I hereby give My sanction, with the advice of the Privy Council, to the Law concerning the Revision of the Board of Audit Act, for which the concurrence of the Imperial Diet has been obtained, and cause the same to be promulgated. Signed:HIROHITO, Seal of the Emperor This eighteenth day of the fourth month of the twenty-second year of Showa (April 18.1947) Countersigned: Prime Minister YOSHIDA Shigeru Law No.73 THE BOARD OF AUDIT LAW Contents Chapter I Organization Section I General Provisions Section II Auditors Section III Council of Auditors Section IV General Executive Bureau Chapter II Competency Section I General Provision Section II Sphere of Audit Section III Measure of Audit Section IV Reports of Audit Section V Responsibility of Fiscal Officials Section VI Miscellaneous Provision Chapter III Board of Audit Regulations The Board of Audit Law Chapter I Organization

Section I General Provision

Art.1. The Board of Audit has such status as independent of the Cabinet.

Art.2. The Board of Audit shall be organized by a Council of Auditors consisting of three Auditors, and General Executive Bureau.

Art.3. The Head of the Board of Audit shall be nominated by the Cabinet, as elected by mutual vote of Auditors.

Section II Auditors

Art.4. The Auditors shall be appointed, with consent of the Diet, by the Prime Minister. In case the House of Councillors does not consent to the appointment of the Auditor despite the consent of the House of Representatives, the consent of the House of Representatives shall be the consent of the Diet in the same way as paragraph 2 of Article 67 of the Constitution of Japan. The Emperor shall attest the appointment and dismissal of the Auditors. The Auditor shall receive salary of fifty thousand yen in a year.

Art.5. The Auditors shall hold office for a term of seven years, with privilege of reappointment for one additional term. If, within a tenure of an Auditor, a vacancy occurs in that office, the successive Auditor shall hold office for a remaining term of the predessessor. The Auditors shall be retired from office upon the attainment of the age of sixty five years.

Art.6. The Auditor shall be retired, by the resolution of the Diet, when, in the collegiate judgment of other Auditors, the Auditor has become incapacitated to perform his duties due to mental or corporal injury, or guilty of malfeasance in office. The provision of paragraph 2 of Article 4 shall apply mutatis mutandis to the preceding paragraph.

Art.7. The Auditor shall forfeit his office, when he is condemned to a penalty heavier than confinement by the criminal court.

Art.8. Except in cases of the preceding two Articles, no Auditor shall, against his will, forfeit his office.

Art.9. No Auditor shall hold another post under Government Office or Local Public Body, or become a member of the Diet or a Local Assembly.

Section III Council of Auditors

Art.10. The Chairman of the Council of Auditors shall be the President of the Board of Audit.

Art.11. The following matters shall be decided by the Council of Auditors: 1. Enactment, or revision or abolition of the Board of Audit Regulations under Art.38. 2. The Report of Audit under Art.29. 3. Decision of such matters and organizations as are subject to audit under Art.23. 4. Matters relating to verification of accounts under Art.24. 5. Demand of punishment under Art.31. 6. Judgment relating to accounting officials under Art.32. 7. Settlement of claim of examination under Art.35. 8. Indication of opinions or demand of disposal under Art.36. 9. Indication of opinions, under Art.37.

Section IV General Executive Bureau

Art.12. The General Executive Bureau shall, under direction and supervision of the Council of Auditors, take charge of general affairs and business of audit and examination. In the General Executive Bureau, there shall be a Secretariat and the following four bureaus: First Audit Bureau Second Audit Bureau Third Audit Bureau Fourth Audit Bureau Assignment of business under Secretariat and each Bureau, and Sections thereunder shall be provided for by the Board of Audit Regulations.

Art.13. In the General Executive Bureau, there shall be one Secretary General, one Deputy Secretary General, and Confidential Secretaries, Secretaries and Technical Officials. The Secretary General and Deputy Secretary General shall be first class and Confidential Secretary shall be second class;and Secretary shall be first, second or third class and Technical Official shall be second or third class. The number of the first class Secretaries shall be eleven.

Art.14. Officials of first class shall be appointed, dismissed, and so on, by the Cabinet in accordance with the decision of the Council of Auditors. With regard to the Secretary General and Deputy Secretary General, the provisions concerning the qualification of appointment or promotion of officials shall not be applied. Officials of second class shall be appointed, dismissed, and so on, by the Prime Minister in accordance with the decision of the Secretary General with consent of Auditors. Officials of third class shall be appointed, dismissed, and so on, by the Secretary General.

Art.15. The Secretary General shall preside over the business of the General Executive Bureau, and sign on official documents. The Deputy Secretary General shall assist the Secretary General and during the period the Secretary General can not perform his function for some reason, or during a vacancy in that office, shall act for him.

