TALLINN, 30 August 2016 – The National Audit Office is of the opinion that the 2015 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. Accounting in state agencies, foundations controlled by the state and public undertakings is predominantly well organised and the financial statements are predominantly free of material misstatement.

The National Audit Office finds that the state's most significant economic transactions were performed according to the State Budget Act, the 2015 state budget that was adopted as an act and the act for its amendment.

The revenue collected by the state in 2015 according to the State Budget Execution Report amounted to 7.99 billion euros, which exceeded the revenue of 2014 by 111 million euros. The expenditure incurred and the investments made by the state amounted to 8.34 billion euros, which exceeded the expenditure of 2014 by 503 million euros. The state’s assets totalled 16.3 billion euros at the end of 2015 and the majority of the assets are fixed assets (forest, roads, buildings, machinery, etc.). Compared to the previous period the value of assets has increased by 51 million euros. The state’s liabilities totalled 7.1 billion euros at the end of 2015, which means that they have decreased by 38 million euros compared to the previous period. Long-term liabilities in the amount of 4.85 billion euros comprise the majority of liabilities. The state’s has loan payables in the amount of 2.9 billion euros and they have not changed considerably compared to the previous period. The state’s pension payables amount to ca 2 billion euros.

The audit revealed that the Ministry of Finance has used the money of the Health Insurance Fund and Unemployment Insurance Fund deposited with the ministry in 2015 for making the state’s payouts in addition to the settlements of the two funds, because the state did not have enough available funds. The National Audit Office is of the opinion that the State Budget Act, the Estonian Health Insurance Fund Act or the Unemployment Insurance Act do not stipulate clearly whether the Ministry of Finance has been granted the permission to do so. The National Audit Office finds that in order to avoid legal disputes and interpretations, and to guarantee legal clarity, it is necessary to obtain the explicit permission or decision of the Riigikogu that is set out in acts. The National Audit Office advised the Ministry of Finance to initiate the amendment of the relevant acts to guarantee legal clarity in whether the money deposited with the Ministry of Finance can be used to manage the state’s liquidity, and to review the liquidity risk management model used throughout the state to guarantee that the funds in the State Treasury are sufficient to cover liabilities at all times. The Ministry of Finance disagreed with the observations made by the National Audit Office, but is prepared to submit proposals to the Riigikogu for avoiding the ambiguousness of acts. The ministry also finds that the effective liquidity management principles guarantee the management of the relevant risk and they do not need to be changed.

The National Audit Office also advised to improve the planning of the state budget and the reports regarding its use. This requires planning the funds required for financing the principle activities of ministries fully in their budgets, making the planning of financial transactions more transparent, disclosing more detailed explanations of the transfers of money from one fiscal year to the next in the Consolidated Annual Report of the State, and preparing more detailed guidelines for ministries regarding the reports about their activities.

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Director of Audit of the Financial Audit Department Krista Zibo is ready to give additional explanations if requested.

The audit report prepared about the Consolidated Annual Report of the State and the audit reports concerning ministries and constitutional institutions are available on the website of the National Audit Office at www.riigikontroll.ee
 

Toomas Mattson
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• Posted: 8/30/2016 10:15 AM
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