UAE President issues Federal Decree-Law establishing UAE Accountability Authority

 President His Highness Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree-Law No. (56) of 2023 on establishing the UAE Accountability Authority.

The new Authority will replace the Supreme Audit Institution, and will report directly to His Highness the President.

Aiming at maintaining and enhancing the integrity of public finances, the new Authority will be the supreme authority for financial control, auditing, integrity and transparency in the country.

The issued Federal Decree-Law regulates the UAE Accountability Authority’s functions and its multifaceted contribution, along with other specialised authorities, in preserving public funds through supervising financial, accounting, and operational activities in entities subject to its oversight, in order to combat financial and administrative corruption; and to strengthen its risk management systems, optimise its detection, limit its causes and hold perpetrators accountable.

According to the Decree, the Authority aims to enhance instilling integrity, accountability, transparency and good governance in the Federal Government and the entities subject to the Authority, to bolster the country’s reputation and the trust in its financial and economic system.

The Authority’s functions include reviewing and auditing the Consolidated Annual Report of the federal government and expressing opinion on it, as well as auditing separate and combined annual financial statements in the entities subject to the control of the Authority, considering the laws and regulations that establish these entities.

Responsibilities also include assessing the efficiency and effectiveness of internal control systems for financial and operational operations, as well as setting the supreme policies on integrity and combating financial and administrative corruption, following their approval by the UAE President. In addition to ensuring the effectiveness, and economic efficiency of the financial and operational activities of the government entities and their adherence to laws, legislation, regulations, policies, decisions and good governance rule.

According to the Decree, the heads of entities subject to oversight and the relevant ministers must implement the findings of the supervision conducted by the Authority. It requires them to provide responses to the Authority within a period not exceeding (30) days from the date of their notification, extendable under specified conditions.

According to the Decree, the Authority will be reviewing and undertaking administrative investigation into complaints and reports regarding any misappropriation of funds and assets belonging to the regulated entities, conflicts of interest, misuse of authority, disclosure of official data and information, or exploitation of public office for personal gain or benefit to third parties.

The functions of the Authority involve implementing preventive measures, controls for administrative investigations, financial disclosures, identifying strong mechanisms to protect whistleblowers and witnesses, as well as initiatives to recover public funds and to comprehensively define the financial and administrative violations, including decisions related to taking actions or abstaining from them, or making statements that may directly or indirectly affect the reputation of the country and its financial and economic interests.

In order to ensure proper accounting and governance practices, the Authority is authorised to audit, examine, and review any documents, data, information, reports, or digital records, or any electronic systems of the subject entities. It is also authorised to access the external audit reports; in addition to accessing entities’ electronic systems and programmes to assess the protection of their official data and information, as well as entities and individuals working with them, in coordination with the relevant authorities.

The Decree also outlines the procedures for conducting an administrative investigation, in which the Authority informs the entity subject to its supervision or the competent authority, to impose a disciplinary penalty on the violating employee. The effort should lead to recovering public funds unlawfully obtained by the violator, who should be compensating for the damages caused. Decisions on measures imposed by the entity should be submitted to the Authority within 15 days from the date of notification. The procedures also include the Authority’s referral of administrative investigation documents to the competent prosecution, should the investigation reveal a suspicion of a criminal offense. The anti-corruption procedures regulation includes the provisions and controls for conducting an administrative investigation.

The Federal Decree-Law authorises the provision of an incentive, whether moral or financial, to any individual who provides substantial information leading to uncovering a financial and administrative corruption offense. The Decree establishes the procedures for granting exemption from prescribed penalties for individuals who, as collaborators or partners, report their involvement in financial and administrative corruption prior to disclosure.

The Decree authorises preserving the administrative investigation upon reaching a settlement resulting in the recovery of public funds, and the provision of information of public interest.

The Decree delineates the entities falling under the purview of the Authority, providing comprehensive definitions of their roles and obligations. It also specifies the functions of the supervisory authority's personnel, clients, and auditors.

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