Art.16. The Director of Bureau shall be nominated by the President of the Board from among Secretaries of first class, with consent of Auditors, upon recommendation of the Secretary General. The Director of Bureau shall preside over the business of the Bureau.

Art.17. The Confidential Secretary shall be in charge of confidential matters under direction of Auditors. Secretaries shall be assigned as Chiefs of Sections of Secretariat or of each Bureau, or assigned to Bureaus or Sections to have charge of general affairs, audit, or examination under instruction of superiors.

Art.18. Technical Officials shall be assigned to Sections to have charge of technics under instruction of superiors.

Art.19. The Board of Audit may establish branch offices according to the provision of the Board of Audit Regulations.

Chapter II Competency

Section I General Provision

Art.20. The Board of Audit shall audit final accounts of the revenues and expenditures of the State under Article 90 of the Constitution of Japan and also such accounts as are provided for by a law. The Board of Audit shall, continuing current audit regularly, supervise the national accounting and secure its adequacy, accuracy, and correction of its illegality.

Art.21. The Board of Audit shall, according to results of audit, certify the final accounts of revenues and expenditures of the State.

Section II Sphere of Audit

Art.22. Matters which shall be subject to the audit by the Board of Audit are as follows: 1. Monthly accounts of revenues and expenditures of the State. 2. Receipts and disbursements of cash money and government properties which are owned by the State. 3. Creation or liquidation of the State credit, or increase or decrease of national bond and other debts. 4. Cash money, precious metals and securities received and disbursed by the Bank of Japan on behalf of the State. 5. The accounts of juridical persons of which 50% or more of capital is contributed by the State. 6. Such accounts as are specially subject to audit of the Board of Audit by a law.

Art.23. The Board of Audit may audit, if it deems it necessary, or at the request of the Cabinet, such accounting as follows: 1. Goods and securities which are owned or taken custody of, by the State, and cash money taken custory of, by the State. 2. Such accounts of receipts and disbursements of cash money, goods, or securities as handled, on behalf of the State by bodies other than the State. 3. The accounts of such bodies as are granted subsidies, bounties or such financial assistance as loan or indemnity of loss and so on, directly or indirectly. 4. The accounts of such bodies as are partially contributed by the State. 5. The accounts of such bodies as are contributed by such bodies as are contributed by the State. 6. The accounts of such bodies as are granted guaranty on payment of the principal or interest. 7. Accounts of contractors with the State of construction, or suppliers of goods to the State. When the Board of Audit decides to audit under the preceding paragraph, the Board shall inform the bodies concerned to that effect.

Section III Measure of Audit

Art.24. Organizations or persons, the accounts of which are audited by the Board of Audit, shall regularly submit to the Board of Audit statements of accounts together with proving vouchers in accordance with the regulations of verifications provided for by the Board. As regards the accounts of receipts and disbursements of moneys, goods and securities which are owned or taken custody of, by the State, other documents designated by the Board of Audit may be submitted to the Board in place of the statements of accounts and vouchers of the preceding paragraph.

Art.25. The Board of Audit may, regularly or temporarily, despatch officials in charge to conduct inspection wherever accounting may happen.

Art.26. The Board of Audit may demand, if necessary to perform its functions, the organizations or persons which are subject to audit of the Board, submittance of books, files, or reports and answer to the inquiry of the Board, or attendance of officials concerned.

Art.27. The competent superior or supervising office, or a responsible person corresponding to them shall report immediately to the Board on such matters as follows concerning such accounts as are subject to the audit of the Board: 1. Discovery of crime concerning accounting. 2. Discovery of loss of money, securities or other properties.

Art.28. The Board of Audit may ask, if necessary for audit, materials of investigation or professional opinion to government offices or public bodies and the like.

Section IV Reports of Audit

Art.29. The reports of audit made according to Article 90 of the Constitution of Japan shall mention the following matters: 1. The certification of the final accounts of revenues and expenditures of the State. 2. Whether or not the amounts of final accounts of national revenues and expenditures correspond to the amounts given in the statement of accounts submitted by the Bank of Japan. 3. Whether or not, as results of audit, there are such matters as in contravention of laws, government ordinance or the budget, or are unjust. 4. Whether or not there is not any payment from reserve fund, as to which no measure has been taken to receive an approval of the Diet. 5. Matters of which the Board demanded disciplinary punishment under Article 31 and the results of it. 6. Decision against accounting officials under Article 32. 7. Matters of which the Board indicated its opinions or demanded disposal under Article 34 and the results of co-operation of officials concerned. 8. Matters of which the Board indicated its opinions or demanded disposal under Article 36 and the results of co-operation of the competent superior.

