TALLINN, 11 December 2006 - As of January 1 this year the duty of the National Audit Office is to audit the activities of local authorities. By now audits in seven local authorities have been completed. Most recently audit reports on the cities of Kuressaare, Paldiski and Kiviõli were completed.
The goal of the audits of the National Audit Office was to assess the operativeness of the internal control system applied for ensuring the lawful use of the assets and money of rural municipalities and cities, the organisation of accounting and the legality of the economic transactions. The National Audit Office found that in all three areas there are considerable deficiencies in the audited cities.
The management of the city has not thought through or sufficiently implemented the internal control opportunities for ensuring the legality of the activities of the agencies of the city. Although the audit committee of the city council has been given broad authority to audit the activities of the city government, the committees used this possibility only to a very limited extent.
The National Audit Office found serious deficiencies in fulfilment of the requirement of the accessibility of the activities of the city. The local authority is obligated to publish most of the information regarding its activities either on the website or in a manner provided by the statutes of the city. The National Audit Office found that in the audited cities a significant share of the information covering the activities of the city had not been made available to the public: for instance, the Cities of Paldiski and Kiviõli had not published the document register and job descriptions of the employees of the institution, the City of Paldiski had not published the budgets of the City and all the cities had problems with publication of legislation.
The National Audit Office identified serious problems upon budgeting and implementation of the budget. Although according to law, the draft budget must be accompanied by a letter of explanation describing the substance of the revenue and expenditure of the budget, the Cities of Paldiski and Kiviõli had not made them. Since the substance of the revenue and expenditure of the budget and the purpose of use thereof have not been described in a letter of explanation, the possibilities of monitoring the activities of the local authority and the implementation of the budget have decreased. This has also fuelled usage of the funds for purposes other than the prescribed purpose.
In addition, there were serious deficiencies in the implementation of the budget in the Cities of Paldiski and Kuressaare. According to law, the amounts designated in the budget may be used exclusively for the prescribed purpose and to the extent approved in the budget. The Cities of Paldiski and Kuressaare have not respected this requirement and have repeatedly incurred expenses not specified in the budget or exceeded the amounts designated in the budget, without applying to the Council for amendment of the budget.
The National Audit Office also found various serious deficiencies in the organisation of accounting and accounting of economic transactions in all the cities. The deficiencies have resulted in a situation where there is no comprehensive overview of the assets or the value thereof. The National Audit Office considers it a serious problem that upon entering into economic transactions the cities disregard their internal procedures and at times also break the law (e.g. upon organisation of public procurement).
The described problems exist more or less in all the local authorities audited by the National Audit Office, as a result of which the National Audit Office is planning on drawing up a summary of the problems identified during the audit and sending it to all local authorities.
Toomas Mattson
Communication Manager of National Audit Office
Telephone: 6400 777
Mob: 51 34900
E-mail: [email protected]
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Posted:
12/11/2006 12:00 AM
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Last Update:
9/17/2015 10:35 PM
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Last Review:
9/17/2015 10:35 PM