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Conference on Relations between SAIs and Parliaments of EU Candidate and

Potential Candidate Countries

hosted by the State Audit Institution of Montenegro

Coordination, Technical and Financial Support: OECD/SIGMA

and the Joint Working Group on Audit Activities (JWGAA)

18-19 November 2013

By Ms Chiara Goretti Economic Adviser to the Minister of Finance, Italy

This talk will focus on:

• The actors

• The playground

• The results

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THE ACTORS

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The Italian Corte dei Conti (1/2)

“Corte dei Conti exercises preventive control over the legitimacy

of government measures and also ex post auditing of the

administration of the State budget. It participates, in the cases

and ways established by law, in auditing the financial

management of the entities receiving regular budgetary

support from the State. It reports directly to the Houses on

the results of audit performed.

The law guarantees the independence of the Corte dei conti and

its members”.

Art. 100, Italian Constitution (1948)

“Corte dei Conti has jurisdiction in matters of public accounts

and in other matters laid out by law”

Art. 103, Italian Constitution (1948)

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The Italian Corte dei Conti (2/2)

Corte dei Conti (CdC) was established in 1862 in the new Italian State,

with the role of safeguarding public finance and guaranteeing the

respect of the jurisdictional system.

The Corte dei Conti pursues these aims exerting two functions:

- The audit function

• Preventive

• Financial audit

- The jurisdictional function

CdC is neither an organ of the Parliament nor of the government (so

called: organ of constitutional relevance). Auxiliary body to the

legislative branch.

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The Italian Parliament • Two Chambers (Senate and Chamber of Deputies), perfect

bicameral. Parliamentary system. Fragmented.

• 14 standing committees, with important role in legislative process.

No Public Account Committee

• CdC has privileged relationship with the Budget Committee (5th

Standing Committe)

The reports of the Court of Auditors on government agencies wich the State regularly subsidises

are referred simultaneously to the committees responsible by subject matter and to the 5th

standing Committee.

Each such committee shall vest one or more Senators with the responsibility of studying the

reports of each government agency or group of agency in order to identify instances which the

committees should investigate.

By June each year, committees shall submit a report to the 5th Standing Committee setting out their

conclusions on aspects relating to the management and actual work of government agencies

falling within their remit.

By September each year, the 5th Standing Committee shall submit a general report to the Senate on

the economic and financial aspects of State-subsidised government agencies and on their

consistency with the Economic Development Plan. This report, to which committee reports shall

be annexed, may also contain draft resolutions relating to the management of such agencies.

(Rule 131, Senate Rule of Procedures)

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THE PLAYGROUND

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Preventive controls (1/5)

On the legality of the government acts:

• Ex ante control

• On a limited number of acts (general planning

acts of the administration, listed in the law)

Opinion:

• Registered

• Provisory registration,

Government can go ahead

send to Parliament, to guarantee accountability of the

government against the legislature

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The State Financial Statement (2/5)

The financial statement for the State budget has to be

officially certified by the Corte dei Conti, before being

transmitted by the executive to Parliament

(art 38 of the budget law)

The procedures for the audit on state accounts (so called

“Judgement of Parifica”, equalisation) have a specific

nature, with accurate audits on the regularity of the

budget flows (June t, for year t-1)

• Financial Statement: 15 volumes+14 annexes

• CdC Documents: 4 volumes (more than 500 pages)

• Included EU funds

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The audit of other public bodies (3/5)

• As for the external audits the Corte dei Conti carries out forms of

mandatory auditing on more than 95% of the general government

units, for a similar amount of total public expenditure (over 11000

entities)

• local administrations (Regions, provinces and municipalities) and health authorities.

Compliance and regularity audits on the management with reference to the respect of

the balance budget, of the domestic stability pact and with regard to national debt and

to the sustainability;

• financial audit on the accounts of bodies subsidised by the State, currently comprising

236 units, 152 belonging to general government, 84 public corporations. The audit

takes into account effectiveness (results), efficiency (time and methods) and

economy (costs). For this purpose the legislator entrusted the CdC with the task of

setting, on a yearly basis, audit programmes and criteria.

• It directly reports to Parliament and to the other elected

assemblies

• The outcomes of the audit are issued also on the Corte dei conti

institutional web site (www.corteconti.it)

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Hearings in Parliament (4/5)

Regular hearings of the President of the Court of

Auditors on:

• Economic and Fiscal Plan (April) and its update

(September)

• Budget draft (October)

• Other important economic bill

• Budget legislation (i.e.: Constitutional reform for the

balanced budget)

• Cognitive survey on various issues

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The new EU framework (5/5)

• Relevance of high quality statistics for EU fiscal

framework

• Public accounts statistics are based on

administrative data. Reliability of administrative

data are crucial for high quality statistics

• Supreme Audit are more and more involved in

Eurostat consultation at national level, to

guarantee the inclusiveness and reliability of

budget records

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THE RESULTS

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Audit functions: are they effective? (1/2)

• Massive amount of documents transmitted, thousands of pages

• limited attention from parliamentarians and standing committees

Why?

At the political level: still limited attention to results. Financial statement

examined in the budget committee in no more than 2 hours. Audit

Reports not perceived as instruments to better political decisions.

In CdC, legal culture is dominant: very punctilious reports, often too

lenghty. Weak efficiency and efficacy analyses

General aspect, related to the administrative culture of a country

Different approach to public management, internal and external control,

accountability to results

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The accountability triangle?

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CdC has an important jurisdictional function; control on legality of acts is

central; the focus is on the bottom side of the triangle

Parliamentary hearings and CdC ceremonies (as “Parifica” for the financial

statement): good evidence in the press. Parlamentarians keen to participate

Is there a role of the press in the accountability triangle?

Conclusions Relationship with Parliament appears to be mediated by the press; it is

likely that is going to gradually evolve

Challenges:

• Consolidations and spending reviews

Efficiency and efficacy issues enter at the core of the political

debate. Indicators and focus on results become crucial for the

process

• Constitutional balanced budget reform

which role for the CdC and at which point of the decisional process?

• Establishment of the fiscal council (parliamentary budget office)

The mandate of the new body will be on forecasts and aggregate

monitoring. Does it change the CdC function?

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