OVERSIGHT

The Australian National Audit Office (ANAO) is an independent statutory authority responsible to parliament The Auditor-General is responsible, under the Auditor-General Act 1997, for providing auditing services to the parliament and public sector entities. The ANAO supports the Auditor-General, who is an independent officer of the parliament. The ANAO’s primary client is the parliament. The ANAO provides parliament with an independent assessment of selected areas of public administration, and assurances about public sector financial reporting, administration, and accountability. This is done primarily by conducting performance and financial statement audits.

The Auditor-General’s Office (Rechnungshof) is a monitoring instrument of the Austrian parliament, which elects this body’s president for a 12-year term. The Auditor-General’s Office is in practice independent from the government and parliament. It is staffed by civil servants who are employed by the government, not the parliament directly. The long tenure of 12 years is intended to allow the president and the office in general maximum independence – from parliament as well as government.
The president of the Auditor-General’s Office reports regularly to the National Council. His reports are debated in the Council’s regular sessions. The cabinet has the right to respond to the office’s critique but cannot influence the reports.

The Audit Office (cour des comptes or rekenhof) is a collateral institution of the federal parliament. The members of the Audit Office are therefore elected by the members of parliament, and can count on high expertise, a qualified staff and a sufficient level of resources. The comments of the Audit Office are public and presented at parliament along with the accounts of the state. The federal audit office garnered extensive media coverage in 2010 for its harsh remarks to the finance ministry.

The national audit office (Rigsrevisionen) is an independent institution under the authority of parliament. It examines the soundness of state accounts and assesses whether institutions have applied funds in the best possible ways. Its work is highly respected.

Legislative accountability is advanced by the audit office being accountable to the parliament and being an integrated part of parliament. Formerly, parliamentary oversight of government finances was performed by parliamentary state auditors. However, this institution is now abolished. In its place is the parliamentary Audit Committee, which was created by combining the task of parliamentary state auditors with the related functions of the administrative and audit section of the Finance Committee. The office of the parliamentary state auditors has also been replaced by the National Audit Office of Finland, which is an independent expert body operating in connection with parliament. Its task is to audit the legality and propriety of the state’s financial arrangements and compliance with the state budget. Specifically, the Office is expected to promote the exercise of parliament’s budgetary power and the effectiveness of administration. The office is directed by the auditor general who is elected by parliament. With about 150 employees, the Office comprises the financial audit unit, the performance audit unit, and the internal services unit.

The Federal Court of Audit (FCA) is a supreme federal authority, and thus an independent body which is not overseen or otherwise constrained by the government or parliament. The FCA is subject only to the law, and provides assistance to both the federal parliament and the federal government in their decision-making procedures. According to the Basic Law, its members have the same independence as the members of the judiciary, and its task is to monitor the budget and the efficiency of the state’s financial practices. The FCA submits its annual report directly to the Bundestag as well as to the government and the Bundesrat. The Bundestag and Bundesrat jointly elect the FCA’s president and vice-president, after proposals from the federal government. Around 1300 court employees “audit the (state) account and determine whether public finances have been properly and efficiently administered” (according to the FCA’s website), while the FCA’s “authorized officers shall have access to any information they require” (Federal Budget Act Section 95 Para. 2). Thus, although Germany’s audit office is not exclusively accountable to the parliament, the latter can still rely on the FCA’s report.

Iceland’s National Audit Office is fully accountable to the parliament. It reports to parliament and performs its important function quite effectively, given its significant manpower constraints and inadequate funding. These latter issues mean that a vast majority of the agencies under its jurisdiction have never been subjected to an audit. No significant strengthening of the office’s staffing or financial resources has occurred in recent years, though the number of staff increased from 47 in 2007 to 49 in 2009.

The controller and auditor-general is appointed by the governor-general on the advice of Parliament and fully accountable to it. The Office of the Auditor-General consists of the following departments: Accounting and Auditing Policy, Legal Group, Local Government, Parliamentary Group, Performance Audit Group and Research and Development. Its scope of functions relates not only to central government but also local government. The legal basis is the Public Audit Act 2001.

Norway has a national audit office, an independent statutory authority that is responsible to parliament. Its main task is to audit the use of government funds to ensure they are used according to parliamentary instructions. The audit office has 500 employees, and its governing council is made up of members of the main political parties. Decisions of the audit office have consistently been consensual.

