on specific matters)

4. Audit with focus on accurate presentation offinancial statements

reported the rights and obligations they had

With regard to the system of incorporated

statements, etc. for FY2001 and whether theiradministrative agencies, it was decided that

financial management in the settlement term issupervision by the competent minister and otherprocessed

involvement by the State should be kept to theaccounting standards, etc. and is presented fairly

minimum level necessary in order to eliminate

in financial statements, etc. As a result, BOA

prior involvement and control by the State as

found a situation where assets succeeded from themuch as possible and to shift priority to ex post

State were not reported in financial statements orfacto check. Incorporated administrative agencies

where expenses required for maintaining andare required to provide information that enables

managing State-owned assets were not reported intheperformancecost statements, etc. Accordingly, it demanded 26

evaluation properly in this ex post facto check.

incorporated administrative agencies to take

Therefore, the agencies need to make accurate

rectification and improvement measures pursuant

financial reports to achieve this purpose.

to the provisions of Article 34 of the BOA Act.

government

to

carry

out

succeeded from the State in the financial

appropriatelyinaccordancewithIncorporated administrative agencies were to

The following table shows audit results onreport their financial accounts for the first timepresentation of financial statements, etc. ofon March 31, 2002. Thus, BOA conducted audit

incorporated administrative agencies and otherwith focus on whether the agencies properlyState-owned bodies.

FY
Item
2001 Rectification and improvement in ensuring that incorporated administrative agencies recognize and report assets andexpenses appropriately and prepare accurate financial statements (demanded measures (Article 34 of the BOA Act);
improper amounts: 2,602.18 million yen (26 incorporated administrative agencies))
Accounting of government-entrusted projects undertaken by incorporated administrative agencies (report on specificmatters)
2002 Rectification and improvement in administration of goods and equipment (demanded measures (Article 34 of the BOAAct); improper amount: 891.62 million yen (Institute of Physical and Chemical Research))
2003 Independent administrative agencies' treatment of refunded consumption tax and accounting of paid consumption tax(report on specific matters)
Measures taken to journalize appropriately subsidized research equipment and equipment attached to buildings into
tangible fixed asset so as to calculate the amount of each asset items and total depreciation of them accurately (measurestaken; improper amount: 1,817.6 million yen (the National Agriculture and Bio-oriented Research Organization))
Measures taken to improve the standards for the distribution of experiment and research expenses in accordance with theprogress status of research and development (measures taken; background amounts: 915.73 million yen (Nippon
Telegraph and Telephone East Corporation; Nippon Telegraph and Telephone West Corporation))
2004 Measures taken to recognize and report assets and revenues concerning remuneration for medical fees appropriately,
resulting in accurate financial statements (measures taken; background amounts: 2,366.72 million yen (7 national
university corporations))
Opinion on uniform accounting procedures in national university corporations concerning leased goods and credits for
medical fees (presented opinions (Article 36 of the BOA Act); background amount: 119,306.85 million yen (Ministry of
Education, Culture, Sports, Science and Technology))
Measures taken to improve accurate and clear presentation of financial statements concerning sports promotion lottery for

518

Section 4 Overview of Audit Results
the appropriate disclosure of financial and management condition (measures taken; improper amount: 15,405.47 million
yen (Japan Sport Council))2005 Measures taken to rectify the financial statements by recognizing and reporting tangible assets appropriately (measurestaken; improper amount: 200.26 million yen (National Museum))
Rectification and improvement in preparing the financial statements with accurate presentation of asset value of thesuccessors of privatized four public highway corporations, by reevaluating and correction of asset, and in establishing theframework for appropriate administration of the final accounts and asset management (demanded measures (Article 34 of
the BOA Act); improper amounts: 13,446.13 million yen (Japan Expressway Holding and Debt Repayment Agency; 6
Expressway Company Co., Ltd))
2006 Rectification and improvement in clarification of accounting methods to record renovated facilities only for agricultural
use as fixed assets in financial statements with accurate asset values (demanded measures (Article 34 of the BOA Act);background amount: 8,983.63 million yen (Japan Water Agency))
2008 Misstatement of financial statements due to inappropriate impairment of fixed asset caused by misunderstanding ofindications of impairment (improprieties; improper amount: 892.4 million yen (Japan Atomic Energy Agency))
Opinion on calculating the recoverable value in impairment accounting in accordance with the purpose of the impairment
standards (presented opinions (Article 36 of the BOA Act); background amount: 6,893.85 million yen (Narita
International Airport Corporation))

5. Audit with focus on appropriateness of asset
management and retention

around 2003. BOA conducted intensive audit ofWith regard to audit with focus on assets ofobjectives of efficiency, effectiveness, and so on,

assets held by State-owned bodies, etc. with theand made substantial achievements.

State-owned bodies, BOA has reported audit

Also,

cases on management and disposition of land foralthoughJapan

Broadcasting

project use in annual audit reports from the past.

Corporation (Nippon Hoso Kyokai) (NHK) is not

The Diet began to deliberate issues of surplus

a State-owned body, BOA reported the conditions

funds, reserve funds, and internally retained fundsof management and disposition of unused realof special accounts, incorporated administrative

property of NHK in the FY2001 Annual Audit

agencies, and public interest corporations from

Report.

FY
Item
1990 Opinion on utilizing the land in housing estate to be used for facilities (presented opinions (Article 36 of the BOA Act);background amount: 3,149.19 million yen (Housing and Urban Development Corporation))
1995 Disposition of land of Japanese National Railways Settlement Corporation (special description; background amount: 3
trillion yen)
2000 Opinion on selling or maintaining appropriately the railway business sites occupied by third parties (presented opinions(Article 36 of the BOA Act); background amount: 1,067.08 million yen (West Japan Railway Company))
2001 New housing and urban development project (special description; background amount: 1,172 billion yen)
Disposition progress of succeeded land to be allotted to the payment of pensions (report on specific matters)
Conditions of management and disposition of unused real property of Japan Broadcasting Corporation (report on specificmatters)
2002 Measures taken to examine the necessity of holding the substitute lands for site acquisition for airport expansion,
resulting in disposition of lands deemed unnecessary (measures taken; background amount: 3,045.74 million yen (NewTokyo International Airport Authority))
2003 Measures taken to establish a system for selling promptly the remains of the land acquired for the construction of
Shinkansen facilities (measures taken; improper amount: 36 million yen (Japan Railway Construction, Transport andTechnology Agency))
2005 Audit results concerning support projects implemented by Organization for Small & Medium Enterprises and Regional
Innovation, Japan (SMERIJ, formerly Japan Small and Medium Enterprise Corporation) (special reports on audit
requested by the Diet)
2006 Opinion on calculating the proper amount of the National Printing Bureau's assets such as land and funds derived from519

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

land transfer income and on establishing appropriate system to return unnecessary assets to the National Treasury(presented opinions (Article 36 of the BOA Act); background amount: 356,742.68 million yen (Ministry of Finance))
2007 Opinion on calculating the appropriate amount of the capital investment from the Special Account for Industrial
Investment into the Succession Account for Communication and Broadcast of the National Institute of Information andCommunications Technology (presented opinions (Article 36 of the BOA Act); background amount: 18,866.4 million yen(Ministry of Internal Affairs and Communications))
Opinion on calculating the appropriate amount of the capital investment from the Special Account for Industrial
Investment into the Succession Account for Industry and Mining of the New Energy and Industrial Technology
Development Organization (presented opinions (Article 36 of the BOA Act); background amount: 18,312.36 million yen(Ministry of Economy, Trade and Industry))
Improvement in examining the necessity of possession of the buildings including dormitories and branch offices and theground of these buildings and in preparing to return them to the National Treasury (demanded measures (Article 36 of
the BOA Act); improper amount: 1,243.97 million yen; background amount: 17,547.84 million yen (Japan Mint))
Rectification and improvement in sharing the information regarding vacant housing for efficient use of the housing at theJapan Finance Corporation formed by the merger of three finance corporations (demanded measures (Article 34 of the
BOA Act); improper amounts: 56.68 million yen (National Life Finance Corporation; the Agriculture, Forestry and
Fisheries Finance Corporation; Japan Finance Corporation for Small and Medium Enterprise))2008 Measures taken to facilitate disposition of the Kugayama Ground, which is regarded as an unnecessary asset, by
preparing a disposition plan for actively promoting arrangement toward its appropriate disposition, including its transfer,and returning it to the National Treasury if arrangement cannot be made (measures taken; improper amount: 3,771.86
million yen (National Printing Bureau))
Opinion on reviewing the appropriate amount of assets including security deposit possessed by the Japan External Trade
Organization, and on reviewing project method carried out with revenues from the interest on security deposit, and on
returning unnecessary assets to the National Treasury (presented opinions (Article 36 of the BOA Act); improper amount:
20,455.8 million yen (Ministry of Economy, Trade and Industry))
The condition of welfare facilities managed and operated by incorporated administrative agencies and national university
corporations (report on specific matters)

6. Audit with focus on bidding and contact
workby reviewing the contract method or demanding

BOA has made reports demanding State-and specifications of contracts. Some of suchowned bodies to secure fairness, competitiveness,

cases are as shown below. BOA has also reported

and transparency in their bidding and contracts

a audit case on NHK.

them to cut expenses by reviewing the contents

FY
Item
2002 Measures taken to conclude purchasing contracts for copy paper for electronic copying machines by designating not thetrade name but general specifications, resulting in reduction of cost (measures taken; improper amount: 33.9 million yen(Japan Atomic Energy Research Institute))
2003 Measures taken to adopt general competitive bidding of contracts for outsourcing office cleaning, to improve fairness,competitiveness and transparency (measures taken; background amount: 559.21 million yen (Urban Development
Corporation))
2004 Measures taken to conduct competitive contracts for the purchase of research equipment, to improve fairness andcompetitiveness (measures taken; background amount: 189.34 million yen & 77.53 million yen (National Agriculture andBio-oriented Research Organization; National Institute of Agrobiological Sciences))2005 Opinion on and rectification and improvement in reconsidering negotiated contract method of contracts for purchasing
goods and outsourcing services so as to ensure the fairness, transparency and benefits by competition (demandedmeasures (Article 34 of the BOA Act); presented opinions (Article 36 of the BOA Act); background amount: 1,511.85
million yen (National Museum of Art))
2006 Rectification and improvement in reviewing the negotiated contracts and introducing competitive contract methods and in
making its estimate of contract unit prices more economical by reflecting the actual conditions of operations, regarding
service contract for processing official gazette extra editions and other publications (demanded measures (Article 34 of
the BOA Act); improper amount: 224.54 million yen (National Printing Bureau))
Measures taken to adopt general competitive bidding for service and rental contract of facilities and goods, to improve
fairness, competitiveness and transparency (measures taken; improper amount: 180.46 million yen (Tokyo Medical and520Section 4 Overview of Audit Results
Dental University))
Execution of bids and contracts concerning floodgate equipment works at the Ministry of Land, Infrastructure andTransport and the Japan Water Agency (report on specific matters)
The competitiveness and economy of contracts for procurement of information systems and the effort for optimization ofservices and systems at incorporated administrative agencies and national university corporations (report on specificmatters)
Rectification and improvement in reconsidering contract method of service contracts which would not pose any particular
problems in ensuring the fairness of horse racing so as to enjoy the benefits of competition (demanded measures (Article
34 of the BOA Act); background amount: 16,575.09 million yen (Japan Racing Association))
2007 Opinion on facilitating the internal control system of Tohoku University for appropriate contract procedures (presented
opinions (Article 36 of the BOA Act); improper amount: 23.1 million yen (Tohoku University))
Measures taken to conduct general competitive bidding for lease contracts to improve fairness and transparency and tobenefit by competition (measures taken; improper amount: 507.21 million yen (Japan Atomic Energy Agency))
Measures taken to contract directly with manufacturing for purchase of materials for ink, to reduce price (measures taken;
improper amount: 28.92million yen (National Printing Bureau))
Measures taken to improve publication method of the public relations magazine shifting from purchasing it from apublisher to publishing it themselves (measures taken; improper amount: 17.63 million yen (Japan Arts Council))2008 Opinion on introduction of competitive contract method to subsidiaries, so as to enjoy further benefits of competition(presented opinions (Article 36 of the BOA Act); improper amount: 3,549.28 million yen (Narita International Airport
Corporation))
Measures taken to ensure the transparency and competitiveness of the contract for the basic design of reconstruction ofterminal sewage disposition of facilities by shifting from negotiated contract to competitive contract (measures taken:
improper amount: 182.33 million yen (Japan Sewage Works Agency))
Measures taken to ensure transparency, fairness and competitiveness in contract procedures for procurement of computer
services with consideration of the scope of the specific procurement rules (measures taken; improper amount: 8,848.25
million yen (Japan Broadcasting Corporation))

Subsection 11

indicated because a large number of special

Special accounts

accounts were established.
Article 13, paragraph (2) of the Public(i) Establishing a large number of special
accounts may make the overall budget
structure complicated and confusing, andmake it difficult to grasp an overview ofpublic finance at a glance.
(ii) The large number of special accounts makes
it difficult for citizens to oversee themsufficiently, and may give way to wastefulspending.
(iii) Special accounts have specific revenue
sources, which means they may be being
used for non-urgent, non-required projects.
(iv) Special accounts show a large amount of
surplus, etc., which means fiscal funds may
not be utilized efficiently.
("Tokubetsu Kaikei No Hanashi" (About special
accounts), Budget Bureau, Ministry of
Finance, April 2006)

Finance Act provides that special accounts may
be established under law only in cases where theState (i) conducts a specific project, (ii) holds
specific funds and manages such funds; or (iii)
otherwise needs to appropriate specific revenue tospecific expenditure and conduct the accounting
therefor separately from the accounting of generalrevenue and expenditure. In FY2006, there were31

specialaccounts.

Specialaccountsaresignificant in that their accounting is conducted
separately from general account to clarify thestatus of operation of specific projects and funds.
Almost the same accounting regulations andprocedures apply to both general account andspecial accounts in the process from budget
compilation to submission of the final accounts toFormerthe Diet, but the following problems had been

SHIOKAWA
521

MinisterreferredoftoFinance

Masajuro

thissituation

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

symbolically by comparing general account to thereform within around the next five years, by"main house" and special accounts to a "detachedsubmittingroom" as follows:

streamlining special accounts (tentative name),

a

bill

for

consolidating

andwhich incorporates consolidation and abolishment"... In short, parents are eating porridge in themain house, persevering a frugal life, but children
are enjoying sukiyaki beef hot pot in a detachedroom. Such a situation is actually going on ..."
(February 25, 2003, House of Representatives'
Committee on Financial Affairs)of special accounts, to the Diet by around 2007;
and (iv) review the earmarked revenue source
system based on the Basic Policy on Review of
Revenue

Sources

Earmarked

for

Roads

(December 9, 2005, government / ruling parties,etc.).

In light of this situation, the government

Then, in order to promote the mattersstarted reform of special accounts, subsequently

specified in the Key Policies for Administrative

the Fiscal System Council reported on review of

Reforms, the government enacted the Act on

special accounts in November 2003, November

Promotion

2004, and November 2005 as part of such effort.

of

Administrative

Reformfor

Realization of Small and Efficient Government

In the November 2005 report, the Council(Act No. 47 of 2006) and the Act on Special

mentioned the following four points as the basic

Accounts (Act No. 23 of 2007). These Acts

attitude to the special account reform: (i)provided for (i) abolishment and consolidation ofabolishment/consolidation of special accounts; (ii)special accounts, (ii) streamlining of treatment

review of earmarked revenue sources and surplus/that differs from general account, and (iii)

reserves; (iii) strict and detailed examination of

disclosure of financial information of special

the contents of budget; and (iv) accountability to

accounts following corporate accounting practice,citizens. In accordance with this basic attitude,

among other matters.

the Council inspected 31 special accounts, andAmong these, with regard to disclosure ofpresented the direction for review.

financial

Then, the government deliberated on review

informationofspecialaccounts

following corporate accounting practice, the Actof special accounts. As a result, the Key Policies

on Special Accounts provided that a competentfor Administrative Reforms (December 24, 2005)

minister must prepare documents for disclosing

were approved by the Cabinet. The Key Policies

the position of assets and liabilities and otherset forth the following in regard to special

financialaccount reform: (i) aim to contribute to fiscal

information

concerning

the

final

accounts for the special accounts the ministersustainability worth a total of about 20 trillion

manages every fiscal year by following theyen over the next five years by streamlining theexample of corporate accounting practice, andassets and surplus of special accounts; (ii)send them to the Minister of Finance (Article 19,

decrease the 31 special accounts to half or toparagraph (1)), and that the Cabinet must submit

one-third through consolidation or by making

said documents to the Diet after they are audited

them incorporated administrative agencies orby BOA (Article 19, paragraph (2)). To this end,

general account in the immediate future, and also

audit of financial documents of special accounts

actively use market testing; (iii) complete thewas added to BOA's mandate from the final
522

Section 4 Overview of Audit Results

well, in order to contribute to improvement in theaccounts for FY2007.

transparency and accountability of administration

As mentioned above, it was indicated thatand improving the project operation.

there were growing public concerns about thefinancial operation of special accounts, and that it

BOA has reported the following audit cases

was difficult for people to clearly understand theon the financial condition of special accounts incondition of financial management of special

annual audit reports over the past ten years. The

accounts merely

information

audit cases are categorized by those reported indisclosed in financial statements. Against such

"Chapter VI, Section 1, Subsection 4 Individual

background, BOA has actively conducted audit of

final accounts, etc." and those reported as report

the financial condition of special accounts as

on specific matters, etc.

based

on

the

Audit cases reported in Chapter VI, Section 1, Subsection 4 Individual final accounts, etc.
FY
Item1998 The finial account of the Special Account for Distributing Tax Allocations and Transferred Tax
1999 The final account for the Special Account for the National Debt Consolidation FundThe final account for the Special Account for Foreign Exchange Fund
2000 The final account for the Special Account for the Trust Fund Bureau
The final account for the Special Account for Specified National Property Improvement
2001 The final account for the Special Account for Industrial Investment
2005 The Special Account for Fiscal Loan Fund after the commencement of the Fiscal Investment and Loan Program Reform
2006 The Special Account for Foreign Exchange Fund
Audit cases reported in Chapter 3 or 4
FY
Item
2001 The final accounts analysis of special accounts (report on specific matters)
The final account of the Account for the Smooth Siting of Power Plants and Other Nuclear Energy Facilities of theSpecial Accounts for Electric Power Development Acceleration Measures (report on specific matters)
2002 The final account of the Special Account for Measures for Advancing the Supply and Demand Structure of Petroleum
and Energy (report on specific matters)
2004 Surplus in the Special Account for Improvement of the Agricultural Management Foundation (report on specific matters)
Surplus in the Special Account for Promotion of Power-Resources Development (report on specific matters)
2005 Audit results concerning special accounts (special report on audit requested by the Diet)2007 Opinion on examining the cause for the unnecessary fund in the Accounts for Energy Demand and Supply of the Special
Account for Energy Measures and reflecting it in estimation of the expenditure budget (presented opinions (Article 36 of
the BOA Act); background amount: 249.1 billion yen (Ministry of Economy, Trade and Industry))
Opinion on proper and efficient spending in the Special Account for Road Improvement (presented opinions (Article 36of the BOA Act); background amount: 72,890.95 million yen (Ministry of Land, Infrastructure, Transport and Tourism))2008 Opinion on preventing the use of surplus, which is originated from funds procured through issuance of constructionfinancing national government bonds and put in special accounts through the general account, from making the legal
restriction on the issuance of construction-financing national government bonds no longer enforced (presented opinions(Article 36 of the BOA Act); background amount: 78,583.78 million yen (Ministry of Finance))

Subsection 12

Information
communications

andadministration
systematically,incomprehensively

and

order

the

to

securecomprehensiveness of administration, to promote
The government formulated the Master Plan

simplification and improve efficiency, and to

for Promoting Government-wide use of IT in

respond to the needs of citizens. Then, in January

1994, and pushed forward the informatization of

2001, the Basic Act on the Formation of an523

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Advanced Information and Telecommunicationsof the competitiveness of contracts, the use of

Network Society (Act No. 144 of 2000) camesystems, and the current condition of the

into

was

Optimization Plan for Services/Systems in theformulated, setting forth that Japan will aim torespective ministries, etc. In October 2006, BOA

become one of the world's most advanced IT

reported the results under the provisions ofnation by FY2005, and measures for realizing an

Article 30-3 of the BOA Act. (Results of audit

e-Government were promoted.

ofeffectandthee-JapanStrategy

computersystemsintherespective

ministries, etc. (FY2005; special report on

In January 2006, the New IT Reform

audit requested by the Diet))

Strategy was formulated as the strategy for the
next period, with the aim to realize a society

In 2007, BOA reported the competitivenesswhere anyone can enjoy the benefits of IT at any

and economy of contracts for procurement oftime from anywhere, and measures have been

information

systems

promoted to make Japan the world's most

optimizationofconvenient and efficient e-Government.

incorporated

administrative

national

BOA has proactively conducted audit in the

and

the

effortfor

servicesandsystems

atuniversity

agencies

corporations

and(FY2006;

report on specific matters).

IT field by placing it as one of the priority policy

In 2009, BOA conducted cross-cutting audit

areas of audit in the Basic Policy on Audit.

of e-application systems, and presented opinions
to the heads of 11 ministries, etc. (Cabinet

1. Cross-cutting audit on information andcommunications (IT)Secretariat; the head office of the Cabinet
Office;In the case of contracts for the State's

Japan

Fair

Trade

Commission;

procurement of information systems and the

National Police Agency; the head office of theframework for promoting informatization of

Ministryadministration (FY2002; report on specificCommunications;matters), BOA indicated as report on specific

Ministry of Finance; National Tax Agency; thematters that the competitiveness in contracts washead office of MHLW; the head office ofweak, and that sufficient effort was not being

MAFF; the head office of METI; and the headmade for the State's proactive participation in theoffice of MLIT) on the status of use of e-

preparation of specifications, etc., management ofapplication

the system development processes after contract,(Article 36 of the BOA Act)). In regard to thisand clarification of the relations of rights after

matter, BOA made a special report to the Diet

development and improvement of the systems.

and the Cabinet as presentation of opinions toofInternal

Affairs

the head

officesystems( presented

and
of

the

opinions

Later, a problem concerning procurement of

the heads of 11 ministries, etc. including thelegacy systems including the Social Insurance

Cabinet Secretariat to take measures forOnline System was picked up at the Diet as aincreasing the cost-effectiveness of infrequently

serious matter of concern, and in June 2005, theused e-application systems that have not

House of Councillors requested BOA to audit

produced sufficient effects in light of thecomputer systems in the respective ministries, etc.

maintenance / operation

BOA accepted this request, and conducted audit

stopping the system or shifting to a simpler
524

expenses,

such

as

Section 4 Overview of Audit Results

system (FY2008; special report to the Diet and2. Individual audit

the Cabinet).

The following tables show audit cases on
information systems procured or operated byauditees by their category.

(1) Audit cases on the status of utilization of systems
FY
Item
2001 Measures taken to establish a framework for examination and implementation of the projects for improvement of
disparities in telecommunications access (measures taken; improper amount: 274.63 million yen (Ministry of Public
Management, Home Affairs, Posts and Telecommunications))
2002 Measures taken to improve administration and utilization of personal computers introduced with subsidies for thepromotion of social participation (measures taken; improper amount: 727.4 million yen (Ministry of Education, Culture,
Sports, Science and Technology))
Utilization of the electronic toll collection system at expressways (report on specific matters)
2003 Measures taken to utilize transmitting-receiving facilities for satellite communications network for educational
information (measures taken; improper amount: 410.67 million yen (Ministry of Education, Culture, Sports, Science andTechnology))
Unnecessary introduction of the printing system for notification form (improprieties; improper amount: 2,271.36 million
yen (Ministry of Health, Labour and Welfare))2004 Measures taken to utilize port and harbor electronic data interchange system (measures taken; background amount:
2,241.72 million yen (Ministry of Land, Infrastructure and Transport))
2005 Measures taken to cease operation of a counterfeit credit card analysis system due to low usage (measures taken;
improper amount: 912.86 million yen (National Police Agency))
Measures taken to utilize effectively idle facilities due to municipal mergers, which were constructed under programs of
the projects for the development of basic facilities for regional intranet (measures taken; improper amount: 92.5 million
yen (Ministry of Internal Affairs and Communications))
2007 Rectification and improvement in specifying the accounting transactions required to be performed by using theaccounting transactions system (demanded measures (Article 34 of the BOA Act); improper amount: 114 million yen(Ministry of Defense))
Opinion on improvements in the operation of the 'One-Stop Service' for the car ownership procedures since it was
seldom used (presented opinions (Article 36 of the BOA Act); improper amounts: 40.73 million yen; backgroundamounts: 6,519.65 million yen (Ministry of Internal Affairs and Communications; National Police Agency; National Tax
Administration; Ministry of Land, Infrastructure, Transport and Tourism))
Rectification and improvement in the management and operation of subsidies for the videoconference systems installed
through the projects to improve regional intranet infrastructure (demanded measures (Article 34 of the BOA Act);
improper amount: 232.29 million yen (Ministry of Internal Affairs and Communications))
2008 Rectification and improvement in promoting the use of the electronic bidding system introduced in the Regional
Environment Offices (demanded measures (Article 34 of the BOA Act); improper amount: 27.97 million yen (Ministry of
the Environment))
Rectification and improvement in taking such drastic measures as the suspension of the unused electronic application
system operation for deposition of patented microbes (demanded measures (Article 34 of the BOA Act); improperamount: 87.54 million yen (National Institute of Advanced Industrial Science and Technology))(2) Audit cases on operation and management of systems
FY
Item
1990 Measures taken to improve data input method for telephone directories (measures taken; improper amount: 147 million
yen (Nippon Telegraph and Telephone Corporation))
2005 Measures taken to implement appropriately the farmland information management system development project and to
update the information input into the system appropriately at the proper time (measures taken; improper amount: 122.79
million yen; background amounts: 1,119.83 million yen (Ministry of Agriculture, Forestry and Fisheries))
2006 Measures taken to grasp and administer properly fixed assets of electric substation equipment for received power whichhave not been serving for business and with no future plan for use, resulting in accurate payment to municipalities where
the Japan Post assets are located (measures taken; improper amount: 2,106.92 million yen (Japan Post))
2007 Measures taken to enter properly electrical communication equipment necessary for management of the roads into theroad management database system (measures taken; improper amount: 310.55 million yen; background amount: 1,496.8
million yen (Ministry of Land, Infrastructure, Transport and Tourism))
525

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)(3) Audit cases on bidding and contract work
FY
Item1998 Improper installation of computers before the launching of procurement processes, regarding the maintenance of local
area communication system (improprieties; improper amount: 51.45 million yen (Defense Agency))
2003 Measures taken to introduce competitive contracts for the purchase of goods and services, resulting in fairness,competitiveness and transparency (measures taken; background amount: 10,905.15 million yen (National Diet Library))
2005 False competitive bidding for purchasing goods (improprieties; improper amount: 603.21 million yen (Ministry of Health,
Labor and Welfare))
Violating the Public Accounting Act and relevant regulations in procuring an employment information search engine
system by concluding a contract for provisions of services over several fiscal years and paid expenses based on it(improprieties; background amount: 2,358.46 million yen (Ministry of Health, Labor and Welfare))
Improper accounting procedure for contract to outsource the development of application software used for officeprocessing of paddy agriculture structural reform measures (improprieties; improper amount: 22.65 million yen (Ministryof Agriculture, Forestry and Fisheries))
2008 Measures taken to ensure transparency, fairness and competitiveness in contract for procurement of computer services
with consideration of the scope of the specific procurement rules (measures taken; improper amount: 8,848.25 million
yen (Japan Broadcasting Corporation))(4) Audit cases on overly high or large procurement price, amount estimated as the target price,specifications, or quantities
FY
Item
1989 Measures taken for economical and effective system design of the digital electronic exchanger remote control system(measures taken; improper amount: 92.4 million yen (Nippon Telegraph and Telephone Corporation ))1993 Measures taken to improve the specifications for data entry work in a contract for entrusting the service of entering data
into computers (measures taken; improper amount: 13.9 million yen (Housing and Urban Development Corporation))
2000 Measures taken to estimate appropriately the target price for the rental and maintenance of digital map systems (measurestaken; improper amount: 10.1 million yen (Ministry of Justice))
2001 Measures taken to estimate economically the unit prices of the outsourcing contracts for the operation of electronic dataprocessing system for foreign resident registration in accordance with the actual conditions of operations (measures taken;
improper amount: 24.8 million yen (Ministry of Justice))
2002 Measures taken to establish economically the Internet access services using optical fiber cables by understanding its
actual usage condition appropriately (measures taken; improper amount: 52.4 million yen (Nippon Telegraph andTelephone East Corporation))
2003 Measures taken to improve the procurement of multi access seat reservation system terminals for the sale of tickets by
researching specifications and prices of similar equipment on the market, resulting in reduction of price (measures taken;
improper amounts: 78.05 million yen (Hokkaido Railway Company; Shikoku Railway Company; Kyushu Railway
Company))
2004 Rectification and improvement in calculating properly the interest on the charges for the software usage under the data
communications services contract (demanded measures (Article 34 of the BOA Act); improper amount: 3,395.94 million
yen (Social Insurance Agency))
2005 Measures taken to estimate economically the cost for digital conversion of the cadastral registry by using existing
electromagnetic records in conversion process (measures taken; improper amount: 56.9 million yen (Ministry of Land,
Infrastructure and Transport))
Measures taken to estimate appropriately the cost of services including the provision of facilities required for port andharbor electronic data interchange system operation by understanding professional companies' service and the market
price (measures taken; improper amount: 18.41 million yen (Ministry of Land, Infrastructure and Transport))
Improper payment without verifying contract execution in the long term, regarding the lease and maintenance of thenuclear power station emergency communications network system(improprieties; improper amount: 6.15 million yen(Ministry of Economy, Trade and Industry))
2006 Rectification and improvement in estimation of target prices of outsourcing contracts for operations including data entry
for application forms of health insurance and employees' pension insurance (demanded measures (Article 34 of the BOAAct); improper amount: 37.19 million yen (Social Insurance Agency))
2007 Rectification and improvement in establishing a system for purchasing economically licenses to use the software forcomputers by such measures as understanding its contract conditions (demanded measures (Article 34 of the BOA Act);
improper amount: 90.11 million yen (Japan Post Holdings Co., Ltd.))
Rectification and improvement in calculating the labor expenses for the support service for operation of the integrated

526

Section 4 Overview of Audit Results
database system for agriculture, forestry and fisheries genome information reflecting the actual situation (demandedmeasures (Article 34 of the BOA Act); improper amount: 20.93 million yen (National Institute of Agrobiological
Sciences))
Measures taken to confirm the basic design specification of development of the system for dispatching experts so as to
avoid additional or new development expenses (measures taken; improper amount: 97.74 million yen (Japan International
Cooperation Agency))

Subsection 13

to exclusively conduct audits of special issues

Othersrequested by the Secretary General of BOA(special

In Subsections 1 to 12 above, audit results

issuesaudits).

In

this

way,

the

have been outlined for each policy area. This

organizational structure for cross-cutting audit

subsection looks at some of the characteristic

wasaudit results that cannot be categorized into any

achievements of cross-cutting audit of publicof the policy areas or those viewed from aworks, information and communications (IT),different angle.

ODA, State-owned bodies, and special accounts

enhanced

intheHeisei

era.

BOA's

are as discussed earlier. In addition to these,
BOA has reported cross-cutting audit findings of

1. Cross-cutting audit
In 1988, the Cross-Cutting Audit Team wasprojects and programs of the State, etc., including

established in the Special Programs Division as

the following, in annual audit reports as report onan actual working unit specializing in cross-specific matters or special report on audit

cutting audit. Then in 2001, the Special Issues

requested by the Diet.

Audit Division was established in the 5th Bureau
Cross-cutting audit cases reported as reports on audit requested by the Diet, reports on specific matters, etc.
FY
1992
1997
1998
2000
2001
2003
2004

2005
2006
2007

2008

Item
Procurement of printed matter ordered by ministries and agencies (report on specific matters)
Results of audit on operation of public accommodation facilities (progress report on audit requested by the Diet)
The status of introduction of an evaluation system in each ministry and agency, etc. (Annex)
Funds established by public interest corporations with State subsidies (report on specific matters)
The status of auditing conducted by national government organs as internal audit (report on specific matters)
Research and study projects ordered by the State (report on specific matters)
Audit results on funds established by public interest corporations with State subsidies (special report on audit requestedby the Diet)
Government public relations (report on specific matters)
Audit results on execution of vitalization project of city center (special report on audit requested by the Diet)
Audit results on negotiated contracts concluded by ministries/agencies (special report on audit requested by the Diet)
Adoption status of penalty clauses related to bid-rigging in the State and juridical persons more than half of whose
capitals are owned by the State (special report to the Diet and the Cabinet)
Matters related to negotiated contracts conducted by ministries/agencies (special report on audit requested by the Diet)
Financial conditions of public interest corporations under the jurisdiction of ministries/agencies (special report on audit
requested by the Diet)

From FY1997 onward, the conditions ofState's finances, etc., 4." in order to help citizens

individual final accounts of the State have been

gain a more precise understanding of thedescribed in "Chapter 6 Outline of the final

accounting of the State. The following are someaccounts of revenue and expenditure and otherof the matters described therein, other than theaudit subject matters, Section 1 Overview of theearlier-mentioned matters relating to the financial
527

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

millionstatus of special accounts.

2003

2004
2005
2006
2007
2008

(FY1997;22

prefectures;

improprieties ;

improperamounts :299.6

million yen)

Individual final accounts, etc. (excluding those relating to
special accounts)
FY
2000
2001
2002

yen),

MESC implemented a large number of

Item

projects for promoting education, such as holding

ClaimsThe State's obligations
National property
The State-owned articles
Public works expenses
Treasury money
Verification of the State's final accounts
The State's social security expenses
Management of national government bonds
Funds for smooth management of national tax
revenues
Government guaranteed obligations
The amount not used, etc. in the settlement ofexpenditure of general accountPresentation of obligations in the State's final
accounts

research meetings or conferences for teachers andother people engaged in education, or conducting
researchandstudiesoneducationbycommissioning or entrusting such projects toprefectural boards of education, etc. MESC
directly paid expenses required for these projects,
such as rewards and travel expenses, from theexpenditure budget under its jurisdiction, by
delegating affairs concerning acts resulting in
expenditures to the Director General of eachprefectural board of education, etc. and affairs
concerning expenditure to the treasurer of eachprefecture.

2. Financial management

When BOA conducted audit of the results ofIn the Heisei era, BOA reported a large
financial

the projects and their accounting, it found thatmanagement, including fraud, starting with a caseboards of education had the treasury departmentof fictitious accounting in projects commissioned

improperly pay various expenses. The boards ofby the Ministry of Education, Science andeducation

Culture (MESC) which was reported in the

preparing fictitious reports of payment of various

annual audit reports for FY1996 and FY1997,

rewards, written travel orders, bills for traveland followed by cases of fraudulent accounting in

expenses, and written approval of acts resulting

violation of the Public Finance Act, Public

in expenditure, etc., pretending to have paid

Accounting

regulations

rewards that were not paid, or pretending to haveconducted by multiple ministries and agencies

gone on business trips without such a fact. The

including the Ministry of Foreign Affairs andboards of education kept such money separately

Prefectural Labour Bureaus as well as State-from the rightfully claimed amounts, and used

owned bodies and prefectural governments, etc..

them for purchasing goods, for employees' late-(1) Projects commissioned by MESC

night snacks, or as congratulatory or condolence

number

of

cases

Act,

concerning

andrelevant

hadclaimedsuch

expensesbyclaiming

payments, which were not directly related to

rewards and travel expenses under fictitious

implementation of the projects, and retained thepretext, and using such money for unintended

remaining amount in bank deposits, etc.

purposes by keeping them under separate(2) Cabinet Secretariat / Ministry of Foreign
Affairs

Prefecturalaccounts

boardsof( FY1996 ;improprieties ;

impropereducation

four

prefectures ;amounts :Taking the incident where a former division

48.46
528

Section 4 Overview of Audit Results

director of the Ministry of Foreign Affairs

and financial management of Prefectural Labour

misappropriated public funds, which came to

Bureaus was taken up as a serious matter oflight in 2001, BOA reported many cases of fraud

concern at the Diet. Since the audit in 2005,

by the head office of the Ministry of Foreign

BOA has conducted intensive audit on all Labour

Affairs and overseas diplomatic establishments.

Bureaus to check whether the staff of the bureaus

Such cases were reported in annual audit reports

engage in similar types of fraud. The following

as follows.

cases on fraud at Prefectural Labour Bureaus(i)Measures demanded under the provisions ofwere reported in annual audit reports.

Articles 34 and 36 of the BOA Act(i) Improprieties concerning improper payment

demanding appropriate execution of theof miscellaneous expenses for implementing

Cabinetprojects (FY2003, FY2004, and FY2005)

Secretariat's

expensesfor(ii) Improprieties concerning business trips by air

remuneration by the Cabinet Secretariat andthe Ministry of Foreign Affairs (FY2000)(FY2004)(ii) Measures demanded under the provisions of(iii) Improprieties

concerning

inappropriate

Articles 34 and 36 of the BOA Act seeking

execution of contracts for purchasing goods

appropriate(FY2005)

executionof

expensesfor(iv) Improprieties

remuneration (FY2000)(iii) Improprieties
accounting

concerning
at

diplomaticof the Public Accounting Act and relevant

overseas

regulations (FY2005)(v) Improprieties

specificmatters(vi) Report on specific matters regarding thestatus of financial management of Prefectural(v) Measures demanded under the provisions ofappropriate

execution

inappropriate(FY2005)

establishments (FY2001)
ofconcerning

implementation of commissioned projects

regardingfinancial management in overseas diplomatic

Article 34

forprovision of services which are in violation

and FY2003)
oncontracts

inappropriate

establishments (FY2000, FY2001, FY2002,(iv) Reportconcerning

the BOAAct

Labour Bureaus (FY2004 and FY2005)

seekingforIn the annual audit reports above, BOA

procurement of goods and services (FYreported situations that can be summarized as

2000)

follows, revealing the failure of some Prefectural(vi) Improprieties
accountingofconcerningof

expenses

contracts

inappropriate

Labour Bureaus to appropriately follow basicforaccountancy rules.

holding

As a result of auditing

international conferences, etc. (FY2001)

management(vii) Measures demanded under the provisions of

of

the

47

the financial

Prefectural

Labour

Article 34 of the BOA Act with regard to

Bureaus nationwide, 25 Labour Bureaus werethefound to have improperly paid expenses including

receiptandpaymentofoverseas

miscellaneous

diplomatic establishments (FY2003)

expensesfor

implementing

projects, rewards, and travel expenses, out of(3) Ministry of Health, Labour and Welfare
In 2004, a series of fraud surfaced at Labour

which 16 Labour Bureaus managed the funds

Bureaus of Hiroshima and Hyogo Prefectures,acquired through the improper payment, etc.
529

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

under a separate account, outside the framework

Bureaus had still held a part of such funds asof the Public Accounting Act and relevant

cash or bank deposits when BOA conducted field

regulations.

audits, and the amount held reached over 66.64
million yen in total.

Meanwhile, BOA found all 47 Labour
Bureaus

payingimplementing

miscellaneous

projects

expensesthroughfor(4) Power Reactor
andNuclearDevelopment Corporation

inappropriate

Fuelaccounting that differed from the fact, such as

It revealed in August 1997 that the Tokai

preparing relevant documents with false contents,

Works of Power Reactor and Nuclear Fuelwhen purchasing goods, etc.

Development Corporation (PNC) had, for a long

In addition, BOA found 32 Labour Bureaus

time, not appropriately stored uranium waste inviolating the Public Accounting Act and relevant

the outside waste storage pits, and that it had

regulations

misappropriatedinprocuringanemployment

most

of

the

budgetfor

information search engine system by concluding

fundamentally repairing the storage pits toa contract for provisions of services over several

different expenses. In April 2001, a newspaper

fiscal years and paid expenses based on it, andreported

two Labour Bureaus concluding a contract underDevelopment Institute (JNC), which succeeded tothe pretense of having conducted competitive

the PNC's affairs, was inappropriately executing

bidding. With regard to the situation where theits budget, such as in paying salaries andamount of outsourcing fees paid to 37 councils

common management expenses. This issue wasfor job stability and creation measures, etc. wasalso taken up in Diet deliberations.

that

the

Japan

NuclearCycle

too large, some Labour Bureaus where theIn order to address these problems, BOA

secretariat of such council was established wereconducted audit and reported the budget forfoundoutside waste storage pits and its execution

to

have

managedimproperly

paid(FY1996; report on specific matters) withoutsourcing fees in a separate account.
Prefectural

regard to the PNC, and budget execution by the

Labour Bureaus were inappropriately paying

Japan Nuclear Cycle Development Instituteovertime allowance. This was considered to be a

(JNC) (FY2000; report on specific matters)

customary practice at Labour Bureaus that hadwith regard to the JNC.

been left uncorrected.

(5) Prefectural policeMoreover,

BOA

found

that

not

From the end of 2003, allegations were

sufficiently recognized the importance of securing

made that some prefectural police, etc. wereappropriate financial management discipline byengaging in inappropriate financial management

observing the Public Accounting Act and relevantof expenses for crime investigation and travel

regulations

expenses (hereinafter referred to as "expenses forPrefectural

Labouraswell

Bureaus

as

basic

had

accounting

procedures. Because of this, they had customarily

crime

engagedintensive audit of the financial management ofinillegalor

impropermanagement

from

the

past.

financialinvestigation,etc.").

BOA

conducted

theprefectural police, etc., focusing on expenses forabovementioned 16 Labour Bureaus that had

crime investigation, etc., in the audit for 2004

managed funds in a separate account, 10 Labour

and

Among

530

2005,

and

reportedonfinancialSection 4 Overview of Audit Results

crime

BOA

investigation and travel expenses for police

expenses

activities at prefectural police, etc. (FY2003;

prefectural police, etc. under various restrictions,

report on specific matters) and the condition ofsuch as giving sufficient consideration to secrecy

financial management of expenses for crimeof criminal investigations and the safety of theinvestigation and travel expenses for police

people concerned, due to the nature of theactivities at prefectural police (FY2004; report

expenses. Therefore, it is vital for the policeon specific matters). The reported findings,

authorities

summarized below, elucidate that the Hokkaido

including documentary evidence such as receipts,

Prefectural Police and the Fukuoka Prefectural

identify the connection between the accounting

Police had overlooked appropriate execution of

documents and crime inspection, etc., develop abasicframework for storing and managing accounting

managementofexpensesaccountancy

of

for

expenses

for

crime

auditsfortofinancialcrimecollectmanagement

investigation,accounting

etc.

of
at

documents

documents, and enhance the framework ofinvestigation, etc.

internal audit.

The financial management of expenses forcrime investigation involves only a relatively

It is extremely regrettable that the Hokkaido

small number of people in consideration of thePrefectural Police and the Fukuoka Prefecturalrequirement for confidentiality. However, thePolicepolice authorities revealed through investigation

management of expenses for crime investigation,

that

out

etc. in a customary and organized manner andinappropriate financial management such as first

disregarded the basic principles of financial

acquiring funds by following fictitious accounting

management for a long time. In order to prevent

procedures in a customary and organized manner

the recurrence of such inappropriate financial

by using the confidentiality as an excuse, andmanagement, the National Police Agency isthenrequired to make further effort including urging

prefectural

makingpolicepayments

werecarrying

without

takingthecarriedout

inappropriate

financial

the officials concerned to renew their recognition

legitimate procedures.

and enhancing internal audit for raising the

When BOA conducted field audits at theKitami Area Police Headquarters of the Hokkaido

effectiveness of the improvement measures.

Prefectural Police, the Police gave explanations
by using false receipts and forged materials for(6) Audit findings on budget
salaries, and travel expenses

later

A. Budget execution

explanation.

auditors

from

Such

acts

determining

prevented
thethePurchasefinancialofexecution,

pharmaceuticals,

etc.

by

management of the Police Headquarters to beconcluding purchase contracts exceeding theappropriate. If the auditee gives explanations

budget for the relevant fiscal year, and paying

based on false information in an organized

for the products through false, inappropriatemanner as in this case, audit would not function

financial management in the following fiscal

effectively. Prefectural police, etc., which are in ayear

position to execute the State's budget, must fully

improprieties;

recognize the seriousness of the fact that such

million yen)

( FY 2002 ;Okayama

improper

University ;amount:6,753.17

In December 1993, BOA demanded theacts actually took place at the field audit sites.
531

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Minister of Education, Science and Culture topharmaceuticals, etc. were performed in thetake rectification and improvement measures

following fiscal year instead of processing thempursuant to the provisions of Article 34 of thein the relevant fiscal year. Such act of conducting

BOA Act about improper budget execution offalse financial management and paying purchasepharmaceutical expenses at national university

costs from the budget for the following fiscal

hospitals,

wherebypharmaceuticals,

etc.

the

paid

for

year was found to be in violation of the Public

beyondtheAccounting Act and relevant regulations and thehospitalspurchasedbudget, and extremely improper.

appropriated amount of budget not within therelevant fiscal year, but from the budget for the

BOA reported a similar situation as that ofnext fiscal year or the fiscal year after next. In

Okayama University for Kyushu University as

response, the Ministry of Education, Science andimproprieties and for national hospitals andCulture took measures such as giving strict

national sanatoria of the MHLW as measures

instructions to national universities that havetaken in the FY2003 Annual Audit Report.

attached hospitals, by sending a notice to them,

B. Payment of salaries, etc.

to conclude contracts and place orders inPayment of salaries, etc. based on a false work

accordance with laws and regulations within therecord (FY2002; Obihiro National Hospital

scope of the remaining amount of budget

and Yakumo National Hospital of the MHLW;

execution after checking such amount.

improprieties)

BOA audited the matter about ten years after

This case related to the issue of doctors

the above measures were taken, and found thatletting hospitals use their names for fictitious

Okayama University Hospital (hereinafter referred

positions, which raised a problem at the time.

to as the "hospital") was in violation of the

When BOA audited the working hours of doctors

Public Accounting Act and relevant regulations

who were employed as full-time employees, theas follows.

doctors were not found to provide full-time

In the financial management of medical

service, and salaries, etc. were paid based on a

expenses from FY1996 to FY2002, the hospital

false work record (improper amounts: 118.17

deferred the accounting procedures of acts

million yen).

resulting in expenditures, etc. for some of the

Payment of cash such as meal allowance bypharmaceuticals, etc. it purchased within theincorporated administrative agencies (FY2008;

relevant fiscal year to the following fiscal year, indemanded measures (Article 36 of the BOA

order to prevent the purchase amount from

Act); measures taken)

exceeding the appropriated amount of budget as a

BOA demanded improvement measures fromresult of processing the accounting of such acts

eight incorporated administrative agencies, stating

within the relevant fiscal year. The amount forthat it was inappropriate for them to continue

which

the

paying a certain amount of cash to their officials

accounting in the relevant fiscal year reachedevery month as meal allowance, etc. without

over 6,753.17 million yen in total.

sufficiently examining whether the payment

thehospitalfailedtoprocess

In this case, the hospital deemed that thecomplied with the situation of society in generalacts resulting in expenditure, etc. for purchase of

based on the purport of the Act on General Rules
532

Section 4 Overview of Audit Results

5.65 million yen / MHLW 15.6 million yen).

for Independent Administrative Agency at the
time

of

or

administrativeafter

becoming

agencies

In this audit, BOA assumed the actual air

incorporated( improper

fare from the air fare-based code printed on theamount :1,297.54 million yen).

air ticket, and compared it with the air fare

C. Payment of travel expenses

claimed. If the amounts did not match, orInappropriate financial management of travelotherwise overpayment was suspected, BOA

expenses (FY1990; courts; improprieties)

verified the claim with the cooperation of the

When BOA conducted audit of official

auditee by, for example, inquiring with the travel

travel expenses paid by district courts, etc., itagency, etc. about the selling price or asking thefound 1,585 cases where the court's officials had

claimant of the travel expenses about facts about

falsely reported a day trip to be an overnight trip

the purchase price, etc.

or had not followed appropriate administrative

A similar case was also reported for theprocedures for settling the expenses with regard

Deposit Insurance Corporation of Japan as

to short-distance business trips for holding

improprieties and for the Bank of Japan as

meetings with the court's branch within its

measures taken in the FY2005 Annual Audit

jurisdictional district; it also found 35 cases

Report.

where the officials had falsely reported an

BOA

also

reported

cases

where

overnight trip to be a trip of three days and two

calculation

of

daily

nights (improper amount: 19.73 million yen).

accommodation fees for overseas business trips

Overpayment of travel expenses for business

was inappropriate, as measures taken. Suchtrips by air (FY2004; Ministry of Finance /inappropriate calculation had been caused because

MHLW; improprieties)

the category of the trip destination, which serves

allowancetheand

BOA reported a case where travel expenses

as the basis for calculating foreign travelfor business trips by air were being overpaid at

expenses, had not been clearly specified in the

Hakodate

Regional

supporting documents, or because the overseas

Customs of the Ministry of Finance and sevenlocal offices, which were used as the bases forLabour Bureaus of the MHLW as improprieties.

the business trips, were not properly treated as

Customs

andOkinawa

the trip destinations.

When BOA audited whether travel expenses
for business trips by air were being paid andImprovement to appropriately calculate thesettled appropriately, it found that travel expenses

daily allowance and accommodation fees ofwere being overpaid; for example, an official

officials making long business trips overseas

who purchased a discount air ticket for a trip

(FY2006;

claimed travel expenses by attaching a receipt for

Finance; improper amount: 9.54 million yen)a higher air fare to the claim form, or an official(7) Administrative
expensesforsubsidized public works projects

who used a package tour including the air faremeasurestaken ;

MinistryofState -In 1995, public attention was drawn to theand accommodation submitted a false receipt
which the official obtained from the travel agency

issue offor regular return airfare to settle the travel

central government bureaucrats by using public

expenses (improper amount: Ministry of Financefunds to attract subsidies for State-subsidized
533

prefectural

bureaucrats

entertaining

Part 3

Chapter 4

Audit in the Heisei Era (1989〜)

Thus, in the audit for 2008, BOA audited 11

public work projects. Thus, BOA urgently
audited how the food expenses constituting theprefectures

public works administrative expenses were being

prefectures other than the abovementioned 13

used, and demanded an improvement measure toprefectures,

exclude expenses for informal gatherings frominappropriate accounting was larger in amount

expenses covered by subsidies. BOA reported thisand conducted earlier than those of the otheraudit case as measures taken in the FY1994

prefectures among the five prefectures that wereAnnualwas

subject to field audits in 2007. Specifically, BOA

indicated that some prefectures were carrying out

conducted audit of consumables expenses, wages,

inappropriate accounting of travel expenses, etc.

andtravelexpenses

which constituted the administrative expenses foradministrative

expenses

State-subsidized

projects under the jurisdiction of MAFF and the

Audit

prefectural

Report.

publicMeanwhile,

works

governments

itprojects,

conducted

andselected
plus

from
Gifu

among

the

Prefecture,

whose

constituting
for

34

the

State-subsidized

MLIT spent at these 12 prefectures.

internal

As a result, BOA found that consumables

investigations on this matter. BOA recognizedthat this problem was an issue of high social

expensesconcern, and conducted audit of prefecturalaccounting based on false documents, and thatgovernments' internal investigations and otherwages and travel expenses were paid for purposes

efforts against the inappropriate accounting. BOA

that were not subject to the subsidy at all 12

reported the audit results in the annual audit

prefectures until the most recent fiscal year

reports for FY1995, FY1996 and FY1997 andsubject to the audit. BOA identified that suchpromoted

improper amount totaled over 556 million yen.

theself - purification

of

local

were

Payment

governments through raising an alarm.

of

paid

throughconsumables

inappropriate

expensesfor

However, it became clear in 2006 to 2007

purchasing goods and payment of wages andthat some prefectures were acquiring funds

travel expenses for purposes not subject to thethrough inappropriate accounting over a longsubsidytime, and social concern grew once again about

such

financial management at local governments that

executing administrative expenses, etc. relating

handle public money. In the audit for 2007, BOA

toaudited 13 prefectures at which inappropriate

improprieties; improper amount: MAFF overaccounting

265.3 million yen; MLIT 290.69 million yen)

was

found

throughinternalthroughasinappropriate accounting,preparingfalseState - subsidized

consumables expenses, wages, travel expenses,

expenses, etc. for State-subsidized projects at

etc.

prefectures, etc. (FY2007; report on specificaccounting

paid

includedthroughinappropriate

administrativeof( FY 2007 ;Statuswere

accounting

projects

ininvestigation. In this audit, BOA found that
that

of

documents,

administrative

matters)

expenses

Furthermore, in the audit for 2009, BOA

relating to State subsidies for public works.
State subsidies and other payments for which

audited 26 prefectures from among the 35

inappropriate accounting was conducted at

prefectures other than the 12 prefectures forprefectures

which audit was conducted in 2008, and also

(FY2006;

reporton

specific

conducted audit of two of the large cities

matters)534

Section 4 Overview of Audit Results

designated by Cabinet Order with a plan to audit

Agency)all of those cities. As a result, BOA found similar

A

joint

developer

implementinga

BOA

subcontracted development project instructed an

conducted audit of 13 cities from amongequipment provider to prepare a false delivery

municipalities other than large cities designateddocument and invoice for a fictitious transaction.

by

The

inappropriate

accounting.

CabinetOrder,

it

Also,

found

when

inappropriate

joint

developer

claimedthefictitious

accounting in all of these cities (FY2008;transaction amount from the university to which

improprieties;

MAFF

the he belonged and managed such amount under

668.77 million yen / MLIT 946.17 million yen),a separate account. As a result, the outsourcing(FY2008; report on specific matters).

fee was overpaid (improper amount: 3.52 million(8) Outsourcing feesyen).

improperamount :From the late 2000s, many audit findings on

Overpayment of the outsourcing fees forpayment of outsourcing fees came to be reported.

commissioned projects for supporting local

Main

of

job-seeking activities, etc. due to using suchoutsourcing fees for research and study found atfees for improper payments or for purposes

several ministries, agencies, and organizations,other than the commissioned projects (FY2006

due to calculating the personnel expenses by

and FY2007; improprieties; MHLW)

audit

cases

were

overpayment

including the number of days spent for other

The outsourcing fees for commissioned

duties or including fictitious expenses in the

projects were being overpaid, because such fees

outsourcing fees. BOA reported these audit cases

were used for improper payments that wereas improprieties or measures taken. Some of the

managed under a separate account or used foraudit cases are as follows.

expenses

that

were

not

Overpayment of the outsourcing fee under acommissioned

projects( improper

survey outsourcing contract due to calculating

192.44 million yen in 18 cases in FY2006 /the personnel expenses by

170.17 million yen for 23 cases in FY2007).

includingthesubjecttotheamounts :number of days spent for other duties (FY

Overpayment of the outsourcing fees for

2004; improprieties; METI; improper amount:affairs of designated statistics surveys, etc. due

33.98 million yen)

to outsources paying consumables expenses for

Overpayment of the outsourcing fee for apurchasing goods by conducting inappropriate

commissioned project on development of eel

accounting including

hatching/raising technology due to including

documents (FY2008; improprieties; Ministrytravel expenses of fictitious business trips inofthe project expenses (FY2004; improprieties;

MEXT, MHLW, MAFF, and METI; improper

MAFF; improper amount: over 5.18 million

amounts: 6.51 million yen)yen)
Improper accounting of the outsourcing fee foraprojectondevelopmentofadvancedmeasurement and analysis systems (FY2006;
improprieties; Japan Science and Technology
535Internal

Affairs

preparation
and

of

false

Communications,Part 3

Chapter 5

Changes in Other Operations

Chapter 5

Section 1

Changes in Other Operations

Adjudication, Demand of Disciplinary Action, Notification to Public Prosecutors
Office and Examination

Subsection 1

The table below shows the trends in the

Adjudication

numbers of cases in which accounting officials
were adjudicated to be liable for indemnity (cases

1. Outline of the system
The Constitution of Japan came into effectfound liable) and cases in which accounting

in 1947, and the new BOA Act and the new

officials were adjudicated to be not liable for

Public Accounting Act were enacted and put into

indemnity (cases found not liable) under theeffectcurrent BOA Act.

in

the

same

year,

leadingtotheestablishment of the system of adjudication on

Until the late 1970s, cases of illegal acts of

the liability for indemnity, for which BOA has

officials responsible for cash handling accounted

mandatefor a large part of the cases found liable.

andresponsibility.

Subsequently,

following the enactment of the Act on the

Between FY1981 and FY1988, most of the

Responsibility of Government Employees Whocases found liable were, as discussed later, cases

Execute the Budget in 1950 and the State-Owned

involving daily settlement of accounts in which

Goods Management Act in 1956, the scope of

officials responsible for cash handling seem toaccounting officials who may be subject tohave made mistakes when receiving or paying

adjudication was expanded considerably.

cash at the cashier, and most of the cases foundAdjudicationisasystemwherein,

notif

liable

were

cases

in

which

officials

accounting officials have lost or damaged cash or

responsible for cash handling at post offices lost

goods that they are handling or carried out

cash in their custody due to robbery or nighttime

payment in violation of the laws and regulations

theft. Subsequently, since the officials foundor the approved budget, and thereby caused

liable were exempt

damage to the State, etc., BOA inquires into

indemnity for the loss of cash upon the demise ofwhether such damage to the State, etc. is due toEmperor Showa in January 1989 (see page 540),

the officials' failure to exercise the due care of athe number of adjudication cases sharply dropped

prudent

in 1989.

manageror

theirintent

or

gross

from

the liability

fornegligence, and adjudicates whether they are

In FY1994, among cases found liable, those

liable to indemnify the damage, pursuant to theinvolving new types of cause of liability started

provisions of Article 32 of the BOA Act or

to increase. The major type of case was that

Article 4 of the Act on the Responsibility ofaccounting clerks at post offices had the cash in

Government

their custody stolen by other officials in their

Employees

Who

Executetheoffices due to their negligence, that is, their

Budget.

failure to exercise the due care of a prudent
manager. In the adjudication procedure, it took

2. Trends of adjudication cases
536Section 1

Adjudication, Demand of Disciplinary Action, Notification to Public Prosecutors Office and Examination

Annual number of adjudication cases
Found liable(unit: number of cases)

Found not liable

Found liable

Found not liable

Found liable

Found not liable

Officials responsible forcash handling

Officials responsible forgoods management

Officials responsible forbudget execution

Officials responsible forcash handling

Officials responsible forgoods management

Officials responsible forbudget execution

Officials responsible forcash handling

Officials responsible forgoods management

Officials responsible forbudget execution

Officials responsible forcash handling

Officials responsible forgoods management

Officials responsible forbudget execution

Officials responsible forcash handling

Officials responsible forgoods management

Officials responsible forbudget execution

―

6

―

―

20 1967

4

2

0

10

0

0

16 1988

1

0

0

0

0

0

1

―

―

7

―

―

23 1968

1

1

0

15

0

0

17 1989

0

0

0

13

0

0

13

1948

12

―

―

1

―

―

13 1969

2

0

0

14

0

0

16 1990

0

0

0

11

0

0

11

1949

32

―

0

31

―

0

63 1970

0

1

0

6

0

0

7 1991

0

0

0

13

0

0

13

1950

59

―

1

56

―

1

117 1971

2

0

0

9

0

0

11 1992

0

0

0

31

0

0

31

1951

69

―

0

2

―

0

71 1972

2

0

0

9

1

0

12 1993

0

0

0

23

0

0

23

1952

48

―

2

3

―

1

54 1973

5

0

0

17

0

0

22 1994

15

0

0

23

0

0

38

1953

53

―

0

4

―

2

59 1974

3

0

0

35

0

0

38 1995

5

0

0

34

0

0

39

1954 107

―

1

18

―

3

129 1975

4

0

1

29

0

0

34 1996

5

0

0

28

1

0

34

1955 113

0

6

8

0

3

130 1976

4

0

0

11

0

0

15 1997

4

0

0

13

0

1

18

1956

56

0

1

20

0

6

83 1977

6

0

0

18

1

0

25 1998

2

0

0

4

0

0

6

1957

34

0

3

34

0

4

75 1978

4

0

0

17

0

0

21 1999

3

0

0

30

0

0

33

1958

46

0

1

44

0

2

93 1979

0

0

0

25

0

0

25 2000

9

1

0

34

0

0

44

1959

22

1

0

20

1

0

44 1980

6

1

0

17

0

3

27 2001

1

0

0

24

0

0

25

1960

12

0

0

22

1

0

35 1981

23

1

0

11

0

0

35 2002

0

0

1

35

0

7

43

1961

12

0

0

17

0

3

32 1982

56

0

0

21

0

0

77 2003

1

0

0

31

0

2

34

1962

8

0

0

22

0

0

30 1983

34

0

0

28

0

0

52 2004

8

0

0

2

0

0

10

1963

3

0

0

10

0

3

16 1984

22

0

0

17

0

0

39 2005

3

1

0

11

0

0

15

1964

5

0

0

9

0

0

14 1985

23

1

0

14

0

0

38 2006

13

0

0

3

2

0

18

1965

8

0

0

15

0

0

23 1986

4

0

0

10

0

0

14 2007

4

0

0

1

0

0

5

1966

8

0

0

16

0

0

24 1987

2

0

0

14

0

0

16 2008

1

0

1

1

1

4

8

FY

Total

Officials responsible forbudget execution

―

16

FY

Total

Officials responsible forgoods management

14

1947

Total

Officials responsible forcash handling

1946

FY

(Note) The fiscal year referred to in this table is the fiscal year in which the audit results were reported.

considerable

time

to

complete

detailed

3. Matters worth noting in connection withadjudication

investigation for fact finding and establish theprocess forfinding

negligenceof

officials(1) Treatment of cases
settlement of accounts

responsible for cash handling.

involvingdaily

In April 2003, after the inauguration of

At post offices, after daily settlement ofJapan Post31, post office officials were no longer

accounts is made, that is, after the cashier clerks

categorized as accounting officials of the State.

finish dealing with the receipt and payment of

Accordingly,

officials

cash for the day, they calculate and verify the

responsible for cash handling at post offices lostamount of cash they handled during the day. Ifcash in their custody were excluded from thethey find that they have lost some amount of

scope of subjects of adjudication, which resulted

cash due to their mistakes in receiving andin the significant decrease in the number ofpaying cash, they notify BOA of these cases

adjudication cases.

(notification of loss of cash under Article 42 of

31

the

cases

in

which

the Public Accounting Act). The number ofJapan Post was dissolved in October 2007, and five stockcompanies including Japan Post Holdings Co., Ltd. andone incorporated administrative agency took over its
functions pursuant to the Postal Service Privatization Act(Act No. 58 of 2007).

adjudication cases involving such daily settlementof accounts had reached 71 around 1965, but it
later decreased to only one in 1974 and 1977,
537

Part 3

Chapter 5

Changes in Other Operations

respectively. This decrease stems from the fact

The notification of the loss of cash found inthat it had become a kind of common practice forthe daily settlement of accounts at cashiers ofaccounting clerks to voluntarily make up for thepost offices came to be made less frequently

lost cash arising in the course of receiving orowing to the accumulation of adjudication

paying cash.

precedents. Furthermore, due to the exemption

However, around 1975 to 1977, accounting

from the liability for indemnity granted upon theclerks of some post offices raised a voice that

demise of Emperor Showa in 1989 (see page

they could not accept the existing practice that540), the cases left unaddressed no longer need toforced them to voluntarily compensate for thebe adjudicated by BOA.

lost cash, and as a result, a small amount of lostaccounting clerks voluntarily in most cases, came(2) Treatment of fictitious accounting in
projects commissioned by the Ministry of
Education, Science and Culture (MESC)

to be treated as the amount of deficit, and thisThe annual audit reports for FY1996 and FY

practice spread across post offices nationwide.

1997 reported the audit cases on fictitious

However, in most cases of loss of cash, theaccounting in the projects commissioned by

Ministry

MESC

cash, which had been compensated for by

of

Posts

and

Telecommunications(prefecturalboardsofeducationordered accounting clerks to compensate the lost

claimed rewards and travel expenses undercash before BOA made adjudication, as provided

fictitious pretext, and used such money forin Article 43 of the Public Accounting Act.

unintended purposes by keeping them under

Dissatisfied with this treatment, accounting clerks

separate accounts). The total improper amountsystematically filed requests for adjudication within these cases was as large as about 348.06

BOA, on the grounds that they did not fail tomillionexercise the due care of a prudent manager

responsible for budget execution involved in(Article 115 of the Cabinet Order on Budgets, thethese cases were found in as many as 26

Settlement of Accounts, and Accounting). Thisprefectures. It took enormous time and labor for

led to a significant increase in the number of

BOA to conduct the adjudication procedure forcases adjudicated by BOA based on this type ofthese cases.

BOA

startedthegovernment

officials

in which the officials concerned were highly

number of cases left unaddressed.
1978,

and

Among these cases, the procedure for thoserequest and also led to a dramatic increase in the
In

yen

to

considerlikely to be found liable was terminated beforeareasonable policy for handling these cases but

BOAreached a conclusion that it had no option but toincurred by the State were compensated for by

apply the conventional practice. Expecting a

the officials.

considerable increase in the number of cases left
unaddressed, BOA decided to try to address as(3) Status of study on specific cases reported inannual audit reports

many cases as possible, giving priority to cases

Two audit cases involving the contracts

involving a large amount of lost cash. As aconcluded by the Social Insurance Agency were

result, the number of cases found liable increased

reported in the FY2003 Annual Audit Report: (i)considerably in the early 1980s.

the contract for purchase of cash registers to
538

made

adjudication,

becausethelossSection 1

Adjudication, Demand of Disciplinary Action, Notification to Public Prosecutors Office and Examination

5. Exemption from liability for indemnity

be used for the national pension program wasUnder Article 32, paragraph (4) of the BOA

found to be improper due to violation of thelaws and regulations on public accounting;

Act

and

Article

7

of

the

Act

on

the

and (ii) contract for services related to the

Responsibility of Government Employees Who

printing system for notification form was

Execute the Budget, the liability for indemnity

found to be improper due to lack of necessity

cannot be exempted or reduced unless decided by

to introduce the system. In addition to the social

the Diet.

impact of these cases, such as provoking theAlong with the San Francisco Peace Treaty

repeated discussions at the Diet, the Social

coming into effect in April 1952, the Act on

Insurance Agency stated in its internal report that

Exemption of Disciplinary Actions and Other

the agency would wait for BOA's decision withMatters in Relation to Public Officers, etc. wasregard to the liability for indemnity to beenacted in the same year (Act No. 117 of 1952).

assumed by its officials responsible for budget

In this Act, Article 4 provides for remittance andexecution. Accordingly, in the FY2004 Annual

reduction of the liability for indemnity, stating

Audit Report, BOA reported the results of its

that when general pardon is granted or restoration

study on whether or not it should conductof right takes place, "obligations. . . based on the

adjudication of the officials involved in theseliability for indemnity to be assumed by officials

cases,

responsible

in

the

sectiontitled"Chapter

5

for

cash

handling,

officials

Adjudication on Accounting Officials; Section 4

responsible for goods management, and other

Status of study on specific cases."

officials of the State, public corporations, financecorporations, public enterprises, etc., such as
disbursing officers and accounting officers, as

4. Court cases relating to BOA's adjudication
Adjudication is the final decision that BOA

specified by Cabinet Order, may be remitted or

makes as an administrative organ through the

reduced prospectively, pursuant to the provisions

procedure for examining whether accountingof Cabinet Order; provided, however, that thisofficials are liable to indemnify and determining

shall not apply to obligations assumed by thethe amount of indemnity if they are found liable.

relevant officials that have arisen from the

However, since the current Constitution does notcriminal

give final judicial power to any administrative

themselves." Based on this Article, the Cabinet

organ (Article 76, paragraph (2)), accounting

Order for Remittance and Reduction of Liability

officials

BOA's

for Indemnity of Government Officials Who

adjudication have the right to file an action with

Execute the Budget (Cabinet Order No. 131 of

the court.

1952) was enacted, following which the relevant

who

are

dissatisfied

with

acts

committed

bytheofficials

Until FY2006, only one action had been

officials were discharged from the obligations

brought to the court to seek revocation of BOA'sbased on their liability for indemnity having

adjudication (in 1983). With regard to this case,arisen from the events that had taken place before

the judgment rendered by the court of appeal in

April 28, 1952, except for obligations having

favor of the State became final and binding inarisen from the criminal acts committed by the

1985.

officials themselves.
539

Part 3

Chapter 5

Changes in Other Operations

Upon the demise of Emperor Showa incomply with a request made upon him/her for

January 1989, the Cabinet Order on Exemption

submission of materials or reports under Articleof26, BOA may demand disciplinary action against

LiabilityforIndemnityofGovernment

such official.

Officials Who Execute the Budget upon Demiseof Emperor Showa (Cabinet Order No. 30 of

An "official who handles accounting for the1989) was enacted, and the relevant officials

State" as referred to in this Article means all

were discharged from the obligations based on

officials who handle accounting affairs such as

their liability for indemnity having arisen frommanagement of claims, contracts, receipt andthe events that had taken place before January 7,

disbursement, handling and custody of cash and1989.

goods, and management of national property.
This category of officials includes not only those

Subsection 2

who have special titles as accounting organs but

Demand of disciplinary action

also their assistants in practical terms who have
duties that they should be held responsible for.

1. Outline of the system
Sanction imposed by the State against(2) Demand of disciplinary action under the
Act on the Responsibility of Government
Employees Who Execute the Budget

government employees' breach of duties or
misconduct in order to maintain order amongas

Under Article 6, paragraph (1) of the Act on

disciplinary action. Article 82 of the National

the Responsibility of Government Employees

Public Service Act (Act No. 120 of 1947)

Who Execute the Budget, if BOA finds, as aprescribes four types of disciplinary action,

result of its audit, that an official responsible fornamely,duty,

budget execution has caused damage to the State

reduction in pay, and reprimand. In the case of

by carrying out disbursement in breach of his/her

accounting officials, if these officials fall under

duty

the statutory grounds for disciplinary action,

negligence, or has carried out disbursement in

BOA may demand that the person authorized

breach of his/her duty or any other act throughshouldintent or gross negligence, although not causing

government

employees

dismissal,

isreferredsuspension

take disciplinary

actiontofromagainst

the

or

any

other

act

through

intentorrelevant officials.

any damage to the State, BOA may demand that

(1) Demand of disciplinary action under the
BOA Act

disciplinary action be taken against the official.

Under Article 31 of the BOA Act, if BOA(3) Demand of disciplinary action under otherlaws

finds, as a result of its audit, that an official who

Under Article 13, paragraph (2) of the Act

handles accounting for the State has caused

on Prevention of Delay in Payment undersubstantial damage to the State through intent or

Government Contracts, etc. (Act No. 256 ofgross negligence, or if an official who handles

1949), if BOA finds, as a result of its audit, that

accounting for the State does not observe thean official who handles accounting for the Stateregulations on the submission of accounts, for

has caused a considerable delay in the payment

instance by neglecting to submit statements ofby the State through intent or negligence, andaccounts and documentary evidence, or does notthat disciplinary action has not taken against the540Section 1

Adjudication, Demand of Disciplinary Action, Notification to Public Prosecutors Office and Examination

official yet, BOA must demand that disciplinary

system is designed to provide the investigation

action be taken against the official.

authorities with clues of crimes committed by
officials who handle accounting for the State in
the course of duty.

2. Number of demands of disciplinary action
Until the end of 2009, BOA had demanded
disciplinary action in seven cases in total; onecase in 1949, one case in 1951, four cases in

2. Number of notifications to the Public
Prosecutors Offices

1952, and one case in 2009. By governing law,

Until the end of 2009, BOA had madeonly one case in 1949 was based on the BOA

notifications to the Public Prosecutors Offices inAct, and the remaining cases were based on thenine cases; two cases in 1947, three cases inAct

1949, one case in 1950, two cases in 1951, and

on

the

ResponsibilityofGovernment

one case in 1952. BOA has not made such

Employees who Execute the Budget.

notification since 1953 up until now.

Strict disciplinary against officials involvedInin illegal or improper financial management is an

recentyears,BOA

has not

madeeffective means for preventing the recurrence of

notification to the Public Prosecutors Office. This

the same types of incidents. BOA works to

is mainly because, in the event of an incident that

identify whether disciplinary action has been

is suspected of involving a crime so clearly as totaken by the relevant authorities against therequire notification, the relevant authorities haveofficials in connection with the improprieties

taken action to accuse the official concerned andreported in the annual audit report it prepares

provided the investigation authorities with clues

every fiscal year, and deliberately considersof crimes before BOA makes notification.

whether or not it should demand disciplinary
Subsection 4

action if no action has been taken. In recent

Examination

years, in the event of misconduct in accounting,
1. Outline of the system

the relevant authorities took disciplinary action as
appropriate without waiting to be demanded by

Under Article 35 of the BOA Act, if BOA is

BOA, and therefore BOA did not make demand

requested by an interested party to examine theof disciplinary action. In 2009, BOA madeconduct of an official who handles accounting for

demand for the first time in 57 years.

the State with regard to the handling of financial
management, it must examine that official's

Subsection 3

Notification
toProsecutors Officeconduct and, if it considers it necessary for such

Publicconduct to be corrected in consequence, it must
notifythecompetent

authorities

or

other

responsible parties of this judgment; and the

1. Outline of the system
Under Article 33 of the BOA Act, if BOA

competent authorities, etc. must take appropriate

finds, as a result of its audit, that an official who

measures pursuant to the judgment of which theyhandles accounting for the State has committed ahave been notified.

crime in the course of duty, BOA must notify the
2. Number of requests for examination

Public Prosecutors Office of the case. This
541

Part 3

Chapter 5

Changes in Other Operations

Until the end of 2009, BOA had dealt withrequests for examination in 85 cases in total.
Out of these, BOA concluded that correction
was necessary in three cases, correction was notnecessary in 18 cases, and it was difficult todetermine the necessity of correction in one case;and among the remaining 63 cases, BOA
dismissed the requests due to the non-fulfillmentof requirements for the request in 20 cases, therequesting party withdrew the request in 22 cases,
and BOA did not accept the request in 21 cases.
The reason why the number of requests for
examination filed thus far is not large is probably
because, when an incident that satisfies thestatutory requirements occurs and an interested
party reports it to the related authorities, theauthorities promptly take corrective measures,and therefore the party does not find it necessary
to file a request for examination with BOA.

542

Section 2

Section 2
Subsection 1

Capacity Development of Officials

Capacity Development of Officials
accounting, and also enacted the "Training Rules

Changes in training courses

for the officials of the Board of Audit." Thereby,
BOA established the current training course

1. From the mid-1940s to 1988
under

the new

system. At that time, BOA conducted group

the Management

Divisiontraining courses at the hall of old BOA main

(Personnel Division from 1948) has taken chargebuilding, but utilized BOA suboffice in 1973.

of training courses, mainly those for newly

Moreover, BOA made it obligatory to take therecruited officials, since BOA's inauguration in

evaluation test of the Assistant Chief Training

1947. From around 1950, the scale of national

Course in 1969. In a decade from 1975, BOA

financesasestablished Manazuru training accommodationWith

facility in 1978. In 1979, BOA newly establishedincreasing complication and segmentalization ofa system to make conventional Assistant Chiefs

public sector accounting, BOA came to consider

who are to engage in audit activities in the future

the content of training courses aimed to improve

be Assistant Auditors. Along with this, BOA

officials' audit capability. Between the mid-1940s

adopted the policy of requiring persons to be

and mid-1960s, BOA conducted the Newly

appointed as Auditors to receive all of the Newly

Recruited Officials Training Course (from 1950),

Recruited Officials Training Course, the Junior

the Junior Auditors Training Course (from 1949),

Auditors Training Couse, and the Assistant

the Assistant Chief Training Course (from 1958),

Auditor Training Course. In addition, in 1983,

the Supervisor Training Course (from 1954), theBOA categorized officials subject to training

Special1951 ;

courses into those recruited as audit personnel

Advanced

and those recruited as administrative personnel,

Training Course), etc. Among these training

and divided the Junior Auditors Training Course

courses, BOA established the Assistant Chief

into the audit course and the administration

Training Course, institutionalized in 1958, tocourse. In 1984, BOA abolished the Training

promote Assistant Chiefs to Auditors, and theDivision along with the new establishment of the

training course can also be considered as theInformation

prototype of the Assistant Auditor Training

Division,

Course (current Government Auditing TechniqueTraining, Personnel Division came to take charge

Training Course (Standard)). In addition to this,of

BOA also started the Consigned Training Course

development works. In the late 1980s, BOA

at National Tax College, etc. and training courses

divided the Junior Auditors Training Course

for officials other than BOA officials around this(audit course) into (I) and (II) in 1986. Moreover,time. In a decade from 1965, BOA establishedalong with permission of change of duty

the Training Division in the Secretariat in 1968

classification from administrative personnel toin order to respond to further complication,

audit personnel, BOA took a new measure forsophistication, and specialization of public sector

administrative personnel in terms of receipt of

BOA was inaugurated
Constitution,

and

has

increased

year

by

administrative

activities

getactive.

Training

corresponding

toCoursethe( fromsubsequent

year

543

the

training&

Communication
newly

courses

Technology

established
and

other

Officeofcapacity

Part 3

Chapter 5

Changes in Other Operations"Supervisor

1992 budget to conduct officials' training course-

Training Course," which had previously only

related works, in order to enhance and strengthen

targeted Deputy Directors and Chiefs, also camethe organizational structure for training courses.

to target Senior Deputy Directors.

B. Shift to a training camp method

training

courses.

In

1987,

the

On the other hand, BOA started the

BOA decided to conduct training courses,

Consigned Training Course, which it conducts bywhich had been conducted at a hall, etc. throughdispatching its officials to external organizations.

gathering of officials in the past, in principle, at

BOA dispatched officials to the National Tax

the Annaka Training Center by a training campCollege and the Training Institute for the

method, except those for a short period or short

Accounting Officials of the Ministry of Financetime, such as part of the "Special Training(from FY1951) and had its officials participate in

Course" and the "Assistant Auditor Training

the administrative training courses of the National

Course," as well as "orientations" and "evaluation

Personnel Authority (from FY1956). Moreover,tests."

for overseas training courses, BOA has conducted

C. Planning and implementation
training courses

overseas dispatch training courses since 1955.

BOA

However, as the National Personnel Authority

newly

established

the

of

new

"Training

inaugurated the Long-term Overseas Fellowship

Courses for Auditors" in FY1993 with the aim ofProgram, which is a unified overseas education

providing newly appointed Auditors with generalsystemallknowledge and skills necessary for Auditors toministries and agencies, in 1966, BOA started

contribute to the smooth performance of audit

dispatching its officials to overseas training

activities. In addition, BOA newly established thecourses under this system in FY1968.

"Technical Practice Training Course" in FY1992

foradministrative

officialsofand the "Seminar-style Training Course" in FY
1993, in the Specialized Skills Training Course.

2. From 1989 to 1998

D. Enhancement of training techniques

The BOA suboffice was the main training

In addition to a lecture hall, there are afacility, but it had inadequate facilities as a
training

facility

because

it

was

made

seminarbyroom,

audio-visualclassroom,

OA

remodeling a building constructed as a bookclassroom, etc. at the Annaka Training Center.

storeroom. Therefore, BOA opened the Annaka

Furthermore, as there is a surveying practiceTraining

Gunma

training field on a premise, it has become

Prefecture in 1992 (see page 586), taking

possible to adopt practical training techniques,advantage of the momentum toward relocation ofsuch as practice and exercise, as well as lectures,

the State's organizations to rural areas, andin training courses.

Centerin

AnnakaCity,

Moreover, BOA has implemented "language

implemented various reforms to training courses.

training course" as the Consigned Training

A. Organizational reform

Course for the purpose of promoting development

Along with the opening of the Annaka
implementedof personnel accomplished at foreign languages

organizational reform, including establishment of

because there have been increasing opportunities

the Training Division in the Secretariat by the FY

to use foreign languages, such as international

Training

Center,BOA

544

Section 2

Capacity Development of Officials

conferences, Official Development Assistancethe Second grade of the Official Business Skills

audit,

of

Test in Booking, for the purpose of improving" English

necessary knowledge for the final accounts,

etc. ,

alonginternationalization.
conversation

with

BOA

training

advancestartedcoursebyfinancial analysis, etc.

foreign

BOA implemented the "Financial accounting

instructors," etc. for further enrichment.
In FY1990, BOA started dispatching its

system of incorporated administrative agencies,

officials to the Institute of Developing Economies

etc. and the current audit (State-owned bodies'

Advanced School, which is intended to develop

financial statements audit training course, etc.)"

experts who can deal with overall development

as the "Special Training Course" for the period

issues in developing countries, as the Consigned

from FY2002 to 2005. This was intended toTraining Course.

promoteInaddition,

implementingin

FY1994," personal

BOA

computerenhancement

andstrengtheningofstartedfinancial statements audit because incorporated

training

administrative agencies were in principle obliged

course," etc., which is intended to increase thetoconduct

accountinginaccordancewithefficiency of audit activities, as the "Special

corporate accounting principles and prepare andTraining Course."

publish financial statements and because public
corporations and agencies, etc. are presumed toFurthermore, BOA newly established theeffectiveness audit course in the "Advanced

be changed into incorporated

Training Course" in FY1997 and "effectivenessagencies and BOA's audit of the composition ofaudit" in the subjects of the "Training Courses forfinances of these agencies is receiving increasing

Auditors" in FY1998. In addition, BOA changed

public expectation and attention.
Inthe names of courses in the "Advanced Training

FY2004,BOA

startedadministrative

the"NewlyCourse," specifically, from the "account course"

Assigned Junior Auditor Training Course" andto the "corporate audit course,"thethe "Training course for intensive explanation of"construction course" to the "public works audit

examples of the FY2003 Annual Audit Reportcourse,"Data(the name of the course was changed to theProcessing System course" to the "information"Training course for intensive explanation ofand communication audit course."

audit techniques" in FY2005)."

and

from

the

from

" Electronic

In FY2005, BOA amended the "Training
Rules for the officials of the Board of Audit,"

3. From 1999
training

and changed the name of the rules to the "Board

facilities and structure models were newlyof Audit Training Rules." Moreover, BOA

completed at the Annaka Training Center, and it

enacted the "IT Audit upskilling Training Course

thus became possible to implement practical

Guidelines" as it was necessary to promote

training courses for construction as the "Special

development of personnel who takes charge ofTraining Course."

the

In

FY1999,construction

audit

audit

of

IT-related

procurement

andIn FY2001, BOA newly established the

management, etc. as a result of increasing IT-"Bookkeeping and Financial Statements Training

related budget. BOA newly established the "IT

Course," which is intended for the acquisition of

Audit upskilling Training Course."
545

Part 3

Chapter 5

Changes in Other Operations

being

In FY2007, BOA decided to dispatch

promotedtoasupervisor

orofficials to graduate schools as the Consigned

manager. Therefore, it was necessary toTraining Course for the purpose of providing

strengthen training courses for officials

them with advanced and professional knowledge

aged

about corporate accounting.

implementation of highly effective audit.

40

or

more

for

efficient(iii) BOA uses position names at BOA and
Subsection 2

names unique to BOA, such as "AssistantReview of the training system

Auditor Training Course," as the names of
BOA reviewed the training system provided

training courses, and it is hard for thosein the Board of Audit Training Rules with theoutside BOA to understand the content,

following awareness of issues during the period

etc. of training courses from the names. It

from 2007 to 2009.

was thus necessary to change the current(i) The training system of the time wasnames of training courses and make it easy

divided into the "General Training Course"

for those outside BOA to guess theandcontent and level, etc. of training courses.

the"Specialized

SkillsTraining

The details of major reviews are

Course." The "General Training Course" isconsidered as training course by duty rank(i) to organize training courses into thethat is based on officials' duty ranks,"Practical Governmental Auditing Training

specifically,

officials,

Course, "theJunior Auditors, Assistant Chiefs, AssistantTechnical

Training

Auditors," Government

newly

recruited

Auditors,

supervisors,and" Government
Course,"Auditing

AuditingandtheTechniquemanagers. In recent years, BOA has

Advanced Training Course" by level withestablishedsubjects

acquisition

of

for

the

emphasis on occupational ability (abilities

techniques

andand functions necessary for each level)knowledge that is directly useful for audit

through the content by duty rank isin the "Junior Auditors Training Course"

partially included,

audit

intended(ii) to integrate the conventional "Supervisorand subjects about statistical analysis
methods,

audit

theories,

etc.,

in

Training Course" and "Training Course forthe"Training Courses for Auditors." Thenewly

appointed

managers""General Training Course" has come to" Government

include training courses by occupational

Training Course," as a training course thatability like the "Specialized Skills Training

puts emphasis on duty rank, andAuditing

into

the

Management

Course," and is now not considered as a(iii) to strengthen training courses for the audit

training course corresponding to duty rank.

techniques of officials aged 40 or more byestablishing(ii) The only training courses available for

(III)

and

(IV)

officials aged 40 or more were the" Government

Auditing"Supervisor Training Course" and theAdvanced Training Course."

in

the

Technique"Training Course for newly appointed

Through the reviews mentioned above, themanagers," which officials receive whentraining system has significantly changed from546

Section 2

Overseas

the conventional one.

Capacity Development of Officials

Fellowship

Programfor

receivinginternational education.

In April 2009, BOA changed the name of adivision from the "Training Division" to the

The current

training"Capacity Development Division" along withorganized as follows.

course systemorganizational reform. Thereby, the Capacity
Training course system (from April 2009)
1. The types of training courses for officials
conducted by the Capacity Development
Division are the "Audit Training Course," the"Special Training Course," and the "Consigned
Training Course."
2. The "Audit Training Course" consists of the"Government Auditing Training Course for
Newly Recruited Officials," the "Practical
Governmental Auditing Training Course," the"Government Auditing Technical Training
Course," the "Government Auditing Technique
Advanced Training Course, " and the"Government Auditing Management Training
Course."(i) The " Government Auditing Training
Course for Newly Recruited Officials" andthe "Practical Governmental Auditing
Training Course" relate to audit practice,works, etc., and refers to the training
courses listed in the following table.
The conventionally used names are statedin angle brackets.

Development Division has come to conduct theinvestigation of accounting audit of those subject
to audit, exchange of opinions, and other works
for necessary cooperation out of works that havebeen conducted by the Management Division, theAudit Policy Planning Division, and the Audit
Technique and Methodology Study Division. In
addition, along with the organizational reform,
BOA newly established the Office of Public
Sector Accounting and Auditing Cooperation as
an office under the Capacity Development
Division.
Subsection 3

Current training course system

As mentioned above, BOA has conducted

Government Auditing
Training Course for
Newly Recruited Officials〈Newly Recruited
Officials Training
Course)〉various reviews of the training courses conductedbytheCapacity

Development

Divisioninaccordance with changes in the domestic andinternational environment surrounding BOA of
the time. Furthermore, from FY2009 onward,

Practical Governmental
Auditing Training Course(Basic)〈Junior Auditors Training
Course (I)〉BOA enhanced training courses on financial
statements in order to improve officials' ability toanalyze and evaluate finance, audit special
accounts, and audit the financial conditions ofPractical Governmental
Auditing Training Course(Advanced)〈Junior Auditors Training
Course (II)〉incorporated administrative agencies, etc. BOA
has also continued to actively provide theConsigned Training Course, such as having its
officials participate in administrative training
courseshostedAuthority

for

by

the

improving

National(ii) The "Government Auditing TechnicalTraining Course " relates to audit
techniques, knowledge, etc., and refers to
the training courses listed in the following
table.

Personnel

managerial

Training course conducted
to develop newly
recruited officials' attitude
as public employees andprovide them with generalknowledge necessary for
officials and adaptability
to workplace
Training course conductedto have Junior Auditors
acquire basic knowledge
about legal systems that isnecessary for audit
practice
Training course conductedto have Junior Auditors
acquire practicalknowledge about audit
practice that is necessary
for auditors, etc.

skills,dispatching its officials to National Tax College
for acquiring expert knowledge on tax, andGovernment Auditing
Technique Training

having its officials take part in the Long-term
547

Training course conductedto have Assistant Auditors

isPart 3

Chapter 5

Changes in Other Operations

Course (Standard)〈Assistant Auditor
Training Course〉

acquire the theory andoperation of theaccounting legal affairs
and audit techniques thatare necessary for auditors(iv) The "Government Auditing Management
Training Course " relates to audit
supervision, management, etc., and refers
to the training courses listed in thefollowing table.

Government Auditing
Training course conductedTechnique Training
to have AssistantCourse (Practical)
Auditors, etc. acquire〈Assistant Auditor
professional audit
Training Course (Practical techniques, knowledge,
Course)〉etc.

Government Auditing
Management Training
Course (Supervisor/Chief)〈Supervisor Training
Course〉

Government Auditing
Technical PracticeTraining Course〈Technical PracticeTraining Course〉

Government Auditing
Management Training
Course (Supervisor/
Deputy Director)〈Supervisor Training
Course〉

Training course conducted
to improve the audit
capacity of audit teams byhaving officials engaging
in audit receive practicaltraining of professional
audit themes(iii) The "Government Auditing Technique
Advanced Training Course" relates to moreadvanced audit techniques, knowledge, etc.,
and refers to the training courses listed in
the following table.
Government Auditing
Technique Advanced
Training Course (I)〈Training Courses for
Auditors〉

Government Auditing
Technique Advanced
Training Course (II)〈Advanced Training
Course〉
Government Auditing
Technique Advanced
Training Course (III)〈newly established〉

Government Auditing
Technique Advanced
Training Course (IV)〈newly established〉

Government Auditing
Management Training
Course (Supervisor/
Senior Deputy Director)<Supervisor Training
Course>Training course conducted
to improve Auditors'
understanding of
responsibilities andauthorities as Auditors
and have them acquire
advanced audit techniques
Training course conducted
to develop Auditors'
advanced professional
knowledge and have themacquire audit techniques
and knowledge
Training course conductedto have mid-level
Auditors, for whom 10
years have passed since
their appointment as
Auditors, acquire
advanced audit techniquescorresponding to thetrends, etc. surrounding
audit
Training course conductedto have experienced
Auditors, for whom 20
years have passed since
their appointment as
Auditors, acquire
advanced audit techniquesby promoting
improvement of theirability to prepare audit
reports corresponding to
the trends, etc.
surrounding audit

Government Auditing
Management Training
Course (Manager/
Director of office, etc.)〈Training Course for
newly appointed
managers〉
Government Auditing
Management Training
Course (Manager/ SeniorDirector, etc.)〈Training Course for
newly appointed
managers〉

Training course conductedto provide Chiefs withmanagement ability andprofessional knowledge
that are necessary forsupervisors.
Training course conductedto provide Deputy
Directors withmanagement ability andprofessional knowledge
that are necessary forsupervisors
Training course conductedto provide Senior Deputy
Directors withmanagement ability andprofessional knowledge
that are necessary forsupervisors
Training course conductedto provide Directors ofoffices or officials in aposition equivalent thereto
with management ability
and professional
knowledge that arenecessary for managers
Training course conducted
to improve themanagement ability that isnecessary for managers ofSenior Directors orofficials in a position
equivalent thereto

3. The "Special Training Course" refers totraining courses other than the "Government
Auditing Training Course for Newly Recruited
Officials," "Practical Governmental Auditing
Training Course," "Government Auditing
Technical Training Course," "the Government
Auditing Technique Advanced Training
Course," and the "Government Auditing
Management Training Course," which areconducted by the Capacity Development
Division when the division recognizes it
especially necessary.
4. The "Consigned Training Course" refers totraining courses conducted by dispatching
officials to external organizations.

548

Section 3

Collaboration with Auditees and Auditing Departments

Section 3 Collaboration with Auditees and Auditing Departments
Subsection 1

At the 20th Public Sector Auditing Forum

Interaction with secretariats toaudit and inspection commissionersof local governments

held in 2007 in commemoration of the 60th
anniversary of the enforcement of the BOA Act,withthe keynote lecture was given by Mr. David M.

secretariats to audit and inspection commissioners

WALKER, the Comptroller General of theof local governments, etc. to promote mutual

Supreme Audit Institution of the United States.

BOA

holds

collaboration

among

regularmeetings

publicsectorauditing
Subsection 3

institutions and exchange opinions on audits,

Training
auditees

audit methods, progress, results, etc. BOA holds

courses,

etc.

for

regular meetings with the Tokyo Metropolitanof

BOA holds training courses and orientation

Membermeetings for auditees in order to strengthen their

Associations (Zenkanren)) twice a year since May

internal audits and checks and to prevent the1988 (40 meetings in total), and Osaka City

recurrence of improper/unreasonable matters.

Government (chair city of the National Urban
Audit Committee (Zenkan)) once a year since(1) Training courses for auditees' internal
auditors, etc.

March 1988 (22 meetings in total).

A. Training courses held by BOA

Government(chairPrefectural

Audit

of

the

Federation

Committee

BOA provides training courses for internal
Subsection 2

auditors and accounting officials of ministries andPublic sector auditing forum

agencies,

finance

corporations

andinstitutions,

incorporated

government-affiliated

The institution for public sector auditing

other(BOA, Administrative Evaluation Bureau ofadministrative agencies, and prefectural and local

Ministry of Internal Affairs and Communications,

governments to provide training on accounting-auditing departments of the national and local

related legal practices and audit techniques.

governments and state-owned bodies, JapaneseAs

Institute of Certified Public Accountants, andsupervisingacademia) gathers at a meeting once a year sinceconstant audits and ensuring proper financial

September 1988 (22 forums in total) to have an

management, BOA provides training courses with

open discussion and exchange opinions on

an aim to contribute to proper and effective

effective

financialadministration

collaboration, and contribute to the further

government

andenhancement of audit activities. From the 14th

institutions, etc. through the improvement ofround, the forum has been comprised of acapabilities of auditees' officials.

audit

activities,

strengthen

mutualanorganization
financial

Categories

keynote lecture by persons with the relevant

follows.

knowledge and experience and panel discussions
with the representatives of public sector auditing
institutions.
549

ofresponsible

management

at

the

for

throughnational

government - affiliatedBOA'sseminarsareasPart 3

Chapter 5

Changes in Other Operations(A) Training Course for Accounting Officialsof Prefectural Governments

training courses have been held for 23 times,

This training course has been held since1949 for prefectural government officials in(D) Training Course for Internal Auditors ofLocal Governments

charge of national treasury, because a need forThis training course has been held sincesuch training arose after World War II in order to1993 for secretariats to audit commissioners of

ensure proper accounting of national subsidies

prefectural governments, etc. in order to enhancethat have been granted to local governments andand strengthen their audit capability, following

to ensure appropriate handling of statements of

the amendment of the audit system in FY1991

accounts and documentary evidence submitted

which required local governments to conduct

under the Regulations on the Submission ofadministrative

audit

and

Accounts. BOA holds these training courses once

consignedthenational

a year. As of FY2008, this type of training

addition to conventional financial audit. BOA

courses has been held for 58 times, participatedholds these training courses once a year. As of

in by a total of 4,510 officials.

FY2008, the training courses have been held for(B) Training Course for Internal Auditors ofState-owned Bodies

16 times, participated in by a total of 890

This training course was introduced to
fictitious business trips) of public corporations(E) Training Course for Internal Auditors ofPrefectural Governments (Construction
Audit Courses and General Audit Courses)

and organizations, etc. This course has been held

Many of the participants in the training

participated in by a total of 1,391 officials.

by

audit

on

works

government,

inofficials.

address the fictitious accounting issues (such asadministrative

courses described in (A) are officials fromagencies since 1983, with an aim to enhance anddepartments that are responsible for state-aided

strengthen internal audit at individual government

prefectural projects. With an aim to enhance andaffiliated institutions, etc. BOA holds thesestrengthen internal audit of such departments, thistraining courses once a year. As of FY2008, thetraining courses has been held since 1996 fortraining courses have been held for 27 times,

these participants who are in charge of audit andparticipated in by a total of 1,690 officials. Until

review

FY2007, these courses were called Training

construction

Course for Internal Auditors of Government-

Courses) and those who are in charge of such

Affiliated Institutions.

works for(C) Training Course for Internal Auditors of
Ministries and Agencies

Construction Audit Courses; renamed "General

This training course has been held since

training courses once a year. As of FY2008, the1986 for officials in charge of internal audit andtraining courses have been held for 14 times,

accounting works at individual ministries andparticipated in by a total of 1,345 officials.

agencies, with an aim to enhance and strengtheninternal audit at these organs. BOA holds theseB. Dispatch of instructors to training seminars,
etc. held by auditees

training courses once a year. As of FY2008, theIn addition to providing training courses,

forofficials

atincorporated

works

for
projects

other

civil

engineering( Construction

state-aided

and
Audit

projects (Non-Audit Courses" in 2007). BOA holds these550Section 3

Collaboration with Auditees and Auditing Departments

BOA also dispatches its officials to training

officials and BOA officials, while also promoting

seminars, etc. held by auditees and relevant

the improvement of internal audit of individualorganizations to present audit findings included inministries and agencies. The first meeting was

the annual audit reports.

held in March 2006 with 56 internal auditorsfrom ministries and agencies and four observers

Recent records of dispatch of instructors
FY

Number oforganizers

FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008

44
37
41
42
48
46
43

Number of
instructors
dispatched
66
60
64
64
72
71
67

from the Budget Bureau, Ministry of Finance.

Number ofparticipants

Since then, BOA has held regular meetings inspring and autumn every fiscal year with

6,417
5,699
5,590
5,448
5,943
5,547
4,762

approximately 50 internal auditors from ministries
and agencies each time.

(2) Internal audit-related works
In April 2005, BOA introduced a new post
titled "Director of Audit Policy Planning" underthe Audit Policy Planning Division. The Directorof Audit Policy Planning is responsible forinternal audit-related works (from April 2009, theOffice of Public Sector Accounting and Auditing
Cooperation under the Capacity Development
Division is in charge), and promotes measures toenhance and strengthen internal audit, etc., suchascarrying

out

unifiedinvestigations

andanalyses on internal audit and internal control ofauditees and holding regular meetings withinternal auditors of individual ministries andagencies.
Officials in charge of internal audit-related
works carry out investigations on the situation ofinternal audit, collect best practices and give
feedbacks to ministries and agencies' internal
audit organs.
The aforementioned regular meetings are
held

with

collaborative

an

aim

to

relationships

deepenamong

appropriate
officials

involved in internal audit through information
sharing and opinion exchange among officials
from ministries and agencies, and among these551

Part 3

Chapter 5

Changes in Other Operations

Section 4
Subsection 1

Investigation and Research
Secretary

Research on audit

GeneralAKIMOTO( Katsuhiko

AKIMOTO) in January 1990.
1. Audit Issue Study GroupIn April 1986, the Audit Issue Study Group,

2. Publication of Kaikei-kensa Kenkyu (Journalof Government Auditing)headed by Professor Yoshitaro KATO at Chuo
University, was established as Secretary General'spractical research to promote more efficient and(1) Purpose and publication status of Kaikeikensa Kenkyu (Journal of Government
Auditing)

effective audit activities. The research put a

Government audit has not been establishedspecial focus on whether governmental projects

as an academic field, although it is an important

have attained their initial objectives and havesocial activity. As such, there were not many

fully exerted their effects. After its establishment,

studies by experts on this topic. In response to

the group had 26 meetings over four years until

such a situation, BOA created Kaikei-kensa

December 1989, when they issued the final report

Kenkyu (Journal of Government Auditing) intitled "Research Report on Performance Audit."

August

The report included comprehensive discussion onorganizational interaction with such academic

performance audit methodologies and seven casefieldsstudies that applied the cost and benefit analysis

administration,

publicmethod and other methods discussed. The reportscience,towas submitted by the group head KATO todevelopment of theoretical and practical studies.

private research group, with an aim to carry out

1989,
as

with

a

finance,

and

view

to

promoteaccounting,economypursuepublicandpolicyinterdisciplinary

40 issues have been released as of December
2009.

(Members of the Audit Issue Study Group)
Name(Chair)Yoshitaro KATO

Title

This journal contains articles by academic
experts who study audit-related matters and byProfessor at Chuo
University

audit practitioners at the national and local(Deputy Head)
Tadao MIYAKAWA

Professor at Hitotsubashi
University
Tsunao IMAMURA
Professor at Chuo
University
Kiyoshi KANAI
Certified public
accountant
Kazuyoshi KUROKAWA
Professor at Hosei
University
Takeshi KUROKAWA
Professor at Tsukuba
University
Muneyuki SHINDOAssociate professor at
Senshu University
Noriyuki TAKAYAMA
Associate professor at
Hitotsubashi University
Masaru NISHIO
Professor at University ofTokyo
Masahiro FUKAYA
Professor at Seikei
University(Title as of the time of establishment of the group)

governments, etc., in addition to research resultsby BOA officials. What is remarkable about thisjournal is that its seventh issue included an
opening article by the Nobel Prize-winningeconomist James McGill Buchanan.
This journal triggered various discussions
about audit and caused great sensations among
relatedacademicsocieties,

researchersandpractitioners, promoting the development ofresearch on audit while also raising BOA's social
status as the journaldeliberations.
552

was

used

for

Diet

Section 4(2) Publication of the English"Government Auditing Review"(Past Visiting Research Fellows)

journalName
1st Yoshitsugu
KANEMOTO
2nd Kaoru ISHII

Title
Associate professor at Faculty of
Economics, University of Tokyo
Professor at Faculty of Businessadministration, Toyo University
3rd Masamitsu
Associate professor at Faculty of
YASAKA
Economics, University of Tokyo
4th Kuniaki
Associate professor at Faculty of
TANABE
Law, University of Tokyo
5th Kosuke
Associate professor at Faculty of
OYAMASocial Sciences, Tsukuba University
6th Nobuyuki
Associate professor at Faculty of
MOCHIDA
Economics, University of Tokyo
7th Hiroya ONO
Associate professor at Faculty ofInternational Economics, Reitaku
University
8th Masahiko
Professor at Faculty of Law,
IWAMURA
University of Tokyo
9th Hiroshi
Associate professor at Faculty of
YOSHIDA
Economics, Tohoku University
10th Nobuo
Professor at Graduate School of
TAKAHASHI Economics, University of Tokyo
11st Toshiyuki
Associate professor at Faculty of
KANAI
Law, Tokyo Metropolitan University
12nd Takashi
Associate professor at Faculty of
SASAKI
Commerce, Hitotsubashi University
13rd Hideki
Professor at Faculty of Economics,
KONISHI
Gakushuin University
14th Akihiro
Associate professor at Graduate
NOGUCHISchool of Economics, Nagoya
University
15th Nobuo INO
Associate professor at Faculty ofRegional Development
Studies,
Toyo University
16th Toshio HARA Associate professor at College ofBusiness Administration, Yokohama
National University
17th Motohiro
Associate professor at Graduate
SATO
School of Economics, Hitotsubashi
University
18th Masafumi
Fulltime lecturer at Faculty of
FUJINO
Economics, Nihon University
19th Toshiyuki
Associate professor at Faculty of
UEMURA
Economics, Toyo University
20th Yoshinori
Professor at Graduate School of
KAWAMURA Commerce, Waseda University
21st Manami HORI Associate professor at School of
Humanities and Culture, Tokai
University(Title as of the time of establishment of assumption)

In order to promote international exchangesongovernment

auditing

studieswith

theInternational Organization of Supreme Audit
Institutions(INTOSAI),

andsupremeaudit

institutions, particularly those of the member
states of the Asian Organization of Supreme
Audit Institutions (ASOSAI), as well as withscholars and researchers in western countries,
BOA selected some articles from its Japanesejournal which it found were desirable to beshared internationally, and published an English
versionofthe journal,

titled"Government

Auditing Review," containing translations of
those articles.
The English journal was first published in
March 1994, and 16 issues have been publishedby March 2009.
3. Introduction of Visiting Research Fellows
In order to study auditing approaches thatare suitable for even more complicated andsophisticated administration and finance in recent
years, BOA invites external experts as Visiting
Research Fellows (part-time employees) andpromotes mid- to long-term research activities
with a focus on discovery and clarification ofadministrative

andfinancialissuesInvestigation and Researchanddevelopment of audit methodologies in various
fields.
The first Visiting Research Fellow was
Associate professor Yoshitsugu KANEMOTO at
the Faculty of Economics, University of Tokyo,

4. Technical seminars

who assumed the post in June 1989. Since then,

BOA holds technical seminars with a focus

21 researchers took up the post by December

on issues faced by divisions that implement

2009.

audits and topics in various administrative fields,
inviting academic experts, practitioners, etc.

553

Part 3

Chapter 5

Changes in Other Operations

specialized in these fields, as lectures. These

audit activities. BOA sets a research theme forseminars are aimed at providing lectures from theeach year, based on which officials collect a wideviewpoint of experts andpromote opinion

range of information on domestic and overseas

exchange among officials. Another purpose is toaudit methodologies, audit cases, and public

promote understanding of BOA by inviting

sector accounting systems and internal audit

opinion leaders from various fields as lecturers

systems, etc. that provide a premise for auditing.

through these opportunities.

Based on the collected information, they create
reports, etc. or submit articles to research

A total of 89 technical seminars have been

journals.

held since February 1990.

Sometimes BOA finds it difficult to study
certain research themes by its own research

5. Participation in academic societies
In order to directly interact with academic

projects or finds it to be more effective orgroups and study the trends, BOA has joined

efficient to outsource certain research projects,

audit-related academic societies as a corporationsuch as those that require particularly high expert

since FY1994. BOA officials attend generalknowledge or those that require collection andmeetings, section meetings, etc., pay attention to

analysis of foreign literature. In such cases, BOA

topics discussed at the meetings, and use theoutsources the research projects to research

topics that are important for future BOA as a

institutes, audit firms, etc.

guide for BOA's research activities.
Subsection 2

As of December 2009, BOA is a member ofLibrary

three academic societies, namely the JapaneseSocietyfor

PublicAdministration,

BOA's

Japan

audit

coversallnational

Association for Planning and Public Management,

administrative fields. BOA relies on books to

and Japan Society of Comparative International

gain knowledge to be able to conduct audit inGovernmental Accounting Research.

such broad areas. The former BOA Act wasenacted in May 1889. In June 1890, it wasprescribed

6. Research projects carried out by BOA andoutsourced research projects

that

the

RecordingSection,Administrative Division of the Secretariat was

areresponsible for works related to the management

heightening as the role that national finance playof books. The responsible section was changedin people's life becomes greater and people begin

for a few times after that due to structural

to keep keen eyes on the proper allocation ofchanges. In July 1923, the reading room was

public resources. Research projects carried out by

established in the library. The BOA building was

BOA and outsourced research projects are mid-burned down in the Great Kanto Earthquake into long-term basic projects to study what

September 1923, but the reading room wasappropriate audit activities look like amid such

restored at a corner of the temporary barracksocial changes.

building in May 1924.

Expectations

for

audit

activities

Research projects carried out by BOA aim to

After the time in the temporary building, thegive officials information useful for their future

new BOA building was finally completed in
554Section 4

Investigation and Research

March 1935. The reading room and library were
established on the north side of the second floorof the new building, with upgraded and enhanced
facilities. After BOA moved into the building of
the Ministry of Education in November 1943 inline with the establishment of the Ministry of
Munitions, it used the Ministry's library until
World War II.
After World War II, the National Diet

Library circa 1975

Library Act came into force in April 1948. In
August 1948, BOA's library was reorganized into
the Board of Audit Library, Branch of the
National Diet Library. The library facilities were
upgraded and enhanced after that. Due to thedestruction of the old BOA building andconstruction of the Central Government Building
No. 7, BOA moved into a temporary building
located in Kanda Jinbocho, Chiyoda-ku, in
December 2003 and stayed there for four years.
BOA then moved into the current building in
December 2007. BOA has recently upgraded thelibrary

facilities,

such

as

introducing

theKasumigaseki Wide Area Network that enables
information sharing with the branches of the
National Diet Library established under otherministries

andagencies,andpromotingmechanized book management. The number ofbooks has been increased from approximately
9,300 at the time of establishment as a branchlibrary, to approximately 52,000 as of the end of
March 2009.

555

Part 3

Chapter 5

Changes in Other Operations

Section 5 International Affairs
Subsection 1

the period from April 1925 to April 1926.

Investigationoffiscalsupervision systems of othercountries

However, the idea of the pre-supervision system
did not work out.

1. Under the former Constitution
2. Under the current Constitution

In introducing a modern fiscal supervisionsystem in Japan, it was necessary for the new

In the field of public sector accounting audit,

Meiji government to study the fiscal supervision

there had been few opportunities for regularsystems of advanced western countries and create

international exchanges for a long period due toa system suited for Japan. For this purpose, thevariousgovernment investigated the fiscal supervisioninternational organization, etc. for public sector

systems of western countries which had alreadyaccounting audit. However, such momentum

had a modern fiscal supervision system at that

finally arose after World War II, and internationaltime, and took actions, such as the dispatch ofconferences,

investigation

westerninternational organizations were also established.

countries. Nobori WATANABE, the President of

BOA participated in the second International

BOA, received an order for investigation of theCongress

audit systems of advanced western countries in(INCOSAI), which was held in Brussels, Belgium

March 1887 when the government was carrying

in September 1956, for the first time, and cameforward preparation for the enactment of theto work on the investigation of the fiscal

Constitution, and investigated the systems withsupervision systems of other countries on a full

Sadajiro HIRATSUKA, Assistant Director, who

scale. The major subsequent investigations of thetraveled together with him as an interpreter, forfiscal supervision systems of other countries are

the period from May 1887 to December 1888.

as follows.

The biggest goal of the investigation was,(1) Issuance of the "Research Paper
Foreign Government Auditing Issues"particularly,

teams

to

to

investigate

advancedthesystemsof

ITO.

NoboriWATANABE,

and

etc.

of

there

came

Supreme

to

had

be

Audit

been

held

no

and

Institutionson

At first, the Legal Affairs Division took

Germany and Prussia by order of Prime Minister
Hirobumi

reasons,

chargetheofinternational

affairs,suchasPresident of BOA, drafted and submitted a draft

investigations of the fiscal supervision systems of

Ordinance on the Board of Audit in December

other countries and works for international

1888 after his return home.

conferences. However, since January 1963, theofSpecial Programs Division has taken charge ofconsideration of introduction of a pre-supervisionsuch international affairs as part of the "overseas

systemBunichisystem investigation and international cooperation

KAWAMOTO was ordered to go abroad toworks," which fall under the special issues oninvestigate the actual examples and results of thewhich the Secretary General of BOA requires

pre-supervision systems of advanced westerninvestigations.

countries, and went to the relevant countries for

Programs Division published the first number of

After
for

that,

againstexpenditure,abackdrop

Director

556

In

April

1973,

the

SpecialSection 5 International Affairs

the "Research Paper on Foreign Government
Auditing

Issues,"

which

was

prepared

Table 1 List of the meetings of the Tokyo International
Meeting on Audit

byDate ofholdingtranslating foreign magazines it purchased for theinvestigation of the fiscal supervision systems of

1stother countries and audit reports and othermaterials donated by other countries. The Special

2ndPrograms Division took charge of editing and3rd

issuing up to the 44th number (issued in
4thDecember 1976) of the "Research Paper on
Foreign Government Auditing Issues." However,

Jun.
1997
Sep.
1998
Sep.
1999

5th

Sep.
2000

6th

Sep.
2001

7th

Feb.
2003

8th

Feb.
2004

9th

Jan.
2005

10th

Feb.
2006

11th

Feb.
2007

the Research & International Division of theSecretariat came to take charge of it along with

Sep.
1996

the transfer of international affairs, such as works
for the investigations of the fiscal supervisionsystems of other countries and works for theInternational Organization of Supreme Audit
Institutions (INTOSAI), thereto in January 1977.
The latest issue of the Research Paper on Foreign
Government Auditing Issues is the 178th issue asof December 2009.
(2) Holding of the
Meeting on Audit
BOA

has

been

Tokyo

International

holding

the

Tokyo

International Meeting on Audit with changing

12th

themes every fiscal year since FY1996, with the

13th

aim of helping seek a clue to solve the problems,

Jan.
2008
Dec.
2008

Theme
Best Audit Implementation Processes Analyzing common audit issues under
different systems
How to conduct effectiveness audit
Issues Surrounding Effectiveness Evaluation
Issues Surrounding Effectiveness Evaluation
Planning, Implementation and Results of theaudit in each SAI's most important issue
area
How to prepare an appropriate audit plan to
conduct effectiveness audit
Audit report with the objective ofeffectiveness which attracted special
attention from the mass media and/or
Parliament/Legislature - how it is planned,
implemented and reported
Audit report with the objective ofeffectiveness which was conducted by the
newly developed audit methodology and/or
prepared by improved reporting process
Audit of Social Security -Social Security
System and Related Audit Reports from theviewpoint of Effectiveness
Audit of Privatizations
Audit of the Projects of Agriculture,
Forestry and Fisheries with the objective ofEffectiveness
Financial Audit: Fair Presentation of
Financial Statements
Audit of Procurement of Defense
Equipment

which the Supreme Audit Institutions (SAIs), etc.
(3) Auditors General Global Working Groupof advanced countries have in carrying out their
missions, through exchange of opinions and

The first meeting of the Auditors General

deepening of discussions (see Table 1). BOA

Global Working Group was held in Washington,held the first meeting in September 1996 under

D.C., United States in January 2000, following atheImplementation

proposal by Mr. David M. WALKER, theProcesses - Analyzing common audit issues underComptroller General of the SAI of the United

different systems." BOA held the first to 12th

States, with the aim of clarifying common issues

meetings as the "Tokyo International Audit

to be worked on by the SAIs of countries in the

Forum" but changed the name of the meeting tofuture and discussing measures to solve them.

the "Tokyo International Meeting on Audit" from

The meeting of the Auditors General Global

the 13th meeting.

Working Group has been held once a year since

theme

of

"Best

Audit

then. BOA has participated in the meetings since557

Part 3

Chapter 5

Changes in Other Operations

the first meeting (except for the seventh meeting).

V
VI
VII
VIII
IX
X
XI
XII
XIII

Jerusalem (State of Israel)
Tokyo (Japan)
Montreal (Canada)
Madrid (Kingdom of Spain)
Lima (Republic of Peru)
Nairobi (Republic of Kenya)
Manila (Republic of the Philippines)
Sydney (Commonwealth of Australia)
West Berlin (Federal Republic of
Germany)
XIV Oct. 1992 Washington, D.C. (United States ofAmerica)
XV Sep. 1995 Cairo (Arab Republic of Egypt)
XVI Nov. 1998 Montevideo (Oriental Republic of
Uruguay)
XVII Oct. 2001 Seoul (Republic of Korea)
XVIII Oct. 2004 Budapest (Hungary)
XIX Nov. 2007 Mexico City (United Mexican States)

The ninth meeting was held in Marrakech,
Morocco in April 2008, and the 10th meeting
was held in Lofthus, Norway in May 2009, withthe participation of the SAIs of 17 countries and
16 countries, respectively.
Subsection 2

International Organization ofSupreme Audit Institutions(INTOSAI)

1. Holding of the International Congress ofSupreme Audit Institutions (INCOSAI)The International Congress of Supreme

Jun. 1965
May 1968
Sep. 1971
May 1974
Oct. 1977
Jun. 1980
Apr. 1983
Apr. 1986
Jun. 1989

Audit Institutions (INCOSAI) I consisting of
SAIs around the world was held in Havana, Cuba

countries and the United Nations, following a

2. Holding of the INCOSAI in Tokyo andestablishment
oftheInternational
Organization of Supreme Audit Institutions(INTOSAI)

proposal by Mr. Emilio Fernandez Camus, thenThe INCOSAI VI was held in Tokyo in

the President of the SAI of Cuba, for the purpose

May 1968 with the participation of the SAIs ofof

for the period from November 2 to 9, 1953 withthe participation of the representatives of 33

promotingexchangeofknowledgeand70 countries, including the United States which

SAIs

the

countries

andparticipated in the INCOSAI for the first time. It

improving fiscal supervision in the countries.

was the first international conference held inJapan was not invited to this congress because it

Japan in the field of public audit, and BOA

had just returned to the field of the international

worked on it with concerted efforts.

experienceofofcommunity at that time.

A permanent international organization of

After that, the INCOSAI has been held

SAIs, which had been a pending issue since theevery three years, and BOA was invited to thefirst INCOSAI, was formed at said convention.

INCOSAI II, held in Brussels, Belgium in

The official name of the established international

September 1956 for the first time and participatedorganization was decided to be the "International

therein. Moreover, BOA has participated in all

Organization of Supreme Audit Institutions"

INCOSAI held thereafter (see Table 2).

