Cooperation with the Seimas Audit Committee Tomas Mackevičius Deputy Auditor General

1. Cooperation with the Seimas Audit Committee Tomas MackevičiusDeputy Auditor General

2. History Before EU accession negotiations (2000–2002) the NAOL was treated as a law-enforcement body • Methods: revisions and inspections • Sanctions: fines, deductions, penalties • Fragmentary coverage Developments: • EU accession (Chapter 28) • LNAO becomes a Supreme Audit Institution • Public accountability framework – NAOL-AC-Auditees

3. Law on the State Control The Seimas: • appoints the Auditor General (five-year term); • fixes and allocates the appropriations for the National Audit Officebudget; • receives the outputs of the NAOL: • audit opinions on the government accounts; • financial (and compliance) audits • performance audits • the annual performance report of the NAOL

4. New Challenges Public Accountability Cycle • Recommendations instead of sanctions • New channels of reporting Systemic improvement • How to ensure implementation without applying direct sanctions? • Development of the concept and arrangements of the parliamentary control

5. Establishment of the Audit Committee • In September 2002 a Subcommittee on Audit was established within the Committee on Budget and Finance • In December 2004 a Standing Seimas Committee on Audit was established • These are significant steps forward

6. Activities of the Audit Committee (related to NAOL) • consider NAOL public audit reports; • prepare draft Seimas resolutions for implementation of audit recommendations; • co-ordinate activities of Seimas Committees and Commissions; • carry out parliamentary scrutiny of the efficiency of the implementation of the functions of the NAOL, the State Property Fund, the Public Procurement Office; • put forward proposals and recommendations relating to the improvement of their activities, • participate in the preparation of draft laws pertaining thereto;

7. The NAOL Annual Work Programme The NAOL shall annually establish the scope of the public audit in the Annual Public Audit Programme (Law on the State Control) • The NAOL drafts the Annual Public Audit Programme. • Audit Committee examines the Programme and presents recommendations to the NAOL. • Annual Public Audit Programme is ultimately approved by the Auditor General. The Seimas can require some audits which are not provided for in the Annual Public Audit Programme by resolution.

8. Good Practice (NAOL) Procedure of submitting Audit Reports and Opinions to the Seimas Audit Committee(approved January 27, 2006) NAOL submits: • all performance audit reports; • financial (regularity) audit reports and opinions when qualified or adverse opinion, or disclaimer of opinion on financial accounts is issued • no later than within 5 working days from processing public audit documents

9. Good Practice (AC) 2 main stages of Audit Committee procedures: • Hearings(NAOL auditors present their findings and recommendations; answer questions) • Consideration(auditee management asked questions, provide explanations, submit action plan on implementation of audit recommendations) • AC adopts decision on the implementation of recommendations • If necessary, additional consideration may take place

10. Good Practice (AC) • The Audit Committee decides on which audit reports are to be considered during its’ meetings; • After considering audit reports the Audit Committee passes a resolution concerning the NAOL recommendations; • Audit Committee can draft a Seimas resolution concerning the implementation of the audit recommendations.

11. Benefits achieved - Public accountability cycle • Better control of how taxpayers’ money used; • Citizens influence government spending via legislators. • NAOL audit findings are a foundation for effective parliamentary control; • Parliamentary control is more efficient and transparent; • Seimas profile is raised by using its powers in controlling the legality and reasonableness of government spending

12. Next Steps Further evolution of NAOL operational independence; Increase efficiency of public accountability system • develop roles and functions of each part of the mechanism, including Min of Finance; • improve procedures; • strengthen internal communication, cooperation and the unbiased engagement of MPs.

13. Conclusions • Co-operation between the NAOL and Seimas Audit Committee has future potential and should be developed. • Auditors, MPs and audit clients should better understand each others roles, needs and expectations. • The mechanisms of this co-operation should be further developed to become more clear and efficient. • The SAI independence should be treated as a value per se and respected by the Seimas and the Government. • The focus needs to be on the outcomes of the public accountability cycle – better value for money and delivery of public services

14. Thank You!