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The Hellenic Court of AuditThe Hellenic Court of Audit

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Greece: Its History – Highlights

Independent state since 1829 Representative democracy with a

parliamentary regime (Constitution in force since 1975)

Full member of the European Union since 1981

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History of the Constitution (I) From the Revolution to the establishment of the

Crowned Democracy(1821-1864) The constitutions of the revolution -The first

Hellenic Republic (1821-1833) The period of absolute monarchy(1833-1843) The period of constitutional monarchy(1843-

1864) -CONSTITUTION OF 1844

The first period of crowned democracy (1864 -1922) CONSTITUTION OF 1864 The introduction of the Parliamentary Principle CONSTITUTION OF 1911

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History of the Constitution (II)

The second Hellenic Republic(1924-1935) - THE CONSTITUTION OF 1927

Period 1935-1952

The reinstatement of the monarchy(1935) Dictatorship (1936-1941) Occupation (1941-1944) Civil War (1946-1949)

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History of the Constitution (III)

The second period of crowned democracy (1952 -1967) - THE CONSTITUTION OF 1952

Military dictatorship (1967-1974)

The Third Hellenic Republic (1974 - ) THE CONSTITUTION OF 1975 The Revisions of 1986 and 2001

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Historical Development Historical Development of the Hellenic Court of of the Hellenic Court of AuditAudit

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Historical Development of the H.C.A. (I) Established in 1833 and modeled on the

French Court of Audit 1887: The preventive audit of the state

expenditures was assigned to the H.C.A. 1923: Further consideration was given

to improvements to its work Since then: The legislation concerning

the work of the H.C.A. has been supplemented by a number of decrees

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Historical Development of the H.C.A. (II) 1969: Law on public accountancy

Principle that budget expenditure should be reported in detail

Principle that public money were to be used only for intended purpose

1972: Judicial audit of public money classified into preventive and a posteriori

1975: H.C.A’s competences enhanced by Constitution.

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Historical Development of the H.C.A.(III) 1980: Decree covering the Court’s

rights and consolidating previous provisions

1981: Decree on Court’s procedures. Since then some 90 further items of

legislation have been voted through, making minor modifications

Decisions of the Plenum govern detailed audit procedures and internal rulings

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Main features of the H.C.A. One of the most old institutions of the

contemporary Greek State. All Constitutions provided for the Court of Audit

Its mandate derives from the Constitution It belongs to the Judiciary Supreme Public Financial Court Right to impose sanctions following a

contradictory procedure

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The Judiciary in Greece (I)

3 distinct branches in the Judiciary: The civil and criminal courts (Supreme

Court of Cassation as Supreme Court) The administrative courts (Council of

State as Supreme Court) Court of Audit

Clear distinction between branches of Judiciary

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Judiciary in Greece (II) Constitutionality of legislative acts or their

provisions may be examined while dealing with a specific case. Courts may refuse to apply any legislative provision deemed not to conform with the Constitution (diffuse and ex post facto review)

In case of contradictory judgments between the Court of Cassation, the Council of State and the Court of Audit regarding the constitutionality or the meaning of the same legislative provisions which are to be applied in a specific case, a final decision is made by the Special Supreme Court

The H.C.A. participates in the Special Supreme Court through its President

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The hierarchy of Judges within the H.C.A.

President

8 Vice-Presidents 26 Judge-Counselors 44 Second-Rank

Judges 45 First-Rank Judges

General Commissioner before the H.C.A.

Commissioner of the State 3 Vice-Commissioners of the

State

TOTAL: 128

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Independence of Judges Functional (in relation to the legislative

and executive powers)

Judges administer justice only according to laws complying with the Constitution

Personal Appointment, permanency, official status

(judicial councils), emoluments First - Rank Judges are drawn from the

National School of Judges Judges of the other ranks are drawn from

those of the previous rank by promotion following assessment by the competent judicial council

Special Provisions

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Special Provisions Judges in high – ranked positions selected by

the Cabinet (consistent with popular sovereignty)

The Vice-Presidents are drawn from among the Judge Counsellors and Vice - Prosecutors

The President and the General Prosecutor before the H.C.A. from the Judge Counsellors, Vice –Presidents and Vice – Prosecutors

Organisation of Justice (classified posts,

geographical dissemination of the Courts)

Infrastructure

Financial issues (Court’s budget)

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National School of Judges (I) Established in 1995

Objectives Selection, instruction & training of the

future civil, criminal and administrative judges, as well as the First – Rank Judges of the Council of State and the H.C.A.

