Remuneration of Judges: a European Perspective DISCLAIMER The views expressed in this publication do not necessarily reflect the views of KNF dr Piotr Staszkiewicz* * Head of the unit, Financial Supervision of Investment Institution Commission of Financial Supervision KNF, tutor at Collegium Civitas Poland

Basic issue Standard for remuneration decision: –Market based –Budget based –Mixed system Linked issue –Budget approval procedures –Or monitoring of the market level Some solutions –EU – standardized budget –PL – mixed system (market base but budgeted salaries) Piotr Staszkiewicz2

Remuneration function Attract the professionals (or best trainee) Safeguard the independence Refrain from influence Balance the power of decision against the impact to the supervised system Maintain the continuance of the engagement and inflow of professional experts Balance the market supply and demand for the professionals with the rare experience Balance the taxpayers burden versus control efficiency Piotr Staszkiewicz3

Remuneration as part of work compensation and family Elements (E.G. EU) – Basic salary –Allowances Expatriate alliances House hold allowance Dependent child allowance Cost of schooling for kids Relocation allowance –Tax deductions Stability aspects (E.G. PL) Fixed term agreements Appointment to the post Strict rules for call back Holiday 2x6 for health 13 salary (annual salary) Bonuses (efficiency) Piotr Staszkiewicz4

Categories of staff - Types of employment (EU) Permanent official Contract agent Temporary Agents (Non-permanent Staff)Temporary Agents (Non-permanent Staff) Interim Staff Trainees Seconded National ExpertsSeconded National Experts Source: Civil servants in the Institutions are divided into two functions groups – administrators and assistants. In parallel, there is a linear career system which consists of 16 levels (grades). The administrator function group (AD) covers grades 5 to 16. New staff generally enter this group at grade 5. The assistant function (AST) covers grades 1 to 11 (overlapping with Administrators in grades 5-11). New staff usually enters at grades 1 or 3. Management positions: The Institutions have their own specific approaches towards recruitment for management level positions. In general, Heads of Unit are appointed from grades 9 to 14, while Directors and Directors-General occupy grades 14/15 and 15/16 respectively. Piotr Staszkiewicz5

Technicalities Remuneration level E.G.: EU Staff policy Public scheme plus adjustments for the different costs of living Scheme Grades Movements within grades (steps) annual Assessment linked AD 14- AD 16 Managerial Level Subject to revision Piotr Staszkiewicz6

Technicalities Staff policy Source: Staff regulation Piotr Staszkiewicz7

ECA vrs NIK staffing Piotr Staszkiewicz8 Source: ECA Annual Activity Report, NIK Report 2010

ECA Age profile Piotr Staszkiewicz9 Source: ECA Annual Activity Report

ECA recruitment report Piotr Staszkiewicz10 Source: ECA Annual Activity Report

Thank you 11Piotr Staszkiewicz

Procedure of financial reporting: a European Perspective DISCLAIMER The views expressed in this publication do not necessarily reflect the views of KNF dr Piotr Staszkiewicz* * Head of the unit, Financial Supervision of Investment Institution Commission of Financial Supervision KNF, tutor at Collegium Civitas Poland

High level view Budget approval Budget execution Budget report preparation European Court of Auditors opinion Opinion on European Court of Auditors Piotr Staszkiewicz13

High level issue Selection of standard –Accrual vrs Cash based –Auditing standards Selection of the “consolidation” procedures –National based vrs EU perspective Perspective –Short term operational – annual –Strategic - ca 7 years impact planning –Value EU indicative, National productive (PL=EU, in terms of value) Piotr Staszkiewicz14

High level issues current changes Shift from the cash based approach towards the accrual one (EU level, National -PL- cash based) Shift from the budgeting based on the organisation units sub budgets towards the activity based budgeting (including key performance indication and target values) Increase value of the audit procedures itself (external, internal, NAO, ECA, peer reviews) Piotr Staszkiewicz15

Overview (control system EU interaction to NAO) Piotr Staszkiewicz16 Source: ECA Annual Activity Report, NIK Annual report 2010

2009 ECA Opinion extract Opinion on the reliability of the accounts VII. In the Court’s opinion, the ‘Annual Accounts of the European Union’ present fairly, in all material respects ( 7 ), the financial position of the Union as of 31 December 2009, and the results of their operations and cash flows for the year then ended, in accordance with the provisions of the Financial Regulation and the accounting rules adopted by the Commission’s accounting officer. VIII. Without calling into question the opinion expressed in paragraph VII, the Court notes that weaknesses in the accounting systems of certain Directorates-General of the Commission (in particular accounting for pre-financing and the related cut-off as well as for invoices/cost claims) still need to be resolved. Opinion on the legality and regularity of the transactions underlying the accounts IX. In the Court’s opinion, ‘Revenue’, commitments for all policy groups and payments underlying the accounts for the policy groups ‘Economic and financial affairs’ and ‘Administrative and other expenditure’ for the year ended 31 December 2009 in all material respects are legal and regular. _____________ ( 7 ) According to the International Standard on Auditing 700 ‘Forming an opinion and reporting on financial statements’ (ISA 700, paragraph 35), the terms ‘present fairly, in all material aspects’ or ‘give a true and fair view’ are equivalent. Source: EN Official Journal of the European Union 11 Piotr Staszkiewicz17

2009 ECA Opinion extract cont’n X. In the Court’s opinion, payments underlying the accounts for the year ended 31 December 2009 for the policy groups ‘Agriculture and natural resources’, ‘Cohesion’, ‘Research, energy and transport’, ‘External Aid, development and enlargement’ and ‘Education and Citizenship’ are materially affected by error. The supervisory and control systems are partially effective in preventing or detecting and correcting the reimbursement of overstated or ineligible costs. Source: EN Official Journal of the European Union 11 Notes: - Used ISA for auditing - Actually Qualified Accounts - Finding presentation both ECA and European Commission - Accounting standards: the provisions of the Financial Regulation and the accounting rules adopted by the Commission’s accounting officer. Piotr Staszkiewicz18

EU accrual based solution Accounting regulation for budget Article In accordance with the principle of accrual-based accounting, the financial statements shall show the charges and income for the financial year, regardless of the date of payment or collection. Piotr Staszkiewicz19

EU budget Piotr Staszkiewicz20 Source: Annual Report 2009

Piotr Staszkiewicz21 EU financial statements - budget statements Source: Annual Report 2009

Reporting on ECA and NAO European Court of Auditors –Annual performance reportAnnual performance report –Clean audit opinion PWC Polish National Audit Office –Annual performance reportAnnual performance report –Audit opinion 1 for 3 years (but not implemented yet) Piotr Staszkiewicz22

Thank you 23Piotr Staszkiewicz