On Thursday, the 21st of November, the Saeima MPs approved amendments to the Law on the State Audit Office in the final reading, rejecting a proposal by Progressives to allow the State Audit Office to carry out audits within the Parliament.
Currently, the State Audit Office law stipulates that the State Audit Office does not audit the Saeima. Progressives wanted this provision to be removed, thus allowing for a related rule to be drafted in the Saeima’s Rules of Procedure, which would give the State Audit Office the right to carry out audits within the Parliament.
According to the law, all state and local governments, their capital companies and other audited entities are subject to audits by the State Audit Office, with an exception only for the Saeima. “However, the Saeima, although hierarchically higher, is also systemically united in the system of state management. The existing exception has no justification and contradicts the principle of good governance,” the parliamentarians argue.
The proposal to amend the Law on the State Audit Office was submitted by Progressives MEPs Jana Simanovska, Ervins Labanovskis, Skaidrīte Ābrama, Edmunds Cepurītis and Leila Rasima. However, the proposal was rejected by the Saeima.
However, the approved amendments to the Law on the State Audit Office stipulate that from 2025 the State Audit Office will issue one audit report instead of 27 separate financial audit reports.
The draft law justification explains that its aim is to simplify the financial audit process of the State Audit Office by redirecting saved resources to performance and compliance audits, as well as to align the law with the amendments to the Law on Budget and Financial Management.
Following the adoption of the draft law, the State Audit Office, when auditing the consolidated annual accounts or the KSGP, will no longer have to issue an opinion and an audit report on each of the accounts of the 14 ministries and 12 central public authorities from 2025, but will have to produce a single audit report.
The State Audit Office will continue to carry out audit procedures on a random basis on ministries, their subordinate bodies and central state institutions and will use the information obtained from the audits to express an opinion on the accuracy of the KSGP. The heads of the institutions concerned will be informed of the inspection results, both by pointing out the identified weaknesses and by providing information on the auditors’ observations which would be helpful for the improvement of the internal control system.
The explanatory memorandum also lists a number of other facts which, according to the politicians, indicate that the State Audit Office has sufficient grounds to streamline its approach to financial audits in order to achieve its objective of verifying the accuracy of the annual accounts with less investment of resources.
The costs necessary to achieve the objectives set out in the draft law will be insignificant and can therefore be covered by the current annual budget of the National Audit Office and the State Treasury, the MEPs assured.