TALLINN, 16 November 2023 – Yesterday auditor General Janar Holm gave a presentation to the parliament on the annual report of the National Audit Office, which addresses the choices of the Estonian electricity system and the challenges for the next decade. The Auditor General emphasised that the affordable price of electricity should be given more attention when making choices for the security of electricity supply. In addition, the Auditor General mentioned the need to speed up the introduction of money from European structural funds and warned that the former flexibility and simplicity in resolving state issues is disappearing.

In the introduction, Janar Holm pointed out that this year, for the first time in history, the National Audit Office was unable to give an assessment on the accuracy of the amount of labour costs or the lawfulness of the use of budgetary funds for labour costs in the area of governance of the Ministry of Internal Affairs. The amount of money that could not be audited is more than 300 million euros and it accounts for nearly 25% of the labour costs of the central government. 

The Ministry of Internal Affairs did not provide the data of personnel costs necessary for the audit, giving inappropriate reasons for this. This example concerning the Ministry of Internal Affairs is indicative of a broader practice of state institutions to cover up and conceal completely ordinary information.

“The openness of the public sector and the simplicity and practicality of solutions in resolving various state issues has been characteristic of Estonia since the 1990s. At least that’s how we have liked to see ourselves,” the Auditor General said. “But this urge and attitude is unfortunately disappearing. Sometimes in a geometric progression. We have heard a lot of caricatural examples of how documents are sealed with a stamp designating them for internal use for many years.”

The Auditor General pointed out that the members of the Riigikogu are also not given information necessary for their work. “The right of a member of the parliament to receive information is directly based on the Constitution, and there is no legal basis to restrict this right, even in the case of trade secrets.”

Holm mentioned that although for some institutions it seems a safer choice to not share data, the fear of disclosing information can have serious consequences at critical moments. This year, the National Audit Office assessed the preparedness of ministries and their subordinate institutions to comply with the National Defence Action Plan and found significant deficiencies in this preparedness.

“One of the results revealed was that because the sub-plans of ministries are confidential, several subordinate institutions of ministries or providers of vital services who should prepare for a national defence crisis and perform the agreed functions when a crisis breaks out do not know what is expected of them,” the Auditor General said. He noted that it is up to the Government Office and the ministries to find a way to share information and make the obligations in the field of national defence clear to those who are responsible for them.

In his presentation, the Auditor General also talked about the use of European funds, admitting that we have managed the use of funds better than many other countries. At the same time, he pointed out that since 2017, an average of 318 million euros per year has remained unused and not funnelled into the economy in Estonia compared to what was optimistically forecast and planned.

According to Holm, it is a concern that the start of each new budgetary period is several times slower than in previous periods. While during the period 2007–2013, payments were made in the first three years to the extent of 13 percent and in the first three years of the period 2014–2020 to the extent of 8 percent, now, in the period that commenced in 2021, payments have been made in the first two years and ten months to the extent of 1.7 percent.

“In order to make the most of the opportunities to boost the Estonian economy, it is high time to address the root causes of delays, reduce bureaucracy and simplify the rules,” Holm said.

The core message of the annual report of the National Audit Office is that Estonia needs a concrete and realistic answer to the question of how it is guaranteed that in the future, our household and commercial consumers have access to the necessary quantity of electricity at all times and, any time, at an acceptable price. The price of electricity needs much more attention than before when making future choices.

Th Auditor General admitted that the choice is not an easy one to make. “When making choices, we must find a balance point, because if we do something too much, the result will be too high price for the electricity. And if we do too little, the consequence will be also too high price for the electricity,” Holm said.

The Auditor General emphasised that, due to its location and the security situation, Estonia must also be prepared for the disruption of some part of the electricity system, in which case it must be possible to replace one element of the system with another.

Priit Simson
Head of Communications of the National Audit Office of Estonia
+372 640 0102
+372 5615 0280
[email protected]
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http://www.riigikontroll.ee/

• Posted: 11/15/2023 2:44 PM
• Last Update: 11/16/2023 2:57 PM
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