The National Audit Office as an auditor acting in the interests of and hired by the taxpayer investigates how the state and local authorities have spent the taxpayer’s money and what they have given them for it. To that end the National Audit Office has the right to cover the entire public sector in Estonia with its audits.
The circle of the audited institutions and persons has, in spite of changes in legal circumstances, remained essentially the same ever since the re-establishment of the National Audit Office in 1990. The only exception was Eesti Pank, the Estonian central bank, whose auditing was note foreseen at the time of establishment of the National Audit Office. Eesti Pank became fully auditable by the National Audit Office only following the entry into force of the National Audit Office Act on 4 March 2002.
The National Audit Office audits state authorities as well as legal persons in public law such as the National Library, Estonian National Opera or public universities. As of 2006 the National Audit Office has the right to audit the assets of local authorities, albeit to a limited extent. The National Audit Office can examine whether the accounting of local authorities is in order, the internal control systems are functioning, the activities are legitimate, and the computer systems are reliable. According to the Riigikogu, the Estonian Parliament, the legitimacy of the activities of a local authority means adherence to the Constitution and the underlying principles thereof as well as adherence to the legislation of the state and of the local authority itself.
The National Audit Office cannot evaluate whether the activities of a local authority in disposal of municipal assets have been effective, e.g. whether the money spent on provision of public services and amenities is in accordance with the level of maintenance of streets and greeneries or whether the construction of a new nursery school has attracted young families to come and live in a rural municipality.
The restriction is not applicable in areas that are target-financed by the state or if the state has granted a local authority use of its assets. The National Audit Office may audit the purposefulness, economy, efficiency and effectiveness of use of state assistance and money allocated for a specific purpose. For instance, the state gives local authorities money for payment of subsistence benefits. The purposefulness and effectiveness of use of the money can be audited by the National Audit Office.
The circle of the audited is not limited only to state authorities, legal persons in public law or local authorities. The aforementioned institutions, persons and units have established various commercial and non-profit associations and foundations for performance of various functions. The National Audit Office has the right to audit these associations and institutions, incl. subsidiaries of companies. If a city or rural municipality has founded an association or institution or participates in it, the restrictions applicable to the National Audit Office in auditing local authorities also apply with regard to auditing them.
Additionally, the National Audit Office can audit the companies where the state has a majority shareholding or that have received loans from the state or whose loans or contractual obligations are secured by the state and the National Audit Office also has the right to audit the use and preservation of state assets by persons who have been granted possession of the state assets.
In connection with funds obtained from the European Union the National Audit Office has the right to carry out audit operations in order to check the use of the European Union funds allocated via the state and local authorities and performance of the obligations assumed before the Union in connection therewith.
11/12/2009 1:26 PM
5/13/2010 4:31 PM
5/13/2010 4:31 PM