Art.30. The Board of Audit may, if it deems it necessary to explain at the Diet with regard to the reports of audit of the preceding Article, make the Auditor to attend the Diet or may explain through documents.

Section V Responsibility of Local Officials

Art.31. The Board of Audit may demand disciplinary punishment to the superior, if it deems, in consequence of audit. that officials in charge of national accounts have caused grave loss to the State by intention or grave negligence. The provision of the preceding paragraph shall apply mutatis mutandis to cases that officials in charge of national accounts do not observe the regulations of verifications, for example neglect submittance of statement of accounts and proving vouchers, or do not comply with the demand under the provision of Article 26.

Art.32. The Board of Audit shall, in case that an accounting official has lost or damaged money or goods, decide whether he is liable for indemnity or not, after inspecting whether or not he has caused loss to the State by lack of due diligence. In case that the Board of Audit, decided he is liable for indemnity, the superior of the official shall order him indemnity in accordance with the decision of the preceding paragraph. The liability to pay an indemnity of paragraph 1 shall not be remitted or reduced except by the general amnesty. Even after the Board of Audit decided that an accounting official was not liable under paragraph 1, the Board of Audit may decide again, within five years, whether he is liable or not, when the Board discovered its decision was unjust due to any mistake or omission on the statements of accounts or vouchers. The preceding two paragraphs shall apply mutatis mutandis to this case.

Art.33. When officials in charge of accounts of the State is recognized to be guilty of crime in execution of his function, the Board of Audit shall refer to the Board of Prosecution for further action.

Section VI Miscellaneous Provisions

Art.34. The Board of Audit may immediately indicate its opinion to the superiors or officials concerned, or demand them disposal of, or order future correction and improvement of, such matters as the Board, in the course of audit, deems illegal or unjust relating to accounts.

Art.35. The Board of Audit shall examine the claims of the persons concerned based on the fiscal disposals of officials in charge of fiscal matters and inform such settlement as the Board recognizes it necessary to correct such disposals, to the competent Ministry or responsible superiors. The competent Ministry or responsible superiors shall take due disposal in accordance with the settlement of the Board.

Art.36. The Board of Audit may state its opinions to the competent Ministry or responsible superior with regard to such matters as the Board deems it necessary to improve laws, ordinances, systems or administration or order improvement thereof.

Art.37. The Board of Audit shall receive previous notice and may state its opinions in the following cases: 1. Establishment, amendment, or abolition of laws or ordinance concerning accounting of the State. 2. Establishment, amendment or abolition of regulations concerning the receipts and disbursements of moneys, goods and securities, and the book-keeping thereof. The Board of Audit shall state its opinions on doubt as to matters relating to accounting of the State, if inquired by the officials in charge of accounts of the State.

Chapter III Board of Audit Regulations

Art.38. The Board of Audit shall provide such regulations as are necessary in addition to the provisions of this Law, with regard to audit of accounts.

Supplementary Provisions:

Art.1. This Law shall come into force at the effective date of the Constitution of Japan.

Art.2. The following Law shall be abolished: Law No.91 of 1896 (Law concerning the Retirement of Auditors) Disciplinary Punishment of Auditors Law

Art.3. With regard to the application of paragraphs 3 and 4 of Article 32 as to the liability of accounting officials based on reasons previous to the effective date of this Law, the judgment of the Board according to the old Board of Audit Law shall be deemed to be the decision in accordance with paragraph 1 of the amended Article 32.

Art.4. Such matters as provided for by the Business Regulation, and other audit regulations enacted by the Board, which are actually effective shall be disposed as before, until enactment of the Board of Audit Regulations according to the amended Article 38.

Art.5. The President of the Board of Audit in office on the effective date of this Law shall hold office, until the appointment of the Head of the Board by the new Law. The President of the preceding paragraph and such two persons as nominated from among Directors of Divisions and Inspectors by the President shall perform the function of new Auditors, until the appointment of the Auditors by the new Law. The President of the Board in office on the effective date of this Law shall act as Secretary General until appointment of the Secretary General of this Law.

Art.6. Directors of Divisions, Inspectors, Secretaries, Vice-inspectors, Special Secretaries, and Clerks in office on the effective date of this Law, except by another nomination, shall be deemed to be appointed Secretaries of the same salary as hitherto, and officials of Chokunin Rank as first class, Sonin Rank as second class, Hannin Rank as third class. The officials suspended from office on the effective date of this Law shall be deemed to be appointed Secretaries suspended from office in the same way.

Art.7. The two of first Auditors shall be appointed for terms of three and five years respectively despite the provisions of paragraph 1 of Article 5.