Poland’s auditing office, the Supreme Chamber of Control (Naczelna Izba Kontroli, NIK), is independent from the government and accountable exclusively to the Sejm. The Chamber’s chairman is elected by the Sejm for six years, so that his term does not coincide with the term of the Sejm. The Senate has to approve the decision. The Chamber has wide-ranging competencies and is entitled to audit all state institutions, government and local government administrative units, together with corporate bodies and nongovernmental organizations that perform public contracts or receive government grants or guarantees. The Chamber can itself initiate monitoring proceedings or do so at the request of Sejm, its bodies or representatives (e.g., the speaker of the Sejm, the president or the prime minister). The Chamber’s activities also include auditing the state budget.

The National Audit Office in Sweden was for a long time a government agency which reported to the government, not to parliament. At that time, parliament had only a minor audit function. In 2003, the audit agency was abolished and a stronger audit office reporting to parliament was created. There are still agencies that are engaged in auditing but the key audit function today is the parliament’s National Audit Office (Riksrevisionen).

The National Audit Office is independent of government. Its head, the comptroller and auditor general, is by statute an officer of the House of Commons. The office scrutinizes public spending on behalf of Parliament and is accountable to the Committee of Public Accounts (PAC). The PAC, in turn, often has a strong impact on public debate.

The General Accountability Office (GAO) is the independent non-partisan agency of the U.S. Congress charged with auditing activities. It is responsive to Congress alone. The GAO undertakes audits and investigations upon the request of congressional committees or subcommittees or if it is mandated by public laws or committee reports. The GAO also undertakes research under the authority of the Comptroller General. In addition to auditing agency operations, the GAO analyzes how well government programs and policies are meeting their objectives. It performs policy analyses and outlining options for congressional consideration. It also has a judicial function in deciding bid protests in federal procurement cases. In many ways, the GAO can be considered a policy analysis arm of Congress. The executive branch also has significant audit functions. Routine, detailed auditing of budget implementation is handled by the Office of Management and Budget (OMB). In addition, there are 69 offices of Inspector General (IG), assigned to various departments and agencies. The IGs have auditing functions and operate with significant independence from their agencies. Thus there is an auditing office that is responsible exclusively to the legislature, plus additional auditors with other forms of independence from the executive.

The auditor general is appointed by Parliament on the advice of the prime minister. Once in place, however, auditor generals have virtually a free hand in deciding who to audit and when. Indeed, in recent years, one senses that the auditor general has considered herself more accountable to the media than to Parliament. There have been few instances when either Parliament or its Public Accounts Committee was able to direct the work of the Office of the Auditor General.

Hungary’s supreme organ of state auditing, the State Audit Office of Hungary (ÁSZ), is accountable only to the parliament. Its president is elected by parliament for six years, with a two-thirds majority vote required, and the office reports to the parliament and its audit committee. Enjoying a broad range of responsibility, the ÁSZ has played an important role in monitoring the government’s activities. The fact that Árpád Kovács, its active, long-standing president, failed to get the required two-thirds majority needed for re-election in late 2009, stands as testimony to this body’s independence and power.

The Office of the Comptroller and Auditor General (OCAG) publishes annual reports and special reports that attract widespread coverage and attention. The office reports to the lower house of parliament in the form of audit certificates or reports which give an audit opinion on the accuracy of the financial statements or accounts, and through reports on the financial management of individual entities and other matters likely to be of concern to the parliament.
The OCAG attends meetings of the lower house’s Public Accounts Committee (PAC) as a permanent witness. The results of the OCAG’s independent examinations are used for PAC enquiries. The committee’s effectiveness is enhanced by its having the OCAG’s reports as a starting point, and in turn the OCAG’s scrutiny gains significantly in impact and effectiveness because its reports are considered by and used as a basis for action by the PAC.
The PAC examines and reports to the lower house as a whole on its review of accounts audited by the OCAG. This process ensures that the parliament can rely on its own auditing processes and capacities.

Since 1999, the Court of Auditors has controlled the financial management of the instruments, administrations and services of the state in an absolutely independent way and transmits a general report to parliament each year.
Moreover, the court can present its findings and recommendations on specific areas of financial management in a special report at any time, either at the request of the parliament or on its own initiative. These special reports are also submitted to parliament.
During the revision period, the court presented a special report on the computerization of ticketing in public transport and on the planning and construction of the museum of the fortress of Luxembourg.

