Jan Pieter Lingen, European Court of Auditors / Sigma Afyonkarahisar, 23-25 September 2010

International Symposium on the changing role of Parliament in the budget process: Experiences from PUIC

Countries and EU Member States

Cooperation between Parliament and Supreme Audit Institution in Exercising Oversight of the Budget:

Some General Considerations and Experiences from the Netherlands and the EU

Jan Pieter Lingen, European Court of Auditors / Sigma

Afyonkarahisar, 23-25 September 2010

Session Two: Budgeting and Budgetary Oversight in the PUIC Countries and

EU Member States: Parliaments and Supreme Audit Institutions / Courts of Accounts

This presentation:

• Parliament and the budget

• Supreme Audit Institutions (SAIs)

• Relations between SAIs and parliaments: how parliaments can benefit

• Challenges

With examples from:• The Netherlands (NL)• EU

Paper gives more details about NL and EU

Cooperation between Parliament and Supreme Audit Institution in Exercising Oversight of the Budget: NL and EU


Parliament and the budget

Power of Parliament – related responsibilities

• draft budget submitted – responsibility to scrutinise before approval

• implementation of the approved budget – responsibility to control

• accounts submitted – responsibility to check and give discharge if warranted

How to live up to these responsibilities?


Supreme Audit Institutions (SAIs)

Two main models

• Office: audit

• Court: audit and judgements

External audit:

• financial audit

• compliance audit

• performance audit

• (ex ante audit; ex ante financial control)


Relations between SAIs and parliaments

• legal position SAIs (independent from government and parliament, part of the executive, parliamentary body)

• reporting and handling reports

• work programme SAI

• audit requests

• other types of communication


Relations between SAIs and parliaments: reports

• annual reports: budget implementation, accounts

• activity reports: sometimes part of Annual report

• special reports: performance audits

• opinions: often draft laws FMC

Parliamentary procedures and committee system

• Public Accounts Committee, Budget Committee, Budgetary Control Committee, subcommittee

Frequency of reports

• capacity, selectivity, resources


Relations between SAIs and parliaments

Work programme SAI

• publication, discussion

Audit requests

• formal: procedure

• informal

• independence issue

Other types of communication

• meetings

• staff exchange


The Netherlands

The setting

• Dutch Parliament: two Chambers, only Second Chamber (150 members) elected directly

• Finance committee is responsible for overall fiscal policy and prepares general budget debates

• Budgetary control committee’s roles are to deal with framework laws on budget and budgetary management, with reports from the SAI, and general discharge and to support and advise branch committees (through its staff)


The Netherlands

The Netherlands Court of Audit (NCA):

• not a Court, but an Office

• college of three members, appointed after proposal from parliament

• audit remit includes central government, state owned enterprises, EU-subsidies

• financial, compliance and performance audit

• approximately 60 audit reports per year


The Netherlands

Relation between parliament and NCA:

• budgetary control committee is linking pin

• all reports are dealt with by budgetary control committee

• regular discussion on work programme and issues of common interest

• requests for audits through committee

• secondment of staff NCA to budgetary control committee


The Netherlands: an example of cooperation

From policy budget to policy accountability

• initiative budgetary control committee: annual report in the political arena

• speeding up discharge procedure

• making discharge more substantive

• focus on performance: 1999 Action Plan

• starting point performance based budgeting


The Netherlands: an example of cooperation

From policy budget to policy accountability

• partnership BCC, NCA, MoF

• joint working group, informal

• boost to performance budgeting and identification of performance indicators

• NCA reports on substance and reliability performance information

• parliamentary attention for discharge raised


The EU

The setting

• European Parliament, 736 members directly elected

• EU budget, ±120 billion euro per year

• European Commission responsible for preparing and implementing budget

• European Parliament together with Council approves budget

• European Parliament is discharge authority


The EU

Parliament: budgetary control committee

• prepares discharge

• deals with reports from SAI

• fight against fraud

Budget committee responsible for budget debate


The EU

The European Court of Auditors (ECA)– the EU SAI

• not a Court, Office model with a college of 27

• Annual report (AR) contains statement (audit opinion) on reliability of the accounts and regularity of revenue and expenditure

• another ± 20 performance audit reports


The EU

Relation between parliament and ECA

• AR is extensively discussed in control committee and is major basis for granting discharge or not

• special reports are also discussed extensively

• proposals for audits or opinions are accommodated by ECA

• agreement on procedure for submitting and publishing reports


The EU: an example of cooperation

Public administration reform: White paper (2000)

• service culture, result oriented

• overhaul of financial management and internal control systems

• strong support from parliament

• reports and opinions from ECA important tools

• input from ECA in debates organized by parliament


Challenges (1)

- secure independence SAI

- proper infrastructure for SAI reports: committee system, procedures, support

- proper arrangements for timely dealing with SAI reports: presentation by SAI, questionnaires, meetings with SAI representatives present

- proper arrangements for the discharge procedure


Challenges (2)

- proper arrangements for suggesting audit topics

- proper arrangements for asking (legal) advice

- proper arrangements for follow-up and recommendations adopted by plenary

- balance between politics and control function: strive for unanimity

- proper arrangements with SAI on publicity

- look for opportunities to get assistance from SAI: FMC reform, reform budget system, accounting system


Documents

Jan Pieter Lingen, European Court of Auditors / Sigma Afyonkarahisar, 23-25 September 2010