Intervistë e Kryetarit të KLSH-së, z. Bujar Leskaj, publikuar në edicionin e dytë të Revistës ALRAQABA të SAI-t të Kuvajtit, prill-qershor 2017.
1.Please provide us with information about your supreme audit institution establishment and its role in controlling the public funds
ALSAI is mandated by the Constitution (Articles 161 to 165 of the Constitution) of Albania to carry out its mission. ALSAI mission is to inform the public and the Albanian Parliament on the legal, economical, efficient, and effective use of resources by central and local Government and other public entities and to promote accountability across the public sector in line with EU good practices and the international standards of INTOSAI, contributing to good governance, through the fight against corruption.
Our vision is to become a professional body that contributes to the added value and savings of the public money by giving assurance on the financial accounts of their users and by helping to improve government management of other public entities through audit, thereby winning the confidence of the Albanian citizens and the auditees.
The institution has a 92 year history, established in 1925. It has currently a staff of 165 employees, among whom 136 are auditors. The philosophy of our work is to be agents of citizens and Parliament to ensure that the management of public funds is made with economy, effectiveness and efficiency. In our audits we are guided by INTOSAI international standards, the ISSAI-s.
The fundamental law of the institution is Law no. 154/2014 “On organization and functioning of the Supreme State Audit Institution”, adopted in November 2014. The adoption of the new law by Parliament is unequivocally regarded as the most important reform in the history of ALSAI since 1992, after the democratic developments in Albania. This law paves the way for a comprehensive reform and modernization of the institution, in accordance with the international standards of supreme audit, the ISSAI-s. The law widens the scope of SAI audit. For the first time in our legislation, the new law gives a full definition of performance audit and IT audit. The new law expands the powers of the SAI in the audit of State concessions, in order to protect the public interest, and guarantees full audit of State revenue collection. It specifies access to the collection, analysis and publication of information, including the confidential one and addresses transparency in dealing with third parties, stressing ethics and professional integrity of SAI employees and experts.
With this law, the legislation of ALSAI approximates even further to international auditing standards and contemporary legislations counterpart institutions in other European countries and beyond. It expands by processing, detailing and completing SAI’s institutional independence, as expressed in the Constitution.
2.What is the extent of independency that your supreme audit institution enjoys and the support it receives?
ALSAI is fully independent to choose its audit policy and plan and to recruit staff as it judges fit for its mission and vision. Its new basic Law of 2014 marks a significant milestone in the legal framework of the country, as it contains amendments aiming substantially towards strengthening the independence of the SAI, its rights and duties, the status of auditors as well as the relationship with the audited entity.
Our financial independence is guaranteed. Every year we prepare our own budget which is approved by the Parliamentary Committee of Economy and Finance. The Committee has supported us in our requests for incerase in number of staff and respective funds. We enjoy full understanding and support from the Parliament and citizens.
3.What are the types of audit practiced by your supreme audit institution and what are the types of reports presented by your supreme audit institution? And to whom?
ALSAI has worked to increase the capacity of its audit troupe, following the approach “national audit to serve the national governance”, which has been the motto of INTOSAI for the period 2013-2016. By being a watchdog institution in the service of citizens and Parliament for safeguarding the management of public money and property, the spirit and motto of our audits over the last year has evolved naturally from the “national audit to serve the national governance” into “audit to serve citizens”, which is the motto of INTOSAI for 2017 onwards until 2020. During these five years 2012-2016, the number and quality of audits, as well as coverage of areas of State activity have been increasing. Audits are selected on the basis of risk analysis. For 2016, we conducted 154 audits of 154 planned, of which:
-118 compliance, legality and financial regularity audits
-7 financial audits;
-14 thematic audits;
-13 performance audits and
-2 IT audits.
The distribution of types of audits reflects the development and modernization of the institution, using in maximum the human resources and capacities that the SAI has currently in disposition. The audits have covered all areas of State spending or of public revenues, focusing on institutions that spend more or have primary importance to the economy and country’s public services. Performance audits have increased significantly in number, quality and coverage of institutions of State administration. With the establishment of the Performance Department as a special structure in 2012 and the mandate of this audit through SAI basic Law of 2014, ALSAI is advancing strongly towards progressive models of performance audit conducted by developed European SAIs and beyond.
In line with country’s Constitution, ALSAI reports every year to Parliament in plenary session on the execution of the State Budget for the previous year, before that the Parliament approves the Budget for the coming year, prepared by the Government. The report is a consolidated one comprising the results of more than 90 audits conducted during that year on the execution of the State Budget. For 2016, ALSAI reported on the execution of the State Budget for 2015. It disclosed economic damage, irregularities and financial violations (incurred in public revenues as well as expenditures) at the level of USD 195 million, seeking compensation for damage and return of this money to the State Budget to the amount over 97 per cent. During the last five years 2012-2016, the amount of economic damage disclosed by ALSAI has surpassed the value of US $ 1 billion , in an economy with an annual GDP of around USD 8.5 billion.