(INTOSAI). The number of member SAIs was
about 60 at the time of inauguration of

Table 2 List of INCOSAI

I
II
III
IV

INTOSAI, but it has continuously increased, andDate of
Venue
holdingNov. 1953 Havana (Republic of Cuba)
Sep. 1956 Brussels (Kingdom of Belgium)
May 1959 Rio de Janeiro (Federative Republic of
Brazil)May 1962 Vienna (Republic of Austria)

SAIs of 188 countries and the European Court of
Auditors, which conducts the audit of theEuropean Union, accede to INTOSAI as ofDecember 2009. Incidentally, at the time of558

Section 5 International Affairs

permanent

and there was increasing momentum toward

international secretariat, which had been set at theestablishment of a regional organization in the

SAI of Austria in Vienna since 1962, formally

Asian region, following a proposal by Mr.

became the International Secretariat of INTOSAITANTUICO, the Chairman of the SAI of the(the name was changed to the General Secretariat

Philippines. The Charter for ASOSAI stipulating

in 1974).

the establishment of the Asian Organization of

establishment

of

INTOSAI,theSupreme Audit Institutions (ASOSAI) and otherAccording to the provisions of INTOSAI,BOA served as the Vice-Chairman for six years

matters

wasfrom 1962 to the INCOSAI VI in Tokyo in 1968,

establishment that was held in October 1978 in

the Chairman of the Governing Board for threeWest Berlin with the participation of theyears up to the INCOSAI VII, and the member ofrepresentatives of the SAIs of 11 countries,

the Governing Board for 12 years up to theincluding Japan. ASOSAI was established then as

INCOSAI XI, respectively. Furthermore, BOA

the fourth regional organization of INTOSAI for

also served as the full member of the Governingthe

Board as a representative of the Asian Region for

professional

six years from the INCOSAI XVII in 2001 to thetechniques of SAIs in the Asian region. The

INCOSAI XIX in 2007.

number of member SAIs was 13 at the beginning.

purposeadoptedofatmutually

knowledge,aconferenceforexchanging

theexperience,andAt said conference, Mr. TANTUICO, theChairman of the SAI of the Philippines was
designated as the Secretary General of ASOSAI,and it was decided to hold the First Assembly of
ASOSAI in New Delhi, India. In May 1979, theFirst Assembly was held in New Delhi, India
with the participation of the representatives of the
SAIs of 12 countries. At said Assembly, theattendees elected the members of the Governing
Board, approved the Rules and Regulations ofTheir Imperial Highnesses the Crown Prince and Crown
Princesses (at that time) attending the opening ceremonyof the INCOSAI in Tokyo

ASOSAI, and conducted other matters. BOA
became the member of the Audit Committee. The
organization

Subsection 3of

ASOSAI

consistsofthe

Assembly (held every three years), the Governing

Asian Organization of Supreme
Audit Institutions (ASOSAI)

Board (held once a year), the Secretariat, and the
Audit Committee. After that, the number of
ASOSAI member SAIs has gradually increased,

1. Establishment of ASOSAI
Followingtheestablishment

ofand SAIs of 45 countries accede to ASOSAI as

theof December 2009.

Organization of Latin American and Caribbean
Supreme Audit Institutions (ILACIF; currently
called OLACEFS) in 1965, regional organizations
were formed in the African and Arab regions,559

Part 3

Chapter 5

Changes in Other Operations

Table 3 List of ASOSAI Assemblies

United States, as observers, the SAI of Austria

Date of
Venue
holding
1st May 1979 New Delhi (India)
2nd Apr. 1982 Seoul (Republic of Korea)
3rd May 1985 Tokyo (Japan)
4th Jun. 1988 Bali (Republic of Indonesia)
5th May 1991 Beijing (People's Republic of China)
6th Nov. 1994 New Delhi (India)
7th Oct. 1997 Jakarta (Republic of Indonesia)
8th Oct. 2000 Chiang Mai (Kingdom of Thailand)
9th Oct. 2003 Manila (Republic of the Philippines)
10th Sep. 2006 Shanghai (People's Republic of China)
11th Oct. 2009 Islamabad (Islamic Republic of Pakistan)that is the Secretary General of INTOSAI, theSAI of Colombia that is the Secretary General ofILACIF, and the Asian Development Bank
(ADB) that is an international organization.
Seventeen officials, including Hideo KAMADA,
the

President

of

BOA,

servedastherepresentatives of BOA. The overall schedule andevents were as follows.
The opening ceremony was held on May 15,
and the attendees totaled over 200 consisting of
17 representatives of BOA, 88 representatives of

2. Holding of the Third Assembly and theSecond International Seminar in Tokyo

other countries and accompanying persons, 15
guests who are government or national diet-(1) Background to the holding of the Assemblyin Tokyorelated persons, etc., including Prime Minister
Yasuhiro NAKASONE, seven former presidents

BOA hosted the Seventh Governing Boardof BOA, 58 BOA officials and persons associatedin Tokyo in May 1984. At said Governing Board,

with the secretariat for preparation for the Third

the representative of Indonesia reported that it

ASOSAI Assembly, etc., and 40 journalists.

had become impossible to hold the Third

Following the opening ceremony, BOA held

Assembly, which was scheduled to be held inconferences, specifically, the Assembly and thesaid country in 1985, due to the country's internalInternational Seminar, in the form of the plenary

circumstances. In response to this, the SAI ofsession and Sub-Theme Committee, respectively,

Indonesia and the members of the Governingin accordance with the customary practice ofBoard strongly requested BOA to host said

ASOSAI. The plenary session was held three

Assembly. BOA accepted this request and cametimes in total on May 15th, 20th, and 21st.

to host said Assembly. BOA established the

BOA held the closing ceremony on May 21

secretariat for preparation for the Third ASOSAI

st. Following a closing address given by Hideo

Assembly, etc. in the General Executive Bureau

KAMATA,in July 1984 and worked on preparation for thethe

President

of

BOA,

the

representatives of the SAIs of seven countries

Assembly with concerted efforts.

delivered an address, and the closing declaration
by Hideo KAMADA, the President of BOA,

(2) Outline of the Assembly

finally

In this manner, BOA held the Third

brought

thecurtain

down

on

the

Assembly and the Second International Seminar,

Assembly. Moreover, the Eighth and Ninthwhich was held at the same time as said

Governing Boards were held immediately before

Assembly, for seven days from May 15 to 21,

the opening ceremony and immediately after the

1985, with the participation of the SAIs of 20

closing ceremony, respectively, in accordance

ASOSAI member countries, including BOA, thewith the customary practice of ASOSAI.

SAIs of four countries and regions, including the560Section 5 International Affairs

ASOSAI activities, including training seminars,(ii) communication

withmemberSAIs

andcollection and provision of information, and (iii)
assistance for the execution of the duties ofinternational conferences, such as the Governing
Board.
Although it was the first time for BOA toexperience such works as the administration of aninternational organization, it played an importantrole,

Appearance of the opening ceremony of the Third
Assembly and the Second International Seminar of
ASOSAI

includingplanning,

coordinating,andsuggesting major decisions as the Secretary
General, at the Governing Board and theAssembly.
Major ASOSAI activities that BOA planned

3. Activities as the Secretary General, etc.

and executed as the Secretary General include (i)(1) Election to the Secretary General
In May 1991, Kiyoshi NAKAMURA, thethe ASOSAI-Sponsored Workshop, which was

President of BOA, was elected to the Secretary

first held by the ASOSAI Fund in Malaysia in

General at the Fifth Assembly held in Beijing,

May 1992 and has been held every year

China. BOA became the third Secretary General

thereafter and (ii) the first-stage ASOSAI Long

of

the

Term Regional Training Programme which wasPhilippines and Malaysia. In response to this,

implemented by the fund of the ADB for the

BOA established the Secretariat of ASOSAI atperiod from 1997 to 2000. Out of these, funds

the General Executive Bureau in June 1991, andallocated to the expenses for the ASOSAI-

appointed

GeneralSponsored Workshop are those that BOA has(Assistant Secretary General for Secretariat) andcontinuously contributed to ASOSAI from its

five Secretariat officials (Senior Director ofbudget on a voluntary basis from FY1992 up to

Research & International Division, Director of

FY2009 as part of its contribution as thethe Office of International Affairs, Deputy

Secretary General, and the funds are valued by

Director of Accounts Division, and two officials

member SAIs.

ASOSAI,

followingtheDeputythe

SAIs

SecretaryofAffairs ) .

In addition, Shinji YAZAKI, the President

Furthermore, BOA dispatched two officials to theof BOA, who is the Secretary General of

SAI of Malaysia, which was the former Secretary

ASOSAI, requested the ADB to provide financial

General, at the end of June to receive theassistance for the ASOSAI Long Term Regional

handoff.

Training Programme in corporation with the head(2) Activities as the Secretary Generalof the SAI of India, who is the Chairman of

of

the

OfficeofInternational

ASOSAI, and thereby realized the programme.

The duties of the Secretary General areprovided in the Charter for ASOSAI and theSuch BOA's activities were highly valued by

Rules and Regulations of ASOSAI, and include

member SAIs, and Shinji YAZAKI, the President(i) planning,of BOA, was reelected to the Secretary Generalcoordination,andexecutionof561

Part 3

Chapter 5

Changes in Other Operations

at the Sixth Assembly. BOA handed off the post

Related to Tsunami, Conflict and other Disasters"of the Secretary General, which it served for thewas held in Jakarta in April 2005 in order tothree periods of nine years, to the SAI of India at

strengthen the capacity of the SAI of Indonesia

the Eighth Assembly held in Chiang Mai,

which was in the position of auditing the use andThailand, in October 2000.

status of use of aid money for damages by the(3) Activities as the Administrator of the
ASOSAI Training Program

Major Earthquake off the Coast of Sumatra and

BOA was elected to the member of the

December 2004. Many SAIs, etc., including

Tsunami in the Indian Ocean that occurred inGoverning Board appointed by the Governing

BOA,

Board

of

Advisory Board on Tsunami-Related Audit of thethe

Audit Board of the Republic of Indonesia (BPK)inconsideration

contribution

to

ASOSAI

Governing

Board

based

of

the

degree(Memberofonoverallits

wasparticipatedestablished

in

in

the

conference.

accordance

with

The

the

professional contribution to ASOSAI) at the 28th

recommendation resolved at said conference, andGoverning Board held in advance of the Eighth

BOA also attended the first meeting of said

Assembly in 2000 owing to high evaluation of its

advisory board held in Jakarta in April 2006 and

past

as

the

Secretary

General.

the second meeting thereof also held in Jakarta in

BOA

was

appointed

toAugust 2009.

activities

Furthermore,

theAdministrator of the ASOSAI Training Program,
Subsection 5

which is in charge of the administration oftraining activities at ASOSAI that had been

International
activities

cooperation

BOA is promoting exchange with audit

conducted directly by the Secretary General inBoardinstitutions of other countries mainly in the field

immediately after said Assembly, and came toof technical cooperation, such as dispatch ofplay a central role in the training activities ofofficials to international training seminars and

ASOSAI. The Charter for ASOSAI and the Rules

acceptance of trainees. The major activities are as

and Regulations of ASOSAI were amended at thefollows.

the

past,

at

the

29th

Governing

11th Assembly in 2009, and the Member of theGoverning

Board

based

on

its

overall

professional contribution to ASOSAI became the

1. Holding of International Seminar, etc. for
audit

Training Administrator of ASOSAI. Along with

BOA co-hosts the following seminars, etc.

this, BOA was appointed to the Training

with the Japan International Cooperation Agency

Administrator of ASOSAI.

(JICA).
(i) BOA has implemented the "Seminar on

Subsection 4

Government Auditing" every year, except

Participation in the Advisory
Board on Tsunami - Related
Audit of the Audit Board of the
Republic of Indonesia (BPK)

1994, since 1980 for the period of about fourweeks, targeting the officials of the SAIs ofdeveloping

countries.

This

seminaris

The "International Conference on Promoting

implemented for the purpose of the transfer

Financial Accountability in Managing Fundsof audit techniques of Japan, and the themes562

Section 5 International Affairs

thereof are "audit of computers," "audit ofSAI of India, seminars hosted by the SAI of

public works," etc.

South Korea, and other seminars, etc. held inonother countries since it dispatched its officials to

Administrative, Financial and Audit Systems

an international training seminar held in theofPhilippines in July 1979 titled "Seminar on Audit(ii) BOA

implemented

Japan

the

(currently," Seminar

theSeminaron

Government Audit Systems)" for the firstof Public Works."time(3) Acceptance and dispatch
investigation teams, etc.

in

October

1995,

targetingthegovernment officials of the Caucasus region,

trainees,

BOA accepted 13 trainees from the Board ofand has implemented it every year since

Audit and Inspection of Korea and dispatchedthen.
(iii) BOA

of

implementedthe" Seminar

seven

on

officials

theretothroughanofficial

Government Auditing," targeting the officials

exchange program for the period from 1987 toof the audit institutions of the Palestinian

1996. In the same manner, BOA has accepted

National Authority, for three years frominvestigation teams from the SAI of the People's

2003.

Republic of China (National Audit Office of the"ASOSAI

People's Republic of China) since 1992 andWorkshop" every three years since 1988 indispatched three officials thereto in March 1995.

order to hold discussions in line with the

Incidentally, BAO dispatched four officials totheme ofsaid office as JICA experts in 1996.

(iv) BOA

had

implemented

thethe International

Seminarof

ASOSAI. BOA changed the name of the

In addition, BOA has accepted three officials

workshop to the "ASOSAI Seminar" in 2006of the SAI of Sri Lanka who visited Japan as

and has implemented it every year since

JICA individual trainees since 1987.
In recent years, BOA has actively acceptedthen.

investigation

teams

from

the

SAIs

and

2. Exchange with the audit institutions of othercountries

government organizations of other countries and(1) Visit of the heads, etc. of the SAIs of othercountries to BOA

based on other countries' requests with thehas dispatched its officials as short-term experts
cooperation of JICA.

In recent years, there have been increasingcases where the heads, etc. of the SAIs of otherof

3. Working Level Meeting of the SAIs of
China, Korea and Japan

interchange and exchange of information andAt the INCOSAI XVIII held in Budapest,

countries

visit

BOA

for

the

purposeHungary in October 2004, the Auditor General of

opinions, etc. with BOA.
(2) Participation
seminarsininternational

the SAI of the People's Republic of China, thetraining

Chairman of the SAI of South Korea, and theUnder the framework of ASOSAI, BOA has

President of BOA agreed to hold the Working

actively dispatched its officials to seminars hosted

Level Meeting of the SAIs of China, Korea andby ASOSAI, seminars hosted by the INTOSAIJapan for the purpose of promoting the sharing ofDevelopment Initiative, seminars hosted by theknowledge, etc. among the SAIs of these three563

Part 3

Chapter 5

Changes in Other Operations

countries. Based on this agreement, the SAIs of
the three countries have held said meeting every
year since 2005. The first meeting was held in
Seoul in June 2005, and the SAIs of the three
countries discussed the direction of the working
level meeting in the future. The second meeting
was held in Tokyo in May 2006 with "Promotionof Professionalism in Audit Work" being set as
the theme of the first joint research. After that,the meetings have been held in turn, specifically,
the third meeting (June 2007) was held in
Beijing, the fourth meeting (June 2008) was heldin Seoul, and the fifth meeting (June 2009) was
held in Tokyo, with the respective theme of joint
research being set. In addition, the Audit
Workshop has been implemented based on theaudit reports of the SAIs of the countries since
the fourth meeting.

564

Section 6

Section 6
Subsection 1

Exchanges with the General Public and Relevant Institutions

Exchanges with the General Public and Relevant Institutions
Therefore,

Public Relations

under

this

situation,itbecamenecessary to integrate them and develop theorganizational structure of public relations.

Public Relations for the General Public(1) Developmentof
PublicOrganizational Structure

In May 1987, the Office of Public Relations

Relations

was established in the Management Division to
engage in both external affairs and public

Triggered by an interview of "a paradise at
taxpayers'

money"

in

1979

by

a

relations together.

general(2) Responding to the Media

newspaper, recognition that BOA is a ReservoirofInformation

has

taken

hold

in

Along

media

with

changesinsocioeconomic

companies and the City News Department ofconditions, etc., the interest of the tax-paying

some media companies started

dispatchpublic in how taxes are used and in wastefulreporters specifically for BOA when compilingspending has increased. In addition, since there

annual audit reports.

have been continued scandals involving publictoAfter this, it became an urgent issue for

officers recently, the focus of the media has

BOA to build the credibility of its audit activities

increased on the movements of BOA, which isand to develop an organizational structure forresponsible for supervising financial management.

public relations to gain understanding and support

And along with this, the number of requests forfor audit results from the public.

interviews by the media has tended to increase.
These requests are generally handled by the

A. Setting up of Public Relations Officer
Based on this situation, Public Relations

Office of Public Relations as a contact window.

Officer was set up in the Management Division

It pays attention to understanding the intention,in April 1986 and the officer was mainly in

etc. of the interview and thereby contributing tocharge of responding to reporters and preparing

accurate reporting.
Most

public relations magazines. This enabled BOA toresponses

to

the

media

are

engage more proactively in public relations for

explanations of audit results and responses to

the general public, such as enhancing publications

their interview questions. The Office of Public

on the demanded measures, etc. and distributing

Relations provides opportunities for explanation

public relations magazines in various fields.

toB. Establishment of Office of Public Relationsorganizational structure to have relevant divisions

Most activities related to public relations

receive interviews in order to promote the details

were supervised by the Management Division;of annual audit reports, which are a compilation

however, there were operations performed byof annual audit activities of BOA, broadly andeach division of the Secretariat respectively.

accurately.

the

media

and

it

has

developed

ansimilar

Explanation of the audit results of BOA

operations were performed by multiple divisions

includes an overall explanation and individual

and therefore they were not efficient andexplanations. Since BOA has no press club, BOA

expressions for common matters were different.

gives explanations to the Nagata Club (or Cabinet

However,

there

were

cases

where

565

Part 3

Chapter 5

Changes in Other Operations

In addition to the explanations to the Nagata

Kisha Club), which is in the official residence ofMinister.

Communication

andClub, a briefing of the annual audit report has

withNagataarebeen given to editorialists, etc. of national

implemented via the Press Office of the Cabinet

newspapers (Asahi, Mainichi, Yomiuri, Nikkei,

Public Relations Office, the Prime Minister's

Sankei, and Tokyo), news service agencies

Official Residence.

( Kyodo,A. Overall Explanation

Corporation (Nippon Hoso Kyokai) respectively

the

Prime

arrangement

the

Club

Jiji ) ,

and

Japan

Broadcastingsince 1986.

An overall explanation has been provided
since the late 1950s. Its aim is to give an overall

This is implemented so that audit results are

summary of improper/unreasonable matters, etc.

accurately understood and then handled properly

reported in the annual audit report when sendingin editorials or news commentary in addition to

the annual audit report to the Cabinet.

individual news reports of the audit results.

B. Individual Explanations(3) Preparation and Issuance of Publications

In addition to A. above, the following
individual explanations are given as a means to

A. Editing and Issuance of Summary Versionof the Annual Audit Report (from 1948)

inform the public of the results of audit activities

After World War II, it was determined toissue this report with the purpose of broadlyof BOA at every opportunity.
(A) Presented
MeasuresOpinionsor

informing people of the activities of the new

Demanded

BOA and its results and thereby gaining the

When BOA presents its opinions or demands

understanding of the people in relation to BOA.

for measures to ministries and agencies, etc.

Therefore, audit reports are described in a simple

pursuant to the provisions of Article 34 or Article

and36 of the BOA Act, the details thereof have beenorganizations,explained since 1983.

activities, etc. of BOA are also introduced.

easy - to - understand

Today,

authorities,thereports

mannerandthevarious

kinds

of

are

distributedto(B) Special Report on Audit Requested by theDietauditees, public libraries, and various groups

When reporting to each House, etc., pursuant

throughout Japan, and they are widely used as ato the provisions of Article 30-3 of the BOA Act,

digest of annual audit reports.

on audit results of the matters for which an audit
has been requested by the Diet based on the

B. Preparation and Distribution of Leaflet"Board of Audit" (from 1986)

provisions of Article 105 of the Diet Act, theIn 1986, a publicity leaflet, "Board ofdetails thereof have been explained since 2006.

Audit," in which the position, authorities, details(C) Special Report to the Diet and the Cabinetof operation and activities, etc. of BOA are

When reporting to the Diet or Cabinet on a

described comprehensively, was issued. Since

presented opinions, demanded measures, or otherthen, the leaflet has been issued every year; it ismatters that are found to be particularly necessary

distributed to many members of the public,

based on the provisions of Article 30-2 of the

including auditees, the Diet, persons related to

BOA Act, the details thereof have been explained

media;

since 2006.

understanding of the role of BOA.
566

and

it

is

used

to

deepentheirSection 6

Exchanges with the General Public and Relevant Institutions

Agency) in FY1988, and then, based on the(4) Use of Government Publicity MediaBOA also engages in activities so that theorganizational reform of BOA and completion ofdetails of annual audit reports and organizations

Annaka Training Center of BOA, "Be Strict andand details of activities of BOA are broadly

Fair:

understood by the public via TV and radio

Supervision Authority" in FY1997.

programsongovernment

government

publicrelationsofAudit,

State's

FiscalandMore than 10 years have elapsed since thosemagazines

andvideos were created and the situation surrounding
BOA

and

Board

publicity

publications.
(5) Operation
WebsitetheManagement

of

has

drasticallychanged,suchasdiversification of reporting means along with

BOA

amendment of the BOA Act. Therefore, "Board

Since the spread of the Internet in society,of Audit: Towards a Bright Future" was created

BOA website was opened in July 1997 and it hasin fiscal year 2008 and is used to further

been operated as a new publicity media.

understanding of the public more broadly on

Later in August 2002, the homepage anddetails of activities of BOA. In addition, it iscontents were reviewed in order to enhance theirused for training held by BOA and various kinds

details; a kids page was opened as part of theof workshops held by auditees.

website for children in July 2004 and Your

(7) Collection of Information

Comments was opened in November 2005

Articles that can be used as a reference forrespectively. Moreover, in April 2007, the overall

audit activities of BOA from the morning andwebsiteevening editions of major newspapers and fromwasupdatedinconsiderationofmagazines are sent to the relevant divisions.

accessibility and usability.
The number of views of the homepage ofIn addition, information collected from thethe website increased drastically to 870,000 views

public on financial management by the State, etc.

in 2008 from 100,000 views in 1999.

is used as a reference for audits. Recently, theamount of information has tended to increase.
(8) Kids Day for Visiting the Workplace of
Their Parents
The kids day for visiting the workplace of
their parents has been implemented since fiscal
year 1999 in cooperation with ministries andagencies, including the Ministry of Education,
Culture, Sports, Science and Technology, for the
purpose of deepening the relationship between
parents and their children by explaining activities

BOA Websiteof BOA and conducting worksite tours as well as
providing an opportunity for children to learn(6) Creation of Publicity Videos
The following publicity videos of BOA wereabout society more broadly and for the purpose

created respectively: "Board of Audit" (jointof deepening the understanding of measures ofcreation with the Japan International Cooperation

ministries and agencies. BOA agreed with these567

Part 3

Chapter 5

Changes in Other Operations

purposes and has joined in this event since the(Nikkeiren);

Mr.

Shuzo

HAYASHI,formerfollowing year in fiscal year 2000.

Director General of the Cabinet Legislation
Bureau; Mr. Kaneo ISHIHARA, former Presidentof the Overseas Economic Cooperation Fund; andMr. Torao CHINO, former President of BOA.
(2) Establishment of the (First) Government
Auditing Consultative Committee(from 1988 to 1995)

BOA image character for children"Dameda Zou"In

December

1988,

the

Government

Auditing Consultative Committee, consisting ofexperts from academia who have profound

Subsection 2

knowledge of administrative and financial issues

Dialogue with Experts

and BOA executives, was established and held.
Government Auditing Consultative Committee

This Committee was established with the purpose(1) EstablishmentoftheConsultative
Committee on Government Auditing Issues(from 1981 to 1983)of studying more effective and appropriate audits
by exchanging opinions on issues over audits.
Opinions were exchanged on trends, etc. of audits
concerning

In April 1981, the Consultative Committee

Official

Development

Assistanceon Government Auditing Issues, consisting of(ODA), social security, agriculture, forestry andexperts from academia who have profoundfisheries, privatized former public enterprises,

knowledge of administrative and financial issues

public projects, and education, for which social

and BOA executives, was established and held.

concerns were high, in addition to an outline ofThis Committee was established with the purpose

annual audit reports. The Committee made up ofof examining the basic way to fulfill thesaid members was discontinued after the 13thfunctions of BOA more effectively and studying

meeting held in February 1995 since almost all

future audits from a long-term perspective.

themes were discussed.

Opinions were exchanged on themes related to"organizational structure for the conduct of(External Members)

audits,"

Name
Title
(Chair)Shuzo HAYASHI Former Director General of the Cabinet
Legislation Bureau (participated in the
1st meeting only)(Chair)Kyonosuke IBE
Supreme Advisor of Sumitomo Bank
(Chairperson from the 2nd meeting andafter)
Akira OGATA
Commentator on international issues
Kazuo KINOSHITA Professor emeritus of Osaka University
Mamoru SHIBATA President of the Japan Center for Local
Autonomy
Yoshimitsu
President of the Japan Resources
TAKEYASU
Association
HiroshiPresident of the Capital Market
TANIMURA
Promotion Fund

"auditauthorities,""securingeffectiveness of audit results," etc., and audits ofpolicy-based finance, public projects, agriculture,
forestry and fisheries, social security, subsidies,public enterprises, etc. for which social concerns
were high, in addition to an outline of annual
audit reports. This Committee was discontinued
after the 13th meeting held in January 1983.
External members of the Committee were
Mr. Takeshi SAKURADA, Honorary Chair ofJapan Federation of Employer's Associations
568

Section 6

Exchanges with the General Public and Relevant Institutions

Kiyoaki TSUJI

Professor emeritus of the University ofTokyo (participated until the 2nd
meeting)
Yoko NUITAJournalist (participated until the 5th
meeting)
Jiro YOSHIKUNI Chairperson of Bank of Yokohama
Tokugoro
Certified public accountant (participated
MURAYAMA
from the 6th meeting)
Akira WATARI President of the Japan Real Estate
Institute (participated from the 3rd
meeting)(Title as of the time of initial participation of the member)(External Members)
Name(Chair)Ken MOROI

Title

Chairperson of Chichibu Onoda
Cement Corporation
Hiroto OYAMA Professor of Tokyo International
University, Faculty of Liberal Arts
Keimei
Professor of Chuo University, Faculty
KAIZUKAof Law
SumikoEconomic commentator (participated in
TAKAHARA
the 1st meeting only)
Riyako GODAI
Commentator (participated from the
2nd meeting)Tsutomu HOTTA Lawyer
Teruhiko MANO Executive Counselor of Bank of Tokyo(Title as of the time of initial participation of the member)(4) Establishment of the (Third) Government
Auditing Consultative Committee(from 2000 to 2004)
The third Committee was established andheld with new members in May 2000. In thisCommittee, opinions were exchanged on themes
related to the "current status and issues of audits,"
First meeting of the (First) Government Auditing
Consultative Committee"future direction of audits," etc. and the trends ofauditsconcerningsocialinfrastructure(3) Establishment of the (Second) Government
Auditing Consultative Committee(from 1995 to 2000)

improvement, social security, education, science,

The second Committee was established andinstitution, incorporated administrative agency,

held with new members in July 1995. In thisetc., in addition to the outline of annual audit

Committee, opinions were exchanged on themesreports. The Committee made up of said newof "current status and present issues of BOA,"

members was discontinued after the 14th meeting"conditions around audits and basic attitude,"held in December 2004 since almost all themes"ideal way of BOA in the future," etc., and trends

were discussed.

andtechnology,

foreignaffairs,

defense,agriculture, forestry and fisheries, special publicof audits concerning public projects, social
security,

agriculture,

forestryandfisheries,(External Members)
Name
Title
(Chair)YoshihikoRepresentative
DirectorandMIYAUCHI
Chairperson of ORIX Corporation
HarumiPresident of Saison Research Institute
SAKAMOTO
Hiroshi SHIONO Professor of University of East Asia
Naoki TANAKA Economic commentator
Tadahiro
Editorialistof
NikkeiShimbun
FUJIKAWA(participated until the 12th meeting)
Hiroshi
Professor of the University of TokyoMIYAJIMA(Title as of the time of initial participation of the member)

education, ODA, etc., for which social concerns
were high, in addition to an outline of annual
audit reports. The Committee made up of said
new members was discontinued after the 15th
meeting held in January 2000 since almost all
themes were discussed.

569

Part 3

Chapter 5

Changes in Other Operations

outline of annual audit reports.

(5) Establishment of the (Fourth) Government
Auditing Consultative Committee(from 2005 to 2008)(External Members)

The fourth Committee was established andheld with new members in April 2005. In this"current status of audits," "performance audit,""audit of basic accountancy," "audit of special
accounts," "audit of State-owned bodies," "crossaudits ofministries

and

Title

Subsection 3

Exchanging Information andOpinions with Other Relevant
Institutions, etc.

Representative Director and Chairpersonof USHIO INC.
Yuri OKINA
President of the Japan ResearchInstitute, Limited
Takeshi SASAKI Professor of Gakushuin University,
Faculty of Law
Nobuhiko SHIMA Journalist
Toshiki TOMITA Professor of Chuo University, Facultyof Law
Akio HARADA Lawyer(Title as of the time of initial participation of the member)Committee, opinions were exchanged on the

cutting

Name(Chair)Jiro USHIO

agencies,""internal audit, etc. of auditees and audit," etc., inaddition to the outline of annual audit reports.
The Committee made up of said new members
was discontinued after the 10th meeting held inMarch 2008 since almost all themes werediscussed.

Exchanging Information and Opinions with
Other Audit Institutions, etc.

(External Members)
Name(Chair)Kakutaro
KITASHIRO
KunikoINOGUCHI(1) Regular Meetings with Administrative
Evaluation Bureau of Ministry of Internal
Affairs and Communications

Title

Representative Director and Chairpersonof IBM Japan
Professor of Sophia University, Facultyof Law (participated until the 2nd
meeting)
Hiroko OTA
Professor of National Graduate Institutefor Policy Studies(participated from 3rd to 5th meetings)
Yuri OKINA
Counselor of the Japan ResearchInstitute, Limited (participated from the
6th meeting)Shinji KAYANO Editorialist of Yomiuri Shimbun,
Tokyo Headquarters
Koji SATO
Dean of Kindai University, Law School
Toshiki TOMITA Professor of Chuo University, Facultyof Law
Masaharu HINO Lawyer(Title as of the time of initial participation of the member)

BOA is established as an institution for
external audits and supervision of various kindsof financial management of the State, etc. At the
same

time,

administrativeevaluation

andmonitoring by the Administrative Evaluation
Bureau of Ministry of Internal Affairs andCommunications (administrative inspection by the
Administrative

Inspection

BureauoftheManagement and Coordination Agency before therestructuring of central government ministries and(6) Establishment of the (Fifth) Government
Auditing Consultative Committee(from 2008)

agencies in January 2001) were implemented to

The fifth Committee was established andunder the Cabinet. Therefore, the position andheld with new members in May 2008 andobjectives of audits by BOA and administrative

meetings were held four times as of December

evaluation and monitoring by the Administrative

2009.

were

Evaluation Bureau are different. However, there

exchanged on the "current status of BOA,"

are common points in their activities from the"performance audit," etc., in addition to theperspective of facilitating adequacy of financial

In

this

Committee,

opinions

assess and monitor the implementation status ofactivities at each administrative institution, etc.

570

Section 6

management

andstreamlining

Exchanges with the General Public and Relevant Institutions

the responsibility to supervise the financial

administrative

execution. Therefore, it was considered to be

managementofnecessary to understand the implementation statusappropriateness, and to correct them. BOA'sand comments of administrative assessment andaudits are not implemented with the aim ofmonitoring in terms of achieving high audit

determining the presence of bid-rigging. In

effectiveness with a limited lineup. In addition,

addition, since BOA does not have an audit

their relationship was discussed also by the Diet,

mandate with bidders other than successful

etc. Based on the aforementioned circumstances,

bidders, it is difficult for BOA to find out

it was determined to hold regular meetings

presence

between BOA and the Administrative Evaluation

probability. However, bid-rigging is an unlawful

Bureau in 1987 and since then opinions haveact of bidders and, at the same time, it is an issue

been exchanged proactively.

related to the proper and economic budget of aofauditees,bid-rigging

toor

ensure

to

their

judge

its

State or State-owned bodies, who are ordering

After introduction of the policy evaluation
system in January 2001, the regular meetings also

parties.

discuss on the implementation status of policy

between BOA and the Fair Trade Commission

evaluation,

ensuring

was considered to contribute to their activities.

uniformity and integrity by the Ministry ofConsequently, it was determined to hold regularInternal Affairs and Communications, etc.

meetings by the agreement in 2000 and thensuch

as evaluationofopinions

In addition, an opinion exchange meeting

Therefore,

have

been

mutualcommunicationexchanged

proactively

concerning each audit result and review result.

has been held once a year since 2005 between
the Deputy Secretary General of BOA and

In addition, in cases where the Fair Trade

executive members of the Ministry of InternalCommission demands remedies based on the Act

Affairs and Communications led by the Director

on Elimination and Prevention of Involvement inGeneral of the Administrative Evaluation Bureau,

Bid Rigging, etc. and Punishments for Acts byand opinions are exchanged concerning audits ofOfficials that Harm Fairness of Bidding, etc. (Act

BOA

and

No. 101 of 2002; commonly known as Act onmonitoring of the Ministry of Internal Affairs andPrevention of Bid Rigging Involving Officials),

Communications

the Fair Trade Commission notifies BOA of thatandadministrativefromevaluationacomprehensive

fact based on the additional resolutions, etc. of

perspective.

said Act.

Both regular meetings have become essential
from

the

perspectiveoffacilitating

communication and cooperation between BOA(3) Exchanges with the Japanese Institute ofCertified Public Accountants

and regulatory authorities of the administrative

Discussions, etc. are held regularly or as

evaluation and monitoring.

necessary in order to exchange with the Japanese(2) Regular Meetings with the Fair Trade
Commission

Institute of Certified Public Accountants despiteof the difference in the field, to facilitatehasexchanging opinions and information on means,

responsibility to crack down bid-rigging that

implementation status, and audit results of each

inhibits competition. On the other hand, BOA has

audit, and study results of said Institute, and to

The

Fair

Trade

Commission

571

Part 3

Chapter 5

Changes in Other Operations

facilitate mutual cooperation in public sector
auditing. Regular meetings are organized twice ayear since February 1986 (50 times in total).

572

Section 7

Information Disclosure and Protection of Personal Information

Section 7 Information Disclosure and Protection of Personal Information
Subsection 1

Information disclosure

hinder the proper execution of the said affairs
or business due to the nature of the said affairs
or business:(a) risk of making it difficult to understandaccurately facts concerning affairs pertaining toaudits, inspections, supervision, examinations,or imposition or collection of tax, or
facilitating unlawful or wrongful acts regarding
such affairs, or making it difficult to discoversuch acts;(b) to (e) (omitted)

1. Outline of the system
The Act on Access to Information Held byAdministrative Organs (Act No. 42 of 1999;
hereinafterreferred

to

as

the

"Information

Disclosure Act") was enacted in May 1999, andput into effect in April 2001. This Act applies toadministrative organs including BOA.
Article

5

of

the

current

Information

Disclosure Act provides for the framework fordisclosure and non-disclosure of administrativeAs

indicated

above,

the

Information

DisclosureAct

clearlyprovidesthat

administrative documents should be disclosed in

documents as follows.

principle, and at the same time, it recognizes thatkeeping those documents undisclosed is necessary( Obligation
toDisclose
Administrative
Documents)
Article 5 When there is a disclosure request,
unless any of the information listed in each of
the following items (hereinafter referred to as"non-disclosure information.") is recorded in
the administrative documents pertaining to thedisclosure
request,
the
head
of
an
administrative organ shall disclose said
administrative documents to the disclosure
requester:(i) to (iv) (omitted)(v) information
concerning
deliberations,
examinations or consultations internallyconducted by or mutually conducted between
state organs, incorporated administrative
agencies, etc., local public entities and local
incorporated administrative agencies, wheredisclosure is likely to cause unjust harm to theopen exchange of opinions or the neutrality ofdecision making, cause unjust confusion among
citizens, or bring unjust advantages or
disadvantages to specific individuals;(vi) information concerning the affairs orbusiness conducted by a state organ, an
incorporated administrative agency, etc., a local
public entity or a local incorporated
administrative agency, where disclosure is
likely to have the following risks or is likely toin some cases in order to protect rights andinterests of private persons and to protect the
public interest. The Act sets forth the six types of
information in items (i) to (vi) of said Article as
information that should be kept undisclosed
exceptionally.
The

amendment

of

the

BOA

Act

accompanying the enactment of the Information
Disclosure Act is discussed in Part 3, Chapter 4
and Section 1.
2. Status of operations
disclosure at BOA

for

information(1) Organizational structure for operations
At BOA, the Legal Affairs Division (or theManagement Division until March 2009) is inchargeoftheoperations

for

information

disclosure. When a request for information
disclosure is filed, the Senior Director of theLegal Affairs Division (or the Senior Director of
the Management Division until March 2009)
receives the request, and the relevant senior
573

Part 3

Chapter 5

Changes in Other Operations

・Information on matters specified in audit
plans, such as the focus of audit, humanresources allocation within the audit
division, audit aspects, and audit methods

director who is the document manager of theadministrative document in question deals withthe case, following the disclosure decision madeby the person authorized to decide on the matter.

・Information on the availability and content
of external information(2) Review criteria for deciding whether or not
to disclose the requested information, etc.

・Information on the plans for conducting
field audits or the status of field audits
conducted in the current audit year, which
are recorded in field audit reports, written
traveling orders and other documents

When a disclosure request is filed, BOA
examines whether or not the information recordedintheadministrative

document

for

which

・Information on the names of BOA staff
members recorded in fields audit reports,
written traveling orders, proposals anddeliberation materials related to annual
audit reports and other documents, bywhich the officials in charge of specific audit
issues or the officials sent to field audits on
specific audit entities can be identified

disclosure is requested falls within any categoryof non-disclosure information, whether or not thedecision to disclose the information should bemade as requested, and other matters, according
to the Review Criteria for the Request for
Information Disclosure (decided by the President(3) Data on disclosure requests, etc.

of BOA on March 29, 2006).

The table below shows the number ofWith regard to information recorded indisclosure requests and other data for each fiscal

administrative documents held by BOA, theyear.

Review Criteria set forth the following types of
information as information that falls within the

Numbers of disclosure requests received, disclosure
decisions made, etc.
(unit: cases)

categories of non-disclosure information referred
to in Article 5, items (v) and (vi) of theRequests received,
etc.

Information Disclosure Act.

Total

Partialdisclosure

Fulldisclosure

Non-disclosure
decisionsDisclosure
decisions
Total

・Information on audit results, etc. recorded
in inquiry letters to auditees prepared andsent under Article 26 of the BOA Act(hereinafter referred to as "inquiry letters")
or response letters received in response to
the inquiry letters

Transfers of
cases

FY

Disclosure
requests

・Information on the results of field audits,
etc. recorded in field audit reports

Decisions made

2001
215
7
222
7
113
24
144
2002
55
6
61
13
27
4
44
2003
53
5
58
9
26
10
45
2004
108
6
114
3
35
10
48
2005
67
9
76
6
30
5
41
2006
71
12
83
5
40
6
51
2007
26
17
43
2
12
14
28
2008
46
10
56
4
18
26
48
Note: "Transfers of cases" mean cases transferred to BOA
under Article 12 of the Information Disclosure Act.

・Information on audit results, etc. recorded
in proposals and deliberation materials
related to annual audit reports
・Information on various types of audit
materials that have been used or are
expected to be used as basic materials for
preparing inquiry letters or mattersreported in annual audit reports andexplanatory materials related to the reports

Subsection 2

・Information on details of discussions at
meetings of the Commissioners recorded in
the minutes
574

Protection
informationofpersonal

Section 7

Information Disclosure and Protection of Personal Information

disclosure, correction, or suspension of use of

1. Outline of the system

retained personal information is filed, the Senior

In May 2003, five laws were enacted
theDirector of the Legal Affairs Division (or theProtection of Personal Information (Act No. 57 ofSenior Director of the Management Division until

2003), as a general law that provides for the

March 2009) receives the request for disclosure,handling of personal information; and the Act onetc., and the relevant Senior Director who is thethe Protection of Personal Information Held byprotection manager of the retained personal

Administrative Organs (Act No. 58 of 2003;

information in question deals with the case,"Administrative Organs

following the disclosure decision, correction

simultaneously,

including:

the

Act

Personal

on

Information
targetingdecision, and the decision of suspension of use

administrative organs including BOA. These laws

made by the person authorized to decide on thecame into effect in April 2005.

matter.

ProtectionAct"),

Thea

specialAdministrativelaw

Organs

Personal(2) Review criteria for deciding whether or not
to disclose the requested information, etc.

Information Protection Act covers all personal
administrative

When a request for information disclosure,documents, and provides for individuals' right toetc. is filed, BOA examines whether or not therequest correction and right to request suspension

retained personal information in question falls

of use, in addition to the right to request

withindisclosure of their personal information.

information, whether or not the decision to

information

recordedinany

categoryofnon - disclosure

The framework for disclosure and non-disclose or not to disclose the information, etc.

disclosure of information prescribed in Article 14

should be made as requested, and other matters,ofPersonal

according to the Review Criteria for the Request

Information Protection Act is the same as thatfor Disclosure of Retained Personal Informationprescribed in the Information Disclosure Act, and(decided by the President of BOA on March 23,

the types of non-disclosure information are2005).

theAdministrative

OrgansWith regard to personal information held bybasically identical under these two Acts.
the

BOA

Act

BOA, this Review Criteria set forth the types of

of

the

information that falls within the categories ofInformation

non-disclosure information referred to in Article

Protection Act is discussed in Part 3, Chapter 4

14, items (vi) and (vii) of the Administrativeand Section 1.

Organs-held Personal Information Protection Act,

The

amendmentofaccompanying

theenactment

Administrative

Organs

Personal

which are basically identical with the types of
2. Status of operations for protection
personal information at BOA

information set forth in the abovementionedof

Review Criteria for the Request for Information
Disclosure.

(1) Organizational structure for operations(3) Data on disclosure requests, etc.

At BOA, the Legal Affairs Division (or theManagement Division until March 2009) is in

The table below shows the number ofcharge of the operations for protection of

disclosure requests and other data for each fiscal

personal

year.

information.

When

a

requestfor575

Part 3

Chapter 5

Changes in Other Operations

When an objection is filed with regard to

Numbers of disclosure requests received, disclosure
decisions made, etc.
(unit: cases)
Requests received,
etc.

Disclosure Act or the Administrative Organs
Personal

Information

Protection

Act,

the

President of BOA is to consult with the Review

Total

Partialdisclosure

Fulldisclosure

Non-disclosure
decisionsDisclosure
decisions
Total

Transfers ofcasesDisclosure
requests

FY

BOA's decisions made under the Information

Decisions madeBoard, in principle (Article 18 of the Information
Disclosure Act, Article 42 of the Administrative

2005
0
0
0
0
0
0
0
2006
0
0
0
0
0
0
0
2007
32
0
32
0
0
4
4
2008
2
0
2
0
0
3
3
Note 1: "Transfers of cases" mean cases transferred to BOA
under Article 21 of the Administrative Organs
Personal Information Protection Act.
Note 2: As of the end of FY2008, BOA has not received acorrection request or request for suspension of use.

Organs Personal Information Protection Act, andArticle 19-2 of the BOA Act).
The

Review

Board,

when

consulted,

considers from a third party perspective whether
BOA's decision is legal and appropriate, and thePresident of BOA makes a determination basedon the opinion of the Review Board, which is

Subsection 3

expected to result in an objective and reasonable

Information Disclosure andPersonal Information Protection
Review Board of BOA

solution.
While ordinary administrative organs, etc.

1. Outline of the organization

are supposed to consult with the Information(1) Establishment and role

Disclosure and Personal Information Protection
Act

Review Board established within the Cabinet

coming into effect in April 2001, the Information

Office, BOA has its own Review Board because

Disclosure Review Board of the Board of Audit

it has a status independent from the Cabinet.

was established as an organ which the President(2) Members

Upon

the

Information

Disclosureof BOA is to consult with when an objection is

The Review Board is composed of three

filed with regard to its decision to disclose

members, all of whom are to serve on a part-timeadministrative documents and other decisions

basis. They are appointed by the President ofmade under said Act.

BOA with the consent of both Houses.
The members of the Review Board holdIn April 2005, when the Administrative

office for three years and may be reappointed.

Organs Personal Information Protection Act came

The Chair of the Review Board is elected byinto effect, this Review Board also assumed thethe members from among them.

role as an organ which the President of BOA is
to consult with when an objection is filed withregard to its decision to disclose, correct, or

List of members of the Review Board (title as of
the time of appointment)

suspend the use of retained personal informationand other decisions made under said Act, and the〈From April 1, 2001, to March 31, 2004〉
Chair: Mitsuaki USUI (professor, University ofTokyo)
Member: Kazutoyo
SUMITA( professor,
Yokohama National University)

Board was reorganized into the Information
Disclosure and Personal Information Protection
Review Board of the Board of Audit ("Review
Board").
576

Section 7

Information Disclosure and Protection of Personal Information
Investigation and deliberation procedure

Member: Riyako GODAI (commentator)〈From April 1, 2004, to March 31, 2007〉
Chair: Mitsuaki USUI (professor, University ofTokyo)
Member: Masao KAWANO (professor, Chuo
University)
Member: Tomiko HAYASAKA (professor, Toin
University of Yokohama)〈From April 1, 2007〉
Chair: Kunitaka OGISO (notary)
Member: Masao KAWANO (professor, Chuo
University)
Member: Tomiko HAYASAKA (professor, Toin
University of Yokohama)Consultation
Submission of written opinion (BOA)
In-camera hearing (note)
Submission of written opinion(objector/intervener)
Deliberation
the issueonSubmission of additional
written opinion when necessary(BOA and objector/intervener)

Deliberation on the draft opinion of the Review Board
Opinion of the Review Board
Note: The procedure whereby the Review Board members
request BOA to present the administrative documentsor retained personal information related to BOA's
decision and inspect these items for themselves, sothat they can quickly and appropriately determine
whether or not the disclosure or non-disclosure
decision, etc. made by the Secretary General with theauthority delegated by the President of BOA is legal
and appropriate.

(3) Office of the Information Disclosure andPersonal Information Protection Review
Board of BOA
In April 2001, the Office of the Information
Disclosure Review Board of the Board of Audit
was established within the Legal Affairs Division
as an organ in charge of administration of theaffairs of the Information Disclosure Review
Board. The Office was renamed the Office of the

3. Status of operation of the Review Boardand handling of consultation cases

Information Disclosure and Personal Information

The following table shows the number of theProtection Review Board of the Board of Audit

Review Board meetings held, and the status ofin April 2005, and transferred to the Audit Policy

handling of consultation cases related to the

Planning Division in April 2009.

disclosure decisions, etc. under the Information
Disclosure Act and the Administrative Organ
Personal Information Protection Act.

2. Investigation and deliberation procedure
The following chart shows the basic flow of
the investigation and deliberation procedure at the

4. Opinions given by the Review Board in pastcases

Review Board (subject to changes depending on
the circumstances of the consultation cases(1) Cases in which the subject of consultation
was audit materials, etc.

actually brought to the Review Board).

・Consultation Case No. 1 of 2001: Case on thedecision not to disclose the questions andsubmitted documents on the specific subject
matter regarding the project commissioned by
the Ministry of Education, Science and Culture(the part of the project targeting Yamanashi
Prefecture) (the consulting authority's decision
577

Part 3

Chapter 5

Changes in Other Operations

Number of meetings, consultation cases, and opinions

Information
Disclosure Act

FY
Meetings
Consultation
Opinions

2001
12
10
1
(1)
9

2002
12
16
6
(1)
10

(unit: times or cases)
2003
12
19
11
(6)
8

2004
12
8
4
(4)
4

2005
11
8
4
(2)
4

2006
12
10
6
(3)
4

2007
11
10
3
(3)
7

2008
11
13
6
(6)
7

Pending
Administrative Consultation
―
―
―
―
0
0
4
4
Organs-heldOpinions
―
―
―
―
0
0
2
4
Personal(2)(4)
Information
Pending
―
―
―
―
0
0
2
0
Protection Act
Notes: 1. The number of consultation cases in each fiscal year includes the number of cases pending as of the end of the previous
fiscal year.
2. The figure in the parentheses in the column of the number of opinions in each fiscal year represents the number of
opinions in which the Review Board found the consulting authority's decision to be appropriate.

disbursement related to the matters found in

found appropriate)

the audit (the consulting authority's decision

・Consultation Case No. 1 of 2003: Case on thefound appropriate)

decision not to disclose the audit materials of
the FY2002 State-subsidized project involving
the citrus shipping facility constructed by a(2) Cases in which the subject of consultation
was field audit reports

specific agricultural cooperative (the consulting

・Consultation Case No. 1 of 2005: Case on thedecision to partially disclose the documents

authority's decision found appropriate)・Consultation Case No. 7 of 2003: Case on the(field audit report) in which the audit results

decision not to disclose the documents written

were recorded with regard to the audit

or prepared by the officials sent to the field

conducted in February 2003 on a specific local

audit conducted in April 2003 on a specificgovernment's model project for development ofauditee (the decision to refuse to answer on thelodging facilities in an underpopulated area

existence of the documents) (the consulting(the consulting authority's decisionauthority's decision found appropriate)partially inappropriate)

found・Consultation Case No. 2 of 2005, and two

・Consultation Case No. 2 of 2006: Case on theother cases: Three cases including the case on

decision to partially disclose the field audit

the decision to partially disclose the documents

report of the field audit conducted in May

concerning the improper/unreasonable matters

1996 on a specific local government (thefound in the field audit conducted in 2002 on a

consulting

specific social insurance office (the consulting

appropriate)

authority's

decision

foundauthority's

decision

foundpartially(3) Cases in which the subject of consultation
was audit results and other records

・Consultation Case No. 3 of 2006, and another・Consultation Case No. 6 of 2007: Case on thecase: Two cases including the case on thedecision to partially disclose specific pages ofdecision

documents"FY1998 History of the Japan Air Self-Defense

concerning FY2005 audit on a specific Labor

Force" prepared by the Chief of Staff JASDF

Bureau and the documents concerning its(the consulting authority's decision

inappropriate)

not

to

disclose

the

578

found

Section 7

Information Disclosure and Protection of Personal Information

partially inappropriate)(4) Cases in which the subject of consultation
was the operation manual of the audit
division・Consultation Case No. 2 of 2007: Case on thedecision not to disclose the operation manualof the audit division (the consulting authority's
decision found partially inappropriate)579

Part 3

Chapter 5

Changes in Other Operations

Section 8 Working Conditions
Subsection 1

in August 1960.

BOA Office Building

Later, on the main building of the former
1. Changes in BOA Office Building

BOA office building, exterior tiles were replaced(1) Return to Main Building of the Former
BOA Office Building

in 1963; air conditioners were introduced in 1969
and 1970; and elevators for the book storeroom
building were added in 1973.

The main building of the former BOA officebuilding, which was constructed on the site of theImperial College of Engineering in March 1935,(2) Construction of the Annex of the Former
BOA Office Building

was determined to be used by the Ministry of

Although BOA returned from the former

Munitions in November 1943 and BOA wasoffice building of the MESC to the main building

relocated to part of the nearby former officeof the former BOA office building, the space ofbuilding of the Ministry of Education, Science

the office building reached a limit due toand Culture (MESC). The number of employees,

increases in the number of employees and in

which

to

operation volume. Therefore, it was determinedorganizational

to build a new annex of the BOA office building.

expansion along with enforcement of the new

The automobile garage in the courtyard was

BOA

floor

dismantled in 1964 and the annex of the former(approximately 874 m2) was expanded on the

BOA office building (building area of 576 m2

rooftop of the fourth floor of the former officeand total floor area of 5,196 m2), a steel-framed,building of the MESC in October 1950. In

reinforced concrete structure with one basement

addition, one floor (approximately 452 m ) was

floor and six stories above ground, was built on

expanded on the rooftop of part of the sixth floor

the site of the automobile garage in June 1966.

of said office building in December 1955.

Immediately after completion of construction of

was

less

approximately
Act

in

than

1,200
1947.

300,

due

to

increased

Therefore,one

2

At the same time, the main building of thethe annex, a kiosk was located on the basement

former BOA office building had been used by thefloor, an automobile garage on the first floor, part

Ministry of Commerce and Industry since Augustof the Secretariat on the Second floor, and five

1945, and then by its successor, the Ministry of

BureausInternational Trade and Industry starting in May

respectively.

on

the

Third

floor

and

above

1949. During that time, one floor was expanded

In addition, in July 1979, three stories, aon the rooftop of part of the fourth floor. Then,

total floor area of 2,131 m2 were added on theconstruction was expanded on the east siderooftop of the sixth floor of the annex of the(approximately 709 m2) in September 1951 andformer BOA office building. For this floor

on the west side (approximately 739 m ) in April

expansion

1952 respectively. After that, more than 16 years

aggregate concrete was used. The ninth floor was

following the relocation to the former officesteel construction. In order to improve thebuilding of the MESC, the BOA returned to theseismic adequacy of the overall building, post-

main building of the former BOA office building

cast reinforced concrete walls with seismic

2580

construction,

artificial

lightweightSection 8

Working Conditions

adequacy were added from the first to sixth

increasing volume of documentary evidence, etc.

floors. Along with the floor expansion of the

could no longer be stored with these warehouses.

annex building, the canteen, which was on the

Therefore, it was determined to build a new

fourth floor of the book storeroom building, waswarehouse for storage of documentary evidence,

moved to the eighth floor; and the auditorium,

etc. in Oji, Kita-ku, and construction of thewhich was on the fifth floor of the main building

warehouse, a reinforced concrete structure withof the former BOA office building, was moved toeight stories (building area of 841 m2 and total

the ninth floor respectively.

floor area of 6,628 m2) was completed in
November1971

administrative( constructionbuilding

wasofcompletedtheinDecember 1971).
Along with completion of the constructionoftheevidence,

Oji
etc.

Book

Storeroom,

storedseparately

documentary
in

book

storerooms in Mishuku and Nakanocho werestored together in the Oji Book Storeroom.
Renovation of the warehouse in Nakanocho,
which was no longer necessary, started in

Former BOA office building viewed from Sannenzaka

November 1972 and it was completed in March
1973 to become a sub-office of BOA used fortraining, etc.

Entrance hall of the main building of the former BOA
office building(3) Changes in Book Storeroom
After enforcement of the new BOA Act in
1947, with respect to a book storeroom to store
documentary evidence, etc., a new warehouse, areinforced concrete structure with three stories(total floor area of 1,004 m2) was built in
Nakanocho, Ichigaya, Shinjuku-ku in 1952; andnew warehouses, two wooden buildings with twostories (total floor area of 1,190 m2) were built in
Mishuku, Setagaya-ku in 1955. However, theSub-office of BOA (Nakanocho, Ichigaya, Shinjuku-ku)
581

Part 3

Chapter 5

Changes in Other Operations

Project."(4) Development of New BOA Office Building

Since this project requires redevelopment of

A. Background of Renovation of the BOA
Office Building

the entire city block, the Community Planning

More than 60 years after construction of theCouncil of Kasumigaseki 3-chome South Area,

former BOA office building and the former office

which consists of landowners, etc., including

building of the MESC (constructed in 1933) and

BOA, was established in July 2001. The Council

they were in a state where smooth operation

prepared the Proposal for Community Planning of

could be hindered due to deterioration, etc. from

Kasumigaseki 3-chome South Area stating thataging. For this reason, development of Central

the area in question is a unique area where

Government Building No. 7 in which BOA andgovernment and the private sector exist together

the Ministry of Education, Culture, Sports,

and that their aim is to create a town in this area

Science and Technology were located, wasthat would lead into the 21st century; and theyscheduledforsubmitted the proposal to the Tokyo Prefecture

Development of Construction of Government

and Chiyoda-ku in December 2001. Development

Buildings and Facilities of the Ministry of Land,of the entire town was implemented by the TypeInfrastructure, Transport and Tourism, which is

1 Urban Development Project of Kasumigaseki 3-

responsible

chome South Area with the Urban Development

inthe Thirdfor

10-Yearbuilding

and

Plan

repairsofCorporation (current Urban Renaissance Agency)

government buildings.
Under the aforementioned situation, theas the builder.

promotion of the "21st Century-type Urban

Regardingdevelopment

of

the

CentralRedevelopment Project" and the "Proactive Use

Government Building No. 7, based on the Act on

of

were

Promotion of Private Finance Initiative (Act No.

determined as part of specific measures of an

117 of 1999), a policy on implementation of theemergency economic package of the government

PFI project was announced in June 2002 and an

in April 2001. In addition, "Development ofassessment was conducted as to whether it would

Central Government Buildings and Facilities with

be efficiently and effectively implemented by

PFI" was determined as a project of the firstusing private funds, management ability, andurban redevelopment project by the Urban

engineering ability as a PFI project. As a result, it

Rejuvenation Headquarters in June 2001. In order

was selected as a PFI project for the design,

to provide inexpensive and good quality services

building, maintenance and management, etc. ofby using private funds and know-how, etc. and to

the government building in August 2002, and it

create business opportunities for the private

was determined that the Ministry of Land,sector,the

Infrastructure, Transport and Tourism would

Centraldevelop the government building using theGovernment Building No. 7 using the PFI

designated builder system of urban development

method and a survey of redevelopment of the

projects. Subsequently, PFI project vendors wereentire city block, including said government

selected by scoring auction in April 2003.

buildings and facilities. This urban redevelopment

Arrangements

project was later named "Kasumigaseki R7

construction, maintenance, and management of

PFI(Privateitwasaforementioned

Finance

Initiative)"

determineddevelopmenttoconduct
of

582

and

agreements

relatedtoSection 8

Working Conditions

the Central Government Building No. 7 weremeeting rooms, book storeroom, etc. wereconcluded in June 2003 and it was determinedarranged as shown in Table 1.

that scheduled completion of construction of theDuring the relocation to the temporary office

government building would be at the end ofbuilding, relocation of documentary evidence,

September 2007, the PFI project method would

furniture and fixtures, etc. took approximately

be the Build Transfer and Operate method

one week in December 2003. The year-end(ownership will be transferred to the State after

ceremony of that year was held in the temporary

completion of construction of buildings andoffice building. Before the year-end ceremony, afacilities), and the project term would be 19 years

farewell ceremony for the BOA office building

from fiscal year 2003 to fiscal year 2021.

was held in the elevator hall on the first floor of

B. Relocation to Temporary Office Building

the former BOA office building on December 18.
Mr. Tsutomu SUGIURA, the President of BOA

Along with implementation of this Project, it
was determined to dismantle part of the former

and

Mr.

