bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 17.12.2017 | Name days: Teiksma, Hilda

5 years «silent» period at State Audit Office

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Auditor General Ingūna Sudraba

The State Audit Office has not completed any audits for nearly five months already, which is the longest period of the last five years, the Auditor General Inguna Sudraba (Ingūna Sudraba) explains this with the reduced budget of the establishment, which is by far not enough to secure the institution’s proper activities.

The Auditor General in an interview to BNN expresses her view that despite smaller spendings, the ministries’ way of thinking about that has not changed. In spite of the pre-elections mood, I.Sudraba does not feel any additional pressure.

What audits are topical at the moment? The State Audit Office of the Republic of Latvia (SAO) has not published any audit results over the past five months… Does that mean everyone has become so honest they do not exceed the resources?

The specifics of our work is that currently all the auditors are working on the audit cycle simultaneously. Financial audit is launched in autumn and it finishes in May 1. This means that in May we are informing about financial resources spent in the previous year, whether the accounting is proper and what the situation of state property management is. We are finishing the consolidated account audit in September; at the same time we are finishing and launching the next audit cycle, which includes legal audits in all the ministries and major institutions. Currently auditors have a very active period, audits have already been completed and reports are being written now. This means that starting from October we will provide much information on what has happened in one or another industry due to a project implementation or some measures political realization. There are various themes: we examine the science and education policies and how effectively they are carried out by the Ministry of Education. Similarly, we study the Ministry of Defence and the Ministry of the Interior, we consider the operations of the Social Integration Program and matters under the responsibility of the Ministry of the Interior. We also evaluate how effectively this social safety net program is being implemented with the help of the World Bank’s resources. Effectiveness of the Road Traffic Safety Directorate activities are also assessed, we study scientific institutes operations in the Ministry of Agriculture as well. We perform extensive audit at Ventspils Free Port.

Will you audit other ports as well?

…in future, because ports are specific legal entities with a very particular management form – shared by the state and the local government. We want this to be the first way of understanding from the legal point of view the effectiveness of ports’ activities, to what extent we use the potential of them and what we have in order the economy could recover and become more concrete.

Will the audits be finished soon?

Practically most of them will finish soon, which means that currently the results of them are being collected and reports are being written. Yet there is still long way ahead – maybe even several weeks, while we match the results with the audited bodies. After that, in correspondence with the terms set by the law, we can publish the results, so the first ones will become public in late October… and many of them also in November and December.

How is The State Audit Office work like in the pre-election mood? Has it changed? Do you feel any pressure?

I would like to note that I have not felt any kind of pressure since the first day I work here at SAO. I do not feel it at the moment either. Noone has sent any demands or requested some kind of information. Nothing like that. I assume that everyone has understood that we are independent and not influencable…

How do you decide which institution to audit?

First of all, we have to operate with the available resources. So there are people with specific qualifications, that can do a certain amount of work. Audits are planned for the whole year at once by developing an annual plan. There is the obligatory work stipulated by the law that we have to do every year – we have to report on the Ministries’ annual accounts. We calculate how much resources this will require. It is about half of the SAO financial resources that are needed to carry out this work. The other half is used for legality and performance audits. This is an extensive and multifaceted evaluation to select audit topics.. in order they would include all sectors and cover the most topical and substantial themes of the public. Each audit must bring added value, it must promote the system arrangement and seek for ways to spend resources more rationally.

Is it enough with the consolidated SAO resources to carry out its duties?

No, it is not. What we are starting to face is that we depend on information technologies. The quality starts disappearing due to them. This is an urgent matter for the next year. Part of the computers has to be replaced for sure. Noone can work with such computers nowadays, the warranty period and physically possible use of them is to expire soon. So we will need some additional resources.

There are problems with human resources as well… Despite the fact that there is overall unemployment, it is difficult to find qualified labour force. We are investing our own funds, because there are no «ready» people in the work force market. Auditors are not prepared in the labour market. We are competing with other audit companies and I feel constant pressure that they are looking for qualified work force as well. Of course, everyone is happy to have a ready made employee, without needing to instruct him or her. We are losing the most skilled workers in the market.

How do you, as the Auditor General, evaluate the overall purchasing system in Latvia, this state and private entities collaboration? How organized and transparent is it?

We cannot consider only the purchasing system. I think that what causes problems is the constant need to answer questions as: Why did they buy it? What will they do with it? Why was it so expensive? Why exactly this company was chosen? Why such technical solution was chosen? Etc. Yet the roots go even deeper. The activities of institutions are not result-oriented, in other words, no specific result is required from them that could be compared with the resources that have been used to achieve this goal.

That way many issues would be solved on why one or another service has been chosen, why it was bought this way and no other, because currently the system is process-oriented, it focuses on spending money. Regulations can be improved endlessly, but if responsibility of why you bought that and what the result of your work is – is not demanded either way, considerable changes cannot take place. Let’s take the Southern Bridge as an example. A bridge is constructed without estimations of the city traffic problems and what should be done to optimize it.

Speaking about the Ministries, if we compare the «fat» and the crisis years, do you see any improvements in the ways money is spent? Has the way of thinking changed?

I would like to note that practically the idea is the same, although not so much money is spent. If there are less resources, there are less inadequate actions as well that are carried out for the state’s money. The Ministries and the state institutions do not feel the responsibility of what to do with the tax payers’ money in a really certificated way. So I am repeating myself, but as long there is no clearly set goal that each official has to reach – the way of thinking cannot be altered.

Does the SAO itself operates according to these standards and the philosophy it popularizes?

It should be emphasized that we are doing the maximum we can, because, first the financial factor has to be considered and, secondly, how much of qualified staff we can hire. We can hire people for short-term or long-term projects, people who do more in short time or in long time but qualitatively. We are constantly balancing the limited time and quality, how many people we need to to carry out a qualitative audit. It takes time until people acquire the necessary basis of knowledge, yet, believe me, they are required to do more and more each year and we are setting new goals every year.

Why did the SAO used to publish at least one audit report a month, but now there is «silence» already for several months?

Trust me, the basic law is what I have already told. A few years ago we could carry out financial audits and legal audits at the same time, yet the budget was cut. Currently we are launching financial audits from October till May and there are no parallel audits. Therefore we publish the results in May and launch new audits that we finish by November.

Is it connected with the budget then?

Also with that, of course.


Leave a reply

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

European Parliament supports changes for combating activities detailed in Panama Papers

Public registries with names of true owners of businesses, effective protection of whistle-blowers and stricter requirements for financial intermediaries are some of the proposals intended to assist with the fight against tax avoidance, as noted by members of the European Parliament.

Most read

Most commented

Newest comments

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive



Category feed: Feed: