We will target audits at administrative reforms and balancing central government finances
Finland's public finances are facing significant challenges. Therefore, our upcoming audits will focus not only on the significance of the topic for central government finances but also on reforms of public administration. We will also pay particular attention to measures required to balance central government finances.
As its name suggests, it is the task of the National Audit Office to audit the state’s financial and asset management. We also monitor fiscal policy and oversee political party and election campaign funding. We aim to ensure, for our part, that state funds are spent for the purposes designated by Parliament prudently, efficiently and in compliance with the law.
We want to work in close cooperation with the central government and our other stakeholders, because it is important that our activities enjoy broad confidence in society. We earn this confidence by performing our statutory tasks with the highest quality and maximum impact.
The National Audit Office will get the new organisation model it needs
When I took up the post of Auditor General at the beginning of 2022, the most important part of my induction was one-to-one discussions with the employees. These 150 discussions gave me an opportunity to hear every employee’s opinion on what is good and worth preserving at the agency and what should be changed.
The employees’ most important wish was to clarify the current, complicated organisation model. This work is underway, and a new model will be introduced at the beginning of 2023. In the future, the National Audit Office will be divided into three units: a monitoring unit, an audit unit and a shared services unit. The organisation is simple and enables a clear allocation of responsibilities. The model also links immediate supervisory work more closely with the activities.
We have continued to develop our guidelines and practices related to financial and other administration. The work is based on the observations made by the Parliamentary Audit Committee in its report last year.
The National Audit Office has maintained high quality in its activities. Thanks for this are due to the professional staff of the National Audit Office. We will continue to develop our activities so that we can further improve our societal impact. The new organisation model will support the achievement of this objective. In the new model, we will also be better able to direct labour inputs to the agency’s basic tasks: audit and monitoring.
However, it is not enough to merely carry out the reorganisation. The National Audit Office’s management and various processes and practices must be aligned and enable uniform ways of operating as well as flexibility in operations.
We direct labour inputs to the agency’s basic tasks: audit and monitoring.
During the annual report period, we have also been preparing for our new tasks. The National Audit Office will be the controller responsible for maintaining the transparency register, or lobbyist register, which is to be established. We will also supervise compliance with the related reporting obligations. The National Audit Office has also been assigned with the new task of auditing the wellbeing services counties, which will start operating in 2023. In addition, as the end of the current strategy period is approaching, we will have to review the National Audit Office’s strategy in 2023. Thus, we have a lot to do, but the direction is correct and clear.
Our audit recommendations are well addressed in public administration
Our audit reports provide recommendations for remedying or developing activities in the audited administrative entity. Through follow-ups, we monitor whether public administration has taken measures as a result of our recommendations.
Our follow-ups have shown that our recommendations are well addressed in public administration: 85 per cent of the recommendations we had made in financial audits were implemented in 2021. According to the follow-ups carried out in 2021, 82 per cent of the recommendations we had made in performance, compliance and fiscal policy audits had been implemented either in full or in part.
The main deliverables of our basic tasks, audit and monitoring, are reports. The total number of audit reports has remained relatively stable in the 2011–2021 reference period.
Financial statements provide a reliable picture of the central government’s financial position and cash flows
In this annual report, we present our main audit findings for the report period, i.e. from autumn 2021 to autumn 2022. The key theme of the conclusions drawn in the performance audits is that the central government needs long-term and comprehensive planning and financing, as well as concrete and measurable objectives. On the basis of the financial audits conducted, there were very few shortcomings in the financial statements of the central government accounting offices. However, there were still many procedures contrary to the budget.
The central government needs long-term and comprehensive planning and financing, as well as concrete and measurable objectives.
Chapter 1 compiles the observations made in the audits targeted at the social security reform and the reform of the student financial aid scheme, as well as at the central government measures aimed at supporting economic activities and growth. A significant observation is that the costs and overall impacts of the modification and development of benefit and support schemes cannot always be sufficiently foreseen or verified.
Chapter 2 presents the key results of the compliance audits conducted and the 61 financial audit reports for 2021 issued by the National Audit Office to the central government accounting offices. The government agencies’ final accounts of 2021 provide mostly true and fair information, but there were still many procedures that were contrary to the budget and that led to cautions. During the annual report period, we targeted compliance audits at the state pension scheme and the management of grants awarded from the proceeds of gambling activities. We concluded that the government liabilities arising from other pension schemes should be reported more comprehensively. The supervision, transparency and effectiveness of grants awarded from the proceeds of gambling activities should be improved.
In chapter 3, it is stated, based on the audits of organisational mergers, competence development, recruitment and climate finance, that the activities of public administration have not been planned sufficiently systematically in all respects. Good management of central government finances requires public administration to operate according to plan. Sufficiently concrete long-term objectives lay the foundation for systematic planning and for steering and monitoring the activities, cost-effectiveness and financial impacts of public administration.
Chapter 4 reports on the impacts of our own activities, the societal significance of our work and our preparations for our new tasks.