TALLINN, 4 April 2018 – the National Audit Office finds that the centralisation of support services of state authorities has generally been successful, the quality of accounting has improved, and accounting has become more effective. It would therefore be reasonable to implement a similar model, i.e. concentrate the accounting service, in central units also in case of local governments.

It would allow saving on working time spent on doing routine accounting activities and use this time more for financial management, which helps to use public funds better and more expediently.

The government decided to transfer the financial, personnel and wage accounting of all ministries and authorities in their area of government to the State Shared Service Centre in 2015. A decision was also made to start concentrating the organisation of public procurements to the State Shared Service Centre, the objective of which is a better quality and economic savings of both carrying out public procurements as well as of the items and services to be purchased.

Audit of the National Audit Office indicates that the quality of financial, personnel and wage accounting has improved as a result of introducing common accounting standards, implementing common business software and concentrating accounting to both the support services units of ministries as well as subsequently to the State Shared Service Centre.

The improvement of the situation has been ensured foremost by the implementation of common information systems. Efficiency has also been improved by specialisation that took place in the course of centralisation, where concentrating similar work segments has enabled organising work more effectively, thereby reducing the number of employees.

According to the assessment of the National Audit Office, the State Shared Service Centre has a well-functioning internal audit system that enables providing high-quality services to state authorities.

Although the State Shared Service Centre has not been offering the service of carrying out public procurements for long, activities to date do provide a basis for concluding that accompanying risks have been taken into consideration and have been attempted to be mitigated upon carrying out large public procurements. First procurements have also obtained lower prices in comparison with earlier procurements. However, the skills of procurement specialists must be developed and harmonised in order to serve as a competence centre and offer comprehensive assistance to authorities in procurement activities.

Carrying out the project of centralising support services has proved to be one-quarter more expensive than planned. The main reason for the project being more expensive is the price increase of developing and implementing the self-service portal for state employees (RTIP), because which functionalities the project should have and what costs it would bring were not analysed thoroughly enough upon creating RTIP. However, RTIP has now been well-implemented and helps save time spent on accounting.

The actual cost of the project during the period 2010–2016 was 6.83 million euros, 4.13 million of which was used for investments and 2.7 million euros for operating costs.

As the National Audit Office finds based on the results of the audit that the quality of accounting has improved and accounting has become more effective in state authorities, it would be beneficial to analyse the implementation of a similar model in local governments, i.e. concentrating the accounting services to central units in order to improve the quality of accounting and make work more effective. It would allow saving on working time spent on doing routine accounting activities and use this time more for financial management, which helps to use public funds better and more expediently.

Background

The analysis of the Ministry of Finance carried out in 2009 revealed that the accounting function was carried out, at an estimate, by 587.3 people in state authorities, and an estimated 12.7 billion euros a year was spent on it. According to the analysis, the technological level of accounting, time spent on processing documents and drawing up reports was inconsistent in different authorities, and manual and duplicate work was common. It was also revealed that state authorities used nearly 15 different information systems for accounting, and nearly 146 authorities had no information system for personnel accounting, i.e. the entire accounting was carried out in Excel or on paper.

On 29 December 2009, the Government of the Republic decided to initiate a project for the centralisation of support services in order to free state authorities of the obligation to provide, develop and invest in support services. The objective was to make the quality and effectiveness of accounting better, improve the availability of financial and personnel information, and reduce the number of employees associated with accounting as well as operating costs accompanying them.

Centralisation of support services covered financial, personnel and wage accounting of all state authorities. The quality of accounting directly depends on the results of centralisation. High quality accounting serves as grounds for giving an accurate and transparent overview of the use of state budget funds to the public.

Toomas Mattson
Head of communications of the National Audit Office of Estonia
+372 640 0777
+372 513 4900
[email protected]
[email protected]

• Posted: 4/4/2018 8:39 AM
• Last Update: 4/4/2018 10:42 AM
• Last Review: 4/4/2018 10:42 AM