Accountability in Finnish administration, introduction

Visa Paajanen, 3.10.2011

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Organisations

Parliament and Parliamentary Audit Committee

National Audit Office

The Government financial controller’s function

Internal audit

European Court of Auditors

An Audit Authority Unit

Program evaluations in EU-programs

Parliamentary Audit Committee

• There are 15 permanent special committees and the Grand Committee (for EU affairs) in Parliament

• Five of the committees are mentioned in the Constitution, one of them is the Audit Committee (founded 2007)

• Task: to oversee the legality and regularity of the management of central government finances and compliance with the budget

• Focuses on the general state and management of central government finances and issues that need to be brought to Parliament's attention

• Considers and reports for Parliament on eg. Report on the Final Central Government Accounts, the Annual Report of the NAOF, the Annual Report of the European Court of Auditors

• 11 MP’s, secretary of 7 civil servants

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National Audit Office of Finland

The NAOF

is an independent constitutional authority in affiliation with the Parliament

audits state’s financial management in order to ensure

• legality and effectiveness of state’s financial management

• compliance with the budget

promotes trust to the rule of law and democracy in public finances and the transparency of the use of state finances

is led by the Auditor-General, who is elected by the Parliament for the term of 6 years

Mission and objectives of the NAOF

The NAOF• promotes good performance and high quality

financial management• supports Parliament in its exercise of legislative

and budgetary power • produces Parliament and Government

(objective, timely, useful and reliable) information on the legality and effectiveness of the State's financial management and compliance with the budget

NAOF’s audit mandate

Government, ministries

Office of the President of the Rebupublic

Government agencies

State aids

Off-budget funds

Unicorporated state enterprises and state-owned companies

State’s payment traffic

Transfer of funds between Finland and EU

Audit types and reporting

• The NAOF carries out its audit task by performing– financial audit (appr. 90 reports)– performance audit (appr. 25 reports)– compliance audit (started 2010; planned 3-4

reports)– audit of fiscal policy (annually in special report to

Parliament)

• Audit reports submitted to the plenary session of the Parliament:– Annual report– Special Reports

• Reports are public

NAOF’s Relationship with Parliament

• Parliament– prescribes the NAO’s tasks by law,– handles the NAO’s budget proposal and

decides on the NAO’s budget within the state budget,

– appoints the Auditor General (term 6 years)– debates the National Audit Office's annual

report – debates if necessary, special audit reports

• The NAOF– supports Parliament by providing it useful and

timely audit information

Relationship between the NAOF and the Audit Committee

• The key measure of cooperation is regular dissemination of information

• Audit Committee uses NAOF’s audit information and expert views in preparing own reports and statements– All the audit reports are sent to Audit Committee

for information– In most cases the committee handles,

the NAOF’s experts are heard in committee meetings

• Audit Committee handles NAOF’s reports to Parliament and prepares conclusions for plenary session

The Government financial controller’s function

• Governments supervisor of performance and finances

• Promotes the quality of the control and reporting system

• Ensures financial accountability

• Controller is responsible that the State annual accounts give true and fair report on finances and financial performance

Internal audit/ control

• Government agencies must have internal control

• Management of the agency is responsible for adequate internal control

• Task for internal control is to ensure:

- legality of operations

- the security of the funds

- good performance of operations

- the true and fair view of the finances and operations for management

Auditors view

• reported audit findings are mainly negative-ones

• recommendations to change activity

=> this week will give you biased image of performance management, it works, but there are possibilities to development