Chile’s General Comptroller (Contraloría General de la República) has far-reaching competences, and is invested with strong political and legal independence. The officeholder is nominated by the president, and must be approved by a three-fifths majority vote in the Senate. The comptroller has oversight power over all government acts and activities, and investigates specific issues at the request of legislators serving in the Chamber of Deputies. The office presents an annual report simultaneously to parliament and the president. The parliament has the right to challenge the constitutionality of the comptroller’s work.

The federal Superior Audit Office was set up in 2001 to help the Chamber of Deputies, the lower house of the National Congress. The Supreme Court has subsequently made it clear that the audit office is to be considered an arm of congress, and not an autonomous agency as such. In practice, the audit office shows a high degree of independence.

The Netherlands’ Court of Audit is the independent organ that audits the legality, effectiveness and efficiency of the national government’s spending. The Court reports to parliament and its members are recommended by parliament and appointed by the cabinet. Parliament frequently consults with this institution, and in many cases this leads to investigations. Investigations may also be initiated by ministers or deputy ministers. However, such requests are not formal due to the independent status of the Court of Audit. Requests by citizens are also taken into account. The Court of Audit is supported by 300 full-time staff, distributed among five departments, of which three are dedicated to research. At least 75% of this staff works in the research departments.
The reports by the Court of Audit are publicly accessible and can be found online and as parliamentary publications (Kamerstuk). Parliament policy staff at national departments or local administration bodies are quite sensitive to criticisms from the Court. Court of Audit criticism can prompt parliamentarians to summon ministers, as was the case in 2003, when a Court of Audit report on the infrastructural Betuweroute project led to considerable public debate. Every year, the Court of Audit checks the financial evaluations of the ministries.
In April 2008, the Court of Audit criticized the government for spending €0.5 billion on hiring external parties for information and communication technology (ICT) projects. The Court of Audit criticized in particular the government’s tendering practices, as ministries tend to over-appreciate the benefits of automation, have too many demands and lack knowledge about the progress of ICT projects. The Court of Audit concluded that a correction mechanism was missing. Parliament members and experts in turn criticized the Court of Audit for underestimating the budget spent by ministries on ICT.

Article 136 of the Spanish constitution regulates the audit office (Tribunal de Cuentas or, literally, Court of Audit) as the organ that exercises the function of auditing the state’s accounts and the financial management of the whole public sector. This office is accountable primarily to the parliament, although is not an integral or exclusive part of it. The offices’ members are appointed by a qualified majority agreement of the two main parties, and thus may not be sufficiently independent, particularly when auditing the political parties’ accounts (see Party Financing).
State and public sector accounts are submitted annually to the audit office, which sends an annual statement of its auditing activities to the parliament, identifying where applicable any infringements that in its opinion may have been committed, or any liabilities that may have been incurred. According to the 2009 statement, 90.9% of all state public sector organizations (including the central public administration, the executive agencies, and the state-owned enterprises) delivered their 2008 accounts to the audit office for inspection, although only 48.9% did so within the ostensible deadline
The audit function, which politically connects the audit office with the parliament, refers to the subjection of the public sector to the principles of legality, efficiency and economy, in connection with the execution of the revenues and expenses budgets. The results of the office’s procedures are expressed in reports, motions and notes addressed to the parliament, through the Joint Committee of the Congress and the Senate for Relations with the Audit Office.

The Audit Office is an independent and autonomous body. It has to support the Federal Assembly and the Federal Council through its analyses and reports. The chairman of the Audit Office is elected by the Federal Council; this election has to be confirmed by the Federal Assembly. In administrative terms, the Audit Office falls under the authority of the Finance Ministry.

The Supreme Audit Office (SAO) is an independent institution that audits the management of state property and provides oversight on national budgetary spending. The president and vice-president of the Supreme Audit Office are appointed by the president of the republic on the basis of a recommendation by the Chamber of Deputies. An advisory board is appointed by parliament following recommendations from the SAO president; however, this was a source of conflict for several years, with parliament rejecting many of the president’s proposals. The reputation of the SAO was damaged by an escalation of the conflict between its president and parliament in autumn 2009. The president was accused of financial irregularities over expenses, but refused to cooperate with an investigation by the relevant parliamentary committee. He claimed it lacked the necessary legal authority, and it did appear that the legal position was unclear.

