Activity of the National Treasury in administration of public funds: failure of internal control

7/10/2003 | 12:00 AM

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TALLINN, 10 July 2003 - The SAO audited the activity of the National Treasury in administration of state cash-flow in 2002. The SAO concludes that there were no shortcomings in the calculation of expenditure and in the making of investments, but insufficient inspection of the National Treasury enables unlawful and inexpedient use of budgetary funds by authorities. Also, the SAO is not certain if accounting records cover all state revenue and whether all revenue is made public.

The above opinion is based on the main findings of the audit:

  • the Treasury has adhered to the State Budget Act and regulations of the Government of the Republic in the making of investments;
  • expenditure in the state budget shows the sums actually paid from the state budget on a cash basis;
  • it is not possible to determine and compare with the bank turnover that all revenue recorded by the National Treasury has in fact been paid into the state budget is not possible; 
  • the National Treasury is not fulfilling the obligation stipulated by law and a regulation of the Minister of Finance to inspect the lawfulness and expediency of payments from the state budget.

The SAO offered proposals to improve the situation, most of which were accepted by the Ministry of Finance. Due to the severity and immediacy of the above-mentioned problems, the SAO is also inspecting the realisation of the proposals in the course of an audit that is presently being conducted, which is to give an opinion on the report on the implementation of the state budget of 2002 by September 1.

The National Treasury is a Department of the Ministry of Finance with its main function being management of state cash flow liquidity, i.e., administration of all state budget revenue, payments from the state budget, and investment of funds available in the state budget and state reserve funds. The revenue collected into the National Treasury was 29.2 billion kroons, and payments were made in the amount of 26.8 billion kroons within 10 months in 2002. The amount of funds administered by the National Treasury was 8.2 billion kroons as of 31 October 2002.


Sven Soiver
Press Representative of State Audit Office
Telephone: (372) 640 0787
GSM: (372) 53 414464
E-mail: Sven.Soiver@riigikontroll.ee

  • Posted: 7/10/2003 12:00 AM
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