Masakuni

SEKIMOTO,

Secretary

office building of the MESC and the former

General gave speeches on their memories of the

BOA office building. Therefore, BOA wasformer BOA office building.

relocated to temporary office building until

BOA was located in the temporary officeconstruction of the new office building isbuilding for four years. Kanda is a town ofcomplete.

students and used bookstores and is a lively

On

the

selectionoftemporary

town.

officeTherefore,

it

left

us withavivid

impression.

building, in consideration of conditions, such as
securing floor area that is enough to store
documentary evidence, etc. so that it will not

Table 1 Arrangement of Divisions in the Temporary
Office Building (After the organizational reformin April 2005)

hinder audits, it was eventually determined to use
the Jinbocho Mitsui Building, which is located at

Floor
South
North
9
SeniorAssistant Research &Secretary
General ; International Division,
Technical
Counselor ; library,andbook
Audit Policy Planning storeroom
Division,
Audit
TechniqueandMethodology
Study
Division, and Health &WelfareService
Division ;Training
Division; and auditorium
8
President, Commissioner, Assistant
Secretary
Commission
meeting General for Secretariat,
room, Special meeting Management Division,room, Secretary General, Secretariat
meeting
DeputySecretary room,
Adjudication
General, and Personnel Division, Legal Affairs
Division
Division, and Review
Board
7
Information& Director General of theCommunication
Audit 5th Bureau, AssistantDivision,
Trade& Secretary General, 5thIndustry Audit Division, Coordination Division,

1 Kandajinbocho, Chiyoda-ku and for whichconstruction was completed in March 2003, as
temporary office building. This building is an
office building (total floor area of 88,648 m2) of
steel

and

partialsteel - reinforced

concreteconstruction with three stories underground and
23 stories above ground, and which is located in
the east city block of J. City, Tokyo, which was
created in the Urban Development Project ofJinbocho 1-chome South Area. As its temporary
office building, BOA leased part of the first floor
to the ninth floor with total floor area of 20,246
m2. In these temporary office building, thePresident's office, Commissioner's office, workrooms of the Secretariat and other Bureaus,583Part 3

6

5

4

3

2

1

Chapter 5

Changes in Other Operations

Natural Resources & Postal Services Audit
Energy Audit Division, Division,
meeting
Government
Financial rooms for Bureau, andInstitutions
Audit book storeroom
Division,
Railways
Construction
Audit
Division, Special Issues
Audit
Divisionfor
Ministries, and Special
Issues Audit Division forAgencies
Education
Audit Director General of theDivision, Science & 4th Bureau, AssistantTechnology
Audit Secretary General, 4thDivision,
National Coordination Division,
University
Audit meeting rooms for
Division,
Agriculture Bureau,
and
book
Audit
Division, storeroom
Agricultural
Infrastructure
Audit
Division, Fisheries &Livestock
Audit
Division, and Forestry
Audit Division
Construction Planning & Director General of the
Housing Audit Division, 3rd Bureau, AssistantPort & Aviation Audit Secretary General, 3rdDivision,
Water Coordination Division,
Resources
Audit meeting rooms for
Division,
Road Bureau,
andbookConstruction
Audit storeroom
Division, Urban & Rural
Development
Audit
Division, Aviation Audit
Division, and Highway
Audit Division
Ground Defense Audit Director General of theDivision,
Maritime 2nd Bureau, Assistant
Defense Audit Division, Secretary General, 2ndAir
DefenseAudit Coordination Division,
Division,
Health& meeting rooms for
Welfare Audit Division, Bureau,
andbook
Labor Audit Division, storeroom
Medical
Care
Audit
Division, and Public
Pension Audit Division
Finance Audit Division, Director General of the
National Property Audit 1st Bureau, AssistantDivision, Judicial Affairs Secretary General, 1st
Audit Division, Foreign Coordination Division,
Affairs Audit Division, meeting rooms for
1st Tax Audit Division, Bureau,
andbook
2nd Tax Audit Division, storeroom
and 3 rd Tax Audit
Division
Accounts
Division, Printing Center, Book
Information& storeroom
Communication
Technology Division
Guards'
Office,Documents
andCoordination
Section,Contact Point for thedisclosure request forholding
information
includingpersonal
information,
PublicRelations Section

Full View of Jinbocho Temporary Office Building

C. Demolition of the Former BOA Office
Building
The main building of the former BOA officebuilding, which was determined to be demolished
due to rebuilding of the BOA office building,was valued as a government building with a long
history on which construction was completed in
1935. However, since part of the former officebuilding of the MESC was determined to bepreserved as a symbolic building recovered fromthe Great Kanto Earthquake, it was determined toreuse the front gate doors and lighting fixtures,etc. of the elevator hall of each floor that were584

Section 8

Working Conditions

used in the main building of the former BOA

skyscraper buildings (a government building andoffice building and to maintain the atmosphere ofa joint government and private sector building),

the former BOA office building in the new

shops, squares, etc. were developed by the urban

building. The former BOA office building weredevelopment project as a joint facility forthen demolished in 2004. An outline of thegovernment and the private sector. It wasformer building that was demolished is given in

determined that BOA and the Ministry of

Table 2.

Education,

Culture,Sports,Scienceand

In addition, land and buildings, etc. thatTechnology would use the government building

BOA managed previously were converted to land

and the Financial Service Agency would use partbased on the rights conversion plan under theof the government and private sector building

urban redevelopment project in December 2004.

respectively. Overall, these parts (including the

However, supervision of said land was transferred

former building of the MESC to be preserved)

in April 2007 to the Ministry of Education,

were developed as Central Government Building

Culture, Sports, Science and Technology, which

No. 7 as stated in Table 3.

is the management government office of Central

When developing the new BOA office

Government Building No. 7. Therefore, there

building, in order to conserve the atmosphere of

were no more government premises managed by

the main building of the former BOA officeBOA.

building, the preserved front gate doors wereused as the front gate doors of the government

Table 2 Outline of the Former BOA Office Buildingbuilding and the preserved lighting fixtures, etc.

Item
Structure

Main Building
Annex Building
Reinforced
Steel-reinforced
concrete structure
concrete structure
One story
One story
underground and 5 underground and 9
stories above ground stories above ground
576 m2
Building area
2,834 m2
2
Total floor area
15,455 m
7,328 m2

were used for the wind break room at the gatewith a driveway on the first floor and an
exhibition room on the second floor respectively.
In addition, in order to maintain the atmosphereof the main building of the former BOA officebuilding and Sannenzaka street, the eaves of thefront gate of the Financial Service Agency, whichuses the government and private sector building,
kept the atmosphere of the front gate of the mainbuilding of the former BOA office building.
Since this project was a joint re-developmentof an entire city block by the government and theprivate sector, the entire area was named"Kasumigaseki Common Gate."
Table 3 Outline of Central Government Building No. 7

Full view of former BOA Office Building (air photography)
Item

Government Building

D. Outline of New BOA Office Building
Structure

As mentioned above, under this project, two
585

Steel-framed

Government andPrivate Sector
Building
Steel-framed

Part 3

Chapter 5

Scale

Changes in Other Operations

structure, and partial structure, and partial
steel-reinforced
steel-reinforced
concrete structure
concrete structurestoriesTwostories Threeunderground and 33 underground and 38
stories above ground stories above ground
Approximately 156 m Approximately 176 m

MaximumheightFloor - area
950%
950％
ratio
Total floor
Approximately
Approximately
area
118,700 m2
114,600 m2
BOA (20F to 32F)
Financial
Service
Residentof Agency(lowergovernment Ministry
Education,
Culture, stories)
offices
Sports, Science andTechnology

E. Relocation to New Office Building
ConstructionofCentralGovernment

Building No.7 was completed at the end of
September 2007 and a commemoration ceremony
for the completion was held at the auditorium on
the third floor on October 2, 2007. Mr. Muneharu
OTSUKA, the President of BOA and other BOA

Office Building (the government building of Central
Government Building No. 7)

officials participated in the ceremony. Later,
working conditions were arranged, such as that

2. Annaka Training Center

the BOA internal network was established; newly
purchased fixings were delivered; desks for

The Annaka Training Center of BOA wasofficials were also replaced; and movable bookopened as a training camp facility in Octoberracks were newly installed in offices, etc.

1992 since it was determined to develop a new

In addition, part of the furniture and fixtures,training facility due to deterioration and limited

etc. that were used in the temporary officespace of the sub-office of BOA, which wasbuilding were relocated first, starting in lateestablished in 1973. It was determined to build

November 2007, and then documentary evidence

the training facility in Annaka City, Gunma

and books, etc. stored in the library were also

Prefecture in cooperation with the government

relocated. Relocation of furniture and fixtures,

policy of relocation of one organ of a ministry oretc., and documents in offices and meetingan agency to a rural area. With respect to therooms, etc. took approximately one week in theconstruction project, the Special Account for

middle of December and relocation of BOA to

Designated National Properties Consolidation was

the new office building was completed without

used from June 1989 and the project was

any problems.

implemented by converting the supervision ofpremises and the building of the sub-office of
BOA with the Kanto Local Finance Bureau.
The new training facility has a site area of586

Section 8

Working Conditions

33,017 m2, where there is an administrative andtraining building (reinforced concrete structurewith three stories), a welfare building (reinforced
concrete structure with one story underground
and

two

storiesaccommodation

above

building

ground ) ,(reinforced

anconcrete

structure with two stories), a special practicebuilding (reinforced concrete structure with twostories), and a gymnastics hall, which can also be
used as an auditorium (reinforced concrete

Front gate of Annaka Training Center

structure with one story). The total floor area is6,992 m2. In addition, a survey practice site

Subsection 2(triangulation point and bench mark), etc. was

Housing Facilities

also prepared on the premises as an exterior
facility. More effective training using training

Regarding housing facilities for officials, atechniques that were not implemented well under

great effort was made to secure housing forthe previous training organizational structure,

officials, such as the 11 lodgings secured insuch as discussion, practice, etc., is implemented

Takinogawa, Kita-ku in the spring in 1947, ain this facility.

building with two stories that were purchased in

Later, it was determined to acquire land

Kamitakada, Nakano-ku in September 1947 to(area of 9,068 m ) to the west of the training

use as a bachelors dormitory with a capacity offacility and to develop construction audit training

28 persons as a measure for housing facilities forfacilities. In November 1998, a construction audit

officials in view of ensuring stable service

training

efficiency due to the housing shortage soon after2

building,

which

is

a

steel-framed

World War II.

structure with one story (total floor area of 786

BOA housing facilities after World War IIm2) was built and full-size structure models, such
as

road

paving,retainingwalls,

are as stated in the following table.

bridges,

Furthermore, since other ministries andarchitectural structures, etc., were developed inonagencies' housing facilities fell in the shortage of

construction audits is implemented using these

supply after World War II, in addition to BOA,

facilities.

laws were passed in 1949, construction and

March

1999.

More

practical

training

operation of housing facilities were implemented
only by the Ministry of Finance, and joint
housing facilities were prepared so that they
could be assigned to ministries when theconstruction was complete. One house from
Nishigahara housing was assigned to BOA at theend of 1949. In 1950, joint housing facilities ofreinforced concrete apartments in Shinjuku and587

Part 3

Chapter 5

Changes in Other Operations

would be relocated and reassigned. Therefore, it

Shirogane were assigned to BOA.
In June 2007, according to the report

was planned that BOA's Komagome dormitory,compiled by the Council for Review and Follow-

Ikenoue housing, and Takinogawa housing and

Up on Effective Use of National Properties of thedormitory would be discontinued.
As of April 2009, 205 houses in 86 sites of

Ministry of Finance, it was determined thatjoint housing facilities are assigned to BOA.

housing facilities in the 23 wards of Tokyo
Establishment Status of BOA Housing Facilities
Facility nameAcquisition date

Number ofbuildings

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

NakanoMasagocho
Kakinokizaka
HatsudaiTachiaigawa
ShimoumaOkusawa
IzumichoMorikawacho
Yukigaya
Kugahara
Mishuku
Mishuku
MishukuFujimaecho
Sakuragaoka
Ichibancho
Ikenoue
Ikenoue
Nakane-town
Nakanocho
Takabancho
Takinogawa 1
Takinogawa 2
Takinogawa 3
Takinogawa 4Todoroki
Takinogawa

Sep. 17, 1947
May 30, 1947
Apr. 13, 1948
Apr. 13, 1948
Apr. 21, 1948
Apr. 13, 1949
Aug. 23, 1949
Aug. 31, 1949
Sep. 6, 1949
Feb. 7, 1950
Feb. 20, 1950
Mar. 31, 1950
Mar. 31, 1951
Mar. 31, 1955
Mar. 19, 1951
Mar. 19, 1951
Mar. 31, 1951
Nov. 30, 1951
Dec. 20, 1952
Mar. 21, 1952
Mar. 31, 1952
Nov. 20, 1952
Jun. 10, 1954
Jan. 31, 1954
Mar. 4, 1958
Nov. 7, 1958
Mar. 31, 1962
Nov. 30, 1966

1
1
1
1
1
1
1
1
1
1
1
30
8
1
5
1
3
8
10
1
1
1
1
1
1
1
1
3

29

Komagome
Dormitory
Kashiwa
Ikenoue
IkenoueAnnakaMar. 31, 1970

1Mar. 26, 1975
Mar. 24, 1979
Mar. 29, 1980
Oct. 2, 1992

1
6
8
1

30
31
32

!
%
"
%
$

!
"
$

Building area /Abolishment date
Remarks
Total area
Tsubo / Tsubo
Feb. 14, 1967 Bachelor dormitory
52/ 80Mar. 31, 1971 Officials residence
104/148
Mar. 28, 1974
30/ 30Oct. 11, 1977
Bachelor dormitory
17/ 26
Dec. 15, 1958 Bachelor dormitory
52/ 68Jun. 21, 1978
26/ 2627/ 27Mar. 31, 1971
20/ 20
Apr. 26, 1965
14/ 24
Sep. 16, 1967
19/ 19Jan. 19, 1970
22/ 22!
!
" Jul. 29, 1963 %Relocated to Mishuku joint"
468/468 $housing facility
May 11, 1964 %$Jul. 9, 1969
Rebuilt in 1954.
81/ 81
Jul. 26, 1976
20/ 30
May 28, 1970
73/ 73!
"Rebuilt in 1956.
278/278$
Oct. 3, 2006
Rebuilt on Feb. 29, 1972.
37/ 47
Nov. 30, 1973
15/ 15Jan. 13, 1976
37/ 46
Apr. 4, 1966 !
90/ 90
Apr. 4, 1966 #37/ 74"Rebuilt in 1953.
Apr. 4, 1966 #29/ 57
Apr. 4, 1966 $29/ 57
Sep. 2, 1998
30/ 48
Including two buildings of
615m2/2,263m2
bachelor's dormitory
266 / 799
Bachelor's dormitory
210 / 622
411 / 672
648 /1,020
137 / 412

History
of
the
Use
of
Information Technology (IT)the ADPS (Automatic Data Processing System)

1. Development of the Use of Large-Size
Computers for Audit Activities

and started investigation and research into the

BOA was early to focus on the impact of

BOA used the computers of auditees and thecomputers on audit activities. Thus, it establishedprivate sector alone. There were problems, such

Subsection 3

Team in the Special Programs Division in 1963,
possibility of using computers. In those days,

588

Section 8

Working Conditions

as not enough time for processing, inability to

Division in May 1987. In February 1988,

implement flexible operation, etc.; however, BOA

MicroVAX was installed in the Office and started

steadily accumulated know-how on the use of

the material search system to accumulate andcomputers.

provide materials and information as well as thelibrary management system to streamline library

Based on this know-how, the Basic Plan for

activities respectively in October 1988.

Audit Information System was established in July
1981. Based on the plan, general computer

Later, since the amount of processing

HITAC M-220H was installed in December 1983,

increased, the Information & Communicationand operation of the sub-system of the audit

Technology Division updated general computers

information management system and the payroll

to HITAC-M640/20 in January 1990 and thensystem was started for activities, such as field

HITAC-M860/40 in January 1995 to enhanceaudits, etc., from April 1984. In addition, theprocessing performance. At the same time, in

ADPS Team of the Special Programs Divisionorder to ensure contract transparency and reduce

was

the

expenses, etc., it was determined to change

Technology

general computer systems with specifications

Division was newly established as a special

unique to a specific manufacturer to an open

division to develop, operate, and manage, etc.

systemfull-scale computer systems.

competition of multiple manufacturers. Alongdevelopmentally

Information&

dissolved

Communication

andconsistingof

servers

procuredbyLater, in April 1985, the operation of thewith this, a newly developed system was built

Final Accounts Verification System (revenue andwith servers, the existing system was changed

expenditure) was started, the audit record system,from general computers to servers sequentially,

which was operated by the Management andand eventually general computers were removed

Coordination Agency was transferred to BOA in

and formulation of the open system was complete

October 1985, and thereby the use of computers

in December 2001.
Major systems operated as of December

installed in BOA was expanded.
In addition, with regard to the use of2009 are the following: the Final Accounts

computers for individual audits, data related to

Verification System, which has been operated

taxation started to be collected and analyzed infrom the start of installation of computers at

1985 and data processing related to labor

BOA, payroll system, registration system of audit

insurance started in 1986. Computers started torecords, business trip management system, andbe used for audits of cases set down in the

Audit Findings Retrieval System, as well as theannual audit report every year. At the same time,

library

the necessity of collection and effective use ofReports Database in which all texts of annualmaterials and information related to audits

audit reports are disclosed to the public, and thesignificantly increased. Therefore, in order tocommunication

implement clerical work related to collection andportals within BOA, etc.

management

system,systemAnnualincluding

email

Audit

and

management of said materials and information,
the Office of Data and Information was newly

2. Development of Personal Computers (PC)and Operation Processing

established in the Research & International
589

Part 3

Chapter 5

Changes in Other Operations

Major operations processed by PC in BOA(1) PC Development

are stated below.

PCs are important as an interface when
officials use the Final Accounts Verification

A. Data
Processing
Software, etc.

System and communication infrastructure, etc.

using

Spreadsheets

word

Data processing with PCs is used to find

full-scale

audit aspects and select sites to be further

introduction to BOA was two units of T560/20

investigated, etc. For example, in cases offor each Bureau and some units to the Secretariat

auditing

as general computing terminals in December

premiums, sites to be further investigated were1983. At the beginning, priority was given to use

selected based on a large amount of business site

as host computer terminals and therefore the time

data in order to implement efficient audits andto use them for spreadsheets and word processing

the selection would be impossible without PCs.

PCs appeared
processors;

mid-1970s along

however,theirfirst,

withthecollection

of

labor

insurance

In addition, PCs are also essential for

was limited. Under this situation, it was difficult

processing the tallying of improper amounts, etc.

to use them for full-scale use.
Later, in 1986, PC9801 desktop-type PCs

Along with the increase in the amount of data

were introduced sequentially to each audit

that can be handled by a PC, the number of audit

division. In fiscal year 1988, laptop-type PCs,

cases set down in the annual audit report after

which are called notebook-type today, started toprocessing more than 1,000 data items increased

be introduced. Then, the introduction of notebook

drastically from only three cases in the FY1989

PCs was implemented in series and in May 1999,

Annual Audit Report, which was five years afterorganizational structure where each official had

the introduction of the PC (simple sum total of

one PC was completed so that e-mail became

the amount of data was approximately 58,000), toavailable full-scale.

43 cases in the FY2007 Annual Audit Report(simple sum total of the amount of data was

In addition, light-weight mobile PCs wereapproximately 6,300,000).

introduced from 1999 in order to use them during

Moreover, some audit divisions built theirbusiness trips, such as field audits, etc., inaddition to the aforementioned PCs. 220 PC units

ownwere introduced by 2009. Mobile PCs were used

individual audits.

for word processing and spreadsheets only at the
beginning; however, they were able to connect

B. Document Processing with Word Processing
Software, etc.

with the internal network in March 2000 and all

Word processing software is used to prepareinternal systems became available from outside

various documents in the course of field audits

BOA at the time of relocation to the new BOA

and annual audit reports. Looking at the amountoffice building in December 2007. Mobile PCsof documents related to annual audit reports,

became an essential tool for communication

which is one of the major uses, from thebetween officials in the office and officials on

perspective of the amount of data of the Annual

business trips particularly for overseas business

Audit Reports Database System with which alltrips in different time zones.

texts of said reports are disclosed to the public, it(2) Operation Processing with PCs

was 1.8MB (Megabyte; approximately 180 pages
590

systemdependingonthedetailsofSection 8

Working Conditions

In addition, since further and stronger

in B5 size paper) on average of one fiscal yearbysecurity measures have been demanded, whenapproximately 50 times to 86.2MB (3,143 pages

BOA was relocated to the temporary officein A4 size paper), including special report to thebuilding

Diet and the Cabinet in FY2007. In the processauthentication with fingerprints was adopted full-of preparing annual audit reports, Inquiry Lettersscale at PC login for the first time among

and materials to be proposed at the Audit Reportministries and agencies to prevent data leakage

Committee were additionally prepared. Therefore,

and accidents due to impersonation when a PC ispreparation of these documents is impossible

stolen, etc., and increases in security level.

mid - 1960 s ;however,itincreasedinDecember2003,

biometric

without using PCs that are provided to all
officials.

3. Final Accounts Verification System

C. Use of Web Technology(1) Introduction of the
Verification System

The web technology is used for searching

Final

Accounts

information in the Internet and intra-net to findThe biggest system from among systems

audit aspects and for investigation necessary fordeveloped and operated by BOA is the Final

audit activities; and most internal activity systems

Accounts Verification System. The verification of

are designed by WBS (Web Based System).

the final accounts, etc., which is the target

D. Operation
Systemactivity of this system, is to verify figures in theProcessing

on

the

Internalstatements of the State final accounts of theexpenditures and revenues. BOA verifies thePCs are used for internal system operations.

accuracy of the statements of the State final

E. Communication via E-mail, etc.

accounts of the expenditures and revenues based

PCs are used for sending and receiving emails and instant messages.

on figures in the statements of accounts, etc.

(3) Information Security Measuressubmitted by the responsible officials, such as

When using PCs, Audit Information System

Disbursing Officers, who handle accounting ofOperation and Management Rules and Guidelines

the State, etc., every year. During the verification,

for Data Management (corresponding to current

each responsible official is required to prepare

Information Security Rules andInformation

detailed statement in which details are described

Security Policy) were established in 1984 and it

for each item and to calculate total sum of each

was stipulated to manage every single floppy

item. This statement is prepared in the period

disk, on which data is recorded. Later, data wasoverlapping the period of compiling annual audit

stored on PC hard disks and NAS (Network

reports. Therefore, the work volume was a heavy

Attached Storage); however, in the new BOA

burden on the audit division. Automation of

office building, it was stipulated that data could

operations to reduce the burden was one of the

not be stored on PC hard disks and it wasaims at the beginning of installing computers at

consolidated and stored on the file server in

BOA.

principle. When storing data on external media,

The development of this system started insuch as a floppy disk, etc., a system was adopted

FY1984, at the beginning of the installation of

to encrypt the data mandatorily.

computers. At that time, the budget for system
591

Part 3

Chapter 5

Changes in Other Operations

development was limited. Therefore, everything

ADAMS with e-signatures and statements offrom system design, manufacturing, testing, andaccounts in paper form were abolished in

to operation was implemented by officials. Test

principle; (2) budget related documents issued byoperation of this system was conducted for

the Ministry of Finance regarding carry-over ofstatements of revenue collecting and statements

funds were also computerized to reduce theof expenditures at the same time as manualamount of operations; and (3) the final accounts

preparation of detailed statements in Octoberdata is also required to prepare with ADAMS and1984 and operation started from the following

therefore, all cross-checking between detailed

year in April 1985. Later, the target operations ofstatements and the final accounts, etc. arethis system were expanded. Operations started forautomatized, which were implemented manuallystatements of goods management from July 1991

before, by importing these data and receiving

and for statements of credit management anddata from the Bank of Japan.

statements of liabilities from April 1995.

(3) Introduction of CEFIAN
Then, BOA started the development of(2) Introduction of A-ACCeSSThe Governmental Accounting affairs Data

CEFIAN and started operation in January 2009 in

Communication Management Systems (ADAMS)

order to update to the new system based onthat is operated by the Ministry of Finance was

movement including the end of use life of

introduced to all government offices in principle

equipment related to A-ACCeSS, establishment

and it was determined to computerize a series ofof operation and system optimization plan foraccounting operations of the State from budgeting

operations related to budgeting and final accounts

to the final accounts starting in FY2003.

byDevelopment of A-ACCeSS, which is a new

documents and final account documents in orderFinal Accounts Verification System, was started

to enhance policy evaluation.

thegovernment,

reviewofbudgetary

in fiscal year 2000 in order to have verification

CEFIAN corresponds to the new formats ofof final accounts by BOA correspond to it, andfinal account documents and the computerization

operation started from April 2003.

of lists of expenditures already distributed that

A-ACCeSSaims tocomputerize

are attached to statements of handling of cash

targetoperations of ADAMS and the targets areoutsidethebudgetandstatementsofstatements of revenue collecting, statements ofexpenditures. In addition, statements of accounts

expenditures, statements of credit management,

were transmitted only by a special line between

and statements of liabilities. Major processing of

A-ACCeSS and ADAMS before; however, under

the previous Final Accounts Verification System

CEFIAN, the electronic documents exchange

was to input figures, etc. in the aforementioned

system under the Kasumigaseki WAN (Widestatements of accounts submitted in a paper form

Area Network) is used.
CEFIAN is a system for statements ofby the responsible officials and to prepare
However,

accounts. However, since documentary evidence

major characteristics of A-ACCeSS are thesubmitted by responsible officials along with thefollowing: (1) A-ACCeSS of BOA receives

statements of accounts is also submitted in ancomputerized statements of accounts sent byelectronic form along with computerization of thedetailed

statements

automatically.

592

Section 8

Working Conditions

operation processing of auditees, the system toimportant communication means today, internal

accept them is being prepared sequentially.

LAN, which forms the infrastructure, was laidthroughout the entire BOA facilities in March

Furthermore, a system to support the finalunder

1996. Along with this, an internal mail systemdevelopment in 2009 and it was planned to

was developed by starting operation of the

include the system in one of the functions ofcommunication system in April 1996. Eventually,

CEFIAN in the future.

it was connected to the Kasumigaseki WAN, theaccountsofnational

properties

wasnetwork between ministries and agencies, in July
4. Communication Infrastructure

1997 and mail exchanges, etc. with other(1) Development of Telephone Network andFacsimiles

ministries and agencies became available.
The e-mail address and domain name to beauditeesisanused for the BOA website on the Internet is

audit

activities.

"jbaudit.go.jp." The part before "go.jp" is the

Telephones have been used since World War II;

characters presenting ministries and agencies in

however, development of a telephone network

as short a form as possible, such as in the case ofremained at a very low level and BOA madethe Ministry of Finance, "mof", and in the case ofcommunications with officials of auditees mainly

Ministry of Economy, Trade and Industry, "meti",by holding direct interviews and via postal mail.

respectively. According to this rule, in the case of

However, along with development of telephone

BOA, it should be "boa"; however, the term boa

networks after World War II, the communications

in English means a fur neckpiece for ladies and ameansconcurrently.

giant snake. Therefore, it was preferred not to use

Telephones that were shared in each division

it as a name representing BOA. Therefore, as a

mid-1970s were assigned approximately as one

resultpiece for two officials. Then, they were enhanced

candidates, "jbaudit" was eventually selected.

sequentially and one telephone was assigned to(3) Internal LAN of New Office Building

Communication
important

audit

of

with

means

BOA

for

developedofaninternal

reviewofmultipleeach official in the new BOA office building and

The internal LAN of new office building is

this was one of the major contributions to

not only connected to Annaka Training Center of

streamlining audit activities.

BOA and to the waiting room of the Diet

Facsimile machines were another important

Building, but also available on mobile PCs thatmeans to communicate with auditees along withare used during business trips so that officials cantelephones. In BOA, facsimile machines were

engage in activities in the same way as the PC

introduced to the Management Division in 1985,

used at their own desk in the BOA office

the Coordination Division of each Bureau inbuilding. This network infrastructure is essential

1988, and then they were introduced to audit

for implementation of BOA activities and became

divisionscomplex

one of the most important infrastructures so thatmachines equipped with a copying function were

if there is a defect, it could have a fatal impact

introduced to all audit divisions.

on BOA activities. Therefore, major parts of the(2) Introduction of E-Mail

network are duplicated to increase availability.

sequentially.

Regardinge-mail,

In

1999,

which

is

the

The

most
593

aforementioned

internal

network

Part 3

Chapter 5

Changes in Other Operations

functions consist of the following: (i) F/W (firewalls) and IPS (intrusion prevention system) toprevent hacking and attacking; (ii) consolidated
file server to store data and documents; (iii)
printer server to control printers of each Division;(iv) mail server to send and receive e-mails; (v)biometric server to authorize users at PC login;( vi )

commonmastersystemtoregisterorganization names, audit point names, etc. thatinternal systems use in common; (vii) messenger
system with which messages can be sent
immediately to officials; and (viii) intra-portal
system to disseminate information to all officials
from each Division or to support electronic
meeting systems, etc.

594II. Appendix

Audit Commission as of September 2018

Audit Commission as of September 2018

Commissioner (President)
Teruhiko KAWATO
Term of office as President(August 2013―)
Term of office as Commissioner(March 2013―)

Commissioner
Dr. Mari KOBAYASHI(Married name, Mari YANAGI)
Term of office as Commissioner(August 2011―)

Commissioner
Yuji MORITA
Term of office as Commissioner(February 2011―)

597

Successive Presidents of BOA

Successive Presidents of BOA

Masuka YAMAGUCHI

Michitoshi IWAMURA

Nobori WATANABE

Term of office as President(May 1881―October 1881)

Term of office as President(October 1881―May 1884)

Term of office as President(May 1884―December 1898)

Mitsuaki TANAKA,

Nobumichi YAMADA

Tadakatsu UTSUMICouncilor of Genroin
May 1887―December 1888
Concurrently served as President
while President WATANABE wason a business trip abroad

Term of office as President(December 1898―March 1900)

Term of office as President(March 1900―June 1901)

599

II.

Appendix

Inajiro TAJIRI

Keizo NAKAKUMA

Kesaroku MIZUMACHI

Term of office as President(June 1901―February 1918)

Term of office as President(February 1918―March 1924)

Term of office as President(March 1924―November 1929)

Kurahei YUASA

Hideo KONO

Kesao OKA

Term of office as President(November 1929―February 1933)

Term of office as President(February 1933―February 1938)

Term of office as President(February 1938―October 1941)

Bunichi KAWAMOTO

Seiichiro ARAI

Hajime SATO

Term of office as President(October 1941―June 1946)

Term of office as President(June 1946―August 1947)

Term of office as President(August 1947―August 1954)

600

Successive Presidents of BOA

Denjiro TOTANI

Susumu KATO

Yoshimi YAMADA

Term of office as President(August 1954―August 1957)

Term of office as President(August 1957―August 1959)

Term of office as President(September 1959―August 1961)

Osamu AKUTAGAWA

Yasuei KOMINE

Torao TSUKAKOSHI

Term of office as President(October 1961―August 1964)

Term of office as President(August 1964―September 1966)

Term of office as President(October 1966―May 1967)

Takashi YAMAZAKI

Yasunobu SHIRAKI

Masao SHIRAISHI

Term of office as President(July 1967―August 1971)

Term of office as President(October 1971―September 1973)

Term of office as President(December 1973―October 1975)

601

II.

Appendix

Saburo SATO

Torao CHINO

Fudeo OMURA

Term of office as President(November 1975―October 1978)

Term of office as President(October 1978―November 1980)

Term of office as President(December 1980―November 1982)

Hideo KAMADA

Tsutomu OKUBO

Keiichi TSUJI

Term of office as President(November 1982―October 1985)

Term of office as President(October 1985―March 1987)

Term of office as President(April 1987―April 1989)

Kiyoshi NAKAMURA

Takashi NAKAJIMA

Shinji YAZAKI

Term of office as President(April 1989―October 1992)

Term of office as President(October 1992―April 1994)

Term of office as President(April 1994―September 1996)602

Successive Presidents of BOA

Shuro HIKITA

Akira KANEKO

Tsutomu SUGIURA

Term of office as President(February 1997―October 1999)

Term of office as President(December 1999―July 2002)

Term of office as President(August 2002―February 2004)

Nobuaki MORISHITA

Muneharu OTSUKA

Kazuhiko FUSHIYA

Term of office as President(February 2004―January 2006)

Term of office as President(January 2006―February 2008)

Term of office as President(February 2008―January 2009)

Masaki NISHIMURA

Hiroyuki SHIGEMATSU

Hisashi YAMAURA

Term of office as President(April 2009―February 2011)

Term of office as President(February 2011―November 2012)

Term of office as President(March 2013―May 2013)603

Secretaries General under the current BOA Act

Secretaries General under the current BOA Act(excluding those who served as President of BOA)

Sunao IKEDA

Minoru OSAWA

Terumasa KAMIMURA

Term of office as Secretary General(January 1952―February 1959)

Term of office as Secretary General(September 1959―March 1962)

Term of office as Secretary General(March 1962―September 1965)

Tomoo UNOSAWA

Tatsuro ISHIKAWA

Toshio SHIBAZAKI

Term of office as Secretary General(September 1966―February 1970)

Term of office as Secretary General(October 1971―December 1975)

Term of office as Secretary General(October 1978―June 1980)

Kyoichiro MATSUO

Kentaro FUJII

Kazuyuki NISHIKAWA

Term of office as Secretary General(June 1980―July 1981)

Term of office as Secretary General(July 1981―March 1985)

Term of office as Secretary General(October 1985―April 1989)

605

II.

Appendix

Katsuhiko AKIMOTO

Hidetaka MIHARA

Takeshi ABE

Term of office as Secretary General(April 1989―July 1990)

Term of office as Secretary General(July 1990―July 1991)

Term of office as Secretary General(October 1992―June 1996)

Takao NAKAJIMA

Joji FUKADA

Masakuni SEKIMOTO

Term of office as Secretary General(June 1996―June 1998)

Term of office as Secretary General(December 1999―December 2002)

Term of office as Secretary General(December 2002―December 2004)

Mineaki MASUDA

Kunitoshi SAITO

Yutaka KAWATAKI

Term of office as Secretary General(April 2009―December 2010)

Term of office as Secretary General(March 2013―March 2014)

Term of office as Secretary General(April 2014―March 2015)

606

Secretaries General under the current BOA Act

Shigeji SUZUKI

Seishi TASHIRO

Katsura SAKURADA

Term of office as Secretary General(April 2015―March 2016)

Term of office as Secretary General(April 2016―March 2017)

Term of office as Secretary General(April 2017―March 2018)

Hajime OKAMURA
Term of office as Secretary General(April 2018―)

607

II. Appendix

Section 1 Changes in Structure, Number of Personnel and Budget of BOA
Subsection 1 Structure(Before World War II)
Names in parentheses in the tables are those which were subsequently established or renamed.

〈March 11, 1880〉〈June 22, 1881〉
1st Bureau

1st Audit Bureau

2nd Bureau
Audit
Division

2nd Audit Bureau

3rd Bureau

3rd Audit Bureau

4th Bureau
5th Bureau

President
Fukucho

BOA
President
Kanji

4th Audit Bureau

BOA
5th Audit Bureau
Bookkeeping Bureau
Administration Section

Bookkeeping Division

Reporting Buresu

Final Accounts Division

Clerical Division

Supplies Section
Recording Section

Editing Division

Reception Section＊1

Administration Division＊1: Established on August 23〈January 18, 1882〉〈January 17, 1883〉
1st Division
2nd Division
1st Audit
Bureau3rd Division

1st Audit Bureau

General Affairs Division

2nd Audit Bureau

Bookkeeping Division

3rd Audit Bureau

1st Division

BOA
President
FukuchoBookkeeping Bureau＊2

2nd Division

Reporting Bureau＊2

Administration Section

BOA

Clerical Division

Supplies Section

President
Fukucho

3rd Division
General Affairs Division

Recording Section

Bookkeeping Division

Reception Section

Administration Section

Annual Report
Section＊3

Annual Report Section

Statistics Section＊4

ClericalDivision

Section of Dispatch andAcceptance of Documents＊5
Recording Section
Supplies Section＊2: Abolished on January 23＊3: Established on January 23＊4: Established on February 3

2nd Audit
BureauStatistics Section＊5: Renamed from Reception Section

608

Section 1〈December 3, 1883〉

Changes in Structure, Number of Personnel and Budget of BOA〈October 14, 1886〉
1st Division

1st Audit
Bureau2nd Division
1st Audit
Bureau＊6

4th Division

2nd Division

Division under directcontrol of Director General

3rd Division
4th Division

1st Division

BOA

3rd Division

2nd Audit
BureauBOA

2nd Division

President
FukuchoPresident
Vice-President

5th Division
6th Division

4th Division＊6

ClericalBureauReporting Division
1st Division

3rd Division

2nd Audit
BureauReview Division

7th Division

Division under directcontrol of Director General

8th Division

Administration Section

Division under directcontrol of Director General

Annual Report Section

Administration Division

Section of Dispatch andAcceptance of Documents

Section of Dispatch andAcceptance of Documents
ClericalBureauRecording Section

Recording Section

Supplies Section(Accounts Section)＊7

Accounts Section

Statistics Section

Statistics Section＊6: Established on May 6, 1884
＊7: Renamed on August 20, 1884

〈September 25, 1889〉

1st Bureau
Director General〈June 2, 1890〉
Registry Officers＊8

Registry Officers

1st Division

1st Division

2nd Division

1st Bureau
Director General

3rd Division
4th Division

Registry Officers

1st Division

1st Division

2nd Division
2nd Bureau
Director General

3rd Division
4th Division

President

3rd Bureau
Director General

1st Division

BOA

2nd Division

President

3rd Division

3rd Division

Registry Officers
1st Division
3rd Bureau
Director General

4th Division

Clerical Bureau

2nd Division

4th Division

Registry Officers＊8

BOA

3rd Division
4th Division

Registry Officers＊8
2nd Bureau
Director General

2nd Division

Administration Section
Section of Dispatch andAcceptance of Documents
Recording Section

2nd Division
3rd Division
4th Division

Secretariat
Administration
Division
Accounts Division

Accounts Section
Statistics Section

Statistics Section

Statistics Section＊9＊8: Registry

Officers set up in the Secretariat (within the
Secretary Bureau) on October 9,1889 were dispatched to eachbureau. (the number of personnel was three per bureau)＊9: Established on October 7609

Section of Dispatch andAcceptance of Documents
Recording Section

II. Appendix〈December 9, 1896〉

1st Bureau
Director General

2nd Bureau
Director General

BOA
President
3rd Bureau
Director General

Secretariat
Administration
Division〈May 7, 1897〉
Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division
Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division
Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division

1st Bureau
Director General

2nd Bureau
Director General

BOA
President

3rd Bureau
Director General

4th Bureau
Director General

Section of Dispatch andAcceptance of Documents

Secretariat
Administration
Division
Accounts Division
Statistics Section＊10

Recording Section

Accounts Division
Statistics Section

Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division
Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division
Review Section
Registry Officers
1st Division
2nd Division
3rd Division
4th Division
Review Section
Registry Officers
1st Division
2nd Division
Section of Dispatch andAcceptance of Documents
Recording Section＊10: Abolished on May 30, 1898

〈October 27, 1898〉

1st Bureau
Director General〈October 7, 1899〉
Division under directcontrol of Director General
1st Division
2nd Division

President's
Secretariat

3rd Division
4th Division
Division under directcontrol of Director General
1st Division

2nd Bureau
Director General

BOA
President

3rd Division
4th Division
Division under directcontrol of Director General
1st Division

3rd Bureau
Director General

4th Bureau
Director General
Secretariat
Administration
Division

1st Bureau
Director General

2nd Division

2nd Division
3rd Division

BOA
President

4th Division
Division under directcontrol of Director General
1st Division

2nd Bureau
Director General

3rd Bureau
Director General

2nd Division
Research Section＊11
Section of Dispatch andAcceptance of Documents
Recording Section

4th Bureau
Director General

Accounts Division＊11: Established on May 15, 1899

610

Secretarial Section
Research Section
Section of Dispatch andAcceptance of Documents
Recording Section
Accounting Section
Division under directcontrol of Director General
1st Division
2nd Division
3rd Division
4th Division
Division under directcontrol of Director General
1st Division
2nd Division
3rd Division
4th Division
Division under directcontrol of Director General
1st Division
2nd Division
3rd Division
4th Division
Division under directcontrol of Director General
1st Division
2nd Division

Section 1〈April 5, 1900〉

Changes in Structure, Number of Personnel and Budget of BOA〈June 13, 1913〉
Secretarial Section

Secretarial Section
Proceedings Section＊12
President's
Secretariat

Proceedings Section

Research Section
Section of Dispatch andAcceptance of Documents
Recording Section

President's
Secretariat

Document Section

Accounting Section
Division under directcontrol of Director General
1st Division
1st Bureau
Director General

4th Division
Division under directcontrol of Director General
1st Division

BOA
President
2nd Bureau
Director General

Accounts Section
Division under directcontrol of Director General
1st Division

2nd Division
3rd Division

BOA
President

1st Bureau
Director General

2nd Division
3rd Division
4th Division
Division under directcontrol of Director General

2nd Division
3rd Division

1st Division

4th Division
Division under directcontrol of Director General
1st Division
3rd Bureau
Director General

Research Section

2nd Bureau
Director General

2nd Division

2nd Division
3rd Division
4th Division

3rd Division
4th Division＊12: Established on January19, 1901

〈September 1, 1921〉〈April 1, 1929〉
Secretarial Section
Proceedings Section

President's
Secretariat

Research Section
Document Section

President's
Secretariat

Accounts Section
Division under directcontrol of Director General
1st Division
1st Bureau
Director General

BOA
President
2nd Bureau
Director General

Research
Division
Division under direct control
of Director General
1st Division

2nd Division
3rd Division
4th Division
Division under directcontrol of Director General
1st Division
2nd Division

1st Bureau
Director General

President

3rd Division

2nd Division
3rd Division
4th Division
Division under direct control
of Director General
1st Division

BOA

2nd Bureau
Director General

4th Division
Division under directcontrol of Director General
1st Division
3rd Bureau
Director General

GeneralAffairs
Division

Secretarial
SectionProceedings
SectionDocument
SectionAccounts
Section2nd Division
3rd Division
4th Division
Division under direct control
of Director General
1st Division

2nd Division
3rd Bureau
Director General

3rd Division
4th Division

2nd Division
3rd Division
4th Division611

II. Appendix〈April 1, 1937〉〈March 20, 1943〉

GeneralAffairs
Division

President's
Secretariat

Research
Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
5th Division＊13
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division＊13
Division under direct control
of Director General
1st Division
2nd Division
3rd Division

1st Bureau
Director General

BOA
President

Secretarial
SectionProceedings
SectionDocument
SectionAccounts
Section2nd Bureau
Director General

3rd Bureau
Director General

4th Bureau
Director General

President's
Secretariat

1st Bureau
Director General

BOA
President

3rd Bureau
Director General＊13: Established on April 1, 1940

〈December 11, 1946〉

Management
Division
President's
Secretariat

Accounts
Division＊15

Secretarial
SectionDocument
SectionAccounts
Section＊14

Research
Section
Reporting
SectionDivision under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
5th Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
5th Division
Research andInternational
Division

BOA

1st Bureau
Director General

President
2nd Bureau
Director General

3rd Bureau
Director General

2nd Bureau
Director General＊14: Abolished on March 14, 1947＊15: Established on March 14, 1947

612

GeneralAffairs
Division

Secretarial
SectionProceedings
SectionDocument
SectionAccounts
SectionResearch
Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
5th Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division
5th Division
Division under direct control
of Director General
1st Division
2nd Division
3rd Division
4th Division

Section 1

Changes in Structure, Number of Personnel and Budget of BOA

March 8, 1948

January 20, 1949

June 1, 1949

Secretariat

Management Division
Documents & Coordination
Division *1
Legal Affairs Division *2(Personnel Division) *3
Research & International Division
Accounts Division

Management Division
Personnel Division
Research & International Division
Accounts Division

Management Division
Personnel Division
Research & International Division
Accounts Division

1st Division
2nd Division
3rd Division
4th Division
5th Division *1(State-owned bodies Audit
Division) *2

1st Division
2nd Division
3rd Division
4th Division
5th Division
6th Division

Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
4th Tax Audit Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

1st Division
2nd Division
3rd Division
4th Division
5th Division

1st Division
2nd Division
3rd Division
4th Division
5th Division
6th Division

Education Audit Division
Health & Welfare Audit Division
Agriculture & Forestry Audit
Division
Commerce & Industry Audit
Division
1st Construction Audit Division
2nd Construction Audit Division

Education Audit Division
Health & Welfare Audit Division
Agriculture & Forestry Audit
DivisionInternational Trade & Industry
Audit Division
1st Construction Audit Division
2nd Construction Audit Division

1st Division
2nd Division
3rd Division
4th Division
5th Division

1st Division
2nd Division
3rd Division
4th Division
5th Division

Judicial Affairs Audit Division
Finance Affairs Audit Division
1st Transport Audit Division
2nd Transport Audit Division
Communication Audit Division

Judicial Affairs Audit Division
Finance Affairs Audit Division
Transport Audit Division
Postal Services &Telecommunications Audit
Division
1st Railways Audit Division
2nd Railways Audit Division(1st Division) *3
Legal Affairs Division
Adjudication Division
Claims Settlement Division
State-owned bodies Audit
Division *4

1st Division
2nd Division
3rd Division
Adjudication Division
Claims Settlement Division

1st Postwar Treatment Audit
Division
2nd Postwar Treatment Audit
Division
National Property Audit Division
Adjudication Division
Claims Settlement Division

1st Postwar Treatment Audit
Division
2nd Postwar Treatment Audit
Division
National Property Audit Division
Adjudication Division
Claims Settlement Division*1: Abolished on October 3*2: Transferred from 4th Audit
Bureau on October 3*3: Established on October 3*4: Transferred to 1st Audit
Bureau on October 3.

*1: Abolished on December 20,
and integrated to Management
Division*2: Transferred from 4th Audit
Bureau, abolished on
December 20, and transferred
to Management Division*3: Established on December 20

Remarks

4th Audit Bureau

3rd Audit Bureau

2nd Audit Bureau

May 3, 1947
Management Division
Documents & Coordination
Division
Research & International Division
Accounts Division

1st Audit Bureau(After World War II) Changes in the Respective Divisions of the General Executive Bureau of BOA

613

January 16, 1951

January 16, 1952

January 8, 1955

Secretariat

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division *1
Claims Settlement Division
Improvement Division

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Improvement Division *1

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Improvement Division

Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
4th Tax Audit Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

Coordination Division *2
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Judicial Affairs Audit Division
Education Audit Division
Health & Welfare Audit Division
Agriculture & Forestry Audit
DivisionInternational Trade & Industry
Audit Division

Judicial Affairs Audit Division
Education Audit Division
Health & Welfare Audit Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionInternational Trade & Industry
Audit Division

Coordination Division *2
Judicial Affairs Audit Division
Police Audit Division *3
Postwar Treatment Audit Division*4
Foreign Affairs, International
Trade & Industry Audit Division
Education Audit Division
Health & Welfare Audit Division

Coordination Division
Judicial Affairs Audit Division
Defense Audit Division
Police Procurement Audit
Division
Foreign Affairs, International
Trade & Industry Audit Division
Education Audit Division
Health & Welfare Audit Division

Finance Affairs Audit Division
Transport Audit Division
Postal Services Audit Division
Telecommunications Audit
Division
1st Railways Audit Division
2nd Railways Audit Division

Finance Affairs Audit Division
Transport Audit Division
Postal Services Audit Division
Telecommunications Audit
Division
1st Railways Audit Division
2nd Railways Audit Division

Coordination Division *2
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionTransport Audit Division
1st Construction Audit Division
2nd Construction Audit Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
DivisionTransport Audit Division
1st Construction Audit Division
2nd Construction Audit Division

1st Postwar Treatment Audit
Division
2nd Postwar Treatment Audit
Division(Police Audit Division) *4
National Property Audit Division
Construction Audit Division

1st Postwar Treatment Audit
Division
2nd Postwar Treatment Audit
Division
Police Audit Division
National Property Audit Division
Construction Audit Division

Coordination Division *2
Finance Affairs Audit Division
Postal Services Audit Division
Telecommunications Audit
Division
1st Railways Audit Division
2nd Railways Audit Division
State-owned bodies Audit
Division

Coordination Division
Finance Affairs Audit Division
Postal Services Audit Division
Telecommunications Audit
Division
Railways Audit Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division*1: Transferred from 4th Audit
Bureau. Renamed to"Adjudication and Opinions
Division" on June 2 (incharge of affairs concerning
coordination of adjudications
and others).
*2: Transferred from 4th Audit
Bureau*3: Established on June 8 (incharge of planning of mattersto be improved in audit)*4: Established on August 24*1: In charge of affairs*1: Integrating Legal Affairs
concerning coordination of
Division, Claims Settlement
adjudication, and affairs
Division, and Improvement
concerning establishment andDivision
abolition, etc. of various BOA *2: In charge of affairs
laws and regulations
concerning adjudication anddemand of claims settlement
as well as control of affairs
within the bureau*3: Renamed to "Defense Audit
Division" on July 1, 1954
*4: Renamed to "Procurement
Audit Division" on September
4

Remarks

4th Audit Bureau

3rd Audit Bureau

2nd Audit Bureau

January 21, 1950
Management Division
Personnel Division
Research & International Division
Accounts Division
Adjudication Division *1
Claims Settlement Division *2(Improvement Division) *3

1st Audit Bureau

II. Appendix

614

April 1, 1959

April 1, 1962

April 1, 1966

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Office of Special Programs *1
Adjudication Division(Special Programs Division) *3

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division *1(Health & Welfare Service
Division) *2

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division *1
Health & Welfare Service
Division(Training Division) *2(Technical Specialist) *3

1st Bureau

Coordination Division
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

2nd Bureau

Coordination Division
Judicial Affairs Audit Division
Defense Audit Division *1
Police Procurement Audit
Division *1
Education Audit Division
Postal Services Audit Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Education Audit Division
Postal Services Audit Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Education Audit Division
Postal Services Audit Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division(Air Defense Audit Division) *4
Education Audit Division
Postal Services Audit Division

Coordination Division
Health & Welfare Audit Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division

Coordination Division
Health & Welfare Audit Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division

Coordination Division
Health & Welfare Audit Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division

Coordination Division
Health & Welfare Audit Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit DivisionInternational Trade & Industry
Audit Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit DivisionInternational Trade & Industry
Audit Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit DivisionInternational Trade Industry Audit
Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit DivisionInternational Trade & Industry
Audit Division

Coordination Division
Finance Affairs Audit Division
Railways Audit Division
Telecommunications Audit
Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

Coordination Division
Finance Affairs Audit Division
Railways Audit Division
Telecommunications Audit
Division
1st State-owned bodies Audit
Division
2nd State-owned bodies Audit
Division

Coordination Division
Finance Affairs Audit Division
Railways Audit Division
Telecommunications Audit
Division
Audit Division No.1
Audit Division No.2
Audit Division No.3
Audit Division No.4
Audit Division No.5
(Audit Division No.6) *3(Audit Division No.7) *3(Audit Division No.8) *3(Audit Division No.9) *3(Audit Division No.10) *3

Coordination Division
Finance Affairs Audit Division
1st Railways Audit Division
2nd Railways Audit Division
Telecommunications Audit
Division
Audit Division No.1
Audit Division No.2
Audit Division No.3
Audit Division No.4
Audit Division No.5
Audit Division No.6
Audit Division No.7
Audit Division No.8
Audit Division No.9

Remarks

5th Bureau

Secretariat

August 1, 1955
Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Improvement Division
Office of Special Programs

3rd Bureau

Changes in Structure, Number of Personnel and Budget of BOA

4th Bureau

Section 1*1: Renamed to "Ground Defense *1: Abolished on April 1, 1961
*1: One person added on April 1,
Audit Division" and*2: Three persons set up, dealing
1965"Maritime Defense Audit
with adjudication related*2: Established on April 1, 1963
*3: Established on April 1, 1964
Division" on December 17,
affairs processed by thecoordination division of each1958
bureau*3: One person set up on April 1,
1961

615

*1: One person added*2 Established on April 1, 1968
*3: One person set up on April 1,
1969*4: Established on April 1, 1967

Remarks

5th Bureau

4th Bureau

3rd Bureau

2nd Bureau

1st Bureau

Secretariat

II. Appendix
January 20, 1971

January 7, 1978

December 17, 1984

December 18, 1987

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division *1
Special Programs Division *2
Health & Welfare Service
Division
Training Division
Technical Specialist *3

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division
Health & Welfare Service
Division(Information & Communication
Technology Division) *1
Training Division *2
Technical Specialist *3

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division
Health & Welfare Service
Division
Information & Communication
Technology Division
Technical Counselor

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division
Health & Welfare Service
Division
Information & Communication
Technology Division
Technical Counselor

Coordination Division
Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
National Property Audit Division
Prime Minister's Office Audit
Division

Coordination Division
Finance Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division
National Property Audit Division
Science & Technology Audit
Division

Coordination Division
Finance Audit Division
National Property Audit Division
State Properties Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
Foreign Affairs Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
Education Audit Division
Postal Services Audit Division
Senior Director Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
1st Education Audit Division
2nd Education Audit Division
Postal Services Audit Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
1st Education Audit Division
2nd Education Audit Division
Science & Technology Audit
Division

Coordination Division
Judicial Affairs Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
1st Education Audit Division
2nd Education Audit Division
Science & Technology Audit
Division

Coordination Division
Health & Welfare Audit Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division
3rd Construction Audit Division
Senior Director Division

Coordination Division
Transport Audit Division
Labor Audit Division
1st Construction Audit Division
2nd Construction Audit Division
3rd Construction Audit Division
Transportation Audit Division
4th Construction Audit Division

Coordination Division
Transport Audit Division
Transportation Audit Division
1st Construction Audit Division
2nd Construction Audit Division
3rd Construction Audit Division
4th Construction Audit Division
Rural Development Audit
Division

Coordination Division
Transport Audit Division
Transportation Audit Division
1st Construction Audit Division
2nd Construction Audit Division
3rd Construction Audit Division
4th Construction Audit Division
Rural Development Audit
Division

Coordination Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit DivisionInternational Trade & Industry
Audit Division
Forestry Audit Division (Audit
Manager)International Trade & Industry's
Affiliates Audit Division

Coordination Division
Health & Welfare Audit Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
DivisionInternational Trade & Industry
Audit Division
Forestry Audit Division (Audit
Manager)International Trade & Industry's
Affiliates Audit Division

Coordination Division
Health & Welfare Audit Division
Medical Care Audit Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division
Labor Audit Division

Coordination Division
Health & Welfare Audit Division
Medical Care Audit Division
Agriculture Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division
Labor Audit Division

Coordination Division
Finance Affairs Audit Division
1st Railways Audit Division
2nd Railways Audit Division
Telecommunications Audit
Division
Audit Division No.1
Audit Division No.2
Audit Division No.3

Coordination Division
Finance Affairs Audit Division
1st Railways Audit Division
2nd Railways Audit Division
Telecommunications Audit
Division
Audit Division No.1
Audit Division No.2
Audit Division No.3

Coordination DivisionInternational Trade & Industry
Audit DivisionInternational Trade & Industry's
Affiliates Audit Division
Postal Services Audit Division
1st Railways Audit Division
2nd Railways Audit Division
Telecommunications Audit
Division
Government Financial Institutions
Audit Division

Coordination DivisionInternational Trade & Industry
Audit DivisionInternational Trade & Industry's
Affiliates Audit Division
Postal Services Audit Division
Railways Audit Division
Railways Construction Audit
Division
Telecommunications Audit
Division
Government Financial Institutions
Audit Division*1: One person reduced on April
28, 1972*2: One person added on April
28, 1972*3: One person added on April
11, 1974
One person added on May
10, 1976
One person added on April
18, 1977*1: Established on April 11, 1984
*2: Abolished on April 11, 1984
*3: One person added on April 4,
1978, renamed to "TechnicalCounselor" on April 4, 1979,
and one person reduced on
January 1, 1980

616

Remarks

5th Bureau

4th Bureau

3rd Bureau

2nd Bureau

1st Bureau

Secretariat

Section 1

Changes in Structure, Number of Personnel and Budget of BOA

December 17, 1991

January 6, 2001

April 1, 2005

April 1, 2009Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Special Programs Division *1
Health & Welfare Service
Division
Information & Communication
Technology Division(Training Division) *2
Technical Counselor

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Audit Policy Planning Division
Audit Technique andMethodology Study Division
Health & Welfare Service
Division
Information & Communication
Technology Division
Training Division
Technical Counselor

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division *1
Audit Policy Planning Division
Audit Technique andMethodology Study Division
Health & Welfare Service
Division
Information & Communication
Technology Division
Training Division
Technical Counselor *1

Management Division
Personnel Division
Research & International Division
Accounts Division
Legal Affairs Division
Adjudication Division
Audit Policy Planning Division
Health & Welfare Service
Division
Information & Communication
Technology Division
Capacity Development Division
Technical Counselor

Coordination Division
Finance Audit Division
Judicial Affairs Audit Division
Foreign Affairs Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
Judicial Affairs Audit Division
Foreign Affairs Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
Judicial Affairs Audit Division
Foreign Affairs Audit Division
1st Tax Audit Division
2nd Tax Audit Division
3rd Tax Audit Division

Coordination Division
Finance Audit Division
National Property Audit Division
Judicial Affairs Audit Division
Grant for Local Government
Audit Division
Foreign Affairs Audit Division
1st Tax Audit Division
2nd Tax Audit Division

Coordination Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
Health & Welfare Audit Division
Medical Care Audit Division
Public Pension Audit Division
Labor Audit Division

Coordination Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
Health & Welfare Audit Division
Labor Audit Division
Medical Care Audit Division
Public Pension Audit Division

Coordination Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division
Health & Welfare Audit Division
Labor Audit Division
Medical Care Audit Division
Public Pension Audit Division

Coordination Division
Health & Welfare Audit Division
Labor Audit Division
Medical Care Audit Division
Public Pension Audit Division
Ground Defense Audit Division
Maritime Defense Audit Division
Air Defense Audit Division

Coordination Division
Transport Audit Division
Transportation Audit Division
1st Construction Audit Division
2nd Construction Audit Division
3rd Construction Audit Division
Urban Development Audit
Division
Highway Audit Division

Coordination Division
Construction Planning & Housing
Audit Division
Port & Aviation Audit Division
Water Resources Audit DivisionRoad Construction Audit Division
Urban & Rural Development
Audit Division
Aviation Audit Division
Highway Audit Division

Coordination Division
Construction Planning & Housing
Audit Division
Port & Aviation Audit Division
Water Resources Audit DivisionRoad Construction Audit Division
Urban & Rural Development
Audit Division
Aviation Audit Division
Highway Audit Division

Coordination Division
Construction Planning & Housing
Audit Division
Port & Aviation Audit Division
Water Resources Audit DivisionRoad Construction Audit Division
Surface Transportation Audit
Division
Environment & Regional
Development Audit Division
Highway Audit Division

Coordination Division
1st Education Audit Division
2nd Education Audit Division
Agricultural Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division
Postal Services Audit Division

Coordination Division
Education Audit Division
Science &Technology Audit
Division
National University Audit
Division
Agricultural Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division

Coordination Division
Education Audit Division
Science & Technology Audit
Division
National University Audit
Division
Agricultural Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division

Coordination Division
Education, Science & Technology
Audit Division for General Issues
Education, Science & Technology
Audit Division for Education
Science & Technology Audit
Division
Agricultural Audit Division
Agricultural Infrastructure Audit
DivisionFisheries & Livestock Audit
Division
Forestry Audit Division

Coordination DivisionInternational Trade & Industry
Audit DivisionInternational Trade & Industry's
Affiliates Audit Division
Science & Technology Audit
Division
Railways Audit Division
Railways Construction Audit
Division
Telecommunications Audit
Division
Government Financial Institutions
Audit Division

Coordination Division
Postal Services Audit Division
Trade & Industry Audit Division
Natural Resources & Energy
Audit Division
Railways Audit Division
Telecommunications Audit
Division
Government Financial Institutions
Audit Division
Special Issues Audit Division

Coordination Division
Information & Communication
Audit Division
Postal Services Audit Division
Trade & Industry Audit Division
Natural Resources & Energy
Audit Division
Government Financial Institutions
Audit Division
Railways Construction Audit
Division
Special Issues Audit Division for
Ministries
Special Issues Audit Division forAgencies

Coordination Division
Information & Communication
Audit Division
Japan Broadcasting Corporation(NHK) & Nippon Telegraph andTelephone Corporation (NTT)
Audit Division
Trade & Industry Audit Division
Natural Resources & Energy
Audit Division
Government Financial Institutions
Audit Division
Postal Services Audit Division
Special Issues Audit Division for
Ministries
Special Issues Audit Division forAgencies*1: One person reduced on April
10, 1992*2: Established on April 10, 1992

*1: One person reduced

617

II. Appendix

Subsection 2

Fixed number of officials of BOA(Before World War II)
Year

Fixed Number of Officials

Year

Fixed Number of Officials

persons

persons

1880. 3.10

(88)

1927. 4. 1

253

1881. 4.28

(126)

1929. 4. 1

256

1882. 1.16

(105)

1932. 7. 4

248

1886. 4.17

(132)

1934. 4. 1

243

1889. 5.10

(138)

1936. 6. 1

253

1890.10.11(191)

1937. 4. 1

260

1891.11.16

208

1937. 4.28

266

1893.10.31

202

1938. 4.20

296

1895. 5. 4237

1939. 4.26

310

1896. 5. 2

315

1940. 4. 1

316

1897. 4. 1

340

1940. 4. 6306

1897.10.15

345

1941. 6.11

280

1898.11. 1

270

1942. 5. 2273

1900. 4. 2

280

1942.11. 1

253

1900. 4. 5

248

1943. 3.20

243

1902. 3.31

206

1945. 4. 1

241

1903.12. 5

198

1907. 4. 1

228

1910. 4. 1

201

1911. 4. 1

224

1913. 6.13

198

1914.11.10

193

1916. 4.13

191

1919. 4. 1

194

1919. 4.10

214

1921. 9. 1287

1923. 4. 1

281

1925. 4. 1

247

Remarks (1) Figures in parentheses indicate the actual number of officials.
(2) The number is described upon each change in the fixed number of officials, in principle.

