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Wednesday 21.03.2018 | Name days: Una, Unigunde, Dzelme, Benedikts

5 years «silent» period at State Audit Office

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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.

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