Continuous training of judges, who have already been appointed.

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National School of Judges (II)

Admission Introductory competition conducted by a committee,

composed of three senior judges and a university professor.

Course of training Training in two stages

Theoretical in School premises Practical in the respective Courts

Graduation exams conducted by a three – member Committee, composed exclusively by senior judges from all branches of jurisdiction.

Appointment to the Courts based on the degree of success

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Organizational Structure of the H.C.A.

Plenum 7 Judicial Sections 7 Judicial Units 108 Administrative Units (headed

by Directors of Audit) staffed by Judicial employees

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Plenum

President Vice-Presidents Judge - Counsellors

General Commissioner before the H.C.A.

Secretary

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Judicial Sections Vice-President 2 Judge Counselors 2 Second-Rank Judges (Consultative

vote)

Vice Commissioner of the State First-Rank Judges Secretary

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Judicial Units

Judge Counselor 2 Second-Rank Judges

or 1 Second-Rank Judge and 1 First-Rank Judge

Secretary

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Administrative Units

Decentralized structure, i.e.16 Units in ministries, 9 in municipalities and 57 in prefectures

Competence (mainly) for audit 6 non auditing Units

I.T. Archives, Personnel, Jurisprudence and Publications, Secretariat, O&M

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Distribution of employees

2/5 in the headquarters (17 Units), i.e. 245 employees (90 in auditing divisions)

1/5 in 23 Units in Athens, i.e. 160 employees (dealing with a priori audit )

2/5 in regional offices, i.e. 245 employees

Total: 650 Auditors: 400 Administrative staff: 250 Vacancies: 180

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Judicial Employees Qualifications Classification - Hierarchy Appointment Age limit Official status Remuneration Constitutional Independence (special

judicial councils)

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Constitutional Attributions

Article 98 of the Constitution (Section V “ The Judiciary”, chapter 2 “Organization and jurisdiction of the Courts”) provides for the judicial competences of the H.C.A., in an indicative way

These competences may be classified as: Auditing Reporting Consulting and Jurisdictional

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Audit of the execution of the State Budget (I)

According to our long legal tradition this means: Distinction between the audit “of the expenditure

of the State, the Local Government Agencies and the Public Entities” (ORDINATOR) and “the accounts of the PUBLIC ACCOUNTANTING OFFICER in general”

The Court is authorised to call those who manage Public Funds (both ordinators and public accounting officers) to give an account before it

Trying any disputes arising from the audit Informing the Legislative of the public money

management done by the Executive

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Audit of the execution of the State Budget (II)

ORDINATOR = official authorized to assume payment responsibilities to the State’s charge and to issue payment orders (a priori audit)

PUBLIC ACCOUNTING OFFICER = anyone proceeding to payments or collecting the public revenue (a posteriori audit)

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Reporting (Relations of the H.C.A. with the Legislative)(I)

Submission to the Parliament of: Annual Report of findings (a

parliamentary debate upon its content exists ‘till this year – Discussion in Parliament’s Plenum - Published in the State Gazette) Results of the Court’s activities Observations stemming from its work Suggestions on reforms and improvements

(including relevant laws) Value – for – money issues from audit work

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Reporting (Relations of the H.C.A. with the Legislative)(II)

Declaration on the Annual Financial Statement and the Balance Sheet of the State (Discussions in the Parliament’s Plenum)

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Consulting The Courts issues (in Plenum) an

expert opinion: upon bills on pensions or on the

acknowledgement of service for granting the right to a pension

on any matter submitted to it by a Minister

on any other issue defined by law

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Jurisdictional Functions

The Court tries legal remedies on cases arising from: Pension grants Audit of accounts Civil liability of public employees

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General Auditing PrinciplesGeneral Auditing Principles