For 2016, for a US dollar spent by ALSAI, the institution has sought compensation of economic damage in the region of 78 US dollars, equal to the compensation amount of four conscutive years 2008-2011. For the five-year period 2012- 2016, the average efficiency index was 127 US dollars, or about 6 times more than the average of the five years from 2007 to 2011.
Every years also, the SAI reports to Parliament (usually in fall) in plenary session on the performance of its activity. Every two or three years, the Parliament issues a resolution to assess the performance of ALSAI and provide recommendations for improving the work in the future. During the year, the SAI has more frequent relations with the Parliamentary Committee on Economy and Finance and its members. It participates in Committee’s investigations and invite Committee members to participate in its activities as well.
4.What is the mechanism of your supreme audit institution to follow up its remarks and recommendations and what are the procedures followed in case you discover financial breach?
In every new audit that we begin, first we see the status of implementation of the remarks and recommendations that we left in the last audit. Sometimes, for very important audits, we organize special missions and send to the auditee our auditors to verify the status of implementation of our recommendations. When the auditor discovers a financial breach, he/she immediately informs his/her superior and in proportion to gravity of the breach, the audit department director, the general director and the Chairman are also informed. The specialists of the Law Department, together with the auditors of the audit team assess whether the conditions of filing a referral to the Office of the General Prosecutor are met.
In line with our strategic goal of improving governance through enhancing the fight against corruption, although criminal charge (the referral) is not for us an end in per se, to fight the anti-culture of impunity for violations of legal provisions in force, resulting in waste of public funds and public assets damage, last year, in 2016, we as SAI have sent to the Office of General Prosecutor 49 referrals against 176 public employees, mainly senior and middle level public officers. From an analysis through years, the number of referrals during the five years 2012-2016 is 4.5 times higher than the criminal charges in the five-year period from 2007 to 2011, or in the last five years we have filed 219 criminal charges at a rhythm of one referral per week .
5.What are the procedures and methods followed by your supreme audit institution to develop its performance and practices?
We select all audits conducted over the year based on risk analysis. Through intensive training and exchange of experiences with partner organizations, our auditors are much aware of and do strictly respect the INTOSAI standards in approaching the auditee, getting the required information and preparing the draft audit report, as well as including the auditee’s remarks in the final report. There is a quality assurance process for each conducted audit. Internal auditors and experts from the Law and Standards Implementation Department select audit files and reports to assess the quality of work during the conduct of an audit or after its conclusion. ALSAI has organized mini peer reviews with specialists from professional audit or accounting organizations in the country and from civil society, to assess the level of quality assurance process in the organization.
On our request, during 2015-2016, experts from the Austrian Court of Audit conducted a peer review in ALSAI and appreciated in their final report the level of independence and professionalism achieved by the SAI.
6.How does your supreme audit institution improve and keep good relations with entities subject to its control while there are some breaches and non-compliance with laws and regulations?
In addition to performance audits where the councilor’s role of the SAI is dominant, the financial and compliance audit reports contain a lot of findings and proposals for measures to improve the organizational structure and/or the way of work of the auditee, independently from the assessment of the financial breach and the investigation to find out its perpetuators and file a referral. ALSAI auditors work patiently with auditee’s managers to make them understand the deficiencies of the their organization and how to eliminate them. The climate that our auditors try to introduce to the auditee during the audit is that of cooperation and full transparency to detect mistakes and prepare measures to avoid them in the future.
7.How is the staff of your supreme audit institution being appointed? Is there a special cadre that attracts those who have efficiency and experience?
The job position in the SAI is a linear function of knowledge and successful application of audit knowledge. New staff is appointed based on transparent recruitment process, aiming to assure the most capable and experienced candidate. Employee structure in ALSAI has continued to change in favor of audit staff with professional qualifications, academic and scientific degrees, as well as possessing second qualification in their field of expertise. Department directors were promoted the ones with over 10 years experience and / or scientific degrees. Another way of promoting professional values is the periodic testing of knowledge learned through training, mentoring and self-taught study of experienced auditors. Such tests are carried out at least twice a year and are part of the personal file of each auditor, serving to further career of the auditor in auditing and other functions.
8.What are your supreme audit institution plans to develop and improve the staff?
During these 5 years 2012-2016, as a result of a recruitment policy based on the requirements of time and turning to modern technologies of audit, the audit staff of the SAI is dominated by economists, lawyers, engineers, and later on is complemented by sociologists, IT experts, journalists, etc. The wide spectrum of training of auditors increases the likelihood of problems in handling the audit, especially performance audits or audits that contain elements of performance. Experience in audit is critical in generating a sound judgment and maintaining professional scepticism, as required by INTOSAI standards. With regard to capacity building through training, each ALSAI auditor must meet the institutional target of 25 training days per year, at least 5 days are continuous training on specific issues. All levels of employees in the SAI undergo training, regardless of position, seniority, etc. Training is conducted in cooperation with domestic and foreign experts, certified in the field of audit and / or the collection, analysis and reporting of information.
Each senior auditor and audit manager in the SAI has under his/her mentorship a new auditor, for a period of 4 months. Such an arrangement helps working to integrate new auditors more quickly, reducing the risk of errors, promote cooperation and create a climate of professional work and care.
