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Fundamental principles of jurisdictional activities of SAIs:

Fundamental principles of jurisdictional activities of SAIs: The road towards an INTOSAI PRONOUNCEMENT. Conceição Ventura. The Supreme Audit Institution of Portugal is a COURT. What does this mean?. 2. It is laid down in the Constitution as a sovereign body ;

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Fundamental principles of jurisdictional activities of SAIs:

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  1. Fundamental principles of jurisdictional activities of SAIs: The road towards an INTOSAI PRONOUNCEMENT Conceição Ventura

  2. The Supreme Audit Institution of Portugal is a COURT What does this mean? 2

  3. It is laid down in the Constitution as a sovereign body; Makes part of the Judicial system, as a Supreme Court; • Therefore, constitutionally established principles for Courts apply to the SAI, as for instance: • The principle of independence and exclusive subjection to the law; • The right to cooperationfrom other entities • The principles that decisions must be grounded, that they are obligatoryand that they must prevail • The principle of publicity 3

  4. Collegial body composed by the President and 18 Members(Including one member in each regional chamber) The members of the Court have the same rights and privileges of the Judges of the Supreme Court and are appointed after a public competition Overview of TCP jurisdictional powers These powers are brought to practice through two main competencies allocated to the Court by the Constitution: 4

  5. Overview of TCP jurisdictional powers The Public Prosecutor Service has seat at the Court 3rdChamber 1stChamber Regional Chambers A Priori Control To give or refuse the Seal in acts and contracts before its set up The PCA prior control aims at verifying if the acts submitted to it are compliant with the applicable laws and if the respective costs have budgetary cover. To enforce financial liabilities The financial liability may be reintegratory or sanctionatory, the first being the imposition on those responsible for restoring the sums corresponding to the damage caused; and the second on the imposition of a fine. 5

  6. Overview of TCP jurisdictional powers Those jurisdictional powers add to the usual mandate of SAI: AUDIT 2nd Chamber A Posteriori Control Engaging in audits of all types (Financial, Compliance and Performance; also combined ones); Giving advice and opinion of the Whole of Government Account; Controlingthe Central , regional and local Administrationaccounts. Regional Chambers 6

  7. Overview of TCP jurisdictional powers Judgements of financial liabilities SOME NUMBERS … Total sum ofreimbursements: 487.225 € Total of fines payed by responsibles: 1.038.273 € 7

  8. Main 2017 OUTCOMES 26,1 M € 0,03% TCP Budget Portugal budget 3538 acts a priori controlled 39 seal refusal 228.500 M€ Controlled 1 459 controlled entities 78 Audits 723 accounts verified 3 reports and opinion on the General State Accounts (National and Regional level) 30 Liability enforcement procedures initiated 357 complaints analysed 8

  9. Strengths and weaknesses of jurisdictional powers Impact of these functions in society • Independence assurance • Power of rapid sanction , thus contradicting the impunity feeling • Direct interaction with citizens • Equidistance between the Legislative and Executive powers • Enlarged mandate • Jurisdictional powers add to audit ones • The weight of historical values: • Collegialdecisions • Fair trial • Credibility reinforced (Court’s usual good reputation) 9

  10. Strengths and weaknesses of jurisdictional powers Impact of these functions in society • Audit Objectives VERSUS enforcement of liabilities: • Pedagogy, education, building (Audit) • Looking for misbehaviours, sanction • Potential less cooperation from the audited entities, considering the powers of enforcement • Fear of sanction • Hidden information • Longeraudits and other control activities • Need to go deeper • More robust evidence 10

  11. Towards an INTOSAI PRONOUNCEMENT Why an INTOSAI Professional Pronouncement on Jurisdictional Activities? 11

  12. Towards an INTOSAI PRONOUNCEMENT More than 28% of SAIs ( 50) perform specific control activities called “jurisdictional”,which have not been included in an holistic manner in the INTOSAI framework; STARTING POINT: Rationale for establishing a standard : • A better framework to develop competences and to harmonize methods; • In the SAI PMF, the part on jurisdictional functions is the only one not based on standards; • To comply with the Strategic Plan of INTOSAI 2017-2022, Strategic Goal 1, Professional Standards, Strategic Objectives 1.2 “Ensure that the ISSAIs are sufficiently clear, relevant and appropriate to make them the preferred solution for INTOSAI’s members”. 12

  13. Towards an INTOSAI PRONOUNCEMENT – Benefits from having a principle-based one in place The existence of a principle-based pronouncement on Jurisdictional activities would allow to: • recognisethe specific competences of those SAIs and shed light on their added value; • ensure more homogeneous practices and methods amidst SAIs; and • a better-understanding of the model in capacity-building programs (remember that there an important number of Court of Auditors in African countries, grounded either in the Portuguese or in the French model). 13

  14. Towards an INTOSAI PRONOUNCEMENT • Having a pronouncement for jurisdictional activities of SAIs within the INTOSAI Framework would indeed be of major relevance to ensure that the main values of the due process of law are adhered to by national legislators. • Furthermore, it would also enable the “Court model” SAIs themselves to act in a common framework of values and principles, leaving details and procedures for each national legislation. 14