618

Section 1

Changes in Structure, Number of Personnel and Budget of BOA(After World War II)
Year

Fixed Number of Officials

Year

Fixed Number of Officials

persons

Year

Fixed Number of Officials

persons

persons

1947

386

1968

1,212

1989

1,236

1948

1,174

1969

1,212

1990

1,237

1949

1,255

1970

1,212

1991

1,238

1950

1,256

1971

1,212

1992

1,240

1951

1,252

1972

1,212

1993

1,243

1952

1,140

1973

1,212

1994

1,246

1953

1,140

1974

1,212

1995

1,248

1954

1,118

1975

1,216

1996

1,251

1955

1,178

1976

1,218

1997

1,252

1956

1,178

1977

1,220

1998

1,253

1957

1,178

1978

1,220

1999

1,253

1958

1,178

1979

1,222

2000

1,254

1959

1,178

1980

1,224

2001

1,255

1960

1,178

1981

1,226

2002

1,256

1961

1,185

1982

1,227

2003

1,257

1962

1,186

1983

1,228

2004

1,297

1963

1,192

1984

1,229

2005

1,297

1964

1,212

1985

1,229

2006

1,296

1965

1,212

1986

1,230

2007

1,281

1966

1,212

1987

1,232

2008

1,278

1967

1,212

1988

1,234

2009

1,284

Remarks (1) Four officials in the special service (three commissioners and one secretary to President) are included.
(2) The table shows the fixed number of officials as of April 1 of each fiscal year, in principle. However, when
the rules on the fixed number of officials are amended, the fixed number as amended is shown.

619

II. Appendix

Subsection 3

Budget of National Government and BOA

FYRevenue

General Account

FY1880FY1881
FY1882
FY1883
FY1884
FY1885
FY1886
FY1887
FY1888
FY1889FY1890
FY1891
FY1892
FY1893
FY1894
FY1895
FY1896
FY1897
FY1898
FY1899FY1900FY1901
FY1902
FY1903
FY1904
FY1905
FY1906
FY1907
FY1908
FY1909FY1910
FY1911
FY1912
FY1913
FY1914
FY1915
FY1916
FY1917
FY1918FY1919FY1920
FY1921
FY1922
FY1923
FY1924
FY1925
FY1926
FY1927
FY1928
FY1929FY1930
FY1931
FY1932
FY1933
FY1934
FY1935
FY1936
FY1937
FY1938FY1939FY1940
FY1941
FY1942
FY1943
FY1944FY1945

Amount of Budget
59,934
68,574
66,81475,60675,98356,622
74,69579,93780,75676,60085,071
83,51485,41388,045
91,143
92,103
198,555
249,525
254,725
252,599
254,550
278,960
282,433
287,470
351,115433,709504,962
635,904
626,788
520,488548,250
573,997582,040
594,417672,195
727,653
600,938
730,929902,373
1,064,190
1,387,924
1,591,287
1,501,486
1,389,354
1,694,285
1,580,462
1,666,775
1,759,318
1,849,094
1,773,567
1,816,276
1,496,854
2,189,975
2,320,504
2,223,776
2,215,414
2,580,010
3,422,136
3,522,361
4,836,636
6,116,828
8,211,077
8,984,912
14,373,216
21,244,332
29,156,653

Amount of Final Accounts
63,36771,49073,508
83,10776,67062,15785,326
88,161
92,957
96,688106,469
103,231
101,462
113,769
98,170118,433
187,019
226,390
220,054254,255
295,855
274,359
297,341
260,221327,467
535,256
530,448857,084
794,937
677,546
672,874
657,192
687,392
721,975
734,648
708,616
813,309
1,084,958
1,479,116
1,808,633
2,000,652
2,065,711
2,087,345
2,045,298
2,127,391
2,071,369
2,056,361
2,062,755
2,005,691
1,826,444
1,596,972
1,531,082
2,045,275
2,331,759
2,246,981
2,259,321
2,372,098
2,914,470
3,594,9784,969,857
6,444,987
8,601,695
9,191,608
14,009,734
21,040,389
23,487,487

620

Expenditure
Amount of Budget
Amount of Final Accounts
59,933
63,141
68,574
71,46066,81473,48175,606
83,10775,98376,66356,62061,11574,68983,22479,93679,45380,74881,504
76,596
79,71484,904
82,12577,06483,556
86,16876,735
81,84884,582
85,837
78,12991,64285,317
203,458
168,857
249,547
223,679
246,473
219,758
252,098
254,166
257,930
292,750
281,413
266,857
281,753289,227
294,273249,596399,628
277,056
464,887
420,741504,962464,276
635,890
602,401
626,788636,361
520,480
532,894548,250
569,154573,997685,375
582,040
593,596594,417573,634
668,235
648,420
750,679
583,270
602,263590,795
780,170735,024902,373
1,017,036
1,064,190
1,172,328
1,504,756
1,359,978
1,591,287
1,489,856
1,501,486
1,429,690
1,389,354
1,521,050
1,785,443
1,625,024
1,580,462
1,524,989
1,666,775
1,578,826
1,759,318
1,765,723
1,856,638
1,814,855
1,773,567
1,736,317
1,828,129
1,557,863
1,497,905
1,476,875
2,091,400
1,950,140
2,320,504
2,254,662
2,223,776
2,163,003
2,215,414
2,206,477
2,417,648
2,282,175
3,488,899
2,709,157
3,550,827
3,288,029
4,882,650
4,493,833
6,173,770
5,860,213
8,657,849
8,133,891
9,317,326
8,276,475
14,459,908
12,551,813
21,838,224
19,871,947
29,156,653
21,496,189

Section 1

Changes in Structure, Number of Personnel and Budget of BOA(Unit: thousand yen)
Special Accounts

Net Budget

Amount of Final
Accounts of Revenue

Amount of Final
Accounts of Expenditure

―
―
―
―
―
―
―
―
―
―
53,404
48,626
46,942
41,73439,703160,925
131,355
131,946
262,376
222,045
120,462
126,809
169,681
137,336
187,890
246,982
593,149
816,893
680,554701,829
1,167,642
831,405
876,658
952,689859,543
899,570993,097
1,420,469
2,057,387
2,688,589
3,043,620
3,208,744
3,418,309
3,478,665
3,962,433
3,236,475
3,047,908
3,447,763
3,541,024
3,724,214
3,549,582
3,191,785
4,199,402
5,014,375
5,993,550
6,039,217
8,590,005
10,349,740
13,152,557
15,925,423
19,691,354
30,111,993
38,994,602
55,898,311
69,826,235
82,915,738

―
―
―
―
―
―
―
―
―
―
25,62024,41821,61725,12725,488106,216
45,279122,990
194,745
222,755
151,038
123,129
125,006
112,666
134,871
192,183
488,980
678,875
532,957
551,735
968,762
658,015
703,960
790,559
694,415
659,164
742,662
896,738
1,196,193
1,908,711
2,265,333
2,304,119
2,539,504
2,653,181
3,042,292
2,663,719
2,451,295
2,832,532
2,844,397
3,063,458
3,052,108
2,691,389
3,622,793
4,374,840
5,228,198
5,235,286
7,661,059
8,402,336
11,729,118
14,390,140
17,408,065
27,717,204
35,554,024
50,621,361
64,913,612
78,355,334

Amount of Final
Accounts of Revenue

Expenditure of BOA

Amount of Final
Accounts of Expenditure

4,737,191
4,771,279
5,159,328
4,499,368
4,275,749
4,541,777
4,471,211
4,556,715
4,260,762
3,804,045
4,688,549
5,481,562
6,238,497
6,334,410
9,046,058
10,865,199
14,330,973
17,365,612
21,087,673
30,464,628
―
―
―
―

621

3,473,436
3,665,409
4,019,930
3,682,972
3,508,567
3,949,455
3,916,526
4,116,839
4,001,041
3,508,575
4,278,847
5,079,577
5,709,615
5,817,378
8,432,236
9,195,999
13,124,950
16,024,369
18,920,358
28,308,048――――

Amount of Budget
51
110
95
98
91
95
92
92
92
92
139
113
113
126
127
126
147
199
199
199
202
183
177
177
177
171
171
185
197
195
214
237
237
237
237
237
209
210
213
237
346
485
547
518
518
457
459
490
490
497
497
477
482
511
509
537
554
561
652
692
709
707
760
740
799
836

Amount of
Final Accounts
46
84
88
86
94
75
85
84
86
102
139
113
113
126
127
126
145
194
200
200
192
183
175
171
166
170
171
181
193
194
214
236
236
226
212
200
208
210
213
237
346
485
547
515
500
457
459
480
477
486
474
454
444
475
475
478
495
549
547
538
547
558
530
486
520
535

II. Appendix

General AccountFY
FY1946FY1947
FY1948FY1949FY1950
FY1951
FY1952
FY1953
FY1954
FY1955
FY1956
FY1957
FY1958
FY1959FY1960FY1961
FY1962
FY1963
FY1964FY1965FY1966FY1967
FY1968FY1969FY1970
FY1971
FY1972
FY1973
FY1974
FY1975
FY1976
FY1977
FY1978FY1979FY1980
FY1981
FY1982
FY1983
FY1984
FY1985
FY1986
FY1987
FY1988
FY1989FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998FY1999FY2000FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008

RevenueAmount of Budget
119,087
214,256
473,145
741,313664,576
793,707932,535
1,027,250
999,879
1,013,314
1,089,652
1,184,613
1,333,083
1,512,094
1,765,162
2,107,382
2,563,091
3,056,807
3,340,498
3,744,725
4,477,147
5,203,436
5,917,332
6,930,854
8,213,085
9,658,999
12,118,949
15,272,616
19,198,131
20,837,157
24,650,234
29,346,615
34,440,043
39,667,586
43,681,366
47,125,364
47,562,139
50,839,441
51,513,359
53,222,882
53,824,828
58,214,155
61,851,731
66,311,891
69,651,178
70,613,465
71,489,671
77,437,497
73,430,517
78,034,005
77,771,230
78,533,159
87,991,484
89,018,896
89,770,226
86,352,554
83,688,984
81,939,568
86,878,703
86,704,827
83,458,343
83,804,191
88,911,212

Amount of Final Accounts
118,899
214,467
508,037
758,611716,792
895,482
1,078,804
1,219,019
1,185,060
1,126,387
1,232,513
1,399,858
1,453,746
1,597,213
1,961,024
2,515,931
2,947,622
3,231,214
3,446,768
3,773,096
4,552,146
5,299,445
6,059,873
7,109,266
8,459,181
9,970,859
12,793,873
16,761,977
20,379,123
21,473,416
25,076,016
29,433,622
34,907,265
39,779,228
44,040,667
47,443,337
48,001,280
51,652,904
52,183,384
53,992,561
56,489,194
61,388,769
64,607,380
67,247,822
71,703,468
72,990,559
71,465,996
77,731,174
76,339,007
80,557,215
81,809,038
80,170,473
89,782,693
94,376,336
93,361,027
86,903,038
87,289,021
85,622,807
88,897,515
89,000,271
84,412,713
84,553,478
89,208,229

622

Expenditure
Amount of Budget
Amount of Final Accounts
119,087
115,207214,256
205,841
473,145461,974
741,046
699,448664,576
633,294
793,707749,837
932,535
873,942
1,027,250
1,017,164
999,879
1,040,761
1,013,314
1,018,169
1,089,652
1,069,204
1,184,613
1,187,675
1,333,083
1,331,562
1,512,094
1,495,039
1,765,162
1,743,148
2,107,382
2,063,467
2,563,091
2,556,617
3,056,807
3,044,291
3,340,498
3,310,969
3,744,725
3,723,016
4,477,147
4,459,195
5,203,436
5,113,035
5,917,332
5,937,081
6,930,854
6,917,837
8,213,085
8,187,696
9,658,999
9,561,131
12,118,949
11,932,172
15,272,616
14,778,302
19,198,131
19,099,793
20,837,157
20,860,878
24,650,234
24,467,612
29,346,615
29,059,841
34,440,043
34,096,030
39,667,586
38,789,831
43,681,366
43,405,025
47,125,364
46,921,154
47,562,139
47,245,063
50,839,441
50,635,307
51,513,359
51,480,622
53,222,882
53,004,511
53,824,828
53,640,431
58,214,155
57,731,141
61,851,731
61,471,062
66,311,891
65,858,938
69,651,178
69,268,676
70,613,465
70,547,185
71,489,671
70,497,431
77,437,497
75,102,488
73,430,517
73,613,605
78,034,005
75,938,516
77,771,230
78,847,867
78,533,159
78,470,310
87,991,484
84,391,798
89,018,896
89,037,431
89,770,226
89,321,049
86,352,554
84,811,128
83,688,984
83,674,289
81,939,568
82,415,970
86,878,703
84,896,776
86,704,827
85,519,592
83,458,343
81,445,480
83,804,191
81,842,570
88,911,212
84,697,395

Section 1

Changes in Structure, Number of Personnel and Budget of BOA(Unit: million yen)
Special Accounts

Net Budget

Expenditure of BOA

Amount of Final
Accounts of Revenue

Amount of Final
Accounts of Expenditure

Amount of Final
Accounts of Revenue

Amount of Final
Accounts of Expenditure

190,778
419,113
1,144,303
1,839,472
2,092,079
1,400,083
1,349,980
1,481,506
1,660,131
1,879,857
2,231,478
2,376,288
3,058,520
3,411,926
3,939,179
4,431,764
4,798,415
5,383,303
6,148,097
7,216,047
8,658,349
10,747,572
13,408,942
16,029,214
18,164,819
19,627,386
22,567,254
27,130,782
33,593,003
39,501,421
49,289,133
60,562,085
71,958,304
83,708,212
96,889,616
105,959,594
111,737,371
119,190,539
128,788,304
126,677,520
148,212,137
167,667,862
172,501,531
175,330,999
194,543,445
207,766,453
220,793,017
236,206,705
247,147,911
267,813,629
280,714,499
283,499,310
306,416,946
310,175,592
341,146,378
396,223,501
399,745,636
385,754,803
419,300,415
452,141,039
501,536,310
395,920,306
387,739,529

178,205
372,500
1,009,595
1,757,275
1,900,029
1,275,068
1,213,628
1,333,513
1,522,006
1,726,572
2,007,473
2,139,318
2,802,768
3,096,323
3,555,073
3,959,211
4,283,616
4,785,868
5,557,586
6,406,370
7,669,892
9,572,302
11,902,721
14,309,416
16,007,565
16,863,593
19,369,727
23,016,568
28,485,462
33,876,198
42,700,575
52,268,427
62,552,732
72,195,935
83,946,459
92,320,981
97,879,671
106,276,630
115,568,866
111,775,183
129,788,557
145,204,789
147,492,227
152,801,642
168,583,841
177,879,328
188,798,218
202,241,118
214,245,102
232,465,893
245,210,470
247,035,976
272,579,000
279,368,933
305,775,943
363,336,765
373,897,723
357,691,356
376,032,929
401,183,565
450,579,547
353,283,177
359,198,223

170,629
411,476
1,035,338
1,626,974
1,989,184
1,653,282
1,781,111
1,978,718
2,014,752
2,225,535
2,509,127
2,653,960
2,729,416
3,116,965
3,634,993
4,306,693
4,686,226
5,259,209
6,028,557
6,999,195
8,314,253
9,925,179
11,500,754
13,348,858
15,435,358
17,783,166
21,592,313
26,352,150
31,452,613
36,974,289
45,475,588
54,143,802
64,122,760
72,676,643
80,111,686
87,217,595
91,381,917
97,594,144
100,988,933
99,502,045
109,432,997
118,045,968
118,082,140
121,357,928
132,750,582
138,160,492
145,931,152
158,289,859
160,744,290
175,417,953
178,387,845
185,023,375
204,086,127
209,620,003
211,258,544
249,965,273
242,954,522
230,192,900
264,270,565
256,444,817
265,279,146
220,154,527
201,444,241

164,802403,417
978,230
1,564,769
1,801,400
1,595,284
1,661,090
1,916,472
2,004,720
2,165,984
2,281,741
2,460,665
2,633,346
2,913,633
3,264,220
3,735,025
4,370,995
5,054,637
5,795,728
6,610,953
7,620,940
8,968,558
10,414,567
12,066,617
13,727,021
15,524,594
18,747,587
22,065,195
28,399,137
33,571,441
40,853,585
48,604,542
57,212,579
64,579,975
72,931,450
80,212,446
83,554,276
90,798,088
93,629,582
90,834,048
95,886,708
102,866,647
105,623,132
113,391,452
116,858,274
120,621,971
129,562,512
137,911,659
145,078,162
155,325,150
161,961,438
169,938,578
186,549,935
198,763,086
199,466,439
248,343,412
245,376,354
230,853,755
233,320,930
230,182,819
250,922,536
203,514,874
204,780,565

623

Amount of Budget
0.8
46
117
173
215
279
312
349
402
430
454
510
533
574
683
736
800
942
1,087
1,397
1,378
1,467
1,672
1,870
2,314
2,575
2,900
3,451
4,105
5,529
6,165
6,703
7,509
8,163
8,373
8,461
8,617
8,724
10,037
9,995
10,52011,006
11,248
11,393
12,15912,783
14,183
14,103
14,523
15,222
15,406
15,883
16,231
16,27517,30017,682
16,78919,086
19,67819,70920,113
21,106
17,022

Amount of
Final Accounts
0.5
41
116
173
215
276
310
345
394
423
451
506
532
558
719
766
829
934
1,142
1,397
1,476
1,543
1,716
1,934
2,378
2,733
3,004
3,650
4,765
5,515
6,115
6,866
7,531
8,332
8,592
8,652
8,890
9,173
9,912
9,789
10,205
10,297
10,816
11,152
12,006
12,753
13,994
13,801
14,17914,761
15,19515,15915,993
15,867
16,126
18,215
16,51418,855
19,134
18,935
19,25420,08016,408

II. Appendix

Section 2 Annual Audit Report
Subsection 1

Improprieties
FY1946FY
Numberof CasesCategory

FY1947
Numberof Cases

Amount

FY1948
Numberof Cases

Amountyen

FY1949Numberof Cases

Amount

yen

yen

yen

Taxes

68

95

216

268

Budgetary accounting

32

44

62

63

Construction

4

20

18

49

Articles

34

71

154

128

Services

3

8

22

―

Insurance

―

―

1

―

Uncollected receivables

―

―

―

44

Subsidies

8

69

56

―

Illegal acts

7

Others

19

69

50

26

Fund management

―

―

―

13

Financial statements

―

―

―

12

Total

175

386

623

750

10

FY1955FY
Category

1,820,000

Numberof Cases

Amount2,795,000

44

FY1956
Numberof Cases

AmountAmount57,614,046

147

FY1957
Numberof Cases

Amount673,263,253

FY1958
Numberof Cases

Amountyen
502,087,705

177

yen
378,087,114

215

yen
462,557,568

161

42,179,206

2

328,591,105

3

27,260,683―

823,313,927

60

170,025,787

19

47,524,866

1,292,618,308

35

314,145,407

26

193,531,790

9
(1)
12

107,647,181

6

12,152,823

373,281,153

3

18,080,000

11,220,000

Insurance

398

2,361,954,715

214

285,772,199

11

177,118,043

33

265,448,959

Uncollected receivables―

Subsidies907

1,244,521,942

598

707,095,058

194

336,368,556

107

191,612,343

Illegal acts

51

197,225,426

30

71,205,594

24

65,094,328

30

110,943,024

Others8

137,214,165

9

196,046,862

6

172,979,678

2

27,851,592

Total

(11)
2,185

6,613,268,217

1,128

2,524,250,279

501

1,500,515,512

(1)
355

1,250,011,300

Taxes

619

Budgetary accounting

Articles

10
(1)
128
(10)
58

Services

Construction

―

―

624

yen
459,764,936

85,523,265―

Section 2

FY1950
Numberof Cases
288
101
(2)
61
(11)
157
(2)
32

Amount

FY1951
Numberof Cases

Amountyen
244,074,077

309

yen
268,920,726

1,219,488,648

40

269,488,977

397,742,456

155,873,953

2,004,429,998

62
(12)
122

1,396,912,526

152,571,415

27

104,249,759

―

―

80

354,267,618
442,255,687

62
(1)
500

137
193
(1)
26
(1)
8

207,163,435

FY1952
Numberof Cases
399
10
(3)
34
(14)
89
(1)
11

Amount

FY1953
Numberof Cases

Amount

FY1954
Numberof Cases745

yen
466,989,945

693

yen
426,016,313

402,337,648

8

193,495,010

574,265,286

73,400,195

404,240,200
1,725,852,347

118
(7)
66

1,140,730,508

7,186,820,090

51
(8)
76

15,404,668

11

428,237,629

7248,955,970―

301,455,433

1,356,187,693

72

129,277,679

45

71,416,237

327,181,632

4

8,571,062

14

365,685,013

3,221,871,546

―

―

―

―

30

6,333,050,188

―

―

―

―

(17)
1,113

14,904,096,700

(13)
1,198

FY1959Numberof Cases

Amount(38)
1,813

FY1960
Numberof Cases

Amount10,290,375,436

11
(8)
1,279
36
(7)
15

(23)
2,232

FY1961
Numberof Cases

Amount11,193,416,129

10
(1)
1,114

2,646,032,316

74,867,000

38

60,790,582

316,982,722

196

1,901,248,732

14,814,250,691

(8)
2,247

FY1962
Numberof Cases

Amount

7,344,072,718
FY1963

Numberof Cases

Amount10120,048,954

―
(2)
17

72,483,687

17

76,522,842

17

58,217,000

31

131,966,735

10

16,670,464

8

53,450,198

20

82,481,518

18

85,059,183

16

65,957,585

4

16,947,323

1

1,262,570

4

4,799,092

29

176,808,805

36

316,726,430

23

210,271,142

―

―
22

―

―
184,452,601―

22

209,152,250

―

200

yen
421,551,775

12,825,304

115

153

yen
348,238,399

10,169,709

yen
321,417,731

121

yen
275,271,153

493,899,458

833,207,707

―

45
(20)
1,166

3,058,600,765

Amountyen
325,224,434―
423,850,650

Annual Audit Report

―

―

196

yen
467,538,296

―

―

―

111

624,074,955

159

233,455,514

346

1,132,115,138364

1,269,817,321

333

1,374,678,510

16

24,327,831

13

19,831,242

10

52,355,053

9

15,598,996

743,252,059

26,228,735

4

7,952,708―

6

323,289,779

6

23,966,817(2)
292
1,297,221,271
338
871,596,752
579
1,885,469,078
651
2,491,523,054
616
2,322,430,236
Remarks Figures in parentheses show the number of cases that are not included in "Amount" due to difficulty of calculation, but
are included in "Number of Cases."625

II. Appendix
FY1964FY
Numberof CasesCategory
Revenues
!
Taxes
%
%
Insurance%%
Articles%"Illegalacts%%
Others
%
%
%
Total
$
Expenditures!
#Construction
Articles##Services# Insurance"# Subsidies# Illegal acts#
Others#
Total$
Others!
Articles%%illegal acts%"
Others
%
%
Total
%
$
Total

181
4
―
―
―
185

Revenues
!
Taxes
%
%
Insurance%%
Articles%"Illegalacts%%
Others
%
%
%
Total
$
Expenditures!
#Construction
Articles##Services# Insurance"# Subsidies# Illegal acts#
Others#
Total$
Others!
Articles%%Illegal acts%"
Others
%
%
Total
%
$
Total

yen
448,557,355
133,256,287

581,813,642

25
5
―
34
403
―
5
472

318,949,091
1,679,577,163

1
5
1
7
664

65,720,612
47,300,000

112
4
―
1
―
117

Numberof Cases
1
3
―
―
―
4
7
―
―
1
135
―
―
143
―
5
―
5
152

Amountyen
535,339,491
78,316,019
3,394,768
617,050,278
135,556,025
11,500,000

53,665,000
2,165,211,866

31
3
―
16
190
―
6
246

19,197,314
28,114,416
840,321
48,152,051
2,795,177,559

1
8
―
9
372

7,723,083
63,831,343

FY1973FY
Category

AmountFY1965
Numberof Cases

Amountyen
891,886,643
61,482,729

953,369,372
78,160,652

71,732,776
273,860,568

423,753,996

18,472,350
18,472,350
1,395,595,718

154,366,645
620,396,246
11,664,164
933,483,080

71,554,426
1,622,087,784

FY1966
Numberof Cases
129
4
―
―
―
133
8
1
―
15
167
―
7
198
―
6
―
6
337

FY1974
Numberof Cases
1
2
―
―
1
4
6
1
―
1
70
1
―
79
―
3
―
3
86

Amountyen
1,068,878,674
138,290,611

8,072,515
1,215,241,800
107,784,234
5,500,000
49,059,350
204,765,547
65,382,538
432,491,669

11,721,976
11,721,976
1,659,455,445

626

Amountyen
540,596,601
90,388,428

630,985,029
26,578,071
5,900,000
107,517,968
530,680,341
12,900,000
683,576,380

27,899,265
27,899,265
1,342,460,674

FY1967
Numberof Cases
134
4
―
―
―
138
6
2
―
4
105
2
―
119
―
3
―
3
260

FY1975
Numberof Cases
1
2
―
―
2
5
4
―
1
2
64
―
―
71
―
6
―
6
82

Amountyen
1,155,057,863
80,103,486

20,344,541
1,255,505,890
53,742,636
6,800,000
85,039,991
437,315,180

582,897,807

33,675,874
33,675,874
1,872,079,571

Amountyen
542,212,984
135,844,461

678,057,445
116,144,468
17,077,800
59,554,509
307,602,028
52,848,444
553,227,249

18,748,727
18,748,727
1,250,033,421
FY1976

Numberof Cases
1
2
―
―
―
3
8
1
2
2
50
―
3
66
―
5
―
5
74

Amountyen
1,437,927,363
115,084,244

1,553,011,607
191,259,481
5,700,000
17,182,970
164,252,050
273,500,392
2,045,230,277
2,697,125,170

69,642,433
69,642,433
4,319,779,210

Section 2
FY1968
Numberof Cases
46
4
―
―
―
50
3
2
―
2
120
―
―
127
1
4
―
5
182

Amountyen
726,293,431
123,226,845

849,520,276
99,162,119
20,709,000
58,887,444
208,637,443

387,396,006
5,500,000
20,144,549
25,644,549
1,262,560,831

FY1969Numberof Cases
1
2
―
―
―
3
5
―
―
1
143
―
1
150
―
―
―
―
153

Amountyen
642,359,384
42,660,606

685,019,990
29,440,787

FY1970
Numberof Cases
1
2
1
―
―
4

1,035,875,000
1,307,978,072

5
―
―
1
131
―
1
138

1,992,998,062

―
4
―
4
146

33,025,110
209,637,175

Amountyen
869,357,837
59,471,806

928,829,643
47,769,295

34,587,134
166,513,185
27,620,844
276,490,458

61,184,873
61,184,873
1,266,504,974

627

Annual Audit Report

FY1971
Numberof Cases
1
2
―
―
―
3
5
1
―
1
183
―
―
190
―
6
―
6
199

Amountyen
1,015,347,344
46,556,608

1,061,903,952
145,163,455
3,100,000
34,542,953
296,425,216

479,231,624

6,105,509
6,105,509
1,547,241,085

FY1972
Numberof Cases
1
2
―
―
―
3
3
3
―
1
157
―
―
164
1
8
―
9
176

Amountyen
1,035,763,158
48,229,064

1,083,992,222
17,700,000
20,300,000
57,903,713
238,971,131

334,874,844
5,560,97821,277,306
26,838,284
1,445,705,350

II. Appendix

FY1977FY
Numberof CasesCategory
Revenues!
Taxes#
Insurance#
Articles#"Medical expenses#
Illegal acts#
Others#
Total$
Expenditures!Budgetary accounting%%
Construction%%
Articles%%%Services%%
Insurance%%"Medical expenses%
Subsidies
%
%
Loan
%
%
%
Illegalacts%%
Others
%
%
%
Total
$
Others!
Articles%%Illegal acts%"
Others
%
%
Total
%
$
Total

1
2
―
―
―
―
3
―
5
2
5
2
―
61
3
1
―
79
1
10
―
11
93

Revenues!
Taxes#
Insurance
premiums#
Articles#"Medical expenses#
Illegal acts#
Others#
Total$
Expenditures!Budgetary accounting%%
Construction%%
Articles%%%Services%%
Insurance benefits%%"Medical expenses%
Subsidies
%
%
Loan
%
%
%
Illegal acts%%
Others
%
%
%
Total
$
Others!
Articles%%Illegal acts%"
Others
%
%
Total
%
$
Total

1,186,567,715
150,392,138

1,336,959,853

258,232,200
3,520,622,000
46,075,686
168,351,015
588,198,787
319,571,911
15,993,374
4,917,044,973
8,769,031
190,960,803
199,729,834
6,453,734,660

Numberof Cases
1
3
―
―
―
―
4
―
3
1
―
5
―
55
19
―
8
91
―
34
―
34
129

Amount1,138,522,285
1,079,387,524

2,217,909,809

37,758,909
36,400,000
224,639,218
598,731,505
430,964,790
116,776,200
1,445,270,622

247,750,844
247,750,844
3,910,931,275

Amount

1
3
―
―
2
―
6

1,168,545,093
265,538,880

6
11
15
3
2
―
67
13
4
1
122

322,015,196
1,275,985,000
193,100,000
49,400,000
141,376,544

―
36
―
36
164

FY1986FY
Category

Amount

FY1978
Numberof Cases

12,443,229
1,446,527,202

440,382,422
549,523,100
4,877,120
14,390,000
2,991,049,382

119,389,532
119,389,532
4,556,966,116

FY1979Numberof Cases
1
3
―
―
1
―
5

1,243,380,334
516,164,935

4
5
3
5
2
―
99
9
6
1
134

19,828,585,425
71,007,704
42,650,000
47,200,000
116,524,423

―
18
―
18
157

FY1987
Numberof Cases
1
3
―
―
―
―
4
―
1
1
―
6
―
77
20
1
25
131
―
35
―
35
170

Amount1,196,657,970
1,046,976,918

2,243,634,888

5,005,618
12,020,000
313,670,694
470,277,293
639,095,486
60,448,789
187,619,525
1,688,137,405

208,224,549
208,224,549
4,139,996,842

628

Amount19,961,300
1,779,506,569

479,816,706
157,599,051
81,303,160
256,900,000
21,081,586,469

153,342,554
153,342,554
23,014,435,592

FY1980
Numberof Cases
1
3
―
―
6
1
11
―
8
1
3
2
―
114
11
1
2
142
―
27
―
27
180

FY1988
Numberof Cases
1
3
―
―
―
1
5
―
2
―
―
6
―
67
14
―
35
124
―
37
―
37
166

Amount1,320,510,995
1,106,566,261

4,632,140
2,431,709,396

32,553,884

294,547,462
1,068,711,256
297,533,027
211,230,820
1,904,576,449

504,990,299
504,990,299
4,841,276,144

Amount
1,781,000,657
703,973,349

104,479,068
34,630,109
2,624,083,183

693,990,662
18,000,000
131,200,000
194,160,472
2,580,647,302
284,363,084
3,874,956
158,000,000
4,064,236,476

251,186,355
251,186,355
6,939,506,014
FY1989Numberof Cases

Amount

1
3
―
―
1
―
5

1,450,153,535
907,533,986

1
4
1
―
7
―
78
8
1
57
157

4,094,905
49,096,096
21,171,606

―
30
―
30
192

20,127,580
2,377,815,101

404,186,916
6,370,457,363
391,455,905
18,794,692
347,491,120
7,606,748,603

283,924,781
283,924,781
10,268,488,485

Section 2

FY1981
Numberof Cases

Amount

2
3
―
―
4
―
9

1,350,331,019
859,379,403

2
6
1
―
3
―
126
4
―
1
143

9,102,711
239,404,722
61,700,000

27,379,400
2,237,089,822

485,926,412
704,216,735
126,498,000
198,813,000
1,825,661,580

FY1982
Numberof Cases
1
3
―
―
1
―
5
―
7
―
2
3
―
111
21
1
1
146

1
31
―
32
184

43,017,494
145,161,605

―
30
―
30
181

1
3
―
―
1
9
14

1,390,861,815
693,416,785

1
2
―
―
3
2
8

8
6
―
―
4
76
91
11
1
―
197

123,709,750
182,778,577

Amount1,421,406,468
747,330,258

4,053,698
2,172,790,424

234,843,252
14,854,836
234,637,402
2,504,369,526
512,857,062
1,992,820
33,400,000
3,536,954,898

FY1983
Numberof Cases
1
3
―
―
5
―
9
―
2
―
3
4
―
74
23
2
―
108

Amount1,190,682,712
923,002,635

28,203,280
2,141,888,627

31,800,000
54,456,452
236,789,222
4,118,568,303
864,243,662
4,543,000
5,310,400,639

FY1984
Numberof Cases
1
3
―
―
―
―
4
―
2
―
1
5
―
84
23
2
―
117

1
39
―
40
157

578,686,216
353,833,185

―
27
―
27
148

2
2
―
―
2
―
6

1,712,637,302
1,532,698,697

1
2
―
―
1
―
4

AmountAnnual Audit Report(Unit: number of cases, yen)
FY1985
NumberAmountof Cases

1,210,145,675
1,103,339,524

2,313,485,199

121,321,680
36,300,000
310,274,365
1,159,739,639
556,378,279
51,038,960
2,235,052,923

1
3
―
―
3
―
7
―
3
―
1
5
―
49
21
2
1
82

1,076,008,541
896,815,633

9,113,830
1,981,938,004

82,900,000
44,800,000
225,369,776
353,681,264
429,209,573
96,511,818
36,244,900
1,268,717,331―
28
413,544,977―
188,179,099
557,991,918
932,519,401
289,400,381
28
413,544,977
4,250,930,501
6,267,737,240
8,384,808,667
4,837,938,503
117
3,664,200,312(Unit: number of cases, yen)
FY1990
FY1991
FY1992
FY1993
FY1994
NumberNumberNumberNumberNumberAmountAmountAmountAmountAmountof Casesof Casesof Casesof Casesof Cases

―
29
―
29
240

3,915,457
127,611,900
2,215,805,957

543,575,756
1,082,139,459
3,625,067,328
112,122,443
3,099,306
5,672,492,619

551,966,273
551,966,273
8,440,264,849

―
2
―
―
4
86
80
9
1
―
182
―
34
―
34
224

557,991,918

1,504,583,276
421,276,298

16,610,307
41,233,981
1,983,703,862

48,000,000

624,988,252
289,794,077
885,344,688
143,751,969
31,322,000
2,023,200,986

296,363,714
296,363,714
4,303,268,562

―
1
―
―
4
101
75
14
1
―
196
―
50
―
50
252

11,690,120
3,257,026,119

13,500,000

2,652,759,871
397,429,191
439,617,404
266,273,474
10,027,772
3,779,607,712

769,947,826
769,947,826
7,806,581,657

629

―
3
―
―
5
94
84
13
1
―
200
―
31
―
31
235

289,400,381

1,619,728,690
2,489,687,437

355,738,000
4,465,154,127

92,229,983

3,564,087,080
701,853,286
888,699,137
461,407,862
2,441,647
5,710,718,995

202,619,678
202,619,678
10,378,492,800

1
2
―
17
2
―
22
―
1
―
2
5
2
127
12
3
―
152
―
43
―
43
217

1,394,293,271
11,613,692,862
932,511,980
10,090,000
13,950,588,113

21,000,000
28,900,000
3,958,540,533
626,336,114
777,615,364
258,651,930
66,170,694
5,737,214,635

762,817,701
762,817,701
20,450,620,449

II. Appendix

FY1995FY
Numberof CasesCategory
Revenues!
Taxes#Insurance premiums#
Articles#Medical expenses"
Illegal acts#
accounting#Illegal acts, budgetaryOthers
#
Total
$
Expenditures!Budgetary accounting%%
Illegal acts, budgetary accounting%%
Construction%%
Articles%%Services%%
Insurance benefits%"Medical expenses%
Subsidies
%
%
Loan
%
%
Illegalacts%%
Illegal acts, budgetary accounting%%
Others%%
Total$
Others!
Articles#Illegal acts"
Others
#
Total
$
Total

1
2
―
33
―
―
―
36
―
―
―
―
―
5
2
142
14
―
―
1
164
―
38
―
38
238

Revenues!Budgetary accounting#
Taxes# Insurance premiums#
Articles" Medical expenses#
Illegal acts#
Others#
Total$
Expenditures!Budgetary accounting## Budgetary accounting, subsidies# Budgetary accounting, services
accounting, illegal acts
# BudgetaryConstruction#
Articles#Services# Services, grants"Insurance benefits# Medical expenses#
Subsidies#
Loan#
Illegal acts#
accounting# Illegal acts, budgetaryOthers
#
Total
$
Others!Budgetary accounting%%
Articles%"Illegal acts%
Others
%
%
Total
$
Total

1,340,927,339
16,071,039,652
460,524,465

17,872,491,456

1,746,119,308
467,829,731
1,512,084,475
163,708,013
20,149,952
3,909,891,479
896,392,525
896,392,525
22,678,775,460

Numberof Cases
―
1
2
―
―
2
―
5
12
―
―
6
2
1
4
―
3
2
212
1
6
―
1
250
―
―
41
―
41
296

Amount627,765,814
2,936,197,138
5,623,832
3,569,586,784
1,390,518,416
78,074,995
30,442,515
33,735,571
48,624,145
438,884,170
965,694,913
1,393,109,159
6,489,433
171,637,881
30,904,387
4,588,115,585

1,594,868,355
1,594,868,355
9,752,570,724

Amount

3
2
―
20
2
―
―
27

1,425,949,588
5,811,783,927

4
―
2
―
―
4
2
206
22
―
―
―
240

48,461,581

―
47
―
47
314

FY2004FY
Category

AmountFY1996
Numberof Cases

157,777,950
31,885,701
7,427,397,166

39,096,000
1,499,743,805
646,356,033
4,402,161,078
2,183,812,174

8,819,630,671
808,115,828
808,115,828
17,055,143,665

FY1997
Numberof Cases
1
2
―
19
―
―
1
23

1,371,785,205
4,810,377,682

22
―
―
―
―
4
2
200
23
1
―
―
252

299,607,879

―
29
―
29
304

FY2005
Numberof Cases
―
2
2
―
―
1
1
6
91
―
―
18
3
―
5
―
4
2
218
―
5
―
2
348
―
1
35
―
36
390

Amount522,632,681
3,041,895,063
3,983,005
6,420,000
3,574,930,749
5,795,506,099
308,803,912
447,774,000
169,229,064
279,672,205
460,223,305
2,166,521,540
37,427,134
23,332,584
9,688,489,843
91,176,944
753,461,639
844,638,583
14,108,059,175

630

Amount152,753,170
9,674,400
6,344,590,457

1,714,023,653
1,796,477,016
2,113,016,548
726,700,294
8,458,836
6,658,284,226
379,924,108
379,924,108
13,382,798,791

FY1998
Numberof Cases
2
2
―
20
1
―
―
25

2,228,769,913
4,155,982,835

1
―
3
1
―
4
2
148
9
4
―
1
173

51,450,000

―
31
―
31
229

FY2006
Numberof Cases

Amount

5
1
2
―
―
3
―
11

52,479,000
821,310,153
3,116,611,281

24
―
―
―
1
1
26
―
4
2
226
5
7
―
4
300

185,885,564

―
―
50
―
50
361

7,318,900
3,997,719,334

19,065,000
496,629,000
568,349,466
215,326,225
747,018,225
2,741,940,544
392,490,675
42,874,259
65,441,680
5,475,020,638

689,737,389
689,737,389
10,162,477,361

Amount206,581,410
4,456,800
6,595,790,958

258,063,494
74,550,000
1,235,562,885
1,868,695,229
1,133,896,764
39,585,233
65,756,663
9,961,232
4,737,521,500
452,377,629
452,377,629
11,785,690,087
FY2007

Numberof Cases

Amount

5
2
2
―
4
14
―
27

93,641,960
682,974,712
2,192,747,145

21
―
1
―
4
2
36
1
4
2
710
7
22
―
5
815

2,289,206,840

―
―
15
2
17
859

81,738,260
351,707,074
3,402,809,151

4,660,321
129,440,027
355,345,105
484,869,788
4,176,655
230,498,184
797,781,184
11,735,937,275
40,692,151
66,403,911
111,030,311
16,250,041,752

247,577,211
17,815,930,379
18,063,507,590
37,716,358,493

Section 2

FY1999Numberof Cases
1
2
―
15
3
1
―
22
―
―
1
1
―
3
2
167
5
3
―
2
184

Amount1,260,577,980
6,223,818,885
151,519,300
67,560,044
8,150,600
7,711,626,809

9,011,000
18,267,014
1,384,677,132
1,426,590,450
1,841,865,081
20,203,507
69,194,389
125,459,196
4,895,267,769―
46
515,184,800―
46515,184,800
252 13,122,079,378(Unit: number of cases, yen)
FY2008
NumberAmountof Cases
1
1
2
―
13
4
4
25

77,501,366
1,024,664,596
1,157,476,870

35
9
―
―
2
―
22
―
4
2
487
―
1
―
5
567

390,548,891
20,107,963

1
―
―
―
1
593

FY2000
Numberof Cases

Amount

1
2
2
12
2
―
―
19

1,121,731,138
5,901,777,924
111,550,000
70,815,750
14,360,130

3
―
1
―
1
3
2
141
7
2
―
1
161

9,815,882

―
46
―
46
226

7,220,234,942

7,800,000
13,869,190
1,171,691,708
1,861,996,843
4,084,680,709
87,254,159
14,242,647
201,529,689
7,452,880,827
738,952,314
738,952,314
15,412,068,083

FY2001
Numberof Cases

Amount

1
2
1
―
4
―
2
10

1,014,703,506
4,783,710,839
25,440,000

1
―
―
1
1
3
2
178
1
6
―
4
197

313,913,495

―
41
―
41
248

15,683,060
9,759,461
5,849,296,866

6,249,030
12,192,000
893,036,888
1,214,821,349
4,318,011,076
56,284,519
97,389,040
292,862,283
7,204,759,680
741,118,587
741,118,587
13,795,175,133

140,091,234
35,903,548
171,746,867
2,607,384,481

160,161,854
225,690,299
225,697,160
630,162,795
6,917,248,967
29,523,857
231,002,380
8,830,144,166
892,409,072

892,409,072
12,329,937,719

631

FY2002
Numberof Cases

Amount(Unit: number of cases, yen)
FY2003
NumberAmountof Cases

3
2
―
―
2
―
―
7

1,315,446,812
4,913,918,986

6
―
―
―
2
3
2
209
―
1
―
3
226

6,906,809,337

―
39
―
39
272

Annual Audit Report

4,672,282
6,234,038,080

95,880,417
473,324,957
1,544,579,002
2,069,383,820
60,963,364
118,894,871
11,269,835,768
1,325,256,061
1,325,256,061
18,829,129,909

1
2
―
―
3
―
2
8

849,019,852
2,843,532,868

3
―
―
―
1
3
2
164
3
7
2
2
187

3,262,217,113

―
24
―
24
219

23,340,557
5,728,983
3,721,622,260

2,271,364,533
480,352,672
1,047,705,013
1,350,602,889
7,478,000
109,127,665
11,115,981
69,494,275
8,609,458,141
310,310,914
310,310,914
12,641,391,315

II. Appendix

Subsection 2
FY

Date of Receipt of Final Accounts, Sending of the Annual Audit Report andSubmission to the Diet
Receipt of Final
Accounts
1893. 7. 3
1894. 7.17
1895. 6.24
1896. 7. 1
1897. 7. 6
1897. 7.23

Forwarding of the Final Accounts(Submission of the Annual Audit Report)
1893.12.16
1894.12.25
1895.12.28
1896.12.26
1897.12.27
1897.11.13

Submission
to the Diet
1894. 5.15
1895. 2.22
1896. 2.29
1897. 2.23
1898. 5.19
1898. 5.19

FY1891
FY1892
FY1893
FY1894
FY1895Emergency
armaments
expenditures
FY1896
1898. 8. 4
1898.12.26
1899. 2.14
FY1897
1899. 7.14
1899.12. 5
1900. 1.26
FY1898
1900. 6.23
1900.12. 3
1901. 2.15
FY18991901. 7. 3
1901.11.19
1902. 1.28
FY19001902. 6. 2
1902.10.27
1902.12.28
FY1901
1903. 6.24
1903.10.10
1905. 1.19
FY19021904. 7. 5
1904.10. 3
1905. 1.19
FY19031905. 7.13
1905.10.11
1906. 1.26
FY1904
1906. 8. 2
1906.10.24
1907. 2.21
FY1905
1907. 8.28
1907.11. 1
1908. 2. 1
FY1906
1908. 9.11
1908.11.13
1909. 1.23
Emergency
1908. 2.18
1908. 3. 2
1909. 1.23
armaments
expenditures
FY19071909. 9. 91909.10.16
1910. 1.21
FY19081910.10. 1
1910.11. 7
1911. 1.21
FY19091911. 7.22
1911.10.25
1912. 1.27
FY19101912.10.11
1912.11.18
1913. 2.24
Former Korea
1912.11.19
1912.12.27
1913. 2.24
FY1911
1913.11. 4
1913.12. 1
1914. 2. 2
FY19121914.11.10
1914.12. 3
1914.12.25
FY1913
1915.10.22
1915.11.22
1915.12.16
FY1914
1916.11.11
1916.12. 7
1917. 6.25
FY1915
1917.12.27
1918. 1.21
1918. 2.16
FY1916
1918. 8.28
1918.11.12
1919. 2.25
FY1917
1919. 7.29
1919.12. 5
1920. 1.31
FY1918
1920.12.10
1920.12.27
1921. 2.24
FY19191921.10. 4
1921.12.27
1922. 2.13
FY19201922.11.30
1922.12.27
1923. 2.15＊
1924. 1.29
1924. 7. 1
FY1921
1923. 8. 2 2
FY1922
1924.12.13
1925. 1.12
1925. 2.18
FY1923
1925. 7.24
1925.12.28
1926. 2. 8
FY1924
1925.12.19
1926. 1.30
1926. 2.24
FY1925
1926.12.18
1927. 1.27
1927. 2.18
Emergency
1927. 1.18
1927. 2. 2
1927. 2.18
armaments
expenditures
FY1926
1927.12.20
1927.12.28
1928. 4.23
FY1927
1928.12.26
1929. 1.16
1929. 2.15
FY1928
1929.12.20
1929.12.27
1930. 4.23
FY19291930.12.20
1930.12.26
1931. 2.20
FY19301931.12.21
1931.12.28
1933. 1.21
FY1931
1932.12.28
1933. 1.24
1933. 2.20
FY1932
1934. 1.15
1934. 2. 3
1934. 2.23
FY1933
1935. 1.21
1935. 2. 1
1935. 2.15
FY1934
1936. 1.20
1936. 2. 5
1936. 5. 4
FY1935
1936.12.10
1937. 2. 3
1937. 2.19
FY1936
1938. 1.15
1938. 2. 1
1938. 2.23
FY1937
1938.12. 8
1938.12.28
1939. 2. 2
FY1938
1939.12.18
1939.12.28
1940. 2.13
FY19391940.12.18
1940.12.27
1941. 1.28
FY19401941.12.19
1941.12.27
1942. 1.21
FY1941
1942.12.19
1942.12.29
1943. 1.21
Emergency
1942.12.19
1942.12.29
1943. 1.28
Army
Material FundFY1942
1943.12.24
1944. 1.13
1944. 1.21
FY19431945. 1.21
1945. 2. 5
1945. 2. 6
FY1944
1946. 8.21
1947. 1.22
1947. 3. 7
FY1945
1947. 4.19
1947. 5. 1
1947. 7.25
Emergency
1947. 3.10
1947. 3.17
1947. 3.22
armaments
expenditure＊
1 An account adopting the budget of the former Korean government.
＊
2 Received again on December 27, 1923, due to loss of documents by fire caused by the Great Kanto Earthquake.

