It has been a year since most of the provisions of the Act of 22 January 2010 on amending the Act on the Supreme Audit Office came into force. The new law modified a lot of regulations concerning NIK’s operation. Changes have been made to the organisational structure as well as planning and execution of audit tasks. Therefore, we decided to ask the President of NIK about the most critical issues related to the Act amendment and request him to summarise the activity of the Polish Supreme Audit Office in the past years.
Mr President, what was most important, in your opinion, in the past six years of operation of the Polish Supreme Audit Office?
Undoubtedly, it was the Act amendment which structured a lot of issues but also entailed some threats for NIK’s independence. Fortunately, we managed to eliminate nearly all of them by persuading Members of the Sejm to adopt the Act without any provisions dangerous for NIK.
What were you afraid of most?
There were some proposals to submit NIK to external audit which could easily be understood as screening of our audit proceedings. That would be a non-constitutional solution. Initially, the draft amendment did not limit the audit to the budget management. The Supreme Audit Office, like any other state institution, should have its finance management monitored. However, these regulations, because of their general nature, allowed the external auditor to have insight into our audit files. We managed to convince the Members of the Sejm that the audit should be limited to economic and financial issues. In my opinion, though, this provision should be specified even further.
What other threats for NIK’s independence did you observe?
There were attempts to make the recruitment of managerial staff politics-driven. The committees selecting Directors and Deputy Directors were supposed to include representatives of the Speaker of the Sejm, that is the majority of the Sejm. In the process of appointing Vice-Presidents, some Members of the Sejm suggested eliminating the President of NIK from that process in a way that if the President and the Speaker failed to agree on who should become Vice-President, then the Vice-President would be appointed by the Speaker without the President’s motion or, in another variant, the Sejm majority would do that.
Can you imagine somebody deliberately leading to a dead-end situation in appointing Vice-President where the candidate for this post is not quite approved by the President?
Yes. There has been a proposal to make Vice-Presidents work on a term-of-office basis. In that case the President would have to cooperate with the persons supported by his or her predecessor, without the statutory right to dismiss them. Nevertheless, we convinced the Members of the Sejm to reject those proposals.
While working on the Act, a spectrum of provisions satisfactory for you were implemented. What good did the Act amendment bring? What do you look at with contentment today?
The Act amendment was followed by significant changes in three areas: organisation, personnel and procedures. The organisational changes enabled better adjustment of the internal structure of audit entities to external expectations and requirements. Therefore, it was possible to formulate audit subjects more precisely. In defining audit subjects we shifted emphasis from internal relations among public institutions to citizens’ problems with them. We want to take under the microscope the way in which the state serves its citizens.
The legislator, when drawing up the amendment in cooperation with NIK, decided that managerial posts should be taken by employees of the Supreme Audit Office, not by politicians from the outside.
I think the motivation behind the legislator’s decision was to safeguard NIK - as an institution which is expected to be apolitical - against the influence of politicians. Making Directors work on a term-of-office basis may be looked at from different perspectives. No doubt, it has some drawbacks. But there are also advantages of that solution. Among others, as regards requirements for candidates for Directors and Deputy Directors, they have already been laid out in the Act very precisely. They have to be nominated auditors, not politically active.
I suppose it’s also important that the principle proposed by you not to reach for politically involved persons applied to Vice-Presidents as well?
Yes, indeed. Vice-Presidents were appointed in line with the principle defined by myself and the Speakers of the Sejm. In line with that rule, the candidate for Vice-President should have auditing experience and may not be involved in current politics.
The legislator also blocked the possibility of auditors being involved in local political life. Obviously, if someone wants to take part in elections for a Member of the Sejm or city council member, they may do so, but afterwards, after getting the seat…
… they have to choose whether to stay at NIK or work as a city council member. In that case the legislator structured the provisions which were quite inconsistent before. The previous regulations provided that the function of the Member of the Sejm or Senator may not be combined with work at NIK, but there was no such reservation towards local government officials coming from elections. That provision gave rise to conflicts of interests where city council members worked at NIK and at the same time audited local government bodies.
The Supreme Audit Office should be perceived as a fully apolitical body.
Following twenty years of democracy, the foundation of NIK is now represented by qualified officials from open external recruitment based on competition. We don’t need to search for candidates among politicians. Of course, at the beginning of the transformation period in Poland it was different as the most active people chose political career. It was worth winning them for NIK. But today the Polish SAI has young, skilled, apolitical auditors - they are its future. The further they are from politics, the more credible for citizens they become.
What other benefits did the Act amendment bring?