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General Audit Principles (I) Distinction provided by the Constitution between

the audit “of the expenditure of the State, the Local Agencies and the Public Entities” and the audit of “the accounts of the public accounting officers in general” (Distinction between preventive and a posteriori audit)

The result of the preventive audit is the approval (visa) or not of the relevant payment orders

The a posteriori audit ends up to a decision taken by a judicial formation, the three-member judicial Unit, in Athens by which the accounts are:

accepted as sound turned down as illegal and eventually charging

the accounting officers with any deficit found

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General Audit Principles (II)

Audit of legality and regularity (the conditions provided by law have been met in the course of the management of public funds)

The audit may involve the examination of issues concerning the so called “substantial part of the expenditure” in order to ascertain that:

the facts reported in the supporting documents correspond to the real facts and

the administrative acts from which the payment obligations derives have been conducted on the basis of sound financial management

In this case the visa is given but the court may report to the relevant Minister

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General Audit Principles (III)

The Court has the authority to examine all incidentally arisen issues, with the “reserve of the res judicata provision” (examination of the administrative acts’ legality)

The Court’s jurisdiction extends to : government departments and ministries local government agencies and the public sector organisations

Right of access to all documents Right to carry out on – the – spot audits

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General Auditing Principles (IV)

Encountering criminal offences (reported to the relevant Minister and taken up by the Public Prosecutor before the criminal courts)

Auditing the purpose of administrative acts does not constitute part of the Court’s auditing competence

Systems examination is not usually carried out as a separate exercise. Evidence about weakness in internal control systems can usually be gained in the course of routine audit work

Performance audit and audit of sound financial management are carried out, although not on a systematic basis

Implementation of International auditing standards

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The preventive auditThe preventive audit

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The preventive audit (I)

Established in1887 Is carried out by the Directors of Audit of the

Court dispersed in all Ministries, Prefectures of Greece, as well as in some Legal Entities of Public Law and Local Government Agencies

Covers less than 10% of the expenditures of the State budget. Concerning the budgets of all others Legal Entities it depends on different factors (In all the cases covers the high risky domains)

The audit work on each payment order is completed within two days from receipt

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The preventive audit (II) Examination of payment order by Director

of Audit Approval (forwarded to be paid) Non approval (return the uncertified order with

a brief report outlining the grounds for refusal)

In case of non approval, where this judgment is disputed, the initiator of the order can resubmit the payment order with an explanation, which the commissioner may accept (forwarded to be paid)

If the Director does not accept the ordinator’s remarks, he is obliged to submit the whole file of the case with a report to the competent Section of the Court, which settles the financial dispute arisen

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The preventive audit (III) The Director of Audit ceases to have any

competence on the case The General Prosecutor before the Court provides

his opinion upon the case in writing The chairman of the Section (Vice-President) assigns

the whole file to one of the judges composing it The judge reports on the specific case before the

Section, which, with a fully justified act, settles the dispute definitively, deciding either in favor of, or against approval

The judicial act of the Section is binding for both parties

The file of the case is returned to the competent Director of Audit in order to execute the Section’s Act

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Preventive audit (IV) The ordinator The beneficiary of the expenditure The Section itself ex officio may apply within a reasonable

period of time for the revocation of the Section’s Act due to misjudgment: either of the legal issues or of the facts of the case

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Preventive audit (V) Approval of a payment order on the

Minister’s own responsibility, provided that: the Director of Audit has denied the

approval of the payment order the competent Section of the Court has

issued a definitive act, according to which the payment order is deemed to be illegal

the Parliament consent to this initiative of the Minister

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Relations with other auditors

In carrying out its work the Court does not place reliance on other auditors

However, the Directors of Audit have contacts with the officers of the General Accounting Office Units (Ministry of Finance), which are located in each ministry and in every prefecture

Every administrative authority having carried out a financial investigation (internal auditors) is obliged to notify the relevant findings to the Court of Audit

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Relations with the European Court of Auditors (I)

Article 248 (former article 188C) of the E.C. Treaty constitutes the legal basis for the cooperation between H.C.A. and E.C.A.