  15. Towards an INTOSAI PRONOUNCEMENT Why ISSAI 400 and 4000 (Compliance Audit) are not meant to frame jurisdictional activities? 15

  16. Towards an INTOSAI PRONOUNCEMENT Extract from ISSAI 4000 on Compliance audit 22. SAIs with jurisdictional powers follow the audit process as it is described in these standards. However, following the planning, execution and evidence gathering phases, there may be additional and specific issues that may lead to legal proceedings and to a final formal judgment on the matters of non-compliance. Such issues are not covered by this ISSAI 4000. 16

  17. Towards an INTOSAI PRONOUNCEMENT Extract from Draft Pronouncement Preamble • Even though some INTOSAI principles, standards and guidelines mention jurisdictional SAIs, there is no complete written standard for this specific kind of institution, which would provide a comprehensive view of all the requirements and main procedures to be followed to carry out their jurisdictional mission and compile good practices. The model of jurisdictional SAI is recognized as one of an organization that can carry out all types of control that a SAI has to perform and which is, in addition to those, invested with the power to rule on the responsibility of the persons accountable to the law in case of irregularities. 17

  18. Towards an INTOSAI PRONOUNCEMENT Extract from Draft Pronouncement item 1.3.8. • One must also underline the complementarity of this document with ISSAIs 400 and 4000 – respectively Fundamental Principles of Compliance Auditing and Compliance Audit Standard. These standards contain common provisions regarding jurisdictional authority and compliance audit characteristics – especially concerning « sufficient and appropriate audit evidences » (ISSAI 4000, 144) and the identification of persons « who may be held responsible for non-compliance acts » (ISSAI 4000, 57, a). However, this standard lacks provisions to completely and accurately describe jurisdictional activities. 18

  19. Towards an INTOSAI PRONOUNCEMENT: Milestones 19

  20. Towards an INTOSAI PRONOUNCEMENT 20

  21. Outcome of the Forum meeting in Santiago : Towards an INTOSAI PRONOUNCEMENT • Agreement on the content of the draft document «  Fundamental principles of jurisdictional activities of SAIs » and its 12 principles; • Unanimous expression of the wish to have this documents labeled as a Standard of the ISSAI Level (as a complement of ISSAI 100) considering that these activities are linked to § 15 of ISSAI 100; • Designation of a Forum representative ( SAI Portugal) to attend the next Compliance Audit Subcommittee ; 21

  22. Outcomes of the August 2018 FIPP and KSC SC Meetings : Towards an INTOSAI PRONOUNCEMENT KSC SC KSC - Kampala – August 20 to 22 Full support of the suggestion to classify the document as a standard and not a guide, support of the justification statement and project proposal with some suggested amendment. Transmission of those information to FIPP chair. FIPP – Norway – August 20 to 24: Agreement on the proposition to classify the document as an INTOSAI – P or a ISSAI. Suggestion of different point to clarify in the document to differenciate it from other INTOSAI existing documents. Request of and adjusted project proposal and justification statement. 22

  23. Next Steps of the « Fundamental principals of jurisdictional activities of SAIs » Towards an INTOSAI PRONOUNCEMENT 23

  24. Towards an INTOSAI PRONOUNCEMENT • Fundamental principles of jurisdictional activities of SAIs • Forth draft July 12th2018 • 1 INTRODUCTION • Objectives of the standard • Introductory remarks • Context and other relevant standards • 2 THE AUTHORITY OF THIS ISSAI • 3 EXPLANATIONS, DEFINITION AND STAKEHOLDERs OF THE JURISIDICTIONAL ACTITIVIES OF THE SAIs • Explanations and definitions • General Jurisdictional competences: • Judgement of accounts • Judgement of the managers of public funds and alike: • Persons accountable under the law: • Stakeholders • those instructing: • “Financial judges” or “members of the jurisdictional formation”: • Public Prosecutor or assistant public prosecutor, when the Law provide: 24

  25. Towards an INTOSAI PRONOUNCEMENT • The 12 GENERAL PRINCIPLES SPECIFIC TO JURISDICTIONAL COMPETENCES • Legal basis of the liability and sanction regime • Right to a fair trial • Independence of the members of the formation of the court • Impartial Judgement • Freedom of access to information • Judgement in a reasonable period • Quality control • Communication to the public • Effectiveness of jurisdictional competence • Existence of remedies • Principle of the cumulation of sanction for the same irregularity • Statutes of limitations (prescription) 25

  26. Towards an INTOSAI PRONOUNCEMENT Members of the Forum: 34 countries 26

  27. To finish: Again the example of Portugal The Court of Auditors of Portugal is rethinking the design and legal framework of its mandate, organisation and functioning related to the jurisdictional powers. Whilst engaging in this sensitive task, it is of the utmost importance to refer to a benchmark, mainly an international recognised standard, such as the project in progress towards anINTOSAI pronouncementontheFundamental principles of jurisdictional activities of SAIs . 27

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