It precisely linked the auditor’s status with the performance of audit tasks. This is a good solution. Persons participating in the audit process get higher pays and enjoy more independence.
The Act amendment also brought a new audit procedure. How do you assess that?
I admit it has some drawbacks.
Could you mention some?
We struggle with the appeal procedure. Three-person team of decision-makers may turn the key audit findings upside down. In my opinion, the two-instance appeal procedure should be brought back to make sure the final decision is homogenous. Another severe weakness of the new procedure is the lack of confirmation by the auditee that the auditor’s findings are consistent with the actual state of affairs. It shouldn’t be the case that the appeal procedure focuses on correcting numbers, names or other minor imperfections. It should rather deal with major irregularities. My successor will have an opportunity to collect all the auditors’ comments, evaluate the procedure and propose changes in the Act. I note with satisfaction, though, that the amendment was implemented in all areas in a reliable, proper and calm manner. NIK has operated in a stable way for my entire term of office. No charges have been raised as to the lack of professionalism or objectivism.
The amendment became a chance to implement other changes.
Yes. I wanted very much to make audit subjects more interesting, more important for citizens. I also wanted audit results to be more up-to-date. NIK reports may not describe reality from a few years ago. In the first place they should focus on current problems citizens have with the general government sector. I think NIK succeeds more and more in finding subjects which are important from citizens’ viewpoint. Also, it carries out audits more efficiently now.
How do you perceive audits from the past six years? Which ones do you find important? Which ones will remain in our memory?
With all certainty, this is the audit of preparations for VIP flights, including the disastrous flight of 10 April 2010. We confirmed then that the Polish law did not allow flights with the intention to land in Smoleńsk because the airport there was not found in any airports register. The law allowed only landing at the airport found in proper registers. Other significant audits included the ones concerning: clinical research, cancer prevention, rights of patients of psychiatric hospitals, organ transplantation, commercialisation of hospitals, rights of the disabled, children’s homes, adoption, flood protection, power safety, privatisation of many sectors, shale gas extraction, construction supervision, construction of roads and motorways, safety on roads, preparations for the European Football Championships Euro 2012, presidency of Poland in the European Union, functioning of 112 emergency number, cultivation of GMO plants, animal shelters, garden plots, city guard, operation of the Elewarr company, use of the National Stadium, physical education in schools, obesity among children and youth, safety on the railway, bankruptcies of travel agencies, excise tax on alcohol, speed cameras, billings, sound barriers and many, many others. All the audits were well received and positively evaluated by the Members of the Sejm, experts, journalists and the public opinion. After many of NIK audits changes were made in the areas in question.
In the past years you have clearly underlined the need to communicate audit results to the public.
If a Supreme Audit Institution may independently plan the subject of an audit, conduct it without any obstacles and communicate its results freely - for me it’s a sign of independence, crucial for the functioning of a democratic state. Sometimes I heard charges that we focus too much on popularising audit results. But after all, NIK is supposed to serve citizens and on their behalf check if the general government institutions operate legally, reliably and economically. If it is the case, the citizen becomes a crucial part of the audit process, not an addition. The amendment of the Act has expanded our capacity in that matter. We may now inform citizens at any stage of the audit, not only from the moment of sending the pronouncement on audit results to the Sejm. That change helped us become a more independent and autonomous audit manager.
Other institutions have had this opportunity since long ago. For instance, the prosecutor’s office may inform the public about its proceedings at any stage.
I had to emphasise several times that the Supreme Audit Office is not only independent of the executive but also autonomous in relation to the Sejm. It’s true that we report to the Sejm but according to the decision of the Constitutional Tribunal this subordination should be limited. It only pertains to the competencies mentioned in the Act and covers as follows: appointing the President, Vice-Presidents, establishing the Charter, assigning audit subjects, appointing members of the Council of NIK, reviewing reports on NIK’s activity or analysing the state budget execution. In other matters NIK is autonomous. Otherwise, it would be one of the offices of the Sejm Chancellery.
In the past years NIK has also introduced instruments to inform its employees e.g. of intentions of the top management.
We’ve focused on internal communication because we want to treat our employees seriously. All of them should know which direction NIK is heading, what important things are going on there. It has become possible thanks to launching a modern, multimedia intranet portal. Also the video conference system has simplified communication mainly for employees from audit entities, without the need to travel on business all the time. It’s not only more efficient but also much cheaper.
International cooperation is very important for you.
We have the EUROSAI presidency in 2008-2011 behind us. The three-year period of chairing the European Organisation of Supreme Audit Institutions established the position of NIK on the international forum.
It all started with the 7th EUROSAI Congress in Cracow.