632

Resolution at theHouse of Peers
1895. 3.11
1895. 3.23
1896. 3.27
1897. 3.24
1899. 3.28
1899. 2.28

Resolution at the House ofRepresentatives
1901. 3.23
1895. 3.23
1896. 3.26
1897. 3.23
1900. 2. 7
1900. 2.14

1899. 3. 2
1900. 2.20
1901. 3.23
1902. 3. 4
1905. 2.27
1905. 2.25
1905. 2.25
1906. 3.26
1907. 3.26
1908. 3.23
1909. 3.24
1909. 3.24

1899. 3. 4
1900. 2.19
1901. 3.23
1902. 3. 8
1903. 6. 4
1905. 2.27
1905. 2.27
1906. 3.27
1907. 3.26
1908. 3.17
1909. 3.24
1909. 3.24

1910. 3.22
1911. 3. 4
1912. 3. 91913. 3.26
1913. 3.26
1914. 6.28
1915. 6. 7
1916. 2.26
1917. 7.11
1918. 3.25
1919. 3.26
1920. 7.28
1921. 3.26
1922. 3.25
1923. 3.25
1924. 7.17
1925. 3.25
1926. 3.25
1926. 3.25
1927. 3.24
1927. 3.24

1910. 3.15
1911. 3.21
1912. 3.22
1913. 3.26
1913. 3.26＊1
1915. 5.31
1915. 6. 91916. 2.28
1918. 3.23
1918. 3.23
1919. 3.25
1920. 7.28
1921. 3.24
1922. 3.24
1923. 3.26
1924. 7.17
1925. 3.23
1926. 3.24
1926. 3.24
1927. 3.25
1927. 3.25

1929. 3.12
1929. 3.23
1930. 5.13
1931. 3.24
1933. 3. 8
1933. 3.22
1934. 3.24
1935. 3.18
1936. 5.18
1937. 3.18
1938. 3.19
1939. 2.28
1940. 3. 4
1941. 2.12
1942. 2. 4
1943. 2.15
1943. 2.22

1929. 3.23
1929. 3.23
1932. 6.14
1932. 6.14
1933. 3.23
1933. 3.23
1934. 3.24
1935. 3.25
1936. 5.31
1937. 8. 3
1938. 3.23
1939. 3.25
1940. 3.21
1941. 3.25
1942. 2.14
1943. 3.25
1943. 3.25

1944. 2. 5
1945. 2.14
1947. 3.25
1947.12. 4
1947. 3.29

1944. 3.23
1945. 3.24
1947. 3.27
1947.12. 6
1948. 3.31

Section 2

FY
FY1946FY1947
FY1948FY1949FY1950
FY1951
FY1952
FY1953
FY1954
FY1955
FY1956
FY1957
FY1958
FY1959FY1960FY1961
FY1962
FY1963
FY1964FY1965FY1966FY1967
FY1968FY1969FY1970
FY1971
FY1972
FY1973
FY1974
FY1975
FY1976
FY1977
FY1978FY1979FY1980
FY1981
FY1982
FY1983
FY1984
FY1985
FY1986
FY1987
FY1988
FY1989FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998FY1999FY2000FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008

Receipt of Final
Accounts
1948. 3. 9
1949. 1.31
1949.11.28
1950.11.24
1951.11.28
1952.11.29
1953.11.30
1954.11. 6
1955.11.10
1956.10.31
1957.10.26
1958.10.25
1959.10.24
1960.10.24
1961.10.23
1962.10.25
1963.10.25
1964.10.24
1965.10.23
1966.10.22
1967.10.21
1968.10.15
1969.10.15
1970.10.15
1971.10.15
1972.10.14
1973.10.13
1974.10.15
1975.10.17
1976.10.19
1977.10.18
1978.10.13
1979.10.12
1980.10.14
1981.10.13
1982.10.12
1983.10.14
1984.10.12
1985.10.15
1986.10.14
1987.10.13
1988.10.14
1989.10.13
1990.10.12
1991.10. 4
1992.10. 6
1993.10. 5
1994.10. 7
1995.10. 6
1996.10. 4
1997.10. 3
1998.10. 2
1999. 9.28
2000. 9.29
2001. 9.28
2002. 9.27
2003. 9.26
2004. 9.10
2004. 9. 6
2006. 9. 8
2007. 9. 7
2008. 9. 9
2009. 9. 8

Forwarding of the Final Accounts(Submission of the Annual Audit Report)
1948. 3.22
1949. 2.15
1950. 1.10
1951. 1.12
1952. 1.18
1952.12.31
1953.12.25
1954.12.24
1955.12.14
1956.12. 7
1957.12. 7
1958.12. 4
1959.12. 4
1960.12. 5
1961.12. 4
1962.12. 4
1963.12. 4
1964.12. 3
1965.12. 2
1966.12. 6
1967.11.30
1968.11.29
1969.11.29
1970.11.30
1971.12. 3
1972.12.12
1973.12.10
1974.12.11
1975.12.11
1976.12.10
1977.12.14
1978.12.15
1979.12.14
1980.12.10
1981.12.15
1982.12.13
1983.12.21
1984.12.10
1985.12.12
1986.12.12
1987.12.11
1988.12.16
1989.12. 8
1990.12.14
1991.12. 9
1992.12.11
1993.12.14
1994.12.16
1995.12.15
1996.12.11
1997.12.12
1998.12.11
1999.11.29
2000.11.30
2001.11.30
2002.11.29
2003.11.28
2004.11. 9
2005.11. 8
2006.11.10
2007.11. 9
2008.11. 7
2009.11.11

633

Submission
to the Diet
1948. 3.30
1949. 3.30
1950. 2.21
1951. 2.24
1952. 3.24
1953. 2.18
1954. 2.11
1955. 1.22
1956. 1.12
1956.12.25
1957.12.23
1958.12.22
1959.12.29
1960.12.27
1961.12.23
1962.12.26
1963.12.24
1964.12.25
1965.12.28
1966.12.27
1967.12.27
1968.12.27
1970. 1.14
1970.12.26
1971.12.29
1972.12.22
1973.12.21
1974.12.27
1975.12.27
1976.12.30
1977.12.27
1978.12.26
1979.12.25
1980.12.26
1981.12.25
1982.12.28
1983.12.26
1984.12.21
1985.12.24
1986.12.29
1987.12.28
1988.12.30
1989.12.25
1990.12.21
1992. 1.24
1993. 1.22
1994. 1.31
1995. 1.20
1996. 1.22
1997. 1.20
1998. 1.12
1999. 1.19
2000. 1.20
2001. 1.31
2002. 1.21
2003. 1.20
2004. 1.19
2004.11.19
2006. 1.20
2006.11.21
2007.11.20
2008.11.21
2009.11.24

Resolution at theHouse of Councillors
1949. 4.25
1950. 3.30
1952. 5.30
1952.12.23
1953. 7.29
1954. 4.23
1954.12. 1
1955. 7.29
1957. 3.29
1958. 4. 9
1958.12.23
1960. 3.21
1961. 6. 8
1962. 5. 6
1963. 2. 5
1964. 3.25
1965. 2.26
1966. 6.22
1967. 6.12
1967.12.21
1968. 5.17
1970. 4.28
1971. 5.19
1972. 5.26
1973. 6.22
1974. 5.17
1975. 6. 6
1977. 5.25
1978. 6.16
1979. 6. 1
1980. 4.25
1981. 4.17
1982. 4.28
1983. 5.18
1983. 5.18
1984. 7.11
1985. 6.19
1986. 5.22
1987. 7. 6
1988. 7.19
1989.12.15
1991. 4.24
1992. 6.19
1992. 6.19
1993. 8.27
1994.10. 4
1996. 2.16
1996. 2.16
1997. 1.17
1998. 1.14
1999.11.10
1999.11.10
2001. 6.27
2002.12.11
2002.12.11
2003. 6.16
2004. 6. 2
2005. 6. 8
2006. 6. 9
2007. 6.13
2008. 6.11
2009. 7. 1

Annual Audit Report

Resolution at the Houseof Representatives
1949. 5.21
1950. 3.18
1951. 3.30
1952. 6. 7
1953. 8.10
1955. 5.28
1955. 5.28
1956. 3.22
1957.11.13
1958. 7. 8
1960. 6.17
1960. 6.17
1961.10.13
1962. 2.23
1963. 3.29
1964. 5.15
1964.12.18
1966. 6. 7
1967. 5. 9
1968. 5.14
1969. 3.18
1970. 4.17
1971. 5.11
1972. 5.12
1973. 7.13
1974.12.25
1975. 6.27
1976.10.21
1977. 5.24
1978. 5.25
1979. 6. 5
1980.10.21
1982. 4.20
1983. 5.25
1984. 3. 9
1985. 3.28
1986. 2.25
1987. 4.14
1987. 4.14
1988.11.18
1989.12.12
1991.10. 4
1991.10. 4
1993. 6. 8
1994. 6.16
1994. 6.16
1996. 6.14
1996. 6.14
1997. 6.17
1997. 6.17
2000. 5.23
2000. 5.23
2002. 5.10
2002. 5.10
2002.12.10
2003. 7.15
2004. 6. 3
2005. 6.30
2006. 6.13
2007.10.18
2008. 6.10
2009. 6.25

II. Appendix

Subsection 3
FY
FY1887
FY1888
FY1889FY1890
FY1891
FY1892
FY1893―
FY1894―
FY1895
FY1896
FY1897
FY1898
FY1899FY1900FY1901
FY1902
FY1903
FY1904
FY1905―
FY1906
FY1907
FY1908
FY1909FY1910
FY1911
FY1912
FY1913
FY1914
FY1915
FY1916
FY1917
FY1918FY1919FY1920
FY1921
FY1922
FY1923
FY1924
FY1925―
FY1926
FY1927
FY1928
FY1929FY1930
FY1931
FY1932
FY1933
FY1934
FY1935
FY1936
FY1937
FY1938FY1939FY1940
FY1941―
FY1942
FY1943
FY1944―FY1945

Date of Resolution of the Annual Audit Report to the Emperor, etc. at the General
Meeting, and Date of Submission to the Emperor
Matters

Annual Audit Report to the Emperor
〃
〃
〃
〃
〃
〃
Graph of progress in Audit on Emergency Armaments Expenditures
Annual Audit Report to the Emperor
Final Audit Report to the Emperor on the Final Accounts of Revenue andExpenditure of Special Account for Emergency Armaments Expenditures
Annual Audit Report to the Emperor
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Final Audit Report to the Emperor on Emergency Armaments Expenditures
Annual Audit Report to the Emperor
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Final Audit Report to the Emperor on Emergency Armaments Expenditures
Annual Audit Report to the Emperor
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Final Audit Report to the Emperor on Emergency Army Material
Annual Audit Report to the Emperor〃〃
Final Audit Report to the Emperor on Emergency Armaments Expenditures
Annual Audit Report to the Emperor

634

Date of resolution at
the General Meeting
1891. 7. 2
1893. 6.20
1894. 7. 4
1894.11. 9
1895. 3.20
1895. 8.12
1896. 7.18―
1897. 8. 2
1897.12.14

Date of Submission
to the Emperor
1891. 7.11
1893. 9.13
1894.10.16
1894.12.10
1895. 6.11
1895.10.12
1896.10.13
1897. 3. 8
1897. 9.13
1897.12.21

1898. 3.25
1899. 4.28
1900. 4.13
1901. 1.15
1902. 1.28
1902.12.24
1903.12.11
1904.12.19
1905.12.19
1906.12.26
1907.12.20
1908. 5.20
1908.12.25
1909.12.12
1910.12.23
1911.12.26
1912.12.25
1913.12.24
1914.12.24
1915.12.27
1917. 1.18
1918. 2.16
1918.12.27
1919.12.24
1921. 1.27
1922. 2. 8
1923. 1.31
1924. 2.15
1925. 2.25
1926. 3.15
1926. 3.23
1927. 3. 9
1927. 3.12
1928. 3. 2
1927. 3.15
1930. 3. 7
1931. 3. 7
1932. 3. 8
1933. 3. 8
1934. 3. 7
1935. 3. 4
1936. 3.11
1937. 3. 91938. 3.19
1939. 2.24
1940. 1.25
1941. 1.24
1942. 1.30
1943. 2. 5
1943. 2. 5
1944. 2. 8
1945. 2.24
1947. 3.27
1947. 4. 4
1947. 4.25

1898. 4.21
1899. 5.12
1900. 5.19
1901. 4.11
1902. 3. 5
1903. 2. 9
1904. 1.25
1905. 1.14
1906. 1.19
1907. 2. 6
1908. 2. 3
1908. 6.12
1909. 2. 2
1910. 2.18
1911. 2. 6
1912. 3. 2
1913. 3.14
1914. 2. 7
1915. 2.22
1916. 2. 5
1917. 2.17
1918. 3.13
1919. 2.26
1920. 3. 3
1921. 3.15
1922. 4. 8
1923. 3.15
1924. 4.15
1925. 3.31
1926. 4.13
1926. 4.13
1927. 4.18
1927. 4.18
1928. 4.13
1929. 4. 4
1930. 4.11
1931. 4.13
1932. 4.15
1933. 3.29
1934. 4. 2
1935. 3.28
1936. 3.27
1937. 3.26
1938. 4. 8
1939. 3.16
1940. 2.14
1941. 2. 7
1942. 2.10
1943. 2.17
1943. 2.17
1944. 2.18
1945. 3.19
1947. 4.23
1947. 4.23
1947. 5. 2

Section 2

Subsection 4FY
FY1946FY1947
FY1948FY1949FY1950
FY1951
FY1952
FY1953
FY1954
FY1955
FY1956
FY1957
FY1958
FY1959FY1960FY1961
FY1962
FY1963
FY1964FY1965FY1966FY1967
FY1968FY1969FY1970
FY1971
FY1972
FY1973
FY1974
FY1975
FY1976
FY1977
FY1978FY1979FY1980
FY1981
FY1982
FY1983
FY1984
FY1985
FY1986
FY1987
FY1988
FY1989FY1990
FY1991
FY1992
FY1993
FY1994
FY1995
FY1996
FY1997
FY1998FY1999FY2000FY2001
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008Annual Audit Report

Date of Sending of the National Property Audit Report and Submission to the Diet,
etc.

Receipt of the statement of
the total value of national
properties
1947.11.30
1948.12. 7
1949.11. 4
1950.11. 1
1951.10.27
1952.10.30
1953.10.29
1954.10.30
1955.10.29
1956.10.29
1957.10.29
1958.10.28
1959.10.31
1960.10.29
1961.10.31
1962.10.31
1963.10.31
1964.10.28
1965.10.22
1966.10.29
1967.10.21
1968.10.25
1969.10.24
1970.10.24
1971.10.29
1972.10.24
1973.10.23
1974.10.22
1975.10.21
1976.10.29
1977.10.28
1978.10.27
1979.10.26
1980.10.24
1981.10.23
1982.10.15
1983.10.18
1984.10.12
1985.10.15
1986.10.21
1987.10.20
1988.10.21
1989.10.20
1990.10.19
1991.10.11
1992.10. 9
1993.10. 8
1994.10.11
1995.10.13
1996.10.22
1997.10.14
1998.10.20
1999.10. 8
2000.10. 6
2001.10.26
2002.10.11
2003. 9.26
2004. 9.10
2005. 9. 6
2006. 9. 8
2007. 9. 7
2008. 9. 9
2009. 9. 8

Forwarding of the statement of thetotal value of national properties(Sending of the Audit Report)
1948. 3.22
1949. 2. 2
1949.12.24
1950.12.23
1951.12.21
1952.12.26
1953.12.22
1954.12.20
1955.12. 7
1956.12. 7
1957.11.29
1958.11.28
1959.12. 4
1960.12. 5
1961.12. 4
1962.12. 4
1963.12. 4
1964.12. 3
1965.12. 2
1966.12. 6
1967.11.30
1968.11.29
1969.11.29
1970.11.30
1971.12. 3
1972.12.12
1973.12.10
1974.12.11
1975.12.11
1976.12.10
1977.12.14
1978.12.15
1979.12.14
1980.12.10
1981.12.15
1982.12.13
1983.12.21
1984.12.10
1985.12.12
1986.12.12
1987.12.11
1988.12.16
1989.12. 8
1990.12.14
1991.12. 9
1992.12.11
1993.12.14
1994.12.16
1995.12.15
1996.12.11
1997.12.12
1998.12.11
1999.11.29
2000.11.30
2001.11.30
2002.11.29
2003.11.28
2004.11. 9
2005.11. 8
2006.11.10
2007.11. 9
2008.11. 7
2009.11.11

635

Submission
to the Diet

Resolution at theHouse of Councillors

1948. 6.22
1949. 5.14
1950. 4. 3
1951. 3.20
1952. 3.29
1953. 6.16
1954. 2.11
1955. 4. 4
1956. 2.24
1957. 2. 1
1958. 2.18
1959. 2.14
1960. 3.28
1961. 2.24
1962. 2. 7
1963. 1.16
1964. 1.28
1965. 1.22
1966. 1.25
1967. 2.21
1968. 1.23
1969. 1.24
1970. 1.30
1971. 1.22
1972. 1.21
1973. 1.23
1974. 1.22
1975. 1.21
1976. 1.30
1977. 1.28
1978. 1.31
1979. 1.30
1980. 1.29
1981. 1.30
1982. 1.29
1983. 1.28
1984. 1.31
1985. 1.29
1986. 1.28
1987. 1.30
1988. 1.29
1989. 1.27
1990. 1.19
1991. 1.29
1992. 1.24
1993. 1.22
1994. 1.28
1995. 1.20
1996. 1.22
1997. 1.20
1998. 1.12
1999. 1.19
2000. 1.20
2001. 1.31
2002. 1.12
2003. 1.20
2004. 1.19
2004.11.19
2006. 1.20
2006.11.21
2007.11.20
2008.11.21
2009.11.24

1948. 7. 5
1949. 5.23
1950. 4.29
1951. 1. 7
1952. 5.26
1953. 7.22
1954. 3.24
1955. 6.13
1957. 3.29
1958. 4. 9
1958.12.23
1960. 3.21
1961. 6. 8
1962. 5. 6
1963. 2. 5
1964. 3.25
1965. 2.26
1966. 6.22
1967. 6.12
1967.12.21
1968. 5.17
1970. 4.28
1971. 5.19
1972. 5.26
1973. 6.22
1974. 5.17
1975. 6. 6
1977. 5.25
1978. 6.16
1979. 6. 1
1980. 4.25
1981. 4.17
1982. 4.28
1983. 5.18
1983. 5.18
1984. 7.11
1985. 6.19
1986. 5.22
1987. 7. 6
1988. 7.19
1989.12.15
1991. 4.24
1992. 6.19
1992. 6.19
1993. 8.27
1994.10. 4
1996. 2.16
1996. 2.16
1997. 1.14
1998. 1.14
1999.11.10
1999.11.10
2001. 6.27
2002.12.11
2002.12.11
2003. 6.16
2004. 6. 2
2005. 6. 8
2006. 6. 9
2007. 6.13
2008. 6.11
2009. 7. 1

Resolution at theHouse ofRepresentatives
1948.11.30
1949. 5.21
1950. 4.30
1951. 5.25
1952. 5.20
1953.12. 8
1954. 3.18
1955. 6. 4
1958. 4.22
1958. 7. 8
1960. 6.17
1960. 6.17
1961.10.13
1962. 2.23
1963. 3.29
1964. 5.15
1964.12.18
1966. 6. 7
1967. 5. 9
1968. 5.14
1969. 3.18
1970. 4.17
1971. 5.11
1972. 5.12
1973. 7.13
1974.12.25
1975. 6.27
1976.10.21
1977. 5.24
1978. 5.25
1979. 6. 5
1980.10.21
1982. 4.20
1983. 5.25
1984. 3. 9
1985. 3.28
1986. 2.25
1987. 4.14
1987. 4.14
1988.11.18
1989.12.12
1991.10. 4
1991.10. 4
1993. 6. 8
1994. 6.16
1994. 6.16
1996. 6.14
1996. 6.14
1997. 6.17
1997. 6.17
2000. 5.23
2000. 5.23
2002. 5.10
2002. 5.10
2002.12.10
2003. 7.15
2004. 6. 3
2005. 6.30
2006. 6.13
2007.10.18
2008. 6.10
2009. 6.25

II. Appendix

Subsection 5

Date of Sending of the Goods Audit Report and Submission to the Diet

FY

Receipt of the statement of
the total value of goods

Forwarding of the statement of the total
value of goods(Sending of the Audit Report)

FY1957

1958.10.31

FY1958

1959.10.24

FY19591960.10.24

1960.12. 5

1961. 2.24

1962. 5. 6

1962. 2.23

FY19601961.10.23

1961.12. 4

1961.12.23

1963. 2. 5

1963. 3.29

FY1961

1962.10.25

1962.12. 4

1962.12.26

1964. 3.25

1964. 5.15

FY1962

1963.10.25

1963.12. 4

1963.12.24

1965. 2.26

1964.12.18

FY1963

1964.10.24

1964.12. 3

1964.12.25

1966. 6.22

1966. 6. 7

Resolution at theHouse ofRepresentatives

Submission
to the Diet

Resolution at theHouse of Councillors

1958.11.29

1959. 2.14

1960. 3.21

1960. 6.17

1959.12. 4

1960. 3.28

1961. 6. 8

1961.10.13

Audit of goods was abolished after the FY1963 Annual Audit Report.

636

Section 3

Section 3
1

BOA Related Laws and Regulations

BOA Related Laws and Regulations

Rules on the Organization of the Board of Audit (Circular Notice of Dajokan No. 35 of April 28,
1881)

Organization of the Board of Audit
The President: second-ranking official
The President shall take the overall control of the Board of Audit's officials and preside over all
affairs administered by the Board of Audit.
The President shall consult with the Emperor about the promotion and demotion of Soninkan andhigher officials, and make an independent decision on the promotion and demotion of Hanninkan andlower officials.
Fukucho: third-ranking official
Fukucho shall assume the duties equivalent to those of the President.
The posts mentioned above shall be Chokuninkan.
First-ranking Director
Second-ranking Director
Third-ranking Director
Fourth-ranking Director
Directors shall take charge of audit of receipt and payment of public money and goods, government
property management methods, and affairs of budget and the final accounts of revenue and expenditure,and shall draft and prepare disciplinary plans for the official in charge of expenses.
Fixed number of officials: 10
Daishokikan
Gonnodaishokikan
Shoshokikan
Gonnoshoshokikan
Secretaries shall supervise affairs of the President's Secretariat and administration, finance andaccounting, and records within the Board of Audit.
Two each of Daishokikan and Shoshokikan shall be Gonnodaishokikan and Gonnoshoshokikan.
The posts mentioned above shall be Soninkan.
Assistant Directors: equivalent to eighth-ranking to seventeenth-ranking officials
Assistant Directors shall be subordinated to Directors and engaged in audit affairs. If Directors areincapacitated, Assistant Directors may carry out the duties on behalf of Directors.
637

II. Appendix

Fixed number of officials: 75
Staff members: equivalent to eighth-ranking to seventeenth-ranking officials
Staff members shall be subordinated to Secretaries and engaged in affairs of documents andcalculation.
Rules on the Board of Audit
Article 1 The Board of Audit shall be responsible for examining and supervising the revenue andexpenditure of the government and maintaining the uniformity of finance and accounting laws andregulations.
Article 2 The Board of Audit shall examine the legitimacy of revenue and expenditure budgets and offer
its opinions to the Cabinet.
Article 3 The Board of Audit shall audit receipt and payment of public money and goods and government
property management methods.
Article 4 When it is necessary to examine the auditee's project in order to audit accounts, the Board ofAudit may conduct on-site audits of the project and offer its opinions to the Cabinet.
Article 5 The Board of Audit shall examine and judge the final accounts of revenues and expenditures of
the treasury and each government office, and pronounce the status of the final accounts of revenues andexpenditures to the relevant accounting officers.
Article 6 The judgment pronounced under the preceding Article shall be the final decision; provided,
however, that if the Cabinet finds the judgment to be inappropriate, the case may be remanded to theBoard of Audit for retrial or special commissioners may be appointed to examine the case.
Article 7 The Board of Audit shall prepare statements of the final accounts of revenue and expenditure andannual reports, and submit them to the Cabinet.
Article 8 The Board of Audit may submit proposals on establishment and amendment of finance andaccounting laws and regulations and internal operational rules to the Cabinet.
Article 9 The Board of Audit may explain the uncertainty in finance and accounting laws and regulations
and notify each government office of such explanation.
Article 10 The Board of Audit shall review budgets and final accounts of local tax revenues andexpenditures.
Article 11 If the officials in charge of expenses violate finance and accounting laws and regulations, theBoard of Audit shall draft a disciplinary plan and submit it to the Cabinet if the officials concerned are
Soninkan or higher officals, or report it to the head of the relevant department if the officials concerned
are Hanninkan or lower officials; provided, however, that if the violation is prescribed in the Penal
Code, the Board of Audit shall notify the Public Prosecutor of the case.
Article 12 Documents issued by the Board of Audit shall be signed by the President, and those issued topronounce the status of the final accounts of revenues and expenditures and disciplinary plans shall bejointly signed by the President and the chief Director.

638

Section 3

2

BOA Related Laws and Regulations

Rules on the Organization of the Board of Audit (Circular Notice of Dajokan No. 5 of January
16, 1882)

Organization of the Board of Audit
The President: equivalent to a second-ranking official
The President shall take the overall control of the Board of Audit's officials and preside over affairs
administered by the Board of Audit. The President shall consult with the Emperor about the promotion anddemotion of Soninkan and higher officials, and make an independent decision on the promotion anddemotion of Hanninkan and lower officials.
Fukucho: equivalent to third-ranking official
The Vice-President shall assume the duties equivalent to those of the President.
Directors: equivalent to fourth-ranking to seventh-ranking officials
Directors shall take charge of audit affairs.
Secretaries: equivalent to fourth-ranking to seventh-ranking officials
Secretaries shall supervise affairs of the President's Secretariat and administration, finance andaccounting, and records within the Board of Audit.
Assistant Directors: equivalent to eighth-ranking to seventeenth-ranking officials
Assistant Directors shall be subordinated to Directors and engaged in audit affairs. If Directors areincapacitated, Assistant Directors may carry out the duties on behalf of Directors.
Staff members: equivalent to eighth-ranking to seventeenth-ranking officials
Staff members shall be subordinated to the Secretaries and engaged in affairs of documents andfinance and accounting.
Rules on the Board of Audit
Article 1 The Board of Audit shall be responsible for auditing the finance and accounting of thegovernment and maintaining the uniformity of finance and accounting laws and regulations.
Article 2 The Board of Audit shall examine and judge the final accounts of revenue and expenditure andpronounce a certificate of grant of discharge to the person who submitted the final accounts.
Article 3 The Board of audit shall certify to the Dajokan the calculation made in the reports on financeand accounting submitted by the head of each government office.
Article 4 The Board of Audit shall audit account ledgers and receipt and payment of money and goods,
and conduct on-site review of projects when necessary.
Article 5 The Board of Audit may inspect all documents necessary for audit and request explanations fromthe officials in charge.
Article 6 The Board of Audit may submit proposals on enactment and amendment of finance andaccounting laws and regulations to the Cabinet.
639

II. Appendix

Article 7 When the Board of Audit finishes auditing the final accounts of revenue and expenditure, it shallprepare an annual report containing the audit results and its opinions on finance and accounting, andsubmit it to the Cabinet.
Article 8 If Accounting officials violate finance and accounting laws and regulations, the Board of Audit
shall notify the head of the relevant department of that effect; provided, however, that this Article shallapply mutatis mutandis in the case of violation of criminal laws.
3

Ordinance on the Board of Audit (Imperial Ordinance No. 20 of April 17, 1886)

Article 1 The Board of Audit shall have the following officials to audit the finance and accounting of thegovernment:
President; Vice-President; Secretaries; Directors; Assistant Directors; and Staff members.
Article 2 The number of President shall be one, and this office shall be filled with by a first-ranking
official appointed from among Chokuninkan. The President shall take charge of examining and judging,under the control and supervision of the Prime Minister, accounts of money and goods of the treasury
and each government office, increase and decrease in government property, operation capital, separate
accounts, and accounts of retained money and collateral, and certifying the legitimacy thereof instatements of revenue and expenditure accounts.
Rules on audit concerning the procedures for examination and judgment and for certification shall be
provided for separately.
Article 3 The President shall take control of the Board of Audit's officials, and shall consult with thePrime Minister about the promotion and demotion of Soninkan, and make an independent decision on
the promotion and demotion of Hanninkan and lower officials.
Article 4 The President may entrust a government office to audit part of its accounts and report the audit
results.
Article 5 The President may inspect books, documents and other objects as found necessary for audit andrequest an explanation from the official in charge.
Article 6 When it is necessary to examine the vaults and warehouses, the actual receipt and payment, andother matters of a project, the President may dispatch Directors to the relevant government office andrequest the attendance of the official in charge to the examination, while notifying the government officein advance.
Article 7 If the President judges the finance and accounting to be proper, the President shall issue acertificate of grant of discharge to the official in charge. If the finance and accounting is not proper, thePresident may notify the head of the relevant department and have the head take action or, whennecessary, may directly consult with the Prime Minister for taking action.
Article 8 The President must prepare a report within five months from the conclusion of every fiscal year
and report to the Prime Minister about the progress in audit of the finance and accounting in theprevious fiscal year. The President may provide an administrative opinion on the performance ofadministrative expenses.
640

Section 3

BOA Related Laws and Regulations

Article 9 The number of Vice-President shall be one, and this office shall be filled with by a secondranking official appointed from among Chokuninkan. The Vice-President shall assist the duties of the
President and if the President is incapacitated, the Vice-President may carry out the duties on behalf of
the President.
Article 10 Secretaries shall be appointed from among Soninkan, and the number thereof shall be two. They
shall take charge of affairs of documents and finance and accounting by order of the President.
Article 11 Directors shall be appointed from among Soninkan, and the number thereof shall be ten. They
shall take charge of affairs of audit by order of the President.
Article 12 Assistant Directors shall be appointed from among Hanninkan, and engaged in affairs of audit
as subordinates of the respective Directors.
Article 13 Staff members shall be appointed from among Hanninkan, and engaged in affairs ofadministration and finance and accounting as subordinates of Secretaries.

641

II. Appendix

4

Comparison between the BOA Act upon promulgation (May 10, 1889) and the BOA Act after thelast amendment (March 20, 1943)

The Board of Audit Act
The BOA Act after the last amendment(Act No. 15 of 1889)(amendment by Act No. 77 of 1943)
The Board of Audit Act
The Board of Audit Act
Chapter I ORGANIZATION
Chapter I ORGANIZATION
Article 1 The Board of Audit shall be under the direct control Article 1 The Board of Audit shall be under the direct controlof the Emperor and have a status independent from theof the Emperor and have a status independent from theministers of state.
ministers of state.
Article 2 The Board of Audit shall have in place one President, Article 2 (1) The Board of Audit shall have in place one
three Directors General, and 12 Directors as its Members,
President, three Directors General, and 14 Directors as its
and also two Secretaries, 24 Assistant Directors, and a few
Members, and also Secretaries, Assistant Directors, Residents
Staff members.
and Clerks.
(2) When the Members of the Board of Audit are called into
the army or navy or when there are any other special
circumstances, these Members may be excluded from thefixed number of Members pursuant to Imperial Ordinance.
〈Amendments〉Partial amendment (Act No. 90 of 1896)
Partial amendment (Act No. 81 of 1900)
Partial amendment (Act No. 31 of 1910)
Partial amendment (Act No. 23 of 1911)
Partial amendment (Act No. 11 of 1913)
Partial amendment (Act No. 36 of 1916)
Partial amendment (Act No. 4 of 1919)
Partial amendment (Act No. 53 of 1921)
Partial amendment (Act No. 43 of 1925)
Partial amendment (Act No. 26 of 1927)
Partial amendment (Act No. 22 of 1929)
Partial amendment (Act No. 19 of 1934)
Partial amendment (Act No. 28 of 1937)
Partial amendment (Act No. 20 of 1940)
Complete amendment (Act No. 77 of 1943)
Article 3 The President of the Board of Audit shall be Article 3 The President of the Board of Audit shall be
Chokuninkan, Directors General shall be Chokuninkan or
Shinninkan, Directors General shall be Chokuninkan,
Soninkan, Directors, Secretaries, and Assistant Directors shall
Directors shall be Chokuninkan or Soninkan, Secretaries,
be Soninkan, and Staff members shall be Hanninkan.
Assistant Directors and Residents shall be Soninkan, andClerks shall be Hanninkan, provided, however that Clerks
may be Soninkan pursuant to the provision of the Imperial
Ordinance. The fixed number of Directors who are
Chokuninkan, Secretaries, Assistant Directors, Residents andClerks shall be specified by Imperial Ordinance.
〈Amendments〉Complete amendment (Act No. 31 of
1910)
Partial amendment of former paragraph (1)(Act No. 36 of 1916)
Partial amendment of former paragraphs(1) and (2) (Act No. 43 of 1925)
Partial amendment of former paragraph (1)(Act No. 19 of 1934)
Complete amendment (Act No. 77 of1943)
Article 4 (1) The President of the Board of Audit shall preside Article 4 (1) The President of the Board of Audit shall presideover the affairs of the Board of Audit, and Directors Generalover the affairs of the Board of Audit, and Directors Generalshall administer the affairs of Bureaus.
are to administer the affairs of Bureaus.
(2) If the President of the Board of Audit is incapacitated, a(2) If the President of the Board of Audit is incapacitated, asenior Director General may carry out the duties on behalf ofsenior Director General may carry out the duties on behalf of
the President.
the President.
Article 5 Three Bureaus shall be established in the Board of Article 5 Three Bureaus shall be established in the Board ofAudit, and audit affairs in each Bureau shall be assigned
Audit, and audit affairs in each Bureau shall be assigned
among one Director General and four Directors.
among one Director General and four or five Directors.
〈Amendments〉Partial amendment (Act No. 11 of 1913)
642

Section 3

BOA Related Laws and Regulations

The Board of Audit Act(Act No. 15 of 1889)

The BOA Act after the last amendment(amendment by Act No. 77 of 1943)
Partial amendment (Act No. 53 of 1921)
Partial amendment (Act No. 28 of 1937)
Partial amendment (Act No. 20 of 1940)
Complete amendment (Act No. 77 of1943)
Article 6 (1) A Member shall be appointed from among persons Article 6 (1) A Member shall be appointed from among persons
qualified under Imperial Ordinance.
qualified under Imperial Ordinance.
(2) Except through criminal proceedings or proceedings for a(2) Except through criminal proceedings or proceedings for a
disciplinary action, a Member shall not be ordered to resign
disciplinary action, a Member shall not be ordered to resignfrom office, to be transferred in position, or to take anfrom office, to be transferred in position, or to take anadministrative leave against the Member's will.
administrative leave against the Member's will.
(3) Provisions on disciplinary actions against Members shall(3) Provisions on disciplinary actions against Members shallbe separately stipulated.
be separately stipulated.
〈Amendment〉Partial amendment (Act No. 31 of 1910)
Article 7 A person and the person's father, child, or sibling may Article 7 A person and the person's father, child, or sibling may
not concurrently serve as Members.
not concurrently serve as Members.
Article 8 A Member may not concurrently hold another Article 8 A Member may not concurrently hold anothergovernment post or concurrently become a member of thegovernment post or concurrently become a member of theImperial Diet or a local assembly.
Imperial Diet or a local assembly.
Article 9 (1) Matters of the Board of Audit shall be decided at Article 9 (1) Matters of the Board of Audit shall be decided at
a General Meeting or a Bureau meeting. The Generala General Meeting or a Bureau meeting. The General
Meeting shall be presided over by the President and theMeeting shall be presided over by the President and the
Bureau meeting shall be presided over by the Director
Bureau meeting shall be presided over by the Director
General.
General.
(2) A matter shall be decided by a majority vote, and in the(2) A matter shall be decided by a majority vote, and in thecase of a tie, the presiding officer shall decide on the matter.
case of a tie, the presiding officer shall decide on the matter.
Article 10 A decision shall be made at a General Meeting in Article 10 A decision shall be made at a General Meeting in
the following cases:
the following cases:(i) when presenting an address or responding to an inquiry(i) when presenting an address or responding to an inquiry
made by the Emperor pursuant to Article 15;
made by the Emperor pursuant to Article 15;(ii) when finalizing a report pursuant to Article 14;(ii) when finalizing a report pursuant to Article 14;(iii) when stating an opinion pursuant to Article 17;(iii) when stating an opinion pursuant to Article 17;(iv) when deciding on or amending rules on audit affairs or(iv) when deciding on or amending rules on audit affairs or
the format or submission deadline for submission of
the format or submission deadline for submission of
accounts; andaccounts; and(v) in any other case when the President finds it necessary to(v) in any other case when the President finds it necessary torefer a matter to the General Meeting.
refer a matter to the General Meeting.
Article 11 All determinations on audit of calculations shall be Article 11 All determinations on audit of calculations shall bemade at a meeting, and whether to make the determination atmade at a meeting, and whether to make the determination at
a General Meeting or to make it at a Bureau meeting shall be
a General Meeting or to make it at a Bureau meeting shall bedecided by the President of the Board of Audit.
decided by the President of the Board of Audit.
Chapter II AUTHORITY
Chapter II AUTHORITY
Article 12 The Board of Audit shall verify and confirm Article 12 The Board of Audit shall verify and confirm
calculations of the revenues and expenditures of public
calculations of the revenues and expenditures of publicmoney, government property and goods, and national
money, government property and goods, and national
government bonds, and supervise finance and accounting.
government bonds, and supervise finance and accounting.
Article 13 The following matters require audit by the Board of Article 13 The following matters require audit by the Board ofAudit:
Audit:(i) the final accounts;(i) the final accounts;(ii) the final accounts of revenues, expenditures, and(ii) the final accounts of revenues, expenditures, andgovernment property and goods of government offices andgovernment property and goods of government offices andgovernment structures;
government structures;(iii) the final accounts of the receipts and payments ofdeposits and securities handled by the Bank of Japan forgovernment purpose;(iii) the final accounts of revenues and expenditures of(iv) the final accounts of revenues and expenditures of bodies
bodies and public or private structures subsidized or speciallyand public or private structures subsidized or speciallyguaranteed by the government; andguaranteed by the government; and(iv) the final accounts that are specially made subject to audit(v) the final accounts that are specially made subject to audit643

II. Appendix
The Board of Audit Act(Act No. 15 of 1889)
by the Board of Audit by laws and Imperial Ordinances.

The BOA Act after the last amendment(amendment by Act No. 77 of 1943)
by the Board of Audit by laws and Imperial Ordinances.
〈Amendments〉Addition of paragraph (3), change offormer paragraphs (3) and (4) into
paragraphs (4) and (5), respectively (ActNo. 53 of 1921)
Article 14 The Board of Audit shall verify and confirm the Article 14 The Board of Audit shall verify and confirm thefinal account pursuant to Article 72 of the Constitution andfinal accounts pursuant to Article 72 of the Constitution andat the same time prepare reports on the following matters:
at the same time prepare reports on the following matters:(i) whether the figures in the final accounts and the(i) whether the figures in the final accounts and thestatements of revenue and expenditure accounts of thestatements of revenue and expenditure accounts of therespective Ministries tally with the figures in the statements
respective Ministries tally with the figures in the statementsof accounts submitted by Accounting Officers;of accounts submitted by the Bank of Japan;(ii) whether the assessment and collection of revenue, the use(ii) whether the assessment and collection of revenue, the useof expenditure, and acquisition, sale, assignment, and use ofof expenditure, and acquisition, sale, assignment, and use ofgovernment property and goods comply with the rules on thegovernment property and goods comply with the rules on thebudget or laws and Imperial Ordinances; andbudget or laws and Imperial Ordinances; and(iii) whether there are any expenditures beyond or outside the(iii) whether there are any expenditures beyond or outside thebudget which have not been approved by the Diet.
budget which have not been approved by the Diet.
〈Amendment〉Partial amendment (Act No. 53 of 1921)
Article 15 The Board of Audit shall present the annual audit Article 15 The Board of Audit shall present the annual audit
report to the Emperor for each fiscal year, and if it finds any
report to the Emperor for each fiscal year, and if it finds any
matter in the report which requires a legal or administrative
matter in the report which requires a legal or administrative
revision, it may also present its opinion to the Emperor.
revision, it may also present its opinion to the Emperor.
Article 16 (1) The Board of Audit may commission a Article 16 (1) The Board of Audit may commission agovernment office with the audit and the grant of discharge
government office with the audit and the grant of discharge
for a part of the calculation of the government office;for a part of the calculation of the government office;provided, however, that the Board of Audit must have theprovided, however, that the Board of Audit must have thegovernment office give it a report on the audit results.
government office give it a report on the audit results.
(2) Regardless of the commissioning referred to in the(2) Regardless of the commissioning referred to in thepreceding paragraph, the Board of Audit may, whenpreceding paragraph, the Board of Audit may, whennecessary, have a competent government office send anecessary, have a competent government office send astatement of account to it and have the government officestatement of account to it and have the government officeconduct audit.
conduct audit.
(3) This Article may also apply to the final accounts of the(3) This Article may also apply to the final accounts of thebodies and the public and private structures under Article 13,
bodies and the public and private structures under Article 13,
item (iii).
item (iv).
〈Amendment〉Partial amendment (Act No. 53 of 1921)
Article 17 (1) The Board of Audit shall receive notice of an Article 17 (1) The Board of Audit shall receive notice of anorder issued by a Ministry on receipt and payment oforder issued by a Ministry on receipt and payment of cash ortreasury money or bookkeeping, prior to its issuance, andgoods or bookkeeping, prior to its issuance, and may state its
may state its opinion, if any.
opinion, if any.
(2) The Board of Audit shall receive notice of an order(2) The Board of Audit shall receive notice of an orderissued by a Ministry for establishing regulations or amending
issued by a Ministry for establishing regulations or amending
existing regulations on revenues and expenditures, prior toexisting regulations on revenues and expenditures, prior totheir issuance.
their issuance.
〈Amendment〉Partial amendment (Act No. 53 of 1921)
Article 18 The Board of Audit shall decide on the formats for Article 18 The Board of Audit shall decide on the formats forstatements of accounts and submission of accounts and thestatements of accounts and submission of accounts and thedeadline for their submission and for responding to questions
deadline for their submission and for responding to questions
thereon.
thereon.
Article 19 (1) The Board of Audit may have government Article 19 (1) The Board of Audit may have government
offices submit to it books and reports that are necessary for
offices submit to it books and reports that are necessary foraudit and a written explanation of the official in charge.
audit and a written explanation of the official in charge.
(2) If the President of the Board of Audit finds it necessary(2) If the President of the Board of Audit finds it necessary
for audit, it may dispatch its official in charge and conduct
for audit, it may dispatch its official in charge and conduct
field audits. In this case, the Board of Audit shall notify thefield audits. In this case, the Board of Audit shall notify thehead of the relevant department in advance, and said head
head of the relevant department in advance, and said head
may have the department's official in charge attend the audit.
may have the department's official in charge attend the audit.
(3) The provisions of the preceding two paragraphs apply
mutatis mutandis to the entities except government offices644

Section 3

BOA Related Laws and Regulations

The Board of Audit Act(Act No. 15 of 1889)

The BOA Act after the last amendment(amendment by Act No. 77 of 1943)
subject to audit by the Board of Audit.
〈Amendment〉Addition of paragraph (3) (Act No. 53 of
1921)
Article 20 The Board of Audit shall audit the statement of Article 20 The Board of Audit shall audit the statement ofaccounts and documentary evidence provided by theaccounts and documentary evidence provided by the
Accounting Officer, and if the Board of Audit determines
Accounting Officer, and if the Board of Audit determinesthat they are proper, it shall issue a certificate of grant ofthat they are proper, it shall issue a certificate of grant ofdischarge to said officer and discharge the officer from his/discharge to said officer and discharge the officer from his/her responsibility, and if necessary, the Board of Audit shallher responsibility, and if necessary, the Board of Audit shallinquire the officer and have the officer give an explanationinquire the officer and have the officer give an explanationor correct the error, and if the Board of Audit, consequently,
or correct the error, and if the Board of Audit, consequently,
determines that they are not proper, it shall give notification
determines that they are not proper, it shall give notification
to the head of the relevant department and have the headto the head of the relevant department and have the headtake action.
take action.
Article 20-2 The Board of Audit shall audit the calculation of
the Bank of Japan and if the Board of Audit determines that
it is proper, it shall notify this to the Minister of Finance. If
the Board of Audit determines that it is not proper, it may
give notification to the Minister of Finance and demand that
the Minister should take appropriate action.
〈Amendment〉Addition (Act No. 53 of 1921)
Article 21 The head of the relevant department may not reduce Article 21 The head of the relevant department may not reduceor exempt the liability of a person who has liability foror exempt the liability of a person who has liability forindemnity based on determination by the Board of Audit,
indemnity based on determination by the Board of Audit,
except through a pardon granted by the Emperor.
except through a pardon granted by the Emperor.
Article 22 If an Accounting Officer neglects to submit a Article 22 If an Accounting Officer neglects to submit astatement of accounts or documentary evidence or fails tostatement of accounts or documentary evidence or fails tocomply with the format, the Board of Audit may notify thecomply with the format, the Board of Audit may notify thehead of the relevant department and demand a disciplinary
head of the relevant department and demand a disciplinary
action.
action.
Article 23 Calculation of secret funds of the government shall Article 23 Calculation of secret funds of the government shallbe excluded from the audit by the Board of Audit.
be excluded from the audit by the Board of Audit.
Article 24 (1) Even after the Board of Audit issues a certificate Article 24 (1) Even after the Board of Audit issues a certificate
of grant of discharge, if the Accounting Officer requests aof grant of discharge, if the Accounting Officer requests a
retrial or if the Board of Audit discovers an error, omission,
retrial or if the Board of Audit discovers an error, omission,or overlapped entry in the statement of accounts within fiveor overlapped entry in the statement of accounts within five
years from the day of the issuance, the Board of Audit may
years from the day of the issuance, the Board of Audit may
conduct a retrial; provided, however, that if the Board of
conduct a retrial; provided, however, that if the Board ofAudit discovers false documentary evidence, it may conduct
Audit discovers false documentary evidence, it may conduct
a retrial even after five years from the day of the issuance.
a retrial even after five years from the day of the issuance.
(2) An Accounting Officer may not further request a trial(2) An Accounting Officer may not further request a trial
against a determination made at a retrial by the Board ofagainst a determination made at a retrial by the Board ofAudit.
Audit.
Chapter III SUPPLEMENTARY PROVISIONS
Chapter III SUPPLEMENTARY PROVISIONS
Article 25 Rules on the Affairs of the Board of Audit shall be Article 25 Rules on the Affairs of the Board of Audit shall be
stipulated separately by Imperial Ordinance.
stipulated separately by Imperial Ordinance.

645

II. Appendix

5

Comparison between the BOA Act at the time of enforcement (May 3, 1947) and the current
BOA Act (after the latest amendment on April 1, 2007)
The BOA Act at the time of enforcement

The current BOA Act

Table of Contents (omitted)
Table of Contents (omitted)
The Board of Audit Act
The Board of Audit Act
Chapter I ORGANIZATION
Chapter I ORGANIZATION
Section 1 General Provisions
Section 1 General Provisions
Article 1 The Board of Audit has a status independent from the Article 1 The Board of Audit has a status independent from the
Cabinet.
Cabinet.
Article 2 The Board of Audit is organized with an Audit Article 2 The Board of Audit is organized with an Audit
Commission consisting of three Commissioners, and a
Commission consisting of three Commissioners, and a
General Executive Bureau.
General Executive Bureau.
Article 3 The person elected by the Commissioners from Article 3 The person elected by the Commissioners fromamong themselves is appointed President of the Board ofamong themselves is appointed President of the Board ofAudit by the Cabinet.
Audit by the Cabinet.
Section 2 Commissioners
Section 2 Commissioners
Article 4 (1) Commissioners are appointed by the Cabinet, with Article 4 (1) Commissioners are appointed by the Cabinet, withthe consent of both Houses of the Diet.
the consent of both Houses of the Diet.
(2) If the House of Representatives consents to the(2) Notwithstanding the provisions of the preceding
appointment of a Commissioner but the House of Councillors
paragraph, if the term of office of a Commissioner expires ordoes not consent to it, the consent of the House ofa vacancy occurs among the Commissioners, and the consent
Representatives shall be the consent of both Houses, inof both Houses of the Diet cannot be obtained because theaccordance with the provision of Article 67, paragraph (2) ofDiet is not in session or due to the dissolution of the House
the Constitution of Japan.
of Representatives, the Cabinet may appoint a Commissioner
without obtaining the consent of both Houses of the Diet.
(3) In the case referred to in the preceding paragraph,approval must be sought from both Houses of the Diet at thefirst session of the Diet convened after the appointment. If
approval is not obtained from both Houses of the Diet, therelevant Commissioner will automatically retire from office.
(3) The Emperor attests the appointment and dismissal of(4) The Emperor attests the appointment and dismissal ofCommissioners.
Commissioners.
(4) Commissioners are paid an annual salary of 50,000 yen.
(5) The remuneration for Commissioners is provided forseparately in another Act.
〈Amendments〉Complete
amendmentofformerparagraph (4) (Act No. 209 of 1947)
Addition of former paragraphs (3), (4)and (5) (Act No. 165 of 1950)
Completeamendmentofformerparagraph (7) (Act No. 86 of 1958)
Deletion of former paragraphs (2) and(5 ), partial amendment of former
paragraph (3) and change into paragraph(2), change of former paragraph (4) into
paragraph ( 3 ) , change of former
paragraphs (6) and (7) into paragraphs(4) and (5) respectively (Act No. 36 of
1999)
Article 5 (1) A Commissioner's term of office shall be seven Article 5 (1) A Commissioner's term of office shall be sevenyears, and a Commissioner may be reappointed for one
years, and a Commissioner may be reappointed for one
additional term only.
additional term only.
(2) If a vacancy arises in the office of Commissioner during(2) If a vacancy arises in the office of Commissioner during
the term of office, the succeeding Commissioner will holdthe term of office, the succeeding Commissioner will holdoffice for the remaining term of the predecessor.
office for the remaining term of the predecessor.
(3) Commissioners retire from office upon reaching the age(3) Commissioners retire from office upon reaching the ageof 65.
of 65.
Article 6 (1) A Commissioner retires from office upon a Article 6 A Commissioner retires from office upon a resolution
resolution by both Houses of the Diet, if, by the consensus
by both Houses of the Diet, if, by the consensus of the otherof the other Commissioners, the Commissioner is found to be
Commissioners, the Commissioner is found to be unable to646Section 3

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unable to perform his/her duties due to a mental or physicalperform his/her duties due to a mental or physical disorder ordisorder or a fact is found that constitutes a breach ofa fact is found that constitutes a breach of obligation in the
obligation in the course of duty.
course of duty.
(2) The provisions of Article 4, paragraph (2) apply mutatis 〈Amendment〉Deletion of paragraph (2) (Act No. 36 of
mutandis to the case referred to in the preceding paragraph.
1999)
Article 7 A Commissioner forfeits his/her office if he/she is Article 7 A Commissioner forfeits his/her office if he/she issentenced to a punishment of imprisonment without work or
sentenced to a punishment of imprisonment without work or
greater by a criminal court.
greater by a criminal court.
Article 8 Except in cases referred to in the preceding two Article 8 Except in cases referred to in the latter part of Article
Articles, a Commissioner does not forfeit his/her office
4 paragraph (3) and the preceding two Articles, aagainst his/her will.
Commissioner does not forfeit his/her office against his/herwill.
〈Amendments〉Partial amendment (Act No. 165 of 1950)
Partial amendment (Act No. 36 of 1999)
Article 9 A Commissioner may not concurrently hold office on Article 9 A Commissioner may not concurrently hold office on
any other, nor may a Commissioner become a member of the
any other, nor may a Commissioner become a member of theDiet, the employee of a local public entity, or the member ofDiet, the employee of a local public entity, or the member ofa local assembly.
a local assembly.
〈Amendment〉Partial amendment (Act No. 53 of 2006)
Section 3 Audit Commission
Section 3 Audit Commission
Article 10 The Chair of the Audit Commission is assumed by Article 10 The Chair of the Audit Commission is assumed by
the President of the Board of Audit.
the President of the Board of Audit.
Article 11 The following matters are decided by the Audit Article 11 The following matters are decided by the Audit
Commission:Commission:(i) enactment, amendment, or repeal of Board of Audit(i) enactment, amendment, or repeal of Board of Audit
Regulations under the provisions of Article 38;
Regulations under the provisions of Article 38;(ii) the statement of audit under the provisions of Article 29;(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 audit subject under the provisions(iii) determination of the audit subject under the provisionsof Article 23;of Article 23;(iv) matters relating to the Submission of Accounts under the(iv) matters relating to the Submission of Accounts under theprovisions of Article 24;
provisions of Article 24;(v) demand for disciplinary action under the provisions of(v) matters relating to a demand for disciplinary action under
Article 31;
the provisions of Article 31 of this Act; Article 13, paragraph(2) of the Act on Prevention of Delays in Payment under
Government Contracts (Act No. 256 of 1949); or Article 6,paragraphs (1) and (4) of the Act on the Responsibility ofGovernment Employees Who Execute the Budget (Act No.
172 of 1950) (including as applied mutatis mutandis under
the provisions of Article 9, paragraph (2) of said Act);(vi) adjudication of an official responsible for cash or goods(vi) adjudication and re-adjudication under the provisions ofhandling under the provisions of Article 32;
Article 32 of this Act (including as applied mutatis mutandis
under the provisions of Article 10, paragraph (3) or Article
11, paragraph (2) of the Act on the Responsibility ofGovernment Employees Who Execute the Budget); or Article
4, paragraph (1) or Article 5 of the Act on the Responsibilityof Government Employees Who Execute the Budget(including as applied mutatis mutandis under the provisionsof Article 8, paragraph (3) or Article 9, paragraph (2) of saidAct);(vii) decision for examination under the provisions of Article(vii) decision for examination under the provisions of Article
35;
35;(viii) presentation of opinions, and demand for measures(viii) presentation of opinions, and demand for measures
under the provisions of Article 36;
under the provisions of Article 36;(ix) presentation of opinions under the provisions of Article(ix) presentation of opinions under the provisions of Article
37
37 of this Act and Article 9, paragraph (5) of the Act on the
Responsibility of Government Employees Who Execute theBudget.
〈Amendments〉Complete amendment of items (v) and647

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Partial amendment of item (vi) (Act No.
251 of 1952)
Partial amendment of item (vi) (Act No.
137 of 1956)
Partial amendment of item (vi) (Act No.
87 of 1984)
Partial amendment of items (v) and (vi)(Act No. 93 of 1986)
Addition of item (ii)-2 (Act No. 112 of2005)

Section 4 General Executive Bureau
Section 4 General Executive Bureau
Article 12 (1) The General Executive Bureau undertakes affairs Article 12 (1) The General Executive Bureau undertakes affairsof administration, audit, and examination under the directionof administration, audit, and examination under the direction
and supervision of the Audit Commission.
and supervision of the Audit Commission.
(2) A Secretariat and the following four bureaus are(2) A Secretariat and the following five bureaus are
established in the General Executive Bureau:
established in the General Executive Bureau:
1st Audit Bureau
1st Audit Bureau
2nd Audit Bureau
2nd Audit Bureau
3rd Audit Bureau
3rd Audit Bureau
4th Audit Bureau
4th Audit Bureau
5th Audit Bureau(3) Assignment of tasks to the Secretariat and the Bureaus,(3) Assignment of tasks to the Secretariat and the Bureaus,
and the organizational subdivisions thereof, are as provided
and the organizational subdivisions thereof, are as provided
for by Board of Audit Regulations.
for by Board of Audit Regulations.
〈Amendment〉Partial amendment of paragraph (2) (ActNo. 110 of 1955)
Article 13 (1) One Secretary General, one Deputy Secretary Article 13 One Secretary General, one Deputy Secretary
General, Personal Secretaries, Administrative Officials, andGeneral, Personal Secretaries, Administrative Officials,
Technical Officials are positioned in the General Executive
Technical Officials, and such other employees as are required
Bureau.
are positioned in the General Executive Bureau.
(2) The Secretary General and Deputy Secretary General are 〈Amendments〉Partial amendment of paragraph (1) andfirst-class officials, Personal Secretaries are second-classdeletion of paragraphs (2) and (3) (Act
officials, Administrative Officials are first-class, second-class
No. 110 of 1955)
or third-class officials, and Technical Officials are secondclass or third-class officials.
(3) First-class Administrative Officials shall be full-time andthe number of them shall be 11.
Article 14 (1) First-class officials are appointed, dismissed, Article 14 (1) Employees referred to in the preceding Article
promoted, and demoted by the Cabinet pursuant to a
are appointed, dismissed, promoted, and demoted by theconsensus decision by the Commissioners.
President of the Board of Audit pursuant to a consensus
decision by the Commissioners.
(2) The provisions of laws and regulations concerning the(2) The President of the Board of Audit may delegate thequalification in terms of appointment and classification of
authority referred to in the preceding paragraph to theofficials do not apply to the Secretary General or the Deputy
Secretary General pursuant to a consensus decision by the
Secretary General.
Commissioners.
(3) Second-class officials are appointed, dismissed, promoted, 〈Amendment〉Complete amendment (Act No. 110 of 1955)
and demoted by the Prime Minister pursuant to a nominationby the Secretary General with the consent of theCommissioners.
(4) Third-class officials are appointed, dismissed, promoted,
and demoted by the Secretary General.
Article 15 (1) The Secretary General presides over the tasks of Article 15 (1) The Secretary General presides over the tasks of
the General Executive Bureau, and signs its official
the General Executive Bureau, and signs its official
documents.
documents.
(2) The Deputy Secretary General assists the Secretary(2) The Deputy Secretary General assists the Secretary
General and, if the office of Secretary General becomes
General and, if the office of Secretary General becomesvacant or the Secretary General is incapacitated, the Deputy
vacant or the Secretary General is incapacitated, the Deputy

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Secretary General carries out the duties of that office.
Secretary General carries out the duties of that office.
Article 16 (1) Each Director General is appointed by the Article 16 (1) A Director General is positioned in each Bureau.
President of the Board of Audit from among first-class
Administrative Officials pursuant to a nomination by the
Secretary General with the consent of Commissioners.
(2) Each Director General administers the tasks of the(2) The Director General administers the tasks of the Bureau,
Bureau.
under the orders of the Secretary General.
〈Amendment〉Complete amendment (Act No. 110 of1955)
Article 17 (1) A Personal Secretary engages in administrative Article 17 (1) A Personal Secretary engages in administrative
work involving confidential matters, under the orders of thework involving confidential matters, under the orders of theCommissioner.
Commissioner.
(2) Administrative Officials serve as Senior Directors of the(2) Administrative Officials engage in affairs of
Secretariat or Bureaus or belong to the respective Bureaus oradministration, audit, and examination under the direction of
Divisions, and engage in affairs of administration, audit, andtheir superiors.
examination under the direction of their superiors.
〈Amendment〉Partial amendment of paragraph (2) (ActNo. 110 of 1955)
Article 18 Technical Officials belong to the respective Bureaus Article 18 Technical Officials engage in technical work, underor Divisions and engage in technical work, under thethe direction of their superiors.
direction of their superiors.
〈Amendment〉Partial amendment (Act No. 110 of 1955)
Article 19 The Board of Audit may have branch offices as Article 19 The Board of Audit may have branch offices asprovided for by Board of Audit Regulations.
provided for by Board of Audit Regulations.
Section 5 The Information Disclosure and Personal Information
Protection Review Board of the Board of Audit〈Amendments〉Addition (Act No. 43 of 1999)
Amendment of the section title (Act No. 61 of 2003)
Article 19-2 (1) The Information Disclosure and Personal
Information Protection Review Board of the Board of Audit
is established in the Board of Audit, in order to study anddeliberate on appeals in response to consultations by the
President of the Board of Audit under the provisions ofArticle 18 of the Act on Access to Information Held byAdministrative Organs (Act No. 42 of 1999) and Article 42of the Act on the Protection of Personal Information Held byAdministrative Organs (Act No. 58 of 2003).
(2) The Information Disclosure and Personal Information
Protection Review Board of the Board of Audit is composedof three Members.
(3) Members serve on a part-time basis.
〈Amendments〉Addition (Act No. 43 of 1999)
Partial amendment of paragraphs (1) and (2) (Act No. 61
of 2003)
Article 19-3 (1) Members are appointed by the President of theBoard of Audit with the consent of both Houses of the Diet,from among persons who possess a wide range of knowledge
and sound judgment.
(2) Notwithstanding the provisions of the preceding
paragraph, the President of the Board of Audit may appoint a
Member from among persons qualified under the preceding
paragraph, if the term of office of a Member expires or avacancy occurs among the Members and the consent of bothHouses of the Diet cannot be obtained because the Diet is
not in session or due to the dissolution of the House ofRepresentatives.
(3) In the case referred to in the preceding paragraph, ex post
facto approval must be obtained from both Houses of theDiet at the first session of the Diet after the appointment. In
such a case, if ex post facto approval is not obtained fromboth Houses of the Diet, the President of the Board of Audit

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must immediately dismiss the relevant Member.
(4) A Member's term of office shall be three years; provided,
however, that the term of office of a Member filling avacancy shall be the remaining term of the predecessor.
(5) Members may be reappointed.
(6) When a Member's term of office expires, such Member
shall continue to carry out his/her duties until a successor isappointed.
(7) If the President of the Board of Audit finds that a
Member is unable to perform his/her duties due to a mental
or physical disorder, or finds that there has been a breach ofobligation in the course of duty or other conduct unbecoming
a Member, the President of the Board of Audit may dismiss
the Member, after having obtained the consent of bothHouses of the Diet.
(8) A Member must not divulge any confidential information
learned in the course of duty. The same applies after a
Member has left office.
(9) While in office, a Member may not become the officer ofa political party or other political organization, nor may a
Member actively take part in political activities.
(10) The remuneration for Members is provided forseparately in another Act.
〈Amendment〉Addition (Act No. 43 of 1999)
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 Information Disclosure and Personal
Information Protection Review Board of the Board of Audit's
procedures for study and deliberation. In this case, the phrase"Review Board" in that Chapter is deemed to be replacedwith "Information Disclosure and Personal Information
Protection Review Board of the Board of Audit."〈Amendment〉Addition (Act No. 61 of 2003)
Article 19-5 A person who has divulged any confidential
information, in violation of the provisions of Article 19-3
paragraph (8), is subject to imprisonment with work for up to
one year or to a fine of up to 300,000 yen.
〈Amendments〉Addition (Act No. 43 of 1999)
Partial amendment of former Article 19-4
and change into Article 19-5 (Act No. 61
of 2003)
Article 19-6 Beyond what is provided for in Articles 19-2 to 19-5, necessary particulars in relation to the Information
Disclosure and Personal Information Protection Review
Board of the Board of Audit are prescribed by Board ofAudit Regulations.
〈Amendments〉Addition (Act No. 43 of 1999)
Partial amendment of former Article 19-5 and change
into Article 19-6 (Act No. 61 of 2003)

Chapter II MANDATE
Chapter II MANDATE
Section 1 General Provisions
Section 1 General Provisions
Article 20 (1) The Board of Audit audits the final accounts of Article 20 (1) The Board of Audit audits the final accounts ofthe expenditures and revenues of the State, pursuant to thethe expenditures and revenues of the State, pursuant to theprovisions of Article 90 of the Constitution of Japan, andprovisions of Article 90 of the Constitution of Japan, andalso audits such accounts as are provided for by law.
also audits such accounts as are provided for by law.
(2) The Board of Audit continuously conducts its audit,(2) The Board of Audit continuously conducts its audit,
supervises financial management, ensures its adequacy, andsupervises financial management, ensures its adequacy, andrectifies any defects.
rectifies any defects.

