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

1. International Symposium on the changing role of Parliament in the budget process: Experiences from PUIC Countries and EU Member States Session Two: Budgeting and Budgetary Oversight in the PUIC Countries and EU Member States: Parliaments and Supreme Audit Institutions / Courts of Accounts 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

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

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

4. 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?

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

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

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

8. Cooperation between Parliament and Supreme Audit Institution in Exercising Oversight of the Budget: NL and EU • Relations between SAIs and parliaments • Work programme SAI • publication, discussion • Audit requests • formal:procedure • informal • independence issue • Other types of communication • meetings • staff exchange

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

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

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

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

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

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

15. Cooperation between Parliament and Supreme Audit Institution in Exercising Oversight of the Budget: NL and EU • The EU • Parliament: budgetary control committee • prepares discharge • deals with reports from SAI • fight against fraud • Budget committee responsible for budget debate

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

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

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

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

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