National Audit Office: the 2013 financial report of the state is accurate and transactions comply with regulations

Toomas Mattson | 8/18/2014 | 3:01 PM

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TALLINN, 18 August 2014 – The National Audit Office is of the opinion that the 2013 Financial Statements of the State are accurate in all material respects, which means that they give a true and fair view of the state’s financial position as well as its financial performance and cash flow for the year ended. The National Audit Office finds that the state's most significant economic transactions were performed according to the State Budget Act, the 2013 State Budget Act and its amendment act. This means that the National Audit Office did not find any significant errors in the implementation of the State Budget Acts.

State budget revenue exceeded expenditure

The state’s total revenue in 2013 according to the State Budget Implementation Report amounted to 7.67 billion euros. The state’s expenditure and investments totalled 7.64 billion euros. In 2013 state budget revenue exceeded expenditure by 30 million euros. The state’s assets totalled 12.5 billion euros as at 31 December 2013 and the majority of the assets are fixed assets. The state’s liabilities as at 31 December 2013 totalled 5.5 billion euros.

The amount of money transferred to next year is large

The state budget implementation report informs the Riigikogu and the general public about the amount of money the government has used over the year and how much of it has been transferred to the next year. In its earlier reports the National Audit Office criticised the insufficiency of the information given about the expenses transferred to the next year. For example, the amount transferred to 2014 is 536 million euros. Unfortunately, the readers of the state’s consolidated report are still looking for answers to the question as to what caused the transfer of expenses in the area of administration of each specific ministry. The reasons why money is transferred have not always been given in the annual reports of the ministries either. Considering the large amount of money transferred, the National Audit Office finds it is important that the reasons for the transfer are analysed and made public to guarantee that the use of money is transparent and budgets are planned more efficiently.

A positive change that can be highlighted is that the changes in the manner of presentation of the State Budget Act have made it easier to compare the annual state budget and its implementation report.

Reporting by ministries should be simplified

The level of accounting in the areas of government of most ministries has improved as a result of the centralisation of accounting and the implementation of single accounting software.

Simplified procurements should be given more attention

State agencies have generally observed the requirements of the Public Procurement Act when acquiring goods and services. However, the auditors still detected certain issues: there were cases where public procurements had not been carried out at all, and the number of such cases was particularly high in regard to simplified procurements; mistakes were made in choosing the type of procurement; and there were problems in the presentation of procurement reports. However, state agencies have corrected their procurement procedures and plans to eliminate the shortcomings pointed out by the National Audit Office last year.

However, the National Audit Office is of the opinion that financing reporting by ministries can be made more economical. As these annual reports have few users, the National Audit Office finds that reporting requirements should be reviewed and simplified wherever possible. This would help prevent the preparation of useless reports and thereby save time for ministries. Reporting should be updated on the basis of the principle that the data for the state’s consolidated report and financial statistics of the government sector are sufficient, but collection of excessive data as well as preparation and auditing of useless reports should stop.

Background

In order to give an opinion of the state’s consolidated report, the National Audit Office audits the accounting of all ministries, the Government Office and constitution institutions every year. In addition to this the National Audit Office checks whether state agencies have performed their economic transactions in compliance with the most important legislation: the State Budget Acts, the State Assets Act and the Public Procurement Act.

By auditing the state’s annual accounts the National Audit Office provides reassurance that the accounting indicators presented to the Riigikogu and the public give true information about the state’s financial status and performance results for the year ended and that the state budget implementation report gives relevant information about the state’s revenue and the expenditure incurred on the account of this revenue. This audit also summarises and generalises the results of the audits carried out in state agencies. The National Audit Office has given its observations about the omissions found in ministries and recommendations on how to avoid them in separate audit reports.

  • Posted: 8/18/2014 3:01 PM
  • Last Update: 8/14/2015 11:47 PM
  • Last Review: 8/14/2015 11:47 PM

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