650Section 3

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The current BOA Act(3) The Board of Audit shall conduct its audit with theobjectives of accuracy, regularity, economy, efficiency,
effectiveness, or other objectives necessary for auditing.
〈Amendment〉Addition of paragraph (3) (Act No. 126 of
1997)
Article 21 The Board of Audit verifies the final accounts of the Article 21 The Board of Audit verifies the final accounts of theexpenditures and revenues of the State through the results ofexpenditures and revenues of the State through the results of
its audit.
its audit.
Section 2 Scope of Audit
Section 2 Scope of Audit
Article 22 The following items require audits by the Board of Article 22 The following items require audits by the Board ofAudit:
Audit:(i) monthly expenditures and revenues of the State;(i) monthly expenditures and revenues of the State;(ii) receipt and payment of cash or receipt and issue of(ii) receipt and payment of cash or receipt and issue of goods
national property owned by the State;owned by the State as well as national property;(iii) acquisition and loss of claims held by the State and(iii) acquisition and loss of claims held by the State andincreases and decreases of national government bonds andincreases and decreases of national government bonds andother obligations;other obligations;(iv) receipt and payment of cash or receipt and issue of(iv) receipt and payment of cash or receipt and issue of
precious metals and securities by the Bank of Japan on
precious metals and securities by the Bank of Japan onbehalf of the State;behalf of the State;(v) accounts of juridical persons to which the State has(v) accounts of juridical persons to which the State has
contributed half or more of the stated capital;
contributed half or more of the stated capital;(vi) accounts specified by law as being subject to audit by(vi) accounts specified by law as being subject to audit by
the Board of Audit.
the Board of Audit.
〈Amendment〉Partial amendment of item (ii) (Act No.
137 of 1956)
Article 23 (1) The Board of Audit may audit financial Article 23 (1) The Board of Audit may audit financial
management in terms of the following, if it considers this to
management in terms of the following, if it considers this tobe necessary, or at the request of the Cabinet:
be necessary, or at the request of the Cabinet:(i) goods on securities owned or retained by the State, and(i) securities owned or retained by the State, and cash andcash retained by the State;
goods retained by the State;(ii) receipt and payment of cash or receipt and issue of goods(ii) receipt and payment of cash or receipt and issue of goods
and securities by entities other than the State, on behalf ofand securities by entities other than the State, on behalf of
the State;
the State;(iii) accounts of an entity that the State has directly or(iii) accounts of an entity that the State has directly or
indirectly granted a subsidy, incentive, or aid, or extended
indirectly granted a subsidy, incentive, or aid, or extended
other financial assistance such as a loan or an indemnity;
other financial assistance such as a loan or an indemnity;(iv) accounts of an entity a part of whose stated capital is(iv) accounts of an entity a part of whose stated capital iscontributed by the State;contributed by the State;(v) accounts of an entity that has further been contributed to(v) accounts of an entity that has further been contributed toby an entity to whose stated capital the State has contributed;
by an entity to whose stated capital the State has contributed;(vi) accounts of an entity for whose borrowings the State(vi) accounts of an entity for whose borrowings the Stateguarantees payment of the principal or interest;
guarantees payment of the principal or interest;(vii) accounts of a contractor for construction rendered to the(vii) accounts of a contractor for construction or otherState and those of a supplier of goods to the State, which
services, or a person entrusted with administrative work or
relate to the contract with the State.
services, rendered to the State or to a juridical person
provided for in item (v) of the preceding Article (hereafterreferred to in this item as "the State, etc."), or accounts of a
supplier of goods to the State, etc., which relate to thecontract with the State, etc.
(2) When the Board of Audit conducts an audit pursuant to(2) When the Board of Audit conducts an audit pursuant to
the provisions of the preceding paragraph, it shall notify thethe provisions of the preceding paragraph, it shall notify theparties concerned of this.
parties concerned of this.
〈Amendments〉Partial amendment of items (ii), (iii), (v),(vi) and (vii) of paragraph (1) (Act No.
110 of 1955)
Partial amendment of paragraph (1), item(i) (Act No. 137 of 1956)
Partial amendment of paragraph (1), item651

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The current BOA Act(ii) (Act No. 71 of 1984)
Partial amendment of items (ii), (iii), (v),(vi) and (vii) of paragraph (1) (Act No. 87
of 1984)
Partial amendment of items (ii), (iii), (v),(vi) and (vii) of paragraph (1) (Act No. 93
of 1986)
Partial amendment of paragraph (1), item(vii) (Act No. 112 of 2005)

Section 3 Auditing Methods
Section 3 Auditing Methods
Article 24 (1) An entity subject to audit by the Board of Audit Article 24 (1) An entity subject to audit by the Board of Audit
must, pursuant to the regulations on the Submission ofmust, pursuant to the regulations on the Submission of
Accounts set forth by the Board of Audit, regularly submit
Accounts set forth by the Board of Audit, regularly submit
statements of accounts and documentary evidence to thestatements of accounts (including electromagnetic records
Board of Audit.
(meaning records made in an electronic form, a magnetic
form, or any other form not recognizable through humanperception, and which are set forth by Board of Audit
Regulations as those for use in computer data-processing; thesame applies in the following paragraph) on which thematters that are to be stated in the relevant statement ofaccounts have been recorded; the same applies hereafter) anddocumentary evidence (including electromagnetic records onwhich the matters that are to 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 may be(2) Other documents specified by the Board of Audit
submitted to the Board of Audit regarding the receipt and(including electromagnetic records on which the matters thatpayment of cash or receipt and issue of goods and securities
are to be stated in the relevant documents have been
owned or retained by the State, in place of the statements ofrecorded) may be submitted to the Board of Audit regarding
accounts and documentary evidence set forth in the preceding
the receipt and payment of cash or receipt and issue of goods
paragraph.
and securities owned or retained by the State, in place of thestatements of accounts and documentary evidence set forth in
the preceding paragraph.
〈Amendment〉Partial amendment of paragraphs (1) and(2) (Act No. 152 of 2002)
Article 25 The Board of Audit may dispatch its staff to conduct Article 25 The Board of Audit may dispatch its staff to conduct
field audits on a regular or temporary basis.
field audits on a regular or temporary basis. In such cases,
the entity subject to the field audits must accept such audits.
〈Amendment〉Partial amendment (Act No. 112 of 2005)
Article 26 The Board of Audit may, if necessary for an audit, Article 26 The Board of Audit may, if necessary for an audit,
request the entity subject to the audit to submit its books,
request the entity subject to the audit to submit its books,
documents, or reports, and may question any relevant party
documents, other materials, or reports, and may question anyor request such party to appear.
relevant party or request such party to appear. In such a case,the entity that has been requested to submit its books,
documents, other materials, or reports, and may question any
relevant party or request such party to appear. In such a case,the entity that has been requested to submit its books,
documents, other materials, or reports, or the party
questioned or requested to appear must respond accordingly.
〈Amendments〉Partial amendment (Act No. 152 of 2002)
Partial amendment (Act No. 112 of 2005)
Article 27 If one of the following facts occurs with regard to Article 27 If one of the following facts occurs with regard to
financial management subject to audit by the Board of Audit,
financial management subject to audit by the Board of Audit,
the head of the relevant department, the supervising
the head of the relevant department, the supervisingauthority, or other person similarly responsible must reportauthority, or other person similarly responsible must report
this immediately to the Board of Audit:
this immediately to the Board of Audit:(i) discovery of a crime in connection with an accounting;(i) discovery of a crime in connection with an accounting;(ii) discovery of loss of cash, securities, or other property.
(ii) discovery of loss of cash, securities, or other property.
Article 28 The Board of Audit may, if necessary for an audit, Article 28 The Board of Audit may, if necessary for an audit,652

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ask government agencies, public entities, and any other party
to submit materials, give expert opinions, etc.

ask government agencies, public entities, and any other party
to submit materials, give expert opinions, etc.

Section 4 Statement of Audit (NOTE)
Section 4 Statement of Audit
Article 29 The following matters must be set down in the Article 29 The following matters must be set down in thestatement of audit to be prepared pursuant to Article 90 ofstatement of audit to be prepared pursuant to Article 90 of
the Constitution of Japan:
the Constitution of Japan:(i) verification of the final accounts of the expenditures and(i) verification of the final accounts of the expenditures andrevenues of the State;revenues of the State;(ii) whether the amounts in the final accounts of the(ii) whether the amounts in the final accounts of theexpenditures and revenues of the State correspond to theexpenditures and revenues of the State correspond to theamounts in the statements of accounts submitted by the Bank
amounts in the statements of accounts submitted by the Bankof Japan;of Japan;(iii) whether the audit resulted in an item being found in(iii) whether the audit resulted in an item being found in
violation of the law, Cabinet Order, or the approved budget,violation of the law, Cabinet Order, or the approved budget,or being found improper;or being found improper;(iv) whether there was any disbursement from the reserve(iv) whether there was any disbursement from the reserve
fund that did not pass through the procedures for obtaining
fund that did not pass through the procedures for obtaining
the Diet's approval;
the Diet's approval;(v) matters regarding which the Board of Audit has(v) matters regarding which the Board of Audit has
demanded disciplinary action pursuant to the provisions ofdemanded disciplinary action pursuant to the provisions ofArticle 31, and the results thereof;
Article 31 of this Act, Article 13, paragraph (2) of the Act
on Prevention of Delay in Payment under Government
Contracts, or Article 6, paragraph (1) of the Act on the
Responsibility of Government Employees Who Execute theBudget (including as applied mutatis mutandis pursuant to
the provisions of Article 9, paragraph (2) of the same Act),and the results thereof;(vi) adjudication of an official responsible for cash or goods(vi) adjudication and re-adjudication under the provisions ofhandling under the provisions of Article 32
Article 32 of this Act (including as applied mutatis mutandis
pursuant to the provisions of Article 10, paragraph (3) or
Article 11, paragraph (2) of the Act on the Responsibility ofGovernment Employees Who Execute the Budget), or Article
4, paragraph (1) or Article 5 of the Act on the Responsibilityof Government Employees Who Execute the Budget(including as applied mutatis mutandis pursuant to theprovisions of Article 8, paragraph (3) or Article 9, paragraph(2) of the same Act);(vii) matters regarding which the Board of Audit has(vii) matters regarding which the Board of Audit haspresented its opinions or demanded measures pursuant to thepresented its opinions or demanded measures pursuant to theprovisions of Article 34, and the results thereof;
provisions of Article 34, and the results thereof;(viii) matters regarding which the Board of Audit has(viii) matters regarding which the Board of Audit haspresented its opinions or demanded measures pursuant to thepresented its opinions or demanded measures pursuant to theprovisions of Article 36, and the results thereof.
provisions of Article 36, and the results thereof.
〈Amendments〉Partial amendment of item (v) andcompleteamendment of item (vi) (Act No. 172 of
1950)
Partial amendment of item (vi) (Act No.
251 of 1952)
Partial amendment of item (vi) (Act No.
137 of 1956)
Partial amendment of item (vi) (Act No.
87 of 1984)
Partial amendment of items (v) and (vi)(Act No. 93 of 1986)
Article 30 If the Board of Audit finds that it is necessary to Article 30 If the Board of Audit finds that it is necessary toappear before the Diet to explain the statement of audit set
appear before the Diet to explain the statement of audit set
forth in the preceding Article, it may have a Commissioner
forth in the preceding Article, it may have a Commissioner(NOTE) The Statement of Audit may be called The Annual Audit Report.
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explain this in an appearance before the Diet or in writing.

explain this in an appearance before the Diet or in writing.
Article 30-2 The Board of Audit may, at any time, report to theDiet and the Cabinet on matters regarding which the Board
of Audit has presented its opinions or demanded measures
pursuant to the provisions of Article 34 or 36, or regarding
other matters that the Board of Audit finds it particularly
necessary to report.
〈Amendment〉Addition (Act No. 112 of 2005)
Article 30-3 If the Board of Audit receives a request fromeither House, any of the Committees of either House, or anyof the Research Committees of the House of Councillors
under the provisions of Article 105 of the Diet Law (Act No.
79 of 1947) (including as applied mutatis mutandis pursuant
to the provisions of Article 54-4 paragraph (1) of the sameAct), it may conduct an audit of the specific mattersrequested and report the results.
〈Amendments〉Addition (Act No. 126 of 1997)
Change of former Article 30-2 into
Article 30-3 (Act No. 112 of 2005)

Section 5 Liability of Accounting Officials
Section 5 Liability of Accounting Officials
Article 31 (1) If the Board of Audit has concluded, as a result Article 31 (1) If the Board of Audit has concluded, as a resultof its audit, that an official who handles accounting for theof its audit, that an official who handles accounting for theState has caused substantial damage to the State throughState has caused substantial damage to the State throughintent or gross negligence, the Board of Audit may demandintent or gross negligence, the Board of Audit may demand
the head of the relevant department or other person
the head of the relevant department or other person
responsible for supervision to take disciplinary action.
responsible for supervision to take disciplinary action.
(2) The provisions of the preceding paragraph apply if an(2) The provisions of the preceding paragraph apply if an
official who handles accounting for the State does notofficial who handles accounting for the State does notobserve the regulations on the Submission of Accounts, forobserve the regulations on the Submission of Accounts, forinstance by neglecting to submit statements of accounts andinstance by neglecting to submit statements of accounts anddocumentary evidence, or does not comply with a demand
documentary evidence, or does not comply with a demand
made upon him/her pursuant to the provisions of Article 26.
made upon him/her pursuant to the provisions of Article 26.
〈Amendments〉Partial amendment of paragraphs (1) and(2) (Act No. 110 of 1955)
Partial amendment of paragraphs (1) and(2) (Act No. 87 of 1984)
Partial amendment of paragraphs (1) and(2) (Act No. 93 of 1986)
Article 32 (1) If an official responsible for cash or goods Article 32 (1) If an official responsible for cash handling has
handling has lost or damaged cash or goods, the Board of
lost cash, the Board of Audit shall inquire into whether he/
Audit shall inquire into whether he/she has in fact caused
she has in fact caused damage to the State through his/herdamage to the State through his/her failure to exercise thefailure to exercise the due care of a prudent manager, anddue care of a prudent manager, and adjudicate whether he/
adjudicate whether he/she is liable to indemnify.
she is liable to indemnify.
(2) If an official responsible for handling goods has lost or
damaged goods or otherwise caused damage to the State byhandling goods in violation of the provisions of the StateOwned Goods Management Act (Act No. 113 of 1956) or by
not handling goods in compliance with the provisions of thesame Act, the Board of Audit shall inquire into whether he/
she has in fact caused damage to the State by intent or grossnegligence, and adjudicate whether he/she is liable toindemnify.
(2) If the Board of Audit adjudicates that an official(3) If the Board of Audit adjudicates that an official
responsible for cash or goods handling is liable to indemnify,
responsible for cash handling or an official responsible forthe head of his/her department or any other person
handling goods is liable to indemnify, the head of his/her
responsible for supervision must order the official to pay thedepartment or any other person responsible for supervisionindemnity in accordance with the adjudication set forth in themust order the official to pay the indemnity in accordance
preceding paragraph.
with the adjudication set forth in the preceding two654Section 3

BOA Related Laws and Regulations

The BOA Act at the time of enforcement

The current BOA Act(3) The liability to indemnify provided for in paragraph (1)is not remitted or reduced unless by pardon.

paragraphs.
(4) The liability to indemnify provided for in paragraph (1)or (2) is not remitted or reduced unless decided by the Diet.

(4) Even if the Board of Audit has adjudicated that an
official responsible for cash or goods handling is not liable
to indemnify pursuant to the provisions of paragraph (1), theBoard of Audit may re-adjudicate within five years if it
discovers that such adjudication was improper, for instancedue to an error or omission, etc., in the statement of accounts
or documentary evidence. The provisions of the preceding
two paragraphs apply mutatis mutandis in such a case.

(5) Even if the Board of Audit has adjudicated that an
official responsible for cash handling or an official
responsible for handling goods is not liable to indemnify
pursuant to the provisions of paragraph (1) or (2), the Board
of Audit may re-adjudicate within five years if it discovers
that such adjudication was improper, for instance due to anerror or omission, etc., in the statement of accounts or
documentary evidence. The provisions of the preceding two
paragraphs apply mutatis mutandis in such a case.
〈Amendments〉Partial amendment of former paragraph(3) (Act No. 172 of 1950)
Partial amendment of paragraph (1),addition of paragraph (2 ), partial
amendment of former paragraphs (2), (3)and (4) and change into paragraphs (3),(4) and (5), respectively (Act No. 137 of1956)
Article 33 If the Board of Audit concludes, as a result of its Article 33 If the Board of Audit concludes, as a result of its
audit, that an official who handles accounting for the State
audit, that an official who handles accounting for the State
has committed a crime in the course of duty, it must notify
has committed a crime in the course of duty, it must notify
the Public Prosecutors Office of the case.
the Public Prosecutors Office of the case.
〈Amendments〉Partial amendment (Act No. 110 of 1955)
Partial amendment (Act No. 87 of 1984)
Partial amendment (Act No. 93 of 1986)
Section 6 Miscellaneous Provisions
Section 6 Miscellaneous Provisions
Article 34 If there are items that the Board of Audit finds, in Article 34 If there are items that the Board of Audit finds, inthe course of its audit, to violate laws and regulations on
the course of its audit, to violate laws and regulations on
financial management or to be improper, it may immediately
financial management or to be improper, it may immediately
present its opinions on the financial management to, orpresent its opinions on the financial management to, or
demand appropriate measures with regard to the financial
demand appropriate measures with regard to the financial
management from, the head of the relevant department ormanagement from, the head of the relevant department orfrom the relevant parties, and may have them take measuresfrom the relevant parties, and may have them take measures
to rectify and improve subsequent management.
to rectify and improve subsequent management.
Article 35 (1) If the Board of Audit has been requested by an Article 35 (1) If the Board of Audit has been requested by aninterested party to examine the conduct of an official who
interested party to examine the conduct of an official who
handles accounting for the State with regard to the handling
handles accounting for the State with regard to the handlingof financial management, the Board of Audit must examineof financial management, the Board of Audit must examinethat official's conduct and, if the Board of Audit considers itthat official's conduct and, if the Board of Audit considers it
necessary for such conduct to be corrected in consequence, it
necessary for such conduct to be corrected in consequence, it
must notify the competent authorities or other responsible
must notify the competent authorities or other responsible
parties of this judgment.
parties of this judgment.
(2) If the competent authorities or responsible parties have(2) If the competent authorities or responsible parties havebeen notified as referred to in the preceding paragraph, they
been notified as referred to in the preceding paragraph, theymust take appropriate measures pursuant to the judgment ofmust take appropriate measures pursuant to the judgment of
which they have been notified.
which they have been notified.
〈Amendments〉Partial amendment of paragraph (1) (ActNo. 110 of 1955)
Partial amendment of paragraph (1) (ActNo. 87 of 1984)
Partial amendment of paragraph (1) (ActNo. 93 of 1986)
Article 36 If, as a result of its audit, the Board of Audit finds Article 36 If, as a result of its audit, the Board of Audit finds
there to be matters necessitating improvement with regard tothere to be matters necessitating improvement with regard tolaws and regulations, systems, or administration, it maylaws and regulations, systems, or administration, it may
present its opinions to, or demand measures for improvement
present its opinions to, or demand measures for improvement
from, the competent authorities or other responsible parties.
from, the competent authorities or other responsible parties.
655

II. Appendix

The BOA Act at the time of enforcement

The current BOA Act

Article 37 (1) The Board of Audit shall be notified of the Article 37 (1) The Board of Audit shall be notified of thefollowing cases in advance and may present its opinions
following cases in advance and may present its opinions
thereon:
thereon:(i) enactment, amendment, or repeal of laws and regulations(i) enactment, amendment, or repeal of laws and regulations
concerning State financial management;
concerning State financial management;(ii) enactment, amendment, or repeal of rules and regulations(ii) enactment, amendment, or repeal of rules and regulations
concerning State handling and accounting of cash, goods,
concerning State handling and accounting of cash, goods,
and securities, or bookkeeping.
and securities, or bookkeeping.
(2) If an official who handles accounting for the State(2) If an official who handles accounting for the State
requests an opinion from the Board of Audit with regard to arequests an opinion from the Board of Audit with regard to amatter he/she is unsure of in connection with thematter he/she is unsure of in connection with theperformance of his/her official duties, the Board of Audit
performance of his/her official duties, the Board of Audit
must present its opinion about this.
must present its opinion about this.
〈Amendments〉Partial amendment of paragraph (2) (ActNo. 110 of 1955)
Partial amendment of paragraph (2) (ActNo. 87 of 1984)
Partial amendment of paragraph (2) (ActNo. 93 of 1986)
Chapter III BOARD OF AUDIT REGULATIONS
Chapter III BOARD OF AUDIT REGULATIONSArticle 38 The Board of Audit shall set forth such regulations Article 38 The Board of Audit shall set forth such regulations
as are necessary with regard to its audit, beyond those set
as are necessary with regard to its audit, beyond those set
forth in this Act.
forth in this Act.
Supplementary Provisions
Supplementary Provisions
Article 1 This Act comes into effect as of the day of Article 1 This Act comes into effect as of the day of
enforcement of the Constitution of Japan.
enforcement of the Constitution of Japan.
Article 2 The following laws shall be abolished.
Article 2 The following laws shall be abolished.
Act No. 91 of 1896 (Act on Resignation of Members of the Act No. 91 of 1896 (Act on Resignation of Members of theBoard of Audit)
Board of Audit)
Act on Disciplinary Actions Against Members of the Board of Act on Disciplinary Actions Against Members of the Board of
Audit
Audit
Article 3 With respect to the application of the provision for Article 3 With respect to the application of the provision forrevising Article 32, paragraphs (3) and (4) related to therevising Article 32, paragraphs (3) and (4) related to theliability for indemnity of Accounting Officers caused byliability for indemnity of Accounting Officers caused byreasons that occurred prior to the enforcement of this Act,reasons that occurred prior to the enforcement of this Act,the judgment based on the prior provisions shall be deemed
the judgment based on the prior provisions shall be deemed
to be the adjudication under the provision for revising
to be the adjudication under the provision for revisingparagraph (1) of the Article.
paragraph (1) of the Article.
Article 4 Prior laws continue to govern the matters specified in Article 4 Prior laws continue to govern the matters specified in
the Rules on the Affairs of the Board of Audit or otherthe Rules on the Affairs of the Board of Audit or othervarious provisions related to audit in relation to thevarious provisions related to audit in relation to theestablishment by the Board of Audit that are in existence atestablishment by the Board of Audit that are in existence atthe time when this Act comes into effect until the Board of
the time when this Act comes into effect until the Board ofAudit Regulations are enacted pursuant to the provision for
Audit Regulations are enacted pursuant to the provision forrevising Article 38.
revising Article 38.
Article 5 (1) The President of the Board of Audit who occupies Article 5 (1) The President of the Board of Audit who occupies
the position corresponding to such position at the time when
the position corresponding to such position at the time when
this Act comes into effect shall stay in the position of thethis Act comes into effect shall stay in the position of the
President of the Board of Audit until a new President of the
President of the Board of Audit until a new President of theBoard of Audit is appointed.
Board of Audit is appointed.
(2) Among the President of the Board of Audit as referred to(2) Among the President of the Board of Audit as referred toin the preceding paragraph and Directors General andin the preceding paragraph and Directors General and
Directors who occupy positions corresponding to such
Directors who occupy positions corresponding to such
positions when this Act comes into effect, two persons
positions when this Act comes into effect, two persons
designated by the President of the Board of Audit as referreddesignated by the President of the Board of Audit as referred
to in the paragraph shall carry out the duties of
to in the paragraph shall carry out the duties ofCommissioners until new Commissioners are appointed
Commissioners until new Commissioners are appointed
pursuant to this Act.
pursuant to this Act.
656

Section 3

The BOA Act at the time of enforcement

BOA Related Laws and Regulations

The current BOA Act(3) The President of the Board of Audit who occupies the(3) The President of the Board of Audit who occupies the
position corresponding to such position when this Act comes
position corresponding to such position when this Act comes
into effect shall carry out the duties of the Secretary General
into effect shall carry out the duties of the Secretary General
until a new Secretary General is appointed pursuant to thisuntil a new Secretary General is appointed pursuant to this
Act.
Act.
Article 6 (1) Directors General, Directors, Secretaries, Assistant Article 6 (1) Directors General, Directors, Secretaries, Assistant
Directors, Residents and Clerks who occupy positions
Directors, Residents and Clerks who occupy positions
corresponding to such positions when this Act comes into
corresponding to such positions when this Act comes into
effect shall be appointed as Administrative Officials based on
effect shall be appointed as Administrative Officials based on
the same salary unless separate orders are issued andthe same salary unless separate orders are issued and
Chokuninan, Soninkan and Hanninkan shall be deemed to
Chokuninan, Soninkan and Hanninkan shall be deemed tohave been appointed as first-class officials, second-classhave been appointed as first-class officials, second-classofficials and third-class officials, respectively.
officials and third-class officials, respectively.
(2) The officials of the Board of Audit who are placed on(2) The officials of the Board of Audit who are placed on
administrative leave when this Act comes into effect shall,administrative leave when this Act comes into effect shall,unless separate orders are issued, be deemed to have been
unless separate orders are issued, be deemed to have been
appointed as Administrative Officials pursuant to theappointed as Administrative Officials pursuant to theprovision of the preceding paragraph while still being placed
provision of the preceding paragraph while still being placedon administrative leave.
on administrative leave.
Article 7 Among the Commissioners appointed for the first Article 7 Among the Commissioners appointed for the firsttime pursuant to this Act, the term of office of two of themtime pursuant to this Act, the term of office of two of themshall be, notwithstanding the provisions of Article 5,
shall be, notwithstanding the provisions of Article 5,paragraph (1), three years for one and five years for theparagraph (1), three years for one and five years for theother.
other.

657

II. Appendix

Section 4

Chronology

Year
Matters on Finance and Accounting
1867 December 27 The Treasury Accounting Officeestablished.

1868

1869

1870

1871

1872

1873

1874
1875

General Matters
was October 14 The political power was returned to theEmperor (Taisei Hokan).
December 9 The decree for the restoration of Imperial
rule was issued, giving birth to new Meiji government.
January 17 The Accounts Division was established.
January 3 The Battle of Toba-Fushimi and the Boshin
February 3 The Treasury Accounting Office and the
War broke out.
Accounts Division were abolished, and the Accounts March 14 The Charter Oath of Five Articles (Gokajo no
Secretariat was established.
Goseimon) was promulgated.
Leap April 21 The Accounts Secretariat was abolished, July 17 The Imperial edict for Edo to be renamed as
and the Kan of finance and accounting was established.
Tokyo was issued.
September 8 The name of the era was changed to"Meiji."
April- Hachitaro OKUMA proposed establishing the fiscal June 17 Former governors of feudal domains voluntarily
supervision authority.
returned their lands and people to the Imperial Court
May 8 The Shi of Audit was established under the Kan of(Hanseki Hokan).
finance and accounting. [page 5]
July 8 The governmental organization was reformed
July 8 The Kan of finance and accounting was abolished,(two Kans and six ministries were established).
and the Shi of Audit became an organ under thejurisdiction of the newly established Ministry of Finance(then it became an organ under the jurisdiction of the
Ministry of Popular Affairs on August 11).
August 12 The Ministry of Finance was consolidated with
the Ministry of Popular Affairs.
July 10 The Ministry of Finance and the Ministry of Leap October 20 The
Ministry
of
Works
was
Popular Affairs were separated. The Shi of Audit became
established.
an organ under the jurisdiction of the Ministry of Financeonce again.
December 9 The Rules on the Organization of Shi of
Audit were enacted.
May 10 The New Currency Bylaw was enacted (Japan's July 14 The Imperial edict for Haihan Chiken (thefirst gold standard system).
abolition of feudal domains and establishment ofJuly 27 The Shi of Audit was abolished.
prefectures) was issued, and the one-shi three-fu andAugust- Hirobumi ITO submitted to Shigenobu OKUMA a
302-ken system was established.
written opinion on restoring the fiscal supervision July 29 The governmental organization was reformed
authority.
(three Houses (the Seiin, the Sain and the Uin) were
August 10 The Ryo of Audit was established under theestablished).
Ministry of Finance. [page 14]
August 19 The Rules on the Organization and Affairs of
the Ministry of Finance and the Rules on the Organization
and Affairs of Ryo of Audit were enacted. [page 14]
October 9 The Shi of Verification of Accounts was November 9 The solar Gregorian calendar was
abolished, and the affairs conducted by the Shi of
introduced.
Verification of Accounts were taken over by the Ryo of(December 3 of the fifth year of Meiji became January
Audit.
1 of the sixth year).
November 15 The Bylaw on National Banks wasenacted.
June 9 The 1873 Statement of the Estimated Amount of January 10 The Conscription Ordinance was proclaimed.
Revenue and Expenditure was developed by the Ministry October 24 Argument about the policy of conqueringof Finance.
Korea was defeated (five Sangi including Takamori
December 27 The Procedures for Treasury Accounting
SAIGO and Taisuke ITAGAKI resigned).
were enacted. [page 18]
January 17 The Petition for the Establishment ofPopularly-elected Assembly was submitted to the Sain.
November- Double-entry bookkeeping was adopted by the April 14 The Sain and the Uin were abolished, and theMinistry of Finance, and a Portuguese national called
Daishin-in and the Genroin were established.
Vincente E. BRAGA gave lectures on the bookkeeping658

Section 4 Chronology
Year

Matters on Finance and Accounting
General Matters
method.[page 25]
December 22 The Statement of the Budget of revenue andexpenditure for July 1875 to June 1876 was promulgated.
1876 January- The Slips Bookkeeping Bylaw was enacted.
June 30 The Rules on the Organization of the Ryo of
Audit were amended.
July 13 The bookkeeping method was amended, and theaffairs on the amendment of the bookkeeping were placed
under the jurisdiction of the Ryo of Audit.
September 19 The Ministry of Finance enacted the
Accounting Bylaw, and the double-entry bookkeeping
method was adopted for the bookkeeping by thegovernment offices.
1877 January 11 All Ryos including the Ryo of Audit in the February 15 The Satsuma Rebellion occurred.
Ministry of Finance were abolished, and ten bureaus suchas the Audit Bureau were established.
(Audits of the preclosing accounts started this year.) [page21]
1878 January 17 The Rules on On-site Documentary Audits by July 22 Gunkuchoson
Henseiho
(the
Law
for
Auditors were enacted. [page 23]
Reorganization of Counties, Wards, Towns andFebruary 9 The Audit Bylaw was enacted. [page 24]
Villages) and the Rules for Local Taxes, etc. were
September 30 The double-entry bookkeeping method wasenacted.
adopted by each government office for the bookkeepingof Treasury Accounting (implemented in July 1879).
1879 February 7 The FY1875 Statement of Revenue andExpenditure Accounts was distributed to each government
office and prefecture (beginning of public release of the
final accounts).
Note: Figures in square brackets in the table show the corresponding page numbers of I. BOA over the Past 130 Years.

659

II. Appendix
Year
President of BOA
1880 Kanji(the Acting Presidentof BOA)
Naritaka ANDO

1881 May 28
MasukaYAMAGUCHI(-October 21, 1881)
October 21
Michitoshi
IWAMURA(-May 7, 1884)

1882

1883

Fukucho

May 28
Naritaka
ANDO(-January
1886)

BOA Matters
March 5 The Audit Bureau in the Ministryof Finance was abolished, and BOA wasestablished under the Dajokan. [page 28]
March 10 BOA's
personnel
structure,
consisting of the President and others
officials, was stipulated.
March 11 The
Audit
Division,theBookkeeping Division, the Final Accounts
Division, the Editing Division, and theAdministration Division were established.
The Audit Division was divided into five
bureaus, and their works were specified.
The number of officials was 88.

April 28 The Rules on the Organization of
the Board of Audit were enacted. [page 29]
June 2 The organization was revised,10,
establishing the 1st to 5th Audit Bureaus,
the Bookkeeping Bureau, the Reporting
Bureau and the Clerical Division.

General Matters
February 28 The Sangi and
the Ministry Kyo wereseparated.
March 3 Six bureaus were
established
under
the
Dajokan.
June 15 Fiscal
examiners
were set up by theGovernment,
appointing
Hirobumi ITO, Shigenobu
OKUMA, etc.
September 18 The Imperial
instruction to take decisive
action for cost saving andfiscal adjustment was issued.
April 28 The
PublicAccounting Act was enacted.
July 25 Trouble
aroseregarding
the
sale
of
government property held by
the Hokkaido Development
Agency.
October 11 The policy toformaconstitutional
government, suspension of
the sale of government
property
held
by
the
Hokkaido
Development
Agency, and dismissal of
Shigenobu OKUMA fromthe position of Sangi, etc.
were decided at the Imperial
Conference (the failed Meiji14 coup of 1881).
October 12 The
Imperial
edict for establishment of theImperial Diet in 1890 was
issued.
January 16 The
PublicAccountingAct
wasamended.
March 14 Hirobumi ITO andothers visited Europe toresearch
variousconstitutions.
June 27 The Bylaw on the
Bank of Japan was enacted(operation commenced on
October 10).

January 16 The Rules on the Organizationof the Board of Audit were amended (theright to examine the budget and the right toprepare the final accounts were both
excluded from its authority). [page 30]
January 18 Five
audit
bureaus
were
abolished, and three audit bureaus were
established with their affairs in charge
stipulated.
June 16 Audits of the preclosing accounts
were abolished.
August 22 Three audit bureaus wereabolished and two bureaus (the 1st and 2nd
Bureaus) were established.
December 22 BOA's office moved to the
newly established BOA building located in
Zenigamecho, Kojimachi-ku.
January 17 Five divisions, namely the 1st, May 5 The
Bylawon
the 2nd, and the 3rd Divisions, the General
NationalBanks
was
Affairs Division and the Bookkeeping
amended (the payback of theDivision were established in the 1st andcurrency notes issued by
2nd Audit Bureaus.
each national bank was

660

Section 4 Chronology
Year

President of BOA

1884 May 7
NoboriWATANABE(-December 20, 1898)
1885

1886

1887 May 14
Mitsuaki
TANAKA (Chief
Cabinet Secretary)concurrently served
as President of
BOA,
while
President of BOA
NoboriWATANABE, wason a business trip
towesterncountries.
1888 December 3
President of BOA
WATANABE
returned to Japan.

Fukucho

BOA Matters
General Matters
September 12 The Procedures for the
stipulated).
Submission of Documentary Evidence were July 2 The first issue of the
stipulated, and were notified to each
Official
Gazettewasgovernment office. [page 36]
published.
November 27 The format of certificate of
grant of discharge for the final accounts
and the issuance procedures were
stipulated.
May 21 BOA's first annual report was August 19 The
Publicsubmitted to the Dajokan. [page 51]
AccountingAct
wasamended.
December 22 The
Dajokansystem was abolished, andthe Cabinet system was put
into effect.
April 16 The Ordinance on the Board of February 27 The Rules on the
Audit was enacted.
Organization of each Kan
October 14 The organization for audit
and Ministry were enacted.
affairs was revised. The Reporting Divisionand the Review Division were establishedin the 1st Audit Bureau, and eight divisions
were established in the 2nd Audit Bureau.
May 24 Presidentof
BOA
NoboriWATANABE, left for western countries toinvestigate the audit systems (returned toJapan in December 1888). [page 62]

April 30 The Sumitsuin wasestablished.

661

II. Appendix

Year
1889

1890

1891

1892

1893

1894

President of
BOA

BOA Matters

General Matters

May 10 The BOA Act was promulgated. [page 63] February 11 The Meiji Constitution (Constitution
Upon its establishment, BOA adopted a threeof the Empire of Japan) was promulgated.
bureau, 12- division structure, with three Directors
The Public Accounting Act was promulgated.
General, 12 Directors, two Secretaries, 24 May 1 The Regulations on Accounting were
Assistant Directors, and a few Staff members.
promulgated.
June 5 The Matters on the Qualifications of June 12 The Regulations on Accounting ofMembers of BOA were promulgated.
Goods Owned by the State were promulgated.
September 24 The Rules on the Affairs of theBoard of Audit were enacted. [page 96]
September 25 The Method of Evidence of Receipt
and Issue of Goods was stipulated and notified toeach government office.
October 7 The Rules on Audit Year and the Rules
on Statistics were stipulated. [page 96]
October 9 The Rules on Supervision of Operation
were stipulated. [page 96]
November 28 The Rules on Request for Auditing
were stipulated. [page 96]
December 17 The format of the certificate of grantof discharge to the statement of accounts of receipt
and disbursement of goods was stipulated. [page101]
June 2 The Secretariat, the Administration Division July 1 The first general election of the House of(within the Secretariat), and the Accounts Division
Representatives was conducted.
were established.
October 20 The Genroin was abolished.
August 20 The Act on the Auditing of the Goods November 29 The first session of the Imperialof Army and Navy for Preparing War wasDiet was held.
promulgated.
October 11 Probationer Directors were set up (thefixed number was six).
October 24 The annual audit report (FY1886) was
submitted to the Cabinet for the first time.[page112]
February 21 The Detailed Regulations on Issue and October 28 The
Mino - Owari
Earthquake
Form of Certificates of Grant of Discharge were
occurred.
stipulated. [page 101]
April 21 The Procedures for the Grant of Dischargeand Annual Audit Report of Commissioned Audits
were established. [page 93]
May- Argument with the Ministry of Postal and
Telecommunications over audit mandate arose.
[page 137]
July 11 The annual audit report to the Emperor (FY1887) was presented for the first time. [page 115]
November 16 The fixed number of Staff menbers
was set up as 160.
December 12 BOA's office was relocated to 2-1
Otemachi, Kojimachi-ku, the former site of the
Ministry of Agriculture and Commerce.
July 9 The Matters on Special Appointment ofAssistant Directors were promulgated.
The Rules on Adjudication and Determination were
stipulated. [page 96]
January 22 The form of certificate of grant ofdischarge was revised (lithographing the part of
the fixed text).
October 31 Probationer Directors were abolished.
August 1 The Sino-Japanese War broke out.
October 24 The Act on Special Account for662

Section 4

Year

President of
BOA

BOA Matters

General Matters
Emergency Armaments
promulgated.

1895

1896

1897

1898

1899
1900

1901

Chronology

May 4 35 Staff
members
wereadditionallyappointed on a temporary basis for auditing the
emergency armaments expenditures (abolished on
October 22, 1898).
May 6 Members for Audit of Emergency
Armaments Expenditures were set up.
May 2 The BOA Act was amended (promulgated),
with the fixed number of Assistant Directors
increased from 24 to 32.
The Act on Retirement of Members of BOA waspromulgated.
The Act on Establishment of BOA's Branch Officein Taiwan was promulgated (one Director General,
three Directors, one Secretary, five Assistant
Directors and a few Staff members). [page 85]
The position of the President of BOA was revised
to the position with Shinninkan status.
The fixed number of Staff was revised to 220.
The Rules on the Affairs of BOA's Taiwan Branch
Office were promulgated.
March 30 One Director General, two Directors, twoAssistant Directors, and a few Staff members wereadditionally set up in BOA's head office, in placeof opening the branch office in Taiwan.
April 1 A four-bureau 14-division structure wasadopted.
30 Staff members were additionally set up on atemporary basis for auditing the affairs in Taiwan(abolished on April 5, 1900.)
May 6 It was stipulated that decision on theorganization of each bureau should be placed
under the authority of the President of BOA.
October 15 Stenographers were set up (twomembers within the fixed number of Staff
members).
December 22 November 1 The fixed number of Staff members
was revised to 190.
Nobumichi
The number of Staff members set up on a
YAMADA
temporary basis for auditing the affairs in Taiwan( -March 12,1900)
was revised to 20.
December 25 The Rules on the Affairs of theBoard of Audit were fully amended. [page 97]
March 1 The Act on Disciplinary Actions against
March 19
BOA Members was promulgated (abolished on
Tadakatsu
May 3, 1947).
UTSUMI(-June2, April 2 The fixed number of Staff members wasrevised to 210.
1901)
April 5 The BOA Act was amended (promulgated),
and the fixed number of Assistant Directors wasrevised to 20.
May 14 The Rules on Audit Affairs were
established. [page 90]
June 5Inajiro
TAJIRI(-February 25,
1918)
663

Expenditures

was

February 26 The Act on Special Account for
Government
Generalof
Taiwanwaspromulgated.
March 29 The Coinage Law was promulgated(the gold exchange standard was established).

July 16

The Civil Code was put into effect.

June 12

Bank of Taiwan was established.

February- Operation of the State-run Yahata
Steel Works commenced.

II. Appendix

Year
1902

1903
1904

1905

1906

1907

1908
1909
1910

1911

1912

1913

President of
BOA

BOA Matters

General Matters

February 27 The Procedures for the Handling of January 30 The first Anglo-Japanese Alliance
Commissioned Audits were revised. [page 93]
was signed.
March 31 The fixed number of Staff members wasrevised to 168.
December 5 The fixed number of Staff members
was revised to 160.
February 10 The Russo-Japanese War broke out.
March 30 The Act on Special Account for
Emergency Armaments Expenditures waspromulgated.
April 1 The Tobacco Monopoly Law waspromulgated.
January 1 The Salt Monopoly law waspromulgated.
December 21 The Residency-General of Korea
was established in Hanseong, and Hirobumi ITO
was inaugurated as the head.
March 31 The Railway Nationalization Act waspromulgated.
November 26 South Manchuria Railway Co.,
Ltd. was established.
April 1 The fixed number of Staff members was March 15 The Ordinance on the Organization ofrevised to 190.
the Karafuto Territory Government waspromulgated.
December 5 The Ordinance on the Organizationof the Railway Board was promulgated.
July- The Local Improvement Movement started.
April 1 The BOA Act was amended; the position August 22 The Japan-Korea Annexation Treatyof secretary was revised from two to one full-time
was signed.
Secretary, the position of Assistant Director was September 30 The
Ordinanceontherevised from 20 to 14 full-time Deputy Directors,
Organization of Government General of Korea
Staff member was revised to Clerk, and Clerk
was promulgated.
Stenographer was revised to Stenographer.
The Act on Special Account for Government
The fixed number of Directors appointed byGeneral of Korea was promulgated.
Imperial Order was revised to three, and the fixed
number of Clerks and Stenographers was revised
to 170.
April 1 The BOA Act was amended; the fixed
number of Deputy Directors was added by four,and the fixed number of Clerks and Stenographers
was added by 19.
November 6 The Matters on Exemption of July 30 The name of the era was changed to
Accounting Officers from Liability for Indemnity"Taisho."
were promulgated (an Accounting Officer was
exempted from liability for indemnity pursuant to
the Imperial Ordinance for the first time). [page157]
March 28 The Instruction for Dispatched Officials June 13 The outline of administrative reform was
was stipulated. [page 151]
announced by the Government.
June 13 The BOA Act was amended; a two-bureau June 30 The Industrial Bank of Japan requested
eight-division structure was adopted, and the fixed
the Government for a relief loan.
number of officials was revised to two Directors
General, eight Directors, and 16 Deputy Directors.
Exceptions to administrative leave for Members
were stipulated.
One Director General and three Directors were
given administrative leave, and were provided half
pay.

664

Section 4 Chronology

Year

1914

1915

1916

1917

1918

1919

1920

1921

1922

President of
BOA

BOA Matters

General Matters

The fixed number of Clerks and Stenographers
was revised to 170.
November 10 The fixed number of Clerks and January 22 The Siemens incident was exposed.
Stenographers was revised to 165.
July 28 World War I broke out.
August 23 Japan declared war on Germany.
September 9 The Act on Special Accounts for
Emergency Armaments Expenditures waspromulgated.
July 19 The Rules on the Submission of Accounts
were enacted (multiple sets of rules on thesubmission of accounts were consolidated intoone). [page 148]
September 11 The system of technical advisor was
set up.
April 13 The BOA Act was amended; the fixed
number of Deputy Directors was revised to 14 andthe position of the President of the BOA was
ranked as Shinninkan.
January 20 The so - called Nishihara Loansstarted.
September 25 The State-run Yahata Steel Works
Bribery Scandal occurred.
November 7 The October Revolution occurred in
Russia.
May 14 Three technical experts who respectively August 2 Siberian intervention was declared by
February 25
Keizo
specialized in machinery, civil engineering, and
the Government.
NAKAKUMA
construction, were commissioned to be served as August 3 Rice riots broke out in Toyama(-March 21,
technical advisors. [page 145]
Prefecture, subsequently spreading nationwide.
1924)
April 1 The BOA Act was amended; the fixed June 28 The Versailles Peace Treaty was signed.
number of Deputy Directors was revised to 17.
April 10 The fixed number of Clerks andStenographers was revised to 185.
January 10 The League of Nations was launched.
March 15 The Tokyo stock market crashed,setting off the post-World War I depression.
May 15 The Ordinance on the Organization of
Ministry of Railways was promulgated.
May 24 The Nikolayevsk Incident broke out.
July 3 Occupation of northern Saghalien, etc.
was announced.
June 24 One technical advisor specializing in April 8 The Public Accounting Act was fully
metallurgy was commissioned.
amended, and the National Property Act was
September 1 The BOA Act was amended; a threepromulgated (put into effect on April 1, 1922).
bureau 12-division structure was adopted.
November 12 The Washington Naval Conference
The fixed number of Clerks and Stenographersbegan.
was revised to 245.
September 29 One technical advisor specializing inelectricity was commissioned.
April 1 The BOA Act was amended (e.g. explicit February 6 The Washington Naval Treaty andprovisions were prescribed so that BOA's audit
the Nine-Power Treaty were signed.
authority extended to accounting of deposits and March 31 The Ordinance on the Organization of
securities handled by the Bank of Japan for a
the South Pacific Mandate and the Act on
government purpose). [page 79]
Special Account for the South Pacific Mandate
The Rules on the Submission of Accounts were
were promulgated.
fully amended.
November 29 Nihon Sekizen Bank closed, andMay 10 The Rules on Audit Affairs, the Rules onbank runs spread nationwide.
Examination for Annual Audit Report and Annual665

II. Appendix

Year

1923

1924

1925

1926

1927

1928

President of
BOA

BOA Matters

General Matters

Audit Report to the Emperor, cases to be voted ata bureau meeting, the Detailed Regulations on
Proceedings of Meetings, and the Rules on
Supervision of Operation were fully amended.
The Rules on Audit Year were abolished. [page151]
April 1 The statement of the total value of national April 5 The Act on the Co-operative Societies
properties as of April 1, 1922 was submitted to theCentral Bank was promulgated.
Cabinet together with the audit report (the first September 1 The Great Kanto Earthquake
audit report on national property).
occurred.
The fixed number of Clerks and Stenographers September 27 The
Ordinanceonthewas revised to 239.
Organization of Department of Imperial Capital
September 1 BOA's office building was burned
Reconstruction
andtheOrdinanceondown in the Great Kanto Earthquake. BOA moved
Compensation for Loss of Discounts on
into a temporary building in December, after using
Earthquake Bill were promulgated.
a temporary office. [page 233]
January 14 The method of processing the September 18 A draft bill of administrative andMarch 27
Kesaroku
certificates of grant of discharge that were
financial reform was decided by three faction of
MIZUMACHI
unissued due to the Great Kanto Earthquake was
the ruling party.
(-November
stipulated.
22, 1929)
June 23 The method of treating the statements ofaccounts and documentary evidence that wereunable to be submitted due to the Great Kanto
Earthquake was stipulated.
July 2 Members of the Examination Committee on
the BOA Act Amendment were set up (forinvestigation of introduction of the pre-supervisionsystem, etc.).
April 1 The BOA Act was amended; the fixed January 8 The Advisory Committee for Prior
number of Deputy Directors was revised to 18.
Supervising Body of Expenditure was
The fixed number of Clerks was revised to 212.
established in the Ministry of Finance.
April 20 Director Kawamoto left for Europe on April 1 The Regulations on Investment ofbusiness to investigate the pre-supervision system
Deposit Bureau Funds and the Regulations on(returned to Japan in April 1926). [page 180]
Special Account for Investment of Deposit
Bureau Funds were put into effect.
April 22 The Public Security Preservation Law
was promulgated.
September 1 A draft bill for consolidation of the
Bank of Taiwan was decided.
February- The Bill Partially Amending the BOA March- The
Bribery
Scandalofthe
Act was submitted by the Business Comrade Party
Reconstruction Bureau spread.
to the House of Representatives, but was shelved March 30 The Law Concerning Debt Workout of(later in 1927 and 1929, bills with the same effectLending to China of the Industrial Bank ofwere submitted to the House of Representatives,
Japan, Limited and Two Other Banks was
but they were both shelved). [page 181]
promulgated.
June 8 A dispute on audit of the Co-operative August 6 Japan Broadcasting Corporation wasSocieties Central Bank occurred with the Ministry
established.
of Finance (a field audit was conducted in December 25 The name of the era was changed
February 1927). [page 184]
to "Showa."
September 30 The scope of subsidized or speciallyguaranteed entities to be audited was clarified.
[page 167]
April 1 The BOA Act was amended; the fixed March 15 The Showa Financial Crisis started.
number of Deputy Directors was revised to 20.
April 22 A three-week moratorium on suspension
The fixed number of Clerks was revised to 216.
of bank payments was declared.
February 20 The Universal Manhood Suffrage
Law was put into effect.

666Section 4 Chronology
President of
BOA Matters
General Matters
BOA
1929 November 22 April 1 The BOA Act was amended; the fixed June 10 The Ordinance on the Organization ofKuraheinumber of Secretaries was revised to two.
the Ministry of Colonial Affairs was
YUASA
The fixed number of Clerks was revised to 218.
promulgated.
(-February 15,
November 12 The Ordinance of the Ministry of
1933)
Finance concerning release of restriction on gold
exports was promulgated.
1930
April 22 The London Naval Treaty was signed.
(The Great Depression spread over Japan thisyear (the Showa Financial Crisis).)1931
October 8 An agreement on the retirement age for September 18 The Manchurian Incident broke
Members was made. [page 146]
out.
December 13 Re-imposition of restriction ongold exports was decided by the Cabinet.
(The depression in rural areas became serious
this year.)
1932
July 4 The fixed number of Clerks was revised to January 28 The first Shanghai Incident broke
210.
out.
March 1 The founding of the state ofManchukuo was declared.
1933 February 15
March 27 Japan withdrew from the League of
Hideo
Nations.
KONO
March 29 The Foreign Exchange Control Law(-February 16,
was promulgated.
1938)
May 31 The Tanggu Truce, a cease - fireagreement, was signed.
1934
April 1 The BOA Act was amended; four Residents December 29 Abrogation of the Washington
were set up, and the fixed number of Clerks was
Naval Treaty was declared.
revised to 201.
1935
March 31 BOA's building was completed in December 9 The
SecondLondonNaval
Sannencho, Kojimachi - ku (currently 3 - 2 - 1
Disarmament Conference was held.
Kasumigaseki, Chiyoda-ku), and the relocation
was completed on May 28. [page 234]
1936
June 1 The fixed number of Clerks was revised to January 15 Japan withdrew from the London
211.
Naval Disarmament Conference.
February 26 The February 26 Incident broke out.
November 25 The Anti-Comintern Pact was
signed by Germany and Japan.
1937
April 1 The BOA Act was amended; a four-bureau July 7 The Marco Polo Bridge Incident occurred
14-division structure was adopted, with four(the Second Sino-Japanese War broke out).
Directors General, 14 Directors and 24 Deputy August 13 The Military Secret Protection Act
Directors.
was amended and enforced.
April 28 The fixed number of Clerks was revised September 10 The
Special
Accountforto 217.
Emergency Armaments Expenditures wasestablished.
October 8 The Matters on Advanced Fund,Payment in Advance, Payment by Rough
Estimate, and Negotiated Contract were
promulgated.
October 25 The Ordinance on the Organizationof the Cabinet Planning Board was promulgated.
November 6 The Anti-Comintern Pact was
signed by Japan, Germany and Italy.
1938 February 16
April 20 Thirty Clerks were temporarily set up for January 11 The Ordinance on the Organization
Kesao OKA
auditing the Special Account for Emergencyof the Ministry of Health and Welfare was(-October 15,
Armaments Expenditures.
promulgated.
1941)
November- Three officials of BOA were dispatched April 1 The National General Mobilization Law
as officials for Finance Bureau review andwas promulgated.
evaluation work of the Mengjiang United Council. November 3 The Government issued a statement
Year

667

II. Appendix

Year

1939

President of
BOA

BOA Matters

General Matters

From then onward, a total of nine officials weredispatched until the end of war.

concerning constructing a New Order in East
Asia.
December 16 The Rules on the Organization of
East
Asia
Development
Board
were
promulgated.
March 25 The
Military
Resource
SecretProtection Act was promulgated.
May 12 The Nomonhan Incident broke out.
July 8 The National Requisition Order waspromulgated.
September 1 The Mengjiang United Autonomous
Government was established.
September 3 The United Kingdom and France
declared war on Germany (World War II brokeout).
October 18 The Rent Control Ordinance and theFarm Rent Ordinance were promulgated.
September 27 Japan, Germany and Italy signed atreaty of military alliance (Axis).
October 12 The Imperial Rule Assistance
Association was created.

April 26 The fixed number of Clerks was revised
to 212.
The fixed number of Clerks added on a temporary
basis was revised to 49.

1940

April 1 The BOA Act was amended; one division
was added to the 2nd Bureau and 3rd Bureau,
respectively, and the fixed number of Directors
was revised to 16, that of Deputy Directors to 28,
and that of Directors of each bureau to four orfive.
April 6 The fixed number of Directors appointed
by Imperial Order was revised to four, and that ofClerks to 202.
April 1 The procedures of submission of accounts April 13 The Soviet-Japanese Neutrality Pact
1941 October 24
Bunichi
were dramatically simplified. [page 196]
was signed.
KAWAMOTO June 11 The fixed number of Clerks was revised to June 22 The Russo-German War broke out.
(-June10,
178, and the fixed number of clerks added on a December 8 Japanese military attacked Pearl
1946)
temporary basis was revised to 47.
Harbor in Hawaii, starting the war with theUnited States and the United Kingdom.
1942
May 2 The fixed number of Clerks was revised to April 28 The Wartime Exceptional Public
155, and the fixed number of Clerks added on a
Accounting Act and the Wartime Exceptional
temporary basis was revised to 63.
Regulations on Accounting were put into effect.
May 5 The Wartime Exceptional Rules on the June 5 The Battle of Midway occurred.
Submission of Account were established July 28 Simplification of administrative measures(simplifying submission of accounts of Army andwas decided by the Cabinet.
Navy). [page 197]
November 1 The Ordinance on the Organization
May- BOA staff were dispatched as staff membersof the Ministry of the Great East Asia wasof Depertment of Military Administration
promulgated (abolishing the Ministry of
Financial Management Supervision in Southeast
Colonial Affairs, East Asia Development Board,
Asia, from then onward dispatching 25 staffetc.).
members in total until the end of war. [page 191]
November 1 The fixed number of Clerks wasrevised to 140, and the fixed number of Clerks
added on a temporary basis was revised to 58.
1943
March 20 The BOA Act was amended; a three- September 8 An unconditional surrender was
bureau 14-division structure was adopted, reducing
declared by Italy.
Directors by one, and Soninkan Directors by two. October 1 The
Matterson
Thorough
The system was revised so as to specify the fixed
Simplification of Budget were decided by the
number of Chokuninkan Directors, Secretaries,
Cabinet.
Deputy Directors, Residents and Clerks by November 1 The Ordinance on the Organizations
Imperial Ordinance.
of the Ministry of Munitions, the Ministry ofThree Deputy Directors were set up on a
Transportation and Communications, and thetemporary basis in addition to the existing 58
Ministry of Agriculture and Commerce was
Clerks for auditing emergency armaments
promulgated (abolishing the Cabinet Planning
expenditures.
Board, the Ministry of Commerce and Industry,
November 11 BOA moved to a part of the former
the Ministry of Postal and Telecommunications,668

Section 4 Chronology

Year

President of
BOA

BOA Matters

General Mattersbuilding of the Ministry of Education.

1944

the Ministry of Railways, the Ministry ofAgriculture and Forestry, and the Maritime
Affairs Agency).

January 29 The Wartime Exceptional Rules on the
Submission of Accounts were also applied to the
Ministry of Munitions ; furthermore, theconventional rules were dramatically amended.
May 4 The Rules on Temporary Measures
Concerning the Submission of Accounts wereenacted (applying a part of the Wartime
Exceptional Rules on the Submission of Accountto general government offices, and further
simplifying said exceptional rules). [page 199]
May 10 The Rules on the Handling ofCommissioned Audits were enacted (consolidating
and simplifying the Procedures for the Handling ofCommissioned Audits). [page 203]
1945
April 1 The fixed number of Clerks added on a April 1 The Ordinance om the Organization of
temporary basis was revised to 54, and two
the Arsenals of Munitions was promulgated.
Residents were newly added on a temporary basis. May 7 Germany declared its unconditionalsurrender to the Allied Powers.
August 14 Japan accepted terms of the Potsdam
Declaration.
August 28 The Allied Powers started occupation.
September 2 Surrender documents were signed on
board the USS Missouri in Tokyo Bay.
The General Headquarters of the Supreme
Commander for the Allied Powers (GHQ) wasestablished.
October 24 The United Nations was established.
November 5 The War Damage Reconstruction
Board was established.
November 6 The Zaibatsu (financial clique) was
dissolved.
December 17 The Public Offices Election Act
was promulgated, restoring party politics.
1946 June 26
July 2 The Examination Committee on the BOA February 1 The first farmland reform was
Seiichiro
Act Amendment was established. [page 242]
implemented.
ARAI
September 17 The Examination Committee on the March 3 The Prices Control Ordinance was put(-August 23,
Finance and Accounting System Reform wasinto effect; former Japanese yen banknotes were1947)
established.
abolished.
August 12 The Headquarters for Economic
Stabilization and the Agency for Commodity
Prices were established.
October 21 The second farmland reform was
implemented.
November 3 The new Constitution of Japan waspromulgated.