Basic principles governing this cooperation: The principle of independence in the activity of

each institution The principle of collegiality in the H.C.A.

decision making The principle of complying with the requisitions

of article 10 (former article 5) of the E.C. Treaty The principle of complying with what is provided

in articles 246, 247 and 248 of the E.C. Treaty

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Relations with the European Court of Auditors (II)

No legal restriction in relation to possible forms of cooperation (combined interpretation of articles 10 and 248 of E.C. Treaty)

Officials and formations of the H.C.A. involved in various aspects of this cooperation Liaison Officer and participants in

E.C.A. audits Fourth Judicial Unit Plenum

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SPECIAL AUDIT ASPECTS The audit of European Community Expenditure

Common Agricultural Policy Structural Funds

The audit of public contracts prior to signature Environmental audit A priori audit of Local Government Agencies

(L.G.As.) Audit of State revenue

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The audit of the European Community Expenditure (I)

A. E.A.G.G.F.-GUARANTEE

In Greece, a “Special Account of Agricultural Products Guarantee” has been established in order to finance the Common Agricultural Policy

The term “expenditure” covers all payments made to farmers, under the Community legislation for various agricultural activities

Sample audit carried out, due to enormous number of payments (+/-24.000 annually). Application of generally accepted methods.

Financial audit. Since 1995 the H.C.A. examines issues, directly related to the sound financial management.

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The audit of the European Community expenditure (II)

B. PROJECTS CO-FINANCED BY THE STRUCTURAL FUNDS

The audit is carried out by the competent administrative Unit The H.C.A. applies, as much as possible the methods of the

E.C.A. This means that the audit team is responsible for: interviewing competent officials examining existing documentation carrying out on-the-spot audits performing financial audit on the relevant transactions examining matters related to the soundness of the

financial management drafting the audit report

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Audit of public contracts prior to signature

The Court (3 Judicial Units) carries out an examination of the legality of the public works, supplies and services contracts made by the State, Public Entities or Public Enterprises where the cost exceeds a certain amount

A file containing all relevant documentation, as well as a draft of the contract to be signed is submitted to the Court

Where the audit is not concluded within forty days from its submission, the contract may be signed

If the Judicial Unit refuses the legality of the contract, then the contract is not signed

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Audit of State Revenue The H.C.A. “monitors the State revenue”

through the annual and monthly accounts, that the public accounting officers submit to the Court.

These accounts are accompanied by the relevant supporting documents (defined by the Court’s Plenum) and justify the corresponding entries.

The accurate collection is also ascertained on a sample basis.

The accuracy and the correctness of their certification is not carried out by the accounting officers.

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The The a posterioria posteriori audit audit

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The auditing process Submission of the accounts to the Court – deadline. Elaboration of the accounts by the Court’s

competent Administrative Unit. Additional info may be requested – Report of

modifications and deficiencies addressed by the Court’s Administrative Unit to the auditee.

Auditee provides response/explanations/clarifications within set deadline.

Court’s Administrative Unit addresses report (together with draft act) to Judicial Unit.

Judicial Unit deliberates case and issues relevant act

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Content of Judicial Units’ Acts Verdict?

Declaration that accounts are sound Accounting officer is charged with eventual

deficit What kind of deficits?

Lack of cash or assets, which is not justified by appropriate supporting documents.

Amounts unduly paid (whether damage exists or not).

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When failure of accounting officers to fulfill their obligations …

… the Court imposes sanctions

Which Judicial Formation? The Judicial Unit

What kind of sanctions? Fine (up to the monthly salary) Accounts are prepared by Court’s officials on the

accounting officer’s expenses. Accounting officers are charged with the sum of

money/value of assets for which appropriate accounts have not been submitted.

Disciplinary action taken following a relevant petition on behalf of the Court and leading to temporary or even permanent loss of employment, (disciplinary offence).

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Legal remediesLegal remedies

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Basic principles governing the procedures before the Court of Audit

Observance of good faith, good morals and of the duty of truth

Initiative of the litigants for the initiation of the proceedings and free settlement of object of the trial.

Initiative of the Court as to the progress of the trial, provided that there is no express provision for the contrary).