9.What are your suggestions to activate your cooperation with the state audit institutions to get benefit of their experience in order to develop and improve your supreme audit institution staff and improve your performance?
Based on INTOSAI’s moto “Experentia mutua Omnibus prodest, during 2012-2016, the institution has signed and implemented dozens of agreements with partner SAIs as the Austrian Court of Audit, the Turkish Court of Accounts, the Polish National State Audit Office (NIK), the SAIs of Croatia, Slovenia, with the State Institution Montenegro audit, the Audit Office of Bosnia and Herzegovina, the SAIs of Macedonia, Czech Republic, Bulgaria, etc. By concrete cooperation with especially the Polish and Turkish SAIs, ALSAI reached to train almost all its auditors. Only for 2016, 153 auditors and employees of the SAI participated in activities abroad. In other words, all SAI employees have been abroad at least once for training or making experience .
In the last five years, we got involved in activities of INTOSAI and EUROSAI, which enable us to compare our professional knowledge with European and beyond good practices. In 2016, SAI managers and auditors have participated in 53 activities developed abroad, relevant to the organizations above, such as congresses, conferences, roundtables, meetings, seminars, training, (the latter in the framework of SAI agreements with partner SAIs). Among the main activities, I can mention the participation of the XXII INCOSAI Congress of INTOSAI in Abu Dhabi, in the meeting of the Working Group of INTOSAI for ISSAI 30- Review of the Code of Ethics; meetings of the Contact Committee of Supreme Audit Institutions of the EU (two meetings), etc.
ALSAI, besides being a member of the Working Group of EUROSAI for Environmental Audits and participating in the Task Force of Audit and Ethics, in 2014 was also accepted as member of the EUROSAI Working Group on the Audit of Calamities and Disasters, providing in each case a modest yet highly appreciated contribution.
The year 2016 marked the start of the implementation of the IPA (Instrument for Pre-Accession in the European Union) Twinning Project 2013, with two partner SAIs, the Polish NIK and the National Audit Office of Croatia, worth 2 1 million euro. This project will conduct 92 missions, with the aim of improving the legal framework of an audit, development of audit methodologies and enhancing reporting capacity, strengthening institutional capacity and improving the impact of the results of the audit. Polish and Croatian experts carried out 36 missions during 2016.
10.What is the nature of your supreme audit institution relations with the Parliament?
Pursuant to United Nations Assembly Resolutions A66 dated 22 December 2011 “Promoting the efficiency, accountability, effectiveness and transparency of public administration by strengthening supreme audit institutions” and Resolution A / 69/228 of 19 December 2014 ” Promoting and strengthening the efficiency, accountability, effectiveness and transparency of public administration by strengthening supreme audit institutions “, ALSAI, by working as an agent of Parliament to ensure efficient management of public funds, has ensured effective cooperation with Parliament.
I would consider as the most important achievement of this cooperation the efforts for the approval of SAI new law, completed in November 2014. The Parliament (in particular the Committee for Economy and Finance, especially the Chairman and its Secretary, but also MPs from other Parliamentary committees as well, played a key role in the adoption of a modern law for the SAI. It welcomed and supported the version presented by the SAI and cooperated closely with the European Union structures, such as the Directorate General of Budget (DG-Budget) and the SIGMA Programme. This law is fully in line with INTOSAI international standards, what was also a repeated demand of the European Union in its Progress Reports on Albania for the years 2011, 2012 and 2013.
During these five years 2012-2016, the Albanian Parliament has adopted several resolutions of evaluation and orientation of SAI work. The Resolution on ALSAI approved last year, in which the Parliament proposed the establishment of a parliamentary Sub-committee within the Committee for Economy and Finance, a practice followed by several European countries and beyond, constitutes for ALSAI the highest expression of confidence that Parliament has on the SAI. It shows the high level of understanding of messages and the importance of ALSAI activity by MPs, especially the members of the Economy and Finance Committee. The upcoming establishment of a sub-committee “profiled” for the SAI’s work will enable continuous communication with Parliament. This paves the way to a situation in which SAI’s recommendations will not only serve for regulatory and remedial effect, but also as “inputs” that Parliament can use in the design of its State Budget policy.
The participation of the Speaker of Parliament, of various MPs and of the Chairman of the Economy and Finance Committee in many ALSAI activities, such as Annual analysis, scientific conferences, etc., testifies that the SAI enjoys parliamentary support. Our audit reports conclusions or recommendation are increasingly present in parliamentary committee discussions and this is an indication of a growing confidence of the Parliament to ALSAI.
Members of Economy and Finance Committee gave a special contribution during the last year’s peer review process, cooperating with Austrian auditors.
The IPA project “Strengthening the capacity of external audit in Albania” is another important meeting point between ALSAI and Parliament. In November 2016, a mission organized by Polish NIK analyzed the regulatory acts and practices of SAI relations with Parliament. To create a clearer picture of how is cooperation with the SAI going, MPs from Economy and Finance Committee cooperated with the mission, by giving an important contribution.
Thank you!