The Congress was wonderfully received by our international partners. During the three-year presidency we developed a strategic plan for EUROSAI for the following 6 years, we emphasised how significant it is for audit institutions to remain independent and how important it is to communicate audit results to the public. We also organised a seminar in Warsaw on public relations created by means of the media. Our partners evaluated them very positively. Recently we’ve won a competition for external auditor of the European Organisation for Nuclear Research - CERN. Other candidates were professional and recognised Supreme Audit Institutions of Norway, Switzerland and Spain. It was also the first time in history that NIK was appointed by the Governing Board of EUROSAI as official candidate for the Governing Board of the International Organisation of Supreme Audit Institutions. Final decision will be taken by the INTOSAI Congress in Beijing in autumn. Personally, as INTOSAI representative, I became member of the International Internal Audit Standards Board in the Institute of Internal Auditors (IIA).
In the international arena, NIK wanted very much to stress independence of Supreme Audit Institutions.
Efforts of many, especially of the Secretary General of INTOSAI, President Moser from Austria (upon approval of many SAI Heads worldwide pursuing support for this Act in their Ministries of Foreign Affairs, including myself) made UN adopt a resolution on the SAIs’ independence. In line with this resolution, independence is one of the guarantees of democracy.
You decided that the Supreme Audit Office should undergo a peer review.
Such reviews are a global standard today. For a Supreme Audit Institution in each country it is important that someone from the outside may have a look at its operation. In our case the audit was conducted by the auditors from Austria, Denmark, Lithuania and the Netherlands.
What were their most significant remarks?
The auditors appreciated our achievements in planning audits and communication with the public. But at the same time they stated that we should improve the way of presenting audit results to auditees and to the Sejm. Our documents are still not transparent enough and too formal. They may be difficult to read because of their complexity. As a consequence, they may have an adverse impact on the response of auditees and persons at the state level who could decide to implement essential changes based on our reports.
Apart from the peer review, it was the first time NIK was evaluated by the Sejm auditor.
We got positive evaluation. The auditor confirmed ”sound management, efficacy and integrity in spending public funds and to a large degree in awarding public procurements”.
Besides, I note with satisfaction that the auditor didn’t infringe our independence e.g. by analysing our audit processes.
A significant system crisis that could have posed a threat to NIK was the issue that came to the surface on the occasion of ACTA. Citizens inquired about NIK’s rights to access personal data.
The wording of the provision adopted while amending the Act could probably be better. Theoretically, it enabled our auditors to have insight into sensitive data which in practice have never been and will never be used by an audit institution. That’s why we proposed some changes limiting our access only to the data which are indispensable in the audit, without the right to use the sensitive data. The Supreme Audit Office has to have access to the data that will enable evaluation of the way public funds are spent. We don’t need any other sensitive data, for instance concerning sexual orientation or religious preferences. The Members of the Sejm shared our standpoint during the Committee meetings. Also the Ombudsman supported that view.
All employees will associate your term of office - as regards economic achievements - with the Green Office.
This is certainly a sign of the times. It seems to me, though, that the most important are the changes that help us use our possibilities in a much better way: video conferences, intranet, but first of all the mobile auditor, that is remote access to our databases from all audit locations. Each auditor received a laptop with the SIM card. What once required long hours or even days, numerous comebacks to the head office or regional branches, browsing through documents (e.g. journals of laws) to gain precise knowledge of the matter which is just being audited, today can be done in no time, on a remote basis. This certainly gives us more comfort of work. There are a few more things I’d like to mention, like ”e-Files” [e-szafa] which makes it possible to order all documents. NIK has always produced enormous amounts of documents which got lost in the archives. Now, thanks to the ”e-Files” every eligible employee may access them without any problem.
Six regional branches have undergone major repairs.
Honestly, I think that our working conditions are quite good at the moment. Auditors spend a lot of time outside of their offices but the conditions at their workplace should be good enough to make sure their work will be of top quality. These conditions are a sign of the employer’s respect for employees. That’s how I see it.
If you were to give a message to your successor, what would you say?
I believe the most important thing is to constantly care for the Supreme Audit Office to be independent from the executive and autonomous with respect to the Sejm. The key to NIK’s success is the service for citizens who have to be sure that we handle issues which are critical for them. The citizens have to know that it is for them that we determine, in a most professional and objective manner possible, how the state operates. By staying independent and autonomous, we can remain far from current politics. We can be a stable and predictable institution which is a real guarantee of democracy. Obviously, this may not be achieved without constant care for professionalism and ethics of all NIK employees. After all, they define the quality of work of the Supreme Audit Office*.