The Court of Accounts (Cour de Comptes) is accountable to parliament which might require any auditing, report or enquiry it needs. This is a big change in contrast with the past when the court was perceived mainly as a controlling institution at the service of the executive. The 2008 constitutional reform has increased the court’s role, but it remains to be seen how the parliament and the court itself will make use of these new opportunities.

The Board of Audit of Japan is considered to be independent of the executive, the legislature and the judiciary system. It submits yearly reports to the cabinet, which together with the cabinet’s financial statements are forwarded to the Diet. The board is free to choose its own points of focus, but parliament can request audits on special topics. Since 2005, the board has been able to forward opinions and recommendations between submissions of its regular yearly audit reports.

The Supreme Audit Office of the Slovak Republic is an independent authority accountable exclusively to parliament. The chairman and the two vice-chairmen are elected by parliament for seven years each, and the office reports regularly and whenever requested to the parliament. The Supreme Audit Office has far-reaching competencies. However, its position is limited by a lack of resources. In the period under review, some of its initiatives, most notably an audit of the privatization of the Slovak gas industry, were prompted by the government, thus casting some doubt on its independence. Moreover, its monitoring activities slowed down during the review period.

General auditing functions are conducted in Italy by the Court of Accounts (Corte dei Conti), which oversees all administrative activities. The court regularly reports its findings to the parliament, but cannot be said to be accountable to the parliament as it is an independent judicial body. The court can review the legitimacy of executive acts (although its decisions can be overruled by the government), and is responsible for the ex post review of the management of the state budget. The court oversees the financial management of publicly funded bodies. It is protected from political influence; its judges remain in office until they are 70 years old, and cannot be removed without cause. Judges are nominated through national competitive exams, and members of the court nominate the court president. The court has a highly skilled professional staff. Citizens may access court decisions via the Internet, at no cost, shortly after decisions are rendered.
The parliament has also its own offices for checking the budgetary accounts provided by the government. This body plays a particularly important role during the budgetary session, and enables the parliament to have its own independent source of information in evaluating government proposals.

The Court of Auditors is totally independent, and has real authority. It is part of the judicial system, on an equal level with other courts. The body is not accountable to the Assembly of the Republic, but must report to it regularly.

The audit office is a constitutional agency that is accountable to the president. It regularly reports to the parliament.

The Court of Accounts reports to the parliament, but is not accountable to it. The parliament elects the court’s president and members from a list of candidates compiled by the parliament’s Plan and Budget Commission. However, the court rapporteurs and the prosecutors are appointed by the Cabinet of Ministers. After its competences were enhanced, the Court of Accounts reported serious inconsistencies in 2006 and 2007, but has no independent power to intervene. According to Paragraph 38 of the Law for the Court of Accounts, the court also oversees “military personnel, equipment and premises,” but the means of this oversight is specified through an ordinance issued under the joint responsibility of the ministries of Defense and Finance. According to experts, even this limited oversight is often impossible, because the military does not grant access to the court’s inspectors.
According to Article 160 of the constitution, the Court of Accounts is charged with auditing, on behalf of the Turkish Grand National Assembly, all accounts related to revenues, expenditures and properties of government departments financed by general and subsidiary budgets. There is a parliamentary Final Accounts Committee which reviews its own accounts annually.

The audit office is a separate court institution, which along with its duties to resolve specific administrative conflicts, is also entrusted with the task of preapproving and reviewing all public expenses made by public services, including ministries and state organizations such as state universities and public hospitals. The audit office is not accountable to parliament. Its president and its eight vice presidents are selected by the cabinet from among the highest-ranking judges who are members of the audit court. In the Papandreou government, a new law has given a high-ranking parliamentary body consisting of the president and the vice presidents of the Greek parliament a consultative role in selecting the leadership of all high courts. This means there has been a slight shift in the balance of control of the audit office, which for a long time had favored the executive.
The 2010 fiscal crisis has triggered a new debate on institutional reforms that might strengthen budgetary oversight and lead to higher-quality data.