SPANISH COURT OF AUDIT PUBLIC AIDS AND SUBSIDIES: ACCOUNTABILITY AND TRANSPARENCY

SPANISH COURT OF AUDIT MODALITIES Multiplicity/plurality of public aids: – Direct/indirect ones – Monetary/non monetary ones – Importance of monetary public aids to the private sector Multiplicity of donors and beneficiaries Multiplicity of functions: – Redistribution of income – Impetus and promotion of certain activities – Relevance of the financial and social scope

SPANISH COURT OF AUDIT ESSENTIAL CHARACTERISTICS Public character of the goal foreseen Implementation by the private sector Combination/confusion of public/private interest Public-private cooperation

SPANISH COURT OF AUDIT IMPORTANCE OF PUBLIC AIDS Quantitative: Important amounts of public expenditure is channeled through public aids Qualitative: They affect important economic sectors (research…) and they are also addressed to areas of great impact and social sensibility Neccessity to guarantee public aids control

SPANISH COURT OF AUDIT CURRENT REGULATION IN SPAIN Background: Motion of the Spanish Court of Audit highlighting the need of providing the granting of subsidies of an appropriate regulation Current legislation: Law 38/2003 of November 17, General Subsidies Act, and subsequent Regulations. Their purpose is to regulate the granting of subsidies by all public administrations

SPANISH COURT OF AUDIT ESSENTIAL NOTES Limitation of the concept of grant: – A monetary contribution, without financial compensation, subject to a specific goal. – Different actions not included in the concept of subsidy Collection of Information : – National database of subsidies. – Access of the Court of Audit to the database (managed by the Ministry of Economy and Finance).

SPANISH COURT OF AUDIT CONTROL SYSTEM Internal control by the Administration – Extensive mandate in current legislation – Capacity to require reimbursement – Sanctioning capacity – Submission of annual report to the Spanish Court of Audit. External control by the Court of Audit – Audit mandate on all kind of public aids – Jurisdiction funtions in relation to accounting responsibilities

SPANISH COURT OF AUDIT MANAGEMENT OF PUBLIC SUBSIDIES Guiding principles: – Publicity, transparency, competition, objectivity, equality and non discrimination – Effectiveness in achieving objectives – Efficient use of public funds

SPANISH COURT OF AUDIT RELEVANCE OF TRANSPARENCY Principle incorporated into national legislation Basic principle in the functioning of a democratic state Guarantee of transparency along the successive phases of the process It implies greater citizen participation

SPANISH COURT OF AUDIT IMPLEMENTATION OF THE PRINCIPLE OF TRANSPARENCY Drafting of an strategic plan: goals, time- schedule, costs, financing Approval and publication of the rules/basis for granting each type of public aid Publication of the call for requests, requirements, eligibility criteria Publication of grantings in the Official Journal

SPANISH COURT OF AUDIT PUBLICITY OF BENEFICIARIES Appropiate publicity should be given to the funding received and to the public nature of the funded activities or performances. Possible claim for the refunding of amounts received, when publicity requirements are not covered. Incorporation of information into the National database.

SPANISH COURT OF AUDIT RESPONSABILITIES Different types of responsibilities: – Administrative – Accounting – Criminal Different responsible managers: – Public Managers – Associate agencies – Beneficiaries and responsible people for the subsidized activity.

SPANISH COURT OF AUDIT ACTIVITY OF THE SPANISH COURT OF AUDIT Auditing function: – Review of the entire process: granting- performance-justification. – Different procedures of justification: Market prices, expert accreditation, auditor, modular … – Singularities of the assessment attending to the private nature of the beneficiary. – Implementation of agreements with the beneficiary. – Auditing experience (1/3)

SPANISH COURT OF AUDIT Activity of the Spanish Court of Audit Specificities of the audit of political parties’ activities: - Recipients of subsidies for their ordinary operation and for electoral campaigns. - Specific regulation for their audit by the Court of Audit. - Relevance of this audit (2/3)

SPANISH COURT OF AUDIT Activity of the Spanish Court of Audit Jurisdictional function: - Requirements : Financial damage caused by the manager of the granted public funds Unfulfilment of budgetary/accounting regulations Acting with intent, fault or negligence (3/3) -Procedure -Goal: Reimbursement of damaged funds

SPANISH COURT OF AUDIT CONCLUSION Relevance of the public granting activivity. Need for an appropiate legal framework for the development of this activity Contribution of SAIs for this activity to take place with full transparency Contribution of SAIs by demanding responsibilities incurred in this activity Control as a guarantee of transparency and citizens’ participation