669

II. Appendix
President ofSecretary
Commissioner
BOA Matters
General Matters
BOA
General1947 August 26
May 3
May 3
January 22 The FY1944 Annual March 31 The Public Finance Act
HajimeSeiichiro
KoemonAudit Report was submitted toand the Act Partially Amending
SATO
ARAI
TSUYA
the Cabinet.
the Public Account Act were(-August 22,(served as April 19 The Act Amending the(conducted
promulgated (put into effect on1954)
anactingthe task of
BOA Act was promulgated (putApril 1).
Secretary
Commissio
into effect on May 3).
April 17 The Local Autonomy Act
General)ner)
March 1 The FY 1945 Annual
was promulgated (put into effectAugust 26
Tsunezo
Audit Report was submitted toon May 3).
DenjiroOYAMA
the Cabinet.
May 1 The Industry
TOTANI(conducted
May 3 The new BOA Act was put
Reconstruction Public
the task of
into effect. [page 250]
Corporation was established,
Commissio
Started with a structure of 19
followed by establishment of aner)divisions in four bureaus, andseries of distribution public
August 23
four divisions in the Secretariat.
corporations and foreign trade
HajimeThe
Regulations
onthepublic corporations.
SATO
Promulgationof
BOA May 3 The Constitution of Japan
Chuichiregulations, the Regulations on
was put into effect.
SHIMOOKA
the Fixed Number of Officials in May 24 The Cabinet of Tetsu(-August 22,
the General Executive Bureau of
KATAYAMA was inaugurated.
1952)
BOA, the Regulations on the June 23 The opening ceremony ofNoboruDistribution of Activities and thethe first session of the Diet under
MOROHASHI
Organization of the General
the new Constitution was held.
(-August 22,
Executive Bureau of BOA, the September 14 Typhoon Kathleen
1950)
Regulations for Enforcement ofstruck and caused serious damage
the BOA Act, the Regulations on
to the Kanto District.
the Claims Settlement of BOA, October 21 The National Public
and the Regulations on theService Act was promulgated (putSubmission of Accounts were
into effect on November 1).
enacted.
The Deputy Director system was
set up ( 23 officials wereappointed).
The new organization consistedof Secretary General, Deputy
Secretary
General,Director
General, Senior Director, Deputy
Director, Chief, and officials in
the regular service.
1948
March 8 The
structure
was March 10 The Cabinet of Hitoshi
expanded to 22 divisions in four
ASHIDA was inaugurated.
bureaus, and five divisions in the June 30 The National Property Act
Secretariat.
was promulgated (put into effect
March 22 The FY1946 Annual
on July 1).
Audit Report was submitted to September 10 The Showa Denko
the Cabinet.
Incident spread, leading to arrests
June 19 The BOA Act wasof government officials, business
amended (the amount of salaryleaders, politicians, etc.
for Commissioners was revised). October 15 The second Cabinet of[page 260]
Shigeru
YOSHIDAwas
inaugurated.
1949
January 20 The names of the audit February 16 The third Cabinet ofdivisions were revised from those
Shigeru
YOSHIDAwas
assigningsequential
serialinaugurated.
numbers to those expressing the March 7 Joseph Dodge, GHQ
audit subjects.
fiscaladviser,emphasized
February 15 The FY1947 Annual
implementationofbalanced
Audit Report was submitted tobudget and abolition of subsidies
the Cabinet.
(the "Dodge Line").
September 5 The first session of April 23 The foreign exchangetheTraining
Coursesforrate was decided at 360 yen to
Year

670

Section 4 Chronology

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters
Accounting
Officials
Prefectural Governments
place.

1950

August 23
DenjiroTOTANI

1951

1952

August 25
SusumuKATO(-August 28)
September 1
SusumuKATO

General Mattersoftookthe dollar (became effective on
April 25).
June 1 Japanese
National
Railways, and Japan Tobacco andSalt Public Corporation were
established.
August 26 The outline of Shoup's
recommendations was announced.
January 10 The FY1948 Annual May 11 The
August 23
Act
on
the
Kinichi
Audit Report was submitted to
Responsibility of Government
WATANUKI
the Cabinet.
Employees Who Execute the
February 15 The Bureau Audit
Budget was promulgated and put
ReportCommittee
wasinto effect.
established in each audit bureau. June 25 The Korean War broke[page 292]out.
May 10 The BOA Act was August 10 The Police Reserve
amended (the method to appoint
Force was created.
Commissioners was revised ) .
[page 260]
May 11 The BOA Act wasamended (revisions related to the
Act on the Responsibility ofGovernment Employees Who
Execute the Budget were made).
[page 260]
June 8 The Improvement Division
was established in the Secretariat.
June 17 The Rules on Demand of
Disciplinary
ActionandAdjudication were enacted.
January 12 The FY1949 Annual September 8 The San Francisco
Audit Report was submitted toPeace Treaty and the Japan-U.S.A.
the Cabinet.
Security Treaty were signed.
February 1 The Audit
ReportCoordination Committee wasestablished in the Secretariat.
[page 293]
January 21
January 16 The
Coordination January 13 Moldy rice found from
Sunao
Division was established in each
rice imported from Burma.
IKEDA
bureau. Three divisions in the April 28 The San Francisco Peace
Secretariat, namely, the Legal
Treaty and the Japan-U.S.A.
Affairs Division, the Claims
Security Treaty took effect. The
Settlement Division and the
GHQ etc. was abolished.
Improvement
Divisionwere July 1 Tokyo International Airport
integrated
into
the
Legal
was established.
Improvement Division.
August 1 Nippon Telegraph andJanuary 18 The FY1950 Annual
Telephone Public Corporation
Audit Report was submitted towas established.
the Cabinet.
August 13 Japan
becameaJune 7 The new Regulations on
member of the International
the Submission of Accounts were
Monetary Fund (IMF) and of theenacted (simplifying the affairs ofWorld Bank.
the submission, and simplifying October 30 The fourth Cabinet ofand clarifying the rules) (put into
Shigeru
YOSHIDAwas
effect on July 1). [page 279]
inaugurated.
August 1 The BOA Act wasamended (revisions related to
Nippon Telegraph and Telephone
Public Corporation were made).

671

II. Appendix

Year

President of
BOA

Commissioner

1953

1954 August 25
August 25
DenjiroYoshimiTOTANIYAMADA(-August 22,
1957)

1955

1956

Secretary
General

BOA Matters

General Matters[page 260]
December 31 The FY1951 Annual
Audit Report was submitted to
the Cabinet.
December 25 The FY1952 Annual May 21 The fifth Cabinet of
Audit Report was submitted to
Shigeru
YOSHIDA
wasthe Cabinet.
inaugurated.
July 27 The
KoreanWar
Armistice Agreement was signed.
December 25 The Amami Islands
were returned to Japan.
June 25 The new Regulations on February 8 The Tokyo District
the Fixed Number of Officials in
PublicProsecutors
Officethe General Executive Bureau of
implemented
crackdowns
on
BOA were enacted.
shipbuilding companies (the start
December 24 The FY1953 Annualof the shipbuilding scandal).
Audit Report was submitted to March 1 The fishing boat Daigo
the Cabinet.
Fukuryu Maru was contaminatedby nuclear fallout from the U.S.
A. thermonuclear bomb test at
Bikini Atoll.
March 8 The Mutual Defense
Assistance Agreement Between
Japan and the U.S.A. was signed.
July 1 The Defense Agency and
the Japan Self-Defence Forceswere established.
December 10 The first Cabinet of
IchiroHATOYAMA
was
inaugurated.
April 1 The
AssistantChief March 19 The second Cabinet ofsystem was set up.
IchiroHATOYAMA
was
August 1 The BOA Act was
inaugurated.
amended (one bureau was added). August 27 The Act on Regulation[page 263]
of
Execution
ofBudget
The fixed number of officials was
Pertaining to Subsidies, etc. wasrevised (in line with adding one
promulgated (put into effect on
bureau, the fixed number was
September 27).
revised to 1,178, by increasing September 10 Japan became a60).
member of General Agreement on
December 14 The FY1954 Annual
Tariffs and Trade.
Audit Report was submitted to October 13 The Japan Socialist
the Cabinet.
Party was created, unifying therightist and leftist socialist
parties.
November 15 The
LiberalDemocratic Party was formed(starting the 1955 organizational
structure).
November 22 The third Cabinet of
IchiroHATOYAMA
was
inaugurated.
April 1 The Auditor System was May 22 The State-Owned Goods
set up (370 auditors wereManagement Act and the Act on
appointed). [page 269]
Management, etc. of Claims Held
September 24 The
secondby State were promulgated (putInternational
Congressofinto effect on January 10, 1957).
Supreme Audit Institutions took July 16 The Economic White
place in Brussels (until September
Paper expressed that the Japanese672Section 4 Chronology

Year

President of
BOA

Commissioner

Secretary
General1957 August 27
August 23
Osamu
SusumuAKUTAGAWA
KATO(-August 24,
1959)

1958

1959 September 25 September 22
YoshimiYasueiYAMADAKOMINE(-August 24,
1961)

1960

February 6
Yasuei
KOMINE
September 22
MinoruOSAWA

BOA Matters

General Matters29), and BOA participated in theeconomy could "no longer be
congress for the first timetermed postwar."(continuously participating since December 18 The United Nationsthen). [page 558]
General Assembly unanimously
December 7 The FY1955 Annual
approved Japan's admission to the
Audit Report was submitted toUnited Nations.
the Cabinet.
December 23 The
Cabinetof
TanzanISHIBASHI
wasinaugurated.
January 10 The BOA Act was February 25 Inauguration of theamended (goods owned by the
first Cabinet of Nobusuke KISHI.
State were included in the scope August 9 Signing of Agreementof mandatory audit subject
on 7 Million Dollars Loanmatters). [page 265]
between Aichi Irrigation Public
December 7 The FY1956 Annual
Corporation and the World Bank.
Audit Report was submitted to August 27 The
first
nuclearthe Cabinet.
reactor in Japan started operation
December 10 The Counselorin
Tokaimurain
Ibarakisystem was set up (one Counselor
Prefecture.
was appointed to each bureau
except for the 3rd Bureau; thenumber was gradually increased,
and two Counselors were set up
in each bureau by April 1973).
April 25 The BOA Act was March 9 The opening ceremony ofamended (the amount of salary
the Kanmon Roadway Tunnel
for Commissioners was revised).
was held.
[page 260]
May 13 The
Zentei - Chuyu
December 4 The FY1957 Annual
incident occurred.
Audit Report was submitted to June 12 The second Cabinet of
the Cabinet.
Nobusuke
KISHI
wasinaugurated.
December 23 Tokyo Tower wascompleted (333 meters high).
April 1 One
Adjudication August 26 The Miike Mine Strike,Counselor and nine Adjudication
the biggest postwar labor dispute,
Officers were set up in thestarted.
Secretariat (among them, three of September 26 The
Isewanthem were to be Senior Directors
Typhoon caused serious damageof Adjudication Division).
to the Chubu District.
December 4 The FY1958 Annual
Audit Report was submitted to
the Cabinet.
May 7 Field audits of diplomatic January 19 The new Japan-U.S.A.
establishments
abroadwere
Security Treaty was signed in
conducted for the first time after
Washington.
war (in the Southeast Asia March 15 World Bank's Board ofregion). [page 282]
Directors approved a 40 million
August 30 BOA's building was
dollar loan to Japan Highway
moved back from the former
Public Corporation (signed onbuilding of the Ministry ofMarch 17).
Education to the former building May 20 The Liberal Democraticof BOA.
Party forcibly passed the new
September 1 History of the Board
Japan-U.S.A. Security Treaty.
of Audit from 1880 to 1960 was July 19 The first Cabinet of
published.
Hayato IKEDA was inaugurated.
December 5 The FY1959 Annual December 8 The second Cabinet
Audit Report was submitted toofHayatoIKEDA
wasthe Cabinet.
inaugurated.

673

II. Appendix

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters

General Matters

December 27 A plan to double
people's incomes was decided by
the Cabinet.
April 1 Four Auditors of Special April 1 The
October 16
1961 October 17
universal
healthOsamu
Torao
Programs Division were set up in
insurancesystemandthe
AKUTAGAWA
TSUKAKOSHI
the Secretariat (among them, one
universal pension system were(-August 22,
was to be Senior Director oflaunched.
1964)
Special Program Division).
May 3 An 80 million dollar World
December 4 The FY 1960 Annual
Bank loan for the Tokaido
Audit Report was submitted to
Shinkansen Line was signed by
the Cabinet, and its format was
Japanese National Railways.
revisedtoB 5,
writtenhorizontally.
April 1 Five Senior Directors were February 15 The first meeting of
1962
March 31
Terumasa
set up in the 5th Bureau to be
the First Provisional Commission
KAMIMURA
involved in auditing State-owned
on Administrative Reform wasbodies (the 1st State-owned
held.
bodies Audit Division and the 2 August 30 The YS-11, Japan'snd State-owned bodies Audit
first
domestically
produced
Division were abolished).
passenger plane, succeeded in
December 4 The FY1961 Annual
flight testing.
Audit Report was submitted to
the Cabinet.
1963
April 1 The Health and Welfare June 4 The Kuroyon Dam wasService Division was establishedcompleted as Japan's biggest archin the Secretariat.
dam.
December 4 The FY1962 Annual July 16 The section between Ritto
Audit Report was submitted to
and Amagasaki of the Meishin
the Cabinet.
Expressway came into operation
(the
first
long - distance
expressway in Japan).
December 9 The third Cabinet of
Hayato IKEDA was inaugurated.
April 1 Five Senior Directors were April 1 Japan moved to Article 81964 August 25
August 24
Takashiadditionally set up in the 5th
status of the IMF.
YasueiYAMAZAKI
Bureau.
April 28 Japan became a member
KOMINE
December 3 The FY1963 Annualof the Organisation for Economic(-September
Audit Report was submitted to
Co-operation and Development.
21, 1966)
the Cabinet.
October 1 The Tokaido
ShinkansenLinestartedoperation.
October 10 The
Tokyo
1964
Olympic Games were held.
November 9 The first Cabinet of
Eisaku SATO was inaugurated.
1965
September 15 April 1 One Senior Director of February 7 US military aircraft
Yasunobu
Special Programs Division wasstarted attack on North Vietnam.
SHIRAKI
added in the Secretariat.
June 22 The Treaty on Basic
August 19 The
first
regular
Relations between Japan and themeeting with the Budget Bureau
Republic of Korea was signed.
of the Ministry of Finance was July 1 The
entireMeishin
held. [page 371]
Expressway came into operation.
December 2 The FY1964 Annual November 19 Issuance of the first
Audit Report was submitted topostwar deficit-financing national
the Cabinet.
government bonds was decided
by the Cabinet.
September 30 September 30 April 1 In the Secretariat, one January 29 The
first
postwar1966 October 4
Torao
Tomoo
Yasunobu
Senior Director of Special
deficit - financing
national
TSUKAKOSHIUNOSAWASHIRAKI
Program Division was added andgovernment bonds were issued by674Section 4 Chronology

Year

President ofCommissioner
BOA
(-May
21,
1967)

Secretary
General

BOA Matters

General Matters

one Counselor for Special
the Government.
Programs Division was set up.
March 31 The total population
June 10 An annex to the former
based on the resident registrationbuilding of BOA was completed
exceeded 0.1 billion.
(one story below ground and six July 4 A change of the proposed
stories above ground).
location
of
New
Tokyo
October 20 The
first
regularInternational
Airportfrommeeting with the Financial
Tomisato to Sanrizuka in Chiba
Bureau of the Ministry of FinancePrefecture was decided by thewas held. [page 371]
Cabinet.
December 6 The FY1965 Annual
Audit Report was submitted to
the Cabinet.
July 14February 1 One of the Deputy February 17 The second Cabinet
1967 July 18
Takashi
Masao
Directors of each division was toof Eisaku SATO was inaugurated.
YAMAZAKISHIRAISHI
be Senior Deputy Director.
May 2 The groundbreaking(-August 23,
November 30 The FY1966 Annual
ceremony of the Tsuruga Nuclear
1971)
Audit Report was submitted to
Power
Plant,
Japan'sfirst
the Cabinet.
commercial nuclear power plant,
was held.
1968
April 1 Training Division was April 18 The Kasumigaseki
established in Secretariat.
Building (147 meters high) was
May 22 The Sixth International
completed.
Congress of Supreme Audit June 26 The Ogasawara Islands
Institutions took place in Tokyo
were returned to Japan.
(until May 30). [page 558]
July 1 The postal code system
International Organization ofstarted.
Supreme
Audit
Institutions(INTOSAI)
was
officiallyestablished.
November 29 The FY1967 Annual
Audit Report submitted to the
Cabinet.
1969
April 1 One Technical Specialist May 26 The
entireTomei
was set up (the number was
Expressway came into operation.
added one by one in 1974, 1976, August 1 60 tons of Japan's first1977 and 1978).
voluntary marketed rice was
November 29 The FY1968 Annual
shipped from Miyazaki to Tokyo.
Audit Report was submitted to November 25 Termination of thethe Cabinet.
land reclamation of Hachirogata
Lagoon was decided.
1970
February 16
November 30 The FY1969 Annual January 14 The third Cabinet of
Saburo SATO
Audit Report was submitted to
Eisaku SATO was inaugurated.
the Cabinet.
February 5 The
Ministryof
Agriculture and Forestry notified
each prefectural government ofthereducedrice
acreageallotment.
March 14 The
Japan
World
Exposition (Expo '70) was held inOsaka.
June 23 The
Japan - U. S. A.
Security Treaty was automaticallyextended, and protest rallies were
held nationwide.
1971 October 26
October 22
October 23
January 20 Six Senior Directors June 17 The Okinawa Reversion
Yasunobu
SaburoTatsuroappointed to 5th Bureau were
Agreement was signed.
SHIRAKISATOISHIKAWA
assigned to the other bureaus (the September 28 The Institute of(-September
structure to audit State-owned
Space and Aeronautical Science675

II. Appendix

Year

President of
BOA
29, 1973)

Commissioner

Secretary
General1972

1973 December 1
November 30
Masao
Torao
SHIRAISHI
CHINO(-October 15,
1975)

1974

1975 November 25 November 21
Saburo
Fudeo
SATO
OMURA
(-October 21,
1978)

1976

December 22
Hideo
KAMADA

BOA Matters

General Mattersbodies was revised).
in the University of Tokyo
November 11 An eight-story Book
succeeded in the launch ofStoreroom was completed in Oji,Japan's first scientific satellite.
Kita-ku.
December 19 Revaluation of the
December 3 The FY1970 Annual
Japanese yen was decided (308
Audit Report was submitted toyen to the dollar; applied fromthe Cabinet.
December 20).
April 28 One of Senior Directors February 3 The Sapporo 1972
of Adjudication Division was
Winter Olympics were held.
reduced, and one Senior Director March 15 The section betweenof Special Programs Division was
Shin-Osaka and Okayama of theadded.
Sanyo Shinkansen Line came into
December 12 The FY1971 Annual
operation.
Audit Report was submitted to May 15 The administrative rights
the Cabinet.
over Okinawa were returned toJapan.
July 7 The first Cabinet of Kakuei
TANAKA was inaugurated.
March 29 A suboffice of BOA January 1 The system of free of
was completed in Ichigaya charge medical care for the
Nakanocho, Shinjuku-ku.
elderly was established.
December 10 The FY1972 Annual February 13 The Japanese yen's
Audit Report was submitted toshift to the floating exchange rate
the Cabinet.
system was decided by theGovernment.
October 17 Organization of thePetroleum Exporting Countries
decided to reduce production of
petroleum for the countries
supporting Israel, which prompted
the oil crisis.
December 22 The second Cabinetof Kakuei
TANAKAwasinaugurated.
December 11 The FY1973 Annual September 1 A radiation leakage
Audit Report was submitted toaccident occurred in Mutsu,
the Cabinet.
nuclearship,
duringanexperimental voyage.
December 9 The Cabinet of Takeo
MIKI was inaugurated.
December 11 The FY1974 Annual March 10 The section between
Audit Report was submitted to
Okayama and Hakata of thethe Cabinet (from this year
Sanyo Shinkansen Line came into
onward, the annual audit report
operation.
was passed to the Prime Minister July 19 The Okinawa Internationalby the President of BOA). [pageOcean Exposition was held.
369]
November 15 The first G6 summit
took place.
December 24 The Special DeficitFinancing National Bond Act wasenacted (issuance of deficitfinancing national government
bonds).
December 10 The FY1975 Annual July 27 Former Prime Minister
Audit Report was submitted to
Kakuei TANAKA was arrested
the Cabinet.
for the Lockheed Aircraft bribery
scandal.
November 5 The
government
decided to confine annual defense

676Section 4 Chronology

Year

President of
BOA

Commissioner

1977

1978 October 24
Torao
CHINO
(-November
29, 1980)

October 23
Hideo
KAMADA

1979

1980 December 2
Fudeo
OMURA
(-November
20, 1982)

December 1
Tsutomu
OKUBO

Secretary
General

BOA Matters

General Mattersbudget to less than 1 % of Gross
National Product.
December 24 The
Cabinetof
Takeo
FUKUDAwasinaugurated.
April 18 Six Counselors were April 24 Joyo, Japan's first sodium
abolished, and six Assistantcooled experimental fast reactor,
Secretaries General were set up
reached criticality, and came into(all the remaining Counselors
operation.
became Assistant Secretaries July 1 Two Acts on the territorial
General on April 4, 1978).
sea were put into effect (start of
May 24 The expansion of thethe age of the 12-nautical milescope of BOA's audit mandate
territorial sea and 200-nautical
was resolved at a plenary session
mile exclusive fishery zone).
of the House of Representatives.
[page 338]
October 12 The Regulations on
the Examination of BOA were
fully amended.
December 14 The FY1976 Annual
Audit Report was submitted to
the Cabinet.
January 7 BOA's structure was May 20 New Tokyo International
October 22
Toshiodramatically reorganized. [pageAirport opened.
SHIBAZAKI
344]
August 12 The Treaty of Peace
October 1 A conference took placeand Friendship between Japanfor the establishment of Asianand China was signed.
Organization of Supreme Audit November 9 Bankruptcy
filings
Institution in West Berlin (untilcaused by the strong yen
October 7).
increased rapidly (1,390 cases).
December 15 The FY1977 Annual December 7 The first Cabinet of
Audit Report was submitted to
Masayoshi
OHIRA
wasthe Cabinet.
inaugurated.
April 1 The Assistant Auditor June 28 The Fifth G7 Summit
system was set up.
took place in Tokyo.
April 4 Technical Specialist was September 6 A fraud scandal,
renamed to Technical Counselor.
including fictitious business trips,
May 7 The First Assembly ofof Japan Railway Construction
Asian Organization of Supreme
Public Corporation was exposed.
Audit Institutions (ASOSAI) took October 2 The KDD Incident wasplace in New Delhi (until May
exposed.
11 ) ; BOA also participated November 9 The second Cabinet(continued to participate from thisof Masayoshi OHIRA wastime on). [page 559]
inaugurated.
July 31 An extension of the annex
to the former building of BOA
completed (became a nine-story
building).
December 14 The FY1978 Annual
Audit Report was submitted to
the Cabinet.
June 23January 1 One
positionof February 26 The Japan Maritime
Kyouichiro
Technical
Counselorwas
Self-Defense Force participated in
MATSUOabolished.
the Rim of the Pacific Exercise
March 5 The memorial ceremony(RIMPAC) for the first time.
for the 100th anniversary of BOA July 17 The Cabinet of Zenko
was held with the attendance of
SUZUKI was inaugurated.
the Emperor (at the National
Education Center, Toranomon

677

II. Appendix

Year

President of
BOA

Commissioner

1981

1982 November 24 November 22
Hideo
Keiichi
KAMADA
TSUJI(-October 22,
1985)

1983

Secretary
GeneralJuly 6
Kentaro
FUJII

BOA Matters

General Matters

Hall, with 1,400 attendees);
History of the Board of Audit
from 1880 to 1980 was publishedand a memorial stamp (worth 50yen) was issued to celebrate the100th anniversary of the fiscal
supervision system. [page 333]
July 18 The
first
ASOSAI
Seminar was held in Hachioji
International Center of the Japan
International Cooperation Agency(JICA) (until August 2); theseminar held annually from thenon.
December 10 The FY1979 Annual
Audit Report was submitted to
the Cabinet.
April 3 The Consultative
March 16 The first meeting of theCommitteeonGovernment
SecondExtraordinary
Auditing Issues was established
Commission for Administrative(the first committee meeting was
Reform took place.
held on April 20; 13 meetings August 25 The
outlineofwere held in total until January
administrativereformto1983). [page 568]
implement the first report (July 1)
July 23 Deputy Chief Cabinetof the Second Extraordinary
Secretary OKINA issued a noticeCommission for Administrative(the so-called OKINA Notice)
Reform was decided by theregarding cooperation for BOA's
Cabinet.
audit. [page 341]
December 7 Bid - rigging
wasDecember 15 The FY1980 Annual
found in bidding for public works
Audit Report was submitted toprojects.
the Cabinet.
April 11 The Second Assembly February 10 The Second
and the First International
Provisional
Commissionon
Seminar of ASOSAI took place
Administrative Reform submitted
in Korea (until April 18; Japanthesecondreportofbecame a governing board
administrativereformmember).
(consolidationofofficial
December 13 The FY1981 Annual
approvals, etc.).
Audit Report was submitted to June 23 The Tohoku Shinkansen
the Cabinet.
Line came into operation.
July 30 The Second Provisional
Commission on Administrative
Reform submitted the third basic
report (including privatization of
three public corporations).
November 10 The entire Chuo
Expressway came into operation.
November 15 The
JoetsuShinkansen Line came into
operation.
November 27 The first Cabinet of
Yasuhiro
NAKASONEwasinaugurated.
February 24 The first session of March 14 The Second Provisional
the Training Course for InternalCommission on Administrative
Auditors of State-owned Bodies
Reform submitted the final report
took place.
(dissolved on March 15).
December 21 The FY1982 Annual March 24 The entire Chugoku

678

Section 4 Chronology

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters

General Matters

Audit Report was submitted to
Expressway came into operation.
the Cabinet.
June 26 The first proportional
December 28 General - purpose
representation
systemwas
computers (HITAC M-220H)
introduced in the House of
were installed. [page 589]
Councillors election.
August 10 The
HealthandMedical Services Act for the
Aged was enacted, incorporating
introduction of co-payment borneby the patient for medical carefor the aged.
December 27 The second Cabinetof Yasuhiro NAKASONE wasinaugurated.
1984
March 6 The Information and April 7 Japan-U.S.A. agricultural
Technology Center of BOA wasnegotiations
weresettledopened.
(including
expandingimportApril 11 The
Information&
quotas of high-quality beef andCommunication
Technology
citrus fruits).
Division was established in the August 7 The amended Health
Secretariat, and the Training
Insurance Act and other laws andDivision was abolished.
regulations,
incorporating
May 28 The Seventh Governing
introduction of 10% co-payment
Board Meeting of ASOSAI wasto be borne by the patient for
held, hosted by BOA (until June
medical care, creation of the
1, with participation of six
retiree medical care system, etc.,
countries such as Korea).
were enacted.
December 10 The FY1983 Annual August 10 The Supervisory
Audit Report was submitted toCommittee for the Japanese
the Cabinet.
National Railways Reconstruction
December 17 BOA's structure wassubmitted to the Prime Minister adramatically reorganized.
proposal on privatization andseparationformanagement
improvementofJapanese
National Railways.
December 21 The
amendedNational Pension Act and otherlaws
andregulations,
incorporating introduction ofbasic pension system, etc., wereenacted.
March 1February 13 Deputy Chief Cabinet March 10 The Seikan Tunnel
1985 October 25
October 24
KiyoshiKiyoshiSecretary FUJIMORI issued abroke through.
Tsutomu
NAKAMURA
NAKAMURA
notice (the so-called FUJIMORI March 14 Ueno Station of the
OKUBO
October 23
Notice) regarding cooperation for
Tohoku Joetsu Shinkansen Lines( -March 29,
Kazuyuki
audit of financial assistance underopened.
1987)
NISHIKAWA
auditee's mandate. [page 342]
March 16 Tsukuba Expo '85 wasMarch 31 31 officials retired inheld in Tsukuba Science City.
line with implementation of the April 1 Nippon Telegraph andmandatory retirement system.
Telephone Corporation (NTT)
April 1 The BOA Act was
and Japan Tabacco, Inc. (JT)amended(concerning
were established.
privatization of Japan Tabacco September 22 The Plaza Accord
and Salts Public Corporation, andwas announced, followed by a
Nippon Telegraph and Telephone
drastic strong - yen / weak - dollar
Public Corporation). [page 335]
situation.
April 6 The Director of Audit October 2 The entire Kanetsu
Policy Planning was set up.
Expressway came into operation.
May 15 The Third Assembly andthe Second International Seminar679

II. Appendix

Year

President of
BOA

Commissioner

1986

1987 April 3
April 2
Takashi
Keiichi
NAKAJIMATSUJI(-April
10,
1989)

1988

Secretary
General

BOA Matters

General Mattersof ASOSAI were held, hosted by
BOA (until May 21). [page 560]
December 12 The FY1984 Annual
Audit Report was submitted to
the Cabinet.
January 1 The Director of the July 22 The third Cabinet ofInformation and Communication
Yasuhiro
NAKASONEwas
Technology Division and theinaugurated.
Director for Consolidated Audit July 30 The
entireTohokuwere set up.
Expressway (between Urawa andFebruary 6 The Regular
Aomori) came into operation.
Consultative Meeting with the October 29 The Government-held
Japanese Institute of Certified
shares of NTT were sold to
Public Accountants (the firstpublic.
meeting) was held.
December 30 The annual defense
April 5 The Director of Accounts
budget exceeded the confinement
Division was set up.
of 1 % of GNP.
April 15 The first session of the
Audit Issue Study Group took
place (until the end of 1989).
[page 552]
July 17 The first session of theTraining Course for Internal
Auditors of Ministries andAgencies took place.
December 12 The FY1985 Annual
Audit Report was submitted to
the Cabinet.
April 1 The BOA Act was April 1 Privatization
andamended (concerning separation
separation of Japanese National
and privatization of Japanese
Railways was implemented.
National Railways). [page 335]
September 4 The long - distanceMay 21 The Office of Public
call service started to be provided
Relations and the Office of Databy three companies : DDI
and Information were established.
Corporation,
Japan
August 4 The first regular meeting
Telecommunication, and Teleway
withtheAdministrative
Japan.
Inspection Bureau of the General September 19 The Tax Reform
Affairs Agency was held.
Act, incorporating abolition of the
December 11 The FY1986 Annual
Maruyu tax - exempt savings
Audit Report was submitted toprinciple, was enacted.
the Cabinet.
November 6 The
CabinetofDecember 18 The Foreign Affairs
Noboru
TAKESHITA
was
Audit Division was established ininaugurated.
the 1st Bureau.
November 18 Japan Airlines was
fully privatized.
February 9 The first briefing on March 13 The Seikan Tunnel
the annual audit report for(53.9 km) came into operation.
auditors of State-owned bodies,
The closing ceremony of theetc. took place. [page 476]
Seikan Renrakusen Ferry, which
March 15 The
First
Regularoperated for 80 years, was held.
Meeting with the Osaka City April 10 The entire Seto Ohashi
Control Bureau of Audit andBridge (Kojima-Sakaiede route)
Personnel Systems (the firstcame into operation.
meeting) took place.
June 18 The Recruit Scandal was
May 30 The Regular Meeting with
exposed.
the Audit Secretariat of the June 20 Japan and the U.S.A.
Tokyo Metropolitan Government
reachedanagreementon(the first meeting) took place.
measuresthat
significantly

680Section 4 Chronology

Year

President of
BOA

Commissioner

April 101989 April 11
KiyoshiShinji
NAKAMURAYAZAKI(-October 23,
1992)

1990

Secretary
General

BOA Matters

General Matters

September 20 The First Public
expand Japan's market for
Sector Auditing Forum took
American beef and oranges.
place.
November 29 A policy of 0.1
December 16 The FY1987 Annual
billion yen grant for the
Audit Report was submitted to" furusato - sosei "(hometown
the Cabinet.
regeneration) project was decided.
December 22 The first meeting of December 24 The
Bill
on
the
First - stage
Government
Consumption Tax was enacted
Auditing Consultative Committee(put into effect on April 1, 1989).
took place (13 meetings were
held in total until February 1995).
April 1January 30 The first briefings on January 8 The name of the era
Katsuhiko
the annual audit report for
was changed to "Heisei."AKIMOTO
directors of accounts divisions of March 6 The former chairman ofministries took place. [page 476]
NTT was arrested for the Recruit
May 29 The
SeniorAssistant
Scandal.
Secretary
Generalfor April 1 The consumption tax was
Management was set up and theintroduced.
Office of International Affairs June 3 The Cabinet of Sosuke
was established.
UNO was inaugurated.
June 1 The Visiting Research June 4 The Tiananmen Square
Fellow system was set up.
Incident occurred.
August 31 The first issue of a July 23 The 15th election for the
research journal, Kaikei-kensa
House of Councillors took place,Kenkyu (Journal of Government
resulting in triumph for the
Auditing), was published.
Socialist Party of Japan, and theDecember 8 The FY1988 Annual
Liberal Democratic Party, ruling
Audit Report was submitted toparty, losing the majority.
the Cabinet.
August 10 The first Cabinet ofToshiki KAIFU was inaugurated.
December 15 The amended
National Pension Act and otherlaws
andregulations,
incorporating the raise of thestarting age for receiving benefits
to the age of 65, etc., wereenacted.
December 29 The closing price of
Nikkei Stock Average of Tokyo
Stock Market showed the highest
price, 38,915.87 yen.
July 10February 15 The first technical February 28 The second Cabinet
Hidetakaseminar took place. [page 554]
ofToshikiKAIFU
wasMIHARA
March 31 Kono Junen No Ayumi
inaugurated.
(BOA Over the Past 10 Years) March 31 The Expo '90, The(1980 to 1989) was published.
International
GardenandJune 8 The Director of Personnel
Greenery Exposition, was held in
Division was set up.
Osaka.
December 14 The FY1989 Annual June 28 The Basic Plan for Public
Audit Report was submitted toInvestments, which planned to
the Cabinet.
spend about 430 trillion yen over
10 years, was decided.
August 2 Iraqi forces invaded
Kuwait.
August 29 Prime Minister KAIFU
decided to give aid to thoseMiddle East nations, including
financial aid to the multinational
force.

681

II. Appendix

Year

President of
BOA

Commissioner

1991

October 27
1992 October 30
Takashi
Syuro
NAKAJIMAHIKITA(-April
4,
1994)

1993

Secretary
GeneralJuly 1Syuro
HIKITA

October 26
Takeshi
ABE

BOA Matters

General Matters

April 12 The Director of Final January 17 The Gulf War started.
Accounts Verification was set up. January 24 An additional
April 17 The ceremony to pray for
expenditures of 9 billion dollars
safety and the groundbreaking
tomultinationalforce
asceremony of the Annaka Training
additional aid to Gulf War wasCenter took place.
decided.
May 8 The
Fifth
General April 24 Dispatch of minesweeper
Assembly of ASOSAI took placevessels of Japan Self-Defense(until May 14), and President ofForces to the Persian Gulf for the
BOA
NAKAMURA
was
removal of mines from the Gulf
appointed to the Secretary
was decided.
General of ASOSAI.
June 3 Mount Unzen in Nagasaki
December 9 The FY1990 Annual
Prefecture erupted.
Audit Report was submitted to June 20 Tokyo Station of thethe Cabinet.
Tohoku, Joetsu Shinkansen Lines
December 17 The BOA structure
opened.
was dramatically reorganized. November 5 The Cabinet of Kiichi[page 431]
MIYAZAWA was inaugurated.
April 10 One Senior Director of June 15 The Act on Cooperation
Training Division was set up, one
withUnitedNationsof Senior Directors of Special
Peacekeeping Operations andPrograms Division was reduced,
Other Operations was enacted.
and the Office of Training under June 18 Japan was expected to be
Training
Divisionwasthe world's largest donor of
established.
Official Development Assistance,
October 6 The completion
with 11,033 million dollars
ceremony of the Annaka Training
posted for the FY 1991 result.
Center of BOA was held. [page July 20 The
Securities
and586]
Exchange
Surveillance
December 11 The FY1991 Annual
Commission was established.
Audit Report was submitted to September 17 The first group of
the Cabinet.
the Self-Defense Force wasdispatched to Cambodia.
October 13 The Tokyo District
Public Prosecutors Office arrested
six
personnel
fromfivecompanies on suspicion of bidrigging concerning acceptance oforders for "blindfold stickers"
used for pension - notification
postcards.
April 1 The Director for Special July 18 The 40th General Election
Audits was set up.
resulted in the LDP's loss ofOctober 4 The first session of the
majority, and the Japan Socialist
Training Course for Internal
Party'sdevastating
defeatAuditors of Local Governments(collapse
of
the
1955
took place.
organizational structure).
December 14 The FY1992 Annual July 23 The Tokyo District Public
Audit Report was submitted toProsecutors Office arrested thethe Cabinet (from this submission
governor of Ibaraki Prefecture on
on, its format was revised to A4suspicion of involvement in asize).
general contractors scandal.
August 9 The Cabinet of Morihiro
HOSOKAWA was inaugurated.
September 30 The Ministry ofAgriculture,
Forestry
andFisheries announced that the
paddy rice crop condition index
for rice produced in 1993 was 80,
and emergency import of rice was682Section 4 Chronology

Year

President of
BOA

1994 April 12
ShinjiYAZAKI(-September
27, 1996)

1995

1996

Commissioner

Secretary
General

BOA Matters

General Matters

decided by the government.
December 14 Partial opening of
the rice market was decided by
the government.
December 15 The final agreementof the Uruguay Round of GATT
was signed.
April 8July 1 The Director for Audit January 29 Four acts concerning
HideakiTechnique and Methodology
political
reforms,
mainlySAEKI
Study was set up.
including the system combining(-July27,
December 16 The FY1993 Annual
single-seat constituencies and1997)
Audit Report was submitted toproportional representation, were
the Cabinet.
enacted.
February 4 H - II,apurelydomestically produced large sized
rocket, was launched successfully.
April 5 "Monju," a fast-breeder
reactor, (located in Tsuruga City)
reached criticality.
April 28 The Cabinet of Tsutomu
HATA was inaugurated.
June 30 The Cabinet of Tomiichi
MURAYAMA was inaugurated.
September 4 Kansai International
Airport came into operation.
April 1 The Director of Training January 17 The Great HanshinDivision was set up.
Awaji Earthquake occurred.
July 10 The first meeting of the March 20 The Tokyo subway
Second - stage
Government
sarin attack occurred.
Auditing Consultative Committee April 19 The yen posted a record
took place (15 meetings werehigh of World War II at 79.75
held in total until January 2000).
yen against the dollar.
December 15 The FY1994 Annual July 25 The publicly announced
Audit Report was submitted toamount of food expenditures of
the Cabinet.
40 prefectural governments forfive fiscal years became 5.2
billion yen, most of which wasspent for bureaucrats' practice ofentertaining each other.
July 27 The
entireKyushuExpressway came into operation.
November 1 The
Act
onStabilization of Supply, Demandand Prices of Staple Food was
put into effect, leading toderegulation of the rice market.
December 8 A sodium leakage
accident of "Monju," a fastbreeder reactor, occurred.
December 19 Introductionofpublic funds to seven housing
loan companies for bad debt
settlement was decided.
January 22 The first session of the January 11 The first Cabinet ofJune 25
Takao
Training Course for Internal
RyutaroHASHIMOTO
was
NAKAJIMA
AuditorsofPrefecturalinaugurated.
Governments (Construction Audit March 19 The Ministry of Health
Courses) took place.
and Welfare submitted a research
February 19 The first session ofreport to clarify the HIV-tainted

683

II. Appendix

Year

President of
BOA

Commissioner

1997 February 18
February 17
Shuro
Tsutomu
HIKITASUGIURA(-October 26, August 1
1999)
Akira
KANEKO

1998

Secretary
General

BOA Matters

General Matters

the Training Course for Internal
blood scandal.
AuditorsofPrefectural July 26 Housing
Loan
Governments (non-Construction
Administration Corporation was
Audit Courses) took place.
established as a body to take over
April 1 Operationofassets of seven housing loan
communication systems (such ascompanies, and collect debts.
e-mails) started.
October 20 The 41st election for
September 4 The First Tokyo
the House of Representatives took
International Meeting on Audit
place; it was the first election
took place (until September 11).
held under the combination of[page 557]
single-seat constituencies andDecember 11 The FY1995 Annual
proportional representation.
Audit Report was submitted to November 7 The second Cabinet
the Cabinet.
of Ryutaro HASHIMOTO wasinaugurated.
December 4 Former
Administrative Vice Minister ofthe Ministry of Health andWelfare was arrested on suspicionof bribery in the Aya WelfareGroup scandal.
March 31 History of the Board of April 1 The consumption tax rate
Audit from 1947 to 1997 under
was increased from 3% to 5%.
the Constitution of Japan was October 1 The Nagano Shinkansen
published.
Line came into operation.
July 1 Operationofthe November 24 Yamaichi Securities
Kasumigaseki WAN started.
Co., Ltd decided to cease its
July 26 The BOA website wasoperations.
launched.
November 28
The
FiscalDecember 12 The FY1996 Annual
Structural Reform Law was
Audit Report was submitted toenacted (frozen in 1998).
the Cabinet.
December 1 The
Kyoto
The Act Partially Amending theConference to prevent global
Diet Act, etc. was enacted
warming was held (the Kyoto(establishment of the audit
Protocolwasadoptedonrequest system from the Diet,
December 11).
enshrining of the audit objectives December 18 The Tokyo Bay
into law). [page 412]
Aqua-Line came into operation.
January 12 The BOA Act was February 7 The Nagano 1998
June 24
Nobuakiamended (concerning the audit
Winter Olympic Games were
MORISHITA
request from the Diet). [page
held.
412]
February 16 The amended Deposit
April 22 The first audit request
Insurance Act and the Act on
from
the
House
of
Emergency Measures for the
Representatives was made underStabilizationofFinancial
Article 105 of the Diet Act
Function were enacted.
(concerning operation of public April 5 The entire Akashi-Kaikyo
accommodation facilities).
Bridge (Kobe-Naruto route) came
September 28 The audit result
into operation.
upon the request from the Diet on June 22 The Banking Bureau andApril 22 was reported to thethe Securities Bureau of theHouse of Representatives.
MinistryofFinancewere
December 11 The FY1997 Annual
abolished, and the Financial
Audit Report was submitted toSupervisory
Agencywasthe Cabinet.
established.
July 30 The Cabinet of Keizo
OBUCHI was inaugurated.
September 3 The Tokyo District
Public Prosecutors Office arrested
four officials of the Defense
684Section 4

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters

Chronology

General Matters
Agency on suspicion of breach oftrust concerning treatment of
overpayment matter.
October 12 Laws
relatedtofinancial
revitalization
were
enacted(specialpublicmanagement of Long-Term Credit
Bank of Japan and Nippon Credit
Bank was decided).
November 16 Emergency
economic measures of a total of
24 trillion yen (such as credit
crunch countermeasures, andmerchandise coupons for regional
revitalization) were decided by
the government.

December 2
1999 December 7
December 3
NobuakiJoji
Akira
MORISHITA
FUKADAKANEKO(-December 4,
2001)(December 7,
2001 - July30, 2002)

2000

February 15 The landscaping work March 3 The Bank of Japanof an on-the-job facility for
implemented
super - easing
construction audit was completed.
monetary policy with zero interest
April 27 The opening ceremony ofrate commitment.
the on - the - job facility for May 11 The entire Shimanamiconstruction audit of the Annaka
Kaido Expressway (OnomichiTraining Center was held.
Imabari Route ) came into
May 10 The BOA Act was
operation.
amended (the provisions on July 1 Newly reorganized NTT
predominance in giving consent
started its operation, dividing theto appointment of Commissioners
business into three operatingof the House of Representatives
companies under the holding
were deleted). [page 415]
company.
November 29 The FY1998 Annual July 12 The Food, Agriculture andAudit Report was submitted to
Rural Areas Basic Act, which
the Cabinet.
aims to raise the food selfsufficiency rate, etc., was enacted.
August 9 The National PublicService Ethics Act was enacted(put into effect on April 1, 2000).
October 1 Japan
Bank
forInternational
Cooperation,
Development Bank of Japan Inc.,and National Life FinanceCorporation were established, in
line
with
integrationofgovernment-affiliated institutions,etc.
January 27 BOA participated in January 20 The Commission on
the first meeting of the Auditors
the Constitution was established
General Global Working Group,as the official organization of theorganized by GAO (until January
Diet at both the House of
28). [page 557]
Representatives and the House of
March 27 The first audit request
Councilors.
from the House of Councillors April 1 The Long - Term Carewas made under Article 105 of
Insurance system started.
the Diet Act (the audit result was April 5 The first Cabinet ofreported on November 10).
Yoshiro MORI was inaugurated.
May 30 The first meeting of the July 4 The second Cabinet of
Third-stage Government Auditing
Yoshiro MORI was inaugurated.
Consultative Committee took July 21 The 26th G8 Summit took
place (14 meetings were held inplace in Nago City, Okinawa
total until December 2004).
Prefecture.

685

II. Appendix

Year

President of
BOA

Commissioner

2001

2002 August 2
July 31
Tsutomu
Muneharu
SUGIURAOTSUKA(-February 16,
2004)

Secretary
General

BOA Matters

General Matters

November 30 The FY1999 Annual November 28 Suspension of 255
Audit Report was submitted to
public works including thethe Cabinet.
reclamation project of Nakami in
Shimane Prefecture was decided.
January 6 In
linewith January 6 The central government
reorganization of government
ministries and agencies were
ministries and agencies, BOA'sreorganized into one Cabinet
structure was reorganized. [pageOffice and twelve Ministries and433]
Agencies.
The Senior Assistant Secretary March 10 The former head of aGeneral for Management wasdivision of the Ministry of
renamed to the Senior AssistantForeign Affairs which supported
Secretary General.
overseas visits by Vips was
April 1 The BOA Act wasarrested on suspicion of siphoning
amended(concerningtheoff public fund.
Information Disclosure Review April 1 The Information
Board). [page 416]
Disclosure Act was put intoThreemembersoftheeffect, and 57 incorporated
Information Disclosure Review
administrative agencies were
Board of BOA were appointed,
established.
and the Director of Management April 26 The first Cabinet of
Division and the Office ofJunichiro
KOIZUMI
wasInformation Disclosure Review
inaugurated.
Board were established.
June 20 The Basic Law on Special
October 17 53
of
the
57
Public Institutions Reform wasincorporated
administrative
enacted.
agencies established in April were July 16 Four officials of thedesignated
as
those
being
Ministry of Foreign Affairs wererequired for submission ofarrested on suspicion of fraud andaccounts.
deception by padding expenses
October 22 The 17th International
for limousine hires for theCongress of Supreme Audit
Okinawa Summit.
Institutions took place in Seoul August 29 The HII-A rocket was(until October 27), and BOA
launched successfully.
became a governing board September 11 Synchronizedmember.
terrorist attacks occurred in theNovember 30 The FY2000 Annual
U.S.A.
Audit Report was submitted to September 22 The Ministry of
the Cabinet.
Agriculture,
Forestry
andFisheries officially announced thefirst infection of mad cow diseasein Japan.
ceremonyto January 1 Euro, common currency
December 13 October 11 The
Masakunicelebrate the 10th anniversary ofin Europe, was introduced to
SEKIMOTO
the Annaka Training Center wasworld financial markets as anheld.
accounting currency.
November 29 The FY2001 Annual April 18 The second temporary
Audit Report was submitted toparallel runway in Narita Airport
the Cabinet.
came into operation.
May 31 The 17th FIFA World
Cup Korea/Japan was held.
July 24 The Act on Elimination
and Prevention of Involvement in
Bid Rigging, etc. was enacted.
July 26 Laws related to healthcare system reform, mainly
incorporating raising of the copayment ratio borne by thepatient for medical care to 30%,
were enacted.
686

Section 4 Chronology

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters

General Matters

October 30 Comprehensive
deflation measures including
financial revitalization programs
were decided.
December 1 The
Morioka Hachinohe section of the Tohoku
Shinkansen Line came into
operation.
2003
February 3 The BOA Act was March 19 U. S. A. and British
amended (concerning the Acts on
military forces started attacks on
online administrative procedures).
Iraq.
[page 419]
April 1 The Japan Post was
April 1 Receiving of account data
established.
via communication lines started, May 8 Industrial
Revitalizationin line with the start of operation
Corporation started operation.
of A-ACCeSS. [page 592]
June 10 Injection of public funds in
The Regulations on Exception to
Resona Holdings was officially
Submission of Accounts in thedecided.
Cases Processed by Utilizing August 27 Six - party talks on
Electronic
Data
Processing
North
Korea's
nuclear
Systems, etc. were enacted.
development program took place
November 28 The FY2002 Annual
in Beijing.
Audit Report was submitted to October 1 32
incorporated
the Cabinet.
administrative agencies were
December 19 BOA moved to aestablished, based on the plan of
temporary
officebuilding
reorganization and rationalization(Jinbocho Mitsui Building) (untilof special public institutions, etc.
December 27). [page 583]
November 19 The second Cabinetof Junichiro KOIZUMI was
inaugurated.
February 17
December 3
April 1 The fixed number of January 9 The Japan Ground Self2004 February 20
Nobuaki
MasakiHiroyuki
officials was revised (the number
Defense Force and Air SelfMORISHITANISHIMURASHIGEMATSU
was added by 40 to make 1,297
Defense Force were dispatched,(-January 20,
in total).
based on the Act on Special
2006)
Two certified public accountants
Measuresconcerning
were employed as officials with a
Humanitarian
Reliefand
fixed term of office for the first
Reconstruction
Work
and
time.
Security Assistance in Iraq.
May 27 Presidentof
BOA March 13 The Shin YatsushiroMORISHITA explained about theKagoshima Chuo section of theaudit system at the Subcommittee
Kyushu Shinkansen Line cameon
Ideal
Governanceandinto operation.
Organizations of the House of April 1 89 national university
Representatives' Commission on
corporations were established,
the Constitution. [page 429]
incorporating
national
November 9 The FY2003 Annual
universities.
Audit Report was submitted to June 2 Fouracts
concerning
the Cabinet.
privatization of four road related
public corporations were enacted.
June 5 Laws related to pension
reform were enacted.
October 23 The Niigata-Chuetsu
Earthquake occurred.
November 26 The government andthe ruling party agreed on thewhole picture of the trinity
reform to review national andlocal tax and finance.
December 26 The
major
earthquake off the coast of687

II. Appendix

Year

President of
BOA

Commissioner

2005

2006 January 27
January 23
Muneharu
KazuhikoOTSUKAFUSHIYA(-February 8,
2008)

Secretary
General

BOA Matters

General Matters

Sumatra and the tsunami in the
Indian Ocean occurred.
January 7 Groundbreaking
February 16 The Kyoto Protocol
Ceremony of No. 7 Central
to prevent global warming came
Government Building was held.
into effect.
April 1 The BOA Act was February 17 Chubu
Centrairamended(concerning
theInternational Airport came into
Information
Disclosureandoperation.
Personal Information Protection March 24 The
2005
World
Review Board of BOA). [pageExposition was held in Aichi,
420]
Japan.
One Assistant Secretary General April 1 The Act on the Protection
was added, Special Issues Auditof Personal Information Held by
Division for Ministries was
Administrative Organs was put
established, one of Senior
into effect.
Directorsof
Adjudication June 22 The amended Long-Term
Division and one of Technical
Care Insurance Act featuring self
Counselors were reduced.
pay of housing and food expenses
April 12 The first meeting of theat care facilities was enacted.
fourth-stage Government Auditing July 25 The Tokyo District Public
Consultative Committee took
Prosecutors Office arrested theplace (10 times in total until
vice president of Japan Highway
March 2008).
Public Corporation on suspicion
April 24 International Conferenceofbid - rigging
ofbridgeon
Promoting
Financialconstruction.
AccountabilityinManaging September 21 The third Cabinet ofFunds Related to Tsunami,
Junichiro
KOIZUMIwas
Conflict and other Disasters took
inaugurated.
place (in Indonesia, until April October 1 Four road-related public28). [page 562]
corporations were privatized, andJune 8 BOA received nine audit
six highway companies wererequests from the House of
established.
Councillors under Article 105 of October 14 Laws related to postal
the Diet Act (received a few
serviceprivatization
wererequests each year from thenenacted.
onward).
November 7 The BOA Act wasamended (extension of the scopeof audit, creation of the system of
special report to the Diet and the
Cabinet). [page 422]
November 8 The FY2004 Annual
Audit Report was submitted to
the Cabinet.
March 23 The
firstregular January 23 Japan Post Holdings
meeting of internal auditors ofCo., Ltd. was established.
ministries and agencies took March 9 The Bank of Japanplace.
decided to end the monetary
March 31 The Regulations on
quantitative easing policy that had
Demand of Disciplinary Action
continued from March 2001.
and Adjudication, and the May 26 The
Administrative
Regulations on the Examination
Reform Promotion Act wasof BOA were fully amended (putenacted.
into effect on April 1).
June 14 Laws related to healthJuly 13 The first special report tocare system reform were enacted.
the Diet and the Cabinet was June 20 Yubari City, Hokkaido,
made under Article 30-2 of thedeclared to apply for designation
BOA Act.
as a municipality under fiscal
November 10 The FY2005 Annual
rehabilitation.
Audit Report was submitted to September 26 The Cabinet of688

Section 4 Chronology

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters
the Cabinet.

2007

2008 February 15
February 12
HisashiKazuhiko
YAMAURAFUSHIYA(-January 25,
2009)

General Matters

Shinzo ABE was inaugurated.
October 23 The former governorof Fukushima Prefecture wasarrested on bid-rigging at theinitiative of government agencies.
(Also, the former governor of
Wakayama
Prefecturewasarrested on November 15, and theformer governor of Miyazaki
Prefecture on December 8).
December 8 The
Act
onPromotion of Decentralization
Reform was enacted.
March 26 The Act on Special January 9 The Ministry of Defense
Accounts,
incorporating
was established.
consolidation of 31 special June 8 The Third-Party Committee
accounts, was enacted. Financial
to Check Pension Records was
documents of special accounts toestablished under the Minister ofbe prepared for FY2007 onward
Internal
Affairs
andwere required to be audited by
Communications, for promptly
BOA before submission to theinvestigating and verifying theDiet. [page 462]
circumstances where such pension
April 1 The BOA Act was
problem occurred as well as its
amended(concerningthecauses and liabilities.
amendmentoftheLocal July 29 The 21st election for theAutonomy Act). [page 412]
House of Councillors resulted inAugust 24 Mr. David M. Walker,
a huge victory of the Democratic
the Comptroller General of theParty of Japan.
SAI of U.S.A., gave a lecture at September 26 The Cabinet ofthe 20th Public Sector Auditing
Yasuo
FUKUDA
was
Forum.
inaugurated.
October 2 The
ceremonyto October 1 Japan Post Co., Ltd.
celebrate completion of the No. 7
was privatized, and the JP Group
Central Government Building wasconsistingoftheholding
held.
company and four operating
November 9 The FY2006 Annualcompanies was established.
Audit Report was submitted to November 28 The
formerthe Cabinet.
Administrative Vice Minister ofDecember 13 (to 19) BOA moved
Defensewasarrestedonfrom a temporary building in
suspicion of bribery involving
Jinbocho to the No. 7 Central
procurement of self - defense
Government
Building
inequipment.
Kasumigaseki. [page 586]
April 1 The Senior Director for April 1 The Medical Care System
Performance Audit Planning,for Elderly started.
Coordination Division was set up. May 21 The Aerospace Basic Act
April 23 History of the Board of
was enacted.
Audit from 1947 to 2007 under June 6 The Basic Act on Reformthe Constitution of Japan wasof National Public Officers'
published.
Systems was enacted.
May 30 The first session of the July 7 The 34th G8 Summit took
Fifth-stage Government Auditing
place in Toyako Town inConsultative Committee took
Hokkaido.
place.
August 8 The
Beijing
2008
November 7 The FY2007 Annual
Olympic Games were held.
Audit Report was submitted to September 15 Lehman
Brothers
the Cabinet.
filed for bankruptcy, leading to
December 2 The first briefings on
global stock selloff.
the annual audit report for deputy September 24 The Cabinet of Tarovice ministers took place. [pageASO was inaugurated.
689

II. Appendix

Year

President of
BOA

Commissioner

Secretary
General

BOA Matters476]

2009 April 6
April 2
April 1
MasakiHiroyukiMineakiNISHIMURASHIGEMATSU
MASUDA

General Matters

October 1 Japan
Finance
Corporation was established.
January 5 Operation of CEFIAN April 22 The amended Act onstarted. [page 592]
Special Measures concerning
April 1 The BOA structure was
Finance of Road Construction
reorganized significantly. [pageand Improvement was enacted.
436]
May 21 The lay judge system
One Assistant Secretary Generalstarted.
was added.
August 30 The 45th election for
November 11 The FY2008 Annual
the House of Representatives
Audit Report was submitted toresulted in the Democratic Party
the Cabinet.
of Japan's becoming the rulingparty, gaining the majority of theseats.
September 16 The Cabinet ofYukio
HATOYAMA
was
inaugurated.

690

Afterword for Original Japanese Version

Afterword
A plan was raised to publish Kaikei Kensain Hyaku-sanju Nen Shi＊ in commemoration of the 130th
anniversary of BOA. To this end, the BOA 130-year history editing project team, headed by the Deputy
Secretary General, was established in October 2008. At the same time, editors and writers were designated,
and they have engaged in writing and editing the contents of the book, holding editorial board meetings
twice during the period of a little over one year.
BOA has already published books on its history at major milestones, such as History of the Board ofAudit, History of the Board of Audit from 1880 to 1960, and History of the Board of Audit from 1880 to
1980. In writing and editing this book, we described the circumstances of BOA in each period fromconsistent viewpoints, including its authority, organization, operations, and achievements, while taking into
consideration the contents of the books above, so that we can understand the changes of each of these
aspects over the 130 years. We also focused on making the contents easy to read, by for example insertingcolumn articles and writing in a colloquial style as much as possible. The book may not have covered
everything that readers want to know, but we hope this book will prove useful for readers to learn about
how BOA has developed to date.
Lastly, we would like to express our deep gratitude to those who have cooperated with us in making
this book, particularly the editors and writers who engaged in planning, editing, and writing the bookdespite their busy schedules.
BOA 130-year history editing project team＊

The Japanese original version of History of the Board of Audit from 1880 to 2010.

Photos, etc. courtesy of:
National Diet Library
Geospatial Information Authority of Japan
National Archives of Japan
Kyoto Prefectural Library and Archives
Construction Research Institute
Kankocho Tsushin, Inc.

Original Japanese Version
Kaikei Kensain Hyaku-sanju Nen Shi
Edited by BOA 130-year history editing project team
Published by the Board of Audit of Japan
3-2-2, Kasumigaseki, Chiyoda-ku, Tokyo
Issue Date: March 2010

English Version
History of the Board of Audit from 1880 to 2010
Translated and Edited by
BOA 130-year history English translation project team
Published by the Board of Audit of Japan
3-2-2, Kasumigaseki, Chiyoda-ku, Tokyo
Issue Date: October 2018