The preclusion of influence by the absence of litigants who have been lawfully and punctually summoned from the oral hearing.

Equality of the litigants Hearing of both sides Public nature of the discussion before the Court Special reasoning of the judgments and their publication at a

public hearing Investigative system Oral nature of the discussion

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Appeal against the Judicial Units’ Acts before the competent Judicial Section

(I) Who is entitled to it?

a. The accounting officer charged.b. The General Prosecutor before the H.C.A. c. The competent Minister or Legal Entity.

Deadlines since notification of the Judicial Unit’s Act. Within one year, in case of appeal by the

accounting officer charged. Within six months, in case of appeal by the

General Prosecutor/ the competent Minister/ Legal Entity.

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Appeal against the Judicial Units’ Acts before the competent Judicial Section (II)

Reasons for annulling a Judicial Act

Any misjudgment of either the legal issues or the actual facts of the case, i.e.

Non competence of the organ having issued the Act. Infringement of a substantive norm of the procedure

for issuing the Act. Violation of the legislation governing the dispute Erroneous ascertainment and appreciation of the

factual circumstances.

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Appeal against the Judicial Units’ Acts before the competent Judicial Section (III)

Procedure• Public hearing• Deliberation – Decision making.

Verdict: Admitting the appeal – annulling the Act of

the Judicial Unit (partially, thus amending the Judicial Act, or as a whole)

Rejecting the appeal. Request of additional information upon the

facts of the case addressed to the litigants.

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Appeal against the Judicial Units’ Acts before the competent Judicial Section (IV)

Suspending the execution of a Judicial Unit’s Act, while an appeal against it is still pending before the Judicial

Section (interim judicial protection)

Who is entitled to it? The litigant having lodged the appeal. The General Commissioner before the H.C.A.

Why suspend the execution of an Act? Because its execution may result in an

irremediable moral or material damage or a damage, the remediation of which may be difficult.

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Other categories of Acts against which an appeal may be lodged before the Judicial Section: Charging acts against public

accounting officers, issued by the Executive (deadline: within six months from the notification of the Act).

Acts regulating pension grants.

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Final Appeal against Judicial Sections’ Decisions before the Plenum (I)

Who is entitled to it?a. Anyone claiming interest in quashing the Judicial

Section’s Decision (i.e. the litigant having lost the case before the Judicial Section).

b. The General Prosecutor before the H.C.A.

Deadlines since notification of the Judicial Section’s Decision.

Within one year N.B.: The General Prosecutor before the H.C.A. may lodge such an appeal, even when the deadline in question has elapsed, only for reason concerning the sound interpretation of the law; therefore, the decision, as far as the litigants are concerned, remains valid.

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Final Appeal against Judicial Sections’ Decisions before the Plenum (II)

• Reasons for quashing a Judicial Section’s Decision.a. Inappropriate composition of the Judicial

Section, which pronounced the decision.b. Violation of a substantive rule regulating the

proceedings followed before the Judicial Section (e.g. principle of equality between the litigants, principle of hearing both sides, special reasoning of the judgments, publication of judgments during a public seating, etc).

c. Misinterpretation, or erroneous implementation of the legislative provisions applied in the case (without reexamining the facts, as defined by the Judicial Section).

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Final Appeal against Judicial Sections’ Decisions before the Plenum (III)

• Public hearing• Deliberation – Decision making.

Verdict: Admitting the final appeal – quashing the

Decision of the Judicial Section and either referring the case back to the Judicial Section in question, or, if the case has reached a certain stage of maturity, pronouncing a final judgment on it.

Rejecting the final appeal.

N.B. Possibility of suspending the execution of the Decision of the Judicial Section, while a Final Appeal against it is pending before the Plenum.

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Civil liability of public officials other than the accounting officers.

What? Action lodged before the Judicial Section claiming

compensation for damages (not “deficits”) caused maliciously or due to gross negligence.

Who is entitled to it? The General Prosecutor before the H.C.A. The competent Mayor, in case of damages caused

to the Local Government Agencies (Municipalities)

N.B. The procedural rules and the legal remedies against the decisions of the Sections pronounced upon appeals apply upon civil liability cases as well.