1. PARLIAMENT’S ROLE IN PUBLIC FINANCE OVERSIGHT – CASE OF SLOVENIA Milan Martin Cvikl Member of Parliament, National Assembly of Slovenia (former State Secretary Public Finance & former Minister for EU Affairs) PEM PAL, Istanbul, February 27, 2008

2. 2CONTENT PARLIAMENT’S ROLE IN BUDGET CYLE PARLIAMENT’S ROLE IN BUDGET CYLE TYPE OF CONTROL TYPE OF CONTROL INTERNAL CONTROL & EXTERNAL CONTROL IN SLOVENIA INTERNAL CONTROL & EXTERNAL CONTROL IN SLOVENIA ROLE OF PARLIAMENT & COMMISSION FOR PUBLIC FINANCE CONTROL (PAC) ROLE OF PARLIAMENT & COMMISSION FOR PUBLIC FINANCE CONTROL (PAC) MAIN TASKS OF THE COMMISSION & EXPERIENCES OF 13 YEARS IN SLOVENIA MAIN TASKS OF THE COMMISSION & EXPERIENCES OF 13 YEARS IN SLOVENIA DISCUSSION OF AUDIT REPORTS IN COMMISSION – OLD & NEW PRACTICES DISCUSSION OF AUDIT REPORTS IN COMMISSION – OLD & NEW PRACTICES CONCLUSION & SOME PROPOSALS CONCLUSION & SOME PROPOSALS

3. 3 Parliament’s Oversight is about strengthening Budget Cycle... Execution Accountintg & Reporting on Execution Internal and External Audit and Adoption of Annual Accounts & Discussion of Audit Reports in Parliament Preparation,Negotiations and Adoption of Buget TRUST IS GOOD, CONTROL IS EVEN BETTER

4. 4 TYPE OF CONTROL BY TIME AND LOCATION EX-ANTE : EX- POST CONTROL EX-ANTE : EX- POST CONTROL INTERNAL : EXTERNAL CONTROL INTERNAL : EXTERNAL CONTROL

5. 5 INTERNAL CONTROL Internal control & joint accounting (MFERAC system) Internal control & joint accounting (MFERAC system) Internal audit (Joint Services, Accreditation & Decentralized) Internal audit (Joint Services, Accreditation & Decentralized) Budget Supervision Office reporting to Gov’t & Parliament biannually Budget Supervision Office reporting to Gov’t & Parliament biannually

6. 6 EXTERNAL CONTROL in SLOVENIA AS EU Member I. Court of Audit of the Republic of Slovenia (SAI) – since 1995 II. National Assembly of the Republic of Slovenia – started 1995, stronger since 2004 III. European Court of Auditors – since 2004 IV. European Commission – since 2006

7. 7 NATIONAL ASSEMBLY OF THE REPUBLIC OF SLOVENIA Parliamentary questions & motions Parliamentary questions & motions Interpellations of ministers Interpellations of ministers Impeachment of Gov’t, PM Impeachment of Gov’t, PM Budget discussion & adoption Budget discussion & adoption Commission for Public Finance Control (Slovene PAC) Commission for Public Finance Control (Slovene PAC)

8. 8 ROLE OF SLOVENE PAC - PUBLIC FINANCE CONTROL COMMISSION controls the implementation of the state budget and the financial plans of the Pension and Health Fund and public RTV; controls the implementation of the state budget and the financial plans of the Pension and Health Fund and public RTV; monitors the implementation of the budgets of local communities which receive financial resources to balance their accounts, monitors the implementation of the budgets of local communities which receive financial resources to balance their accounts, controls the implementation of financial plans and the accuracy of the financial statements of public funds, public enterprises, and public institutes founded by the Republic of Slovenia; controls the implementation of financial plans and the accuracy of the financial statements of public funds, public enterprises, and public institutes founded by the Republic of Slovenia; reports to the National Assembly on the control performed and proposes necessary measures reports to the National Assembly on the control performed and proposes necessary measures

9. 9 MAIN TASKS OF THE COMMISSION discussion of the annual financial statement of the state budget (report on implementation of programs by budget users) discussion of the annual financial statement of the state budget (report on implementation of programs by budget users) discussion of the reports of the Court of Audit (up to 100, 50 annually discussed) discussion of the reports of the Court of Audit (up to 100, 50 annually discussed) discussion of the report of budget inspection ( biannually and as needed) discussion of the report of budget inspection ( biannually and as needed) discussion of the reports of the supervisory bodies of public funds and companies; discussion of the reports of the supervisory bodies of public funds and companies; the Commission is working body responsible for discussing laws relating to public financial control, and the working body concerned when laws related public finance (local financ., borrowing, parafunds etc.) the Commission is working body responsible for discussing laws relating to public financial control, and the working body concerned when laws related public finance (local financ., borrowing, parafunds etc.)

10. 10 DISCUSSION OF AUDIT REPORTS Setting the agenda: Regular vs. Value for Money Reports (Value for Money, Results. Oriented Budgeting) Setting the agenda: Regular vs. Value for Money Reports (Value for Money, Results. Oriented Budgeting) Persons invited to meeting – Ministers vs. Technocrats - Witnesses Persons invited to meeting – Ministers vs. Technocrats - Witnesses Discussion in OLD APPROACH: among members and against SAI Discussion in OLD APPROACH: among members and against SAI Discussion in NEW APPROACH: directed toward audited institutions (witnesses) Policy making vs. Best implementation Discussion in NEW APPROACH: directed toward audited institutions (witnesses) Policy making vs. Best implementation Decisions, recommendations: OLD vs. NEW Decisions, recommendations: OLD vs. NEW

11. 11 WHO SITS WHERE: NEW – PAC APPROACH

12. 12 The IDEAL PAC (Public Accounts Committee Westminster) process Prepare PAC brief Produce a commenta ry on the Treasury Minute Draft PAC Report Chairman’s pre- briefing Attend PAC Debriefing note Debriefing meeting Team preparation for PAC AC 16/02 AC 14/03 “Reports that count” And AC 05/05 Guidance Attend PAC to agree Report CURRENT SITUATION IN SLOVENIA

13. 13 CONCLUSION (1 of 2) Establish and have strong, independent, supreme audit institution Establish and have strong, independent, supreme audit institution Establish a parliamentary control body – opposition to work with minister of finance Establish a parliamentary control body – opposition to work with minister of finance Utilize all internal & external control bodies Utilize all internal & external control bodies

14. 14 CONCLUSION ( 2 of 2) Parliament SHOULD be an ally of MoF and of Auditors in improved PEM and in ensuring control Parliament SHOULD be an ally of MoF and of Auditors in improved PEM and in ensuring control Utilize independence & power of supreme audit institution (SAI) Utilize independence & power of supreme audit institution (SAI) Forget POLITICS, IT IS about PERFORMANCE of the Government as an Industry of Services Forget POLITICS, IT IS about PERFORMANCE of the Government as an Industry of Services

15. PARLIAMENT’S ROLE IN PUBLIC FINANCE OVERSIGHT – CASE OF SLOVENIA THANK YOU FOR YOUR ATTENTION !!! milan.cvikl@dz-rs.si