The tradition of supreme audit in Turkey, dates back to the Ottoman reforms commenced in 1839. The Turkish Court of Accounts (TCA) was set up by an imperial edict of His Majesty Sultan Aziz I on 29 May 1862 and took its place as a Supreme Audit Institution in the first Ottoman Constitution of 1876. After foundation of the Turkish Republic in 1923 it was re-established and maintained its status in the 1924, 1961 and 1982 Constitutions.
Constitutional Basis
The Turkish Constitution defines TCA as a constitutional establishment and entrusts it with the task of auditing on behalf of the Grand National Assembly (Parliament) the revenues, expenditures and property of governmental departments operated under the general and annexed budgets.
TCA is a collegiate Supreme Audit Institution, which includes elected president and members and appointed audit staff. Constitutionally and by virtue of its Law, TCA is an audit institution that also exercises judicial power.
While the auditors carry out the audit function, the colleges perform the judicial function.
Budgeting Independence
TCA is a sui generis institution which cannot be placed in any one of the traditional three branches of government and is fully independent of the executive and the legislature.
It enjoys financial independence by preparing its own budget, which is submitted to Parliament without intervention of the executive. The President is the sole authority to authorise expenditures from TCA's budget which leaves no room for Parliament to interfere with TCA's budgetary spending.
Preparation of Audit Programmes
The Turkish SAI has complete discretion in deciding what accounts and issues to look at and how and when to examine them; also in deciding whether reporting the matter in question to Parliament is necessary. TCA programmes its work
through the Audit Planning and Reporting Group which prepares an annual audit plan based on the proposals of the auditors.
Content and Timing of Reports to Parliament
Reporting to Parliament on the issues indicated by the Law of TCA, is a statutory mandate placed on the Court. Except for the "Statement of General Conformity ", The TCA Law leaves it to TCA to determine the content and timing of the reports.
Tenurial Safeguards
The President can not be dismissed from office before his seven year term of office has been completed or age of sixty five and similarly, Members cannot be discharged from office or retired before the age of 65.
As for the auditors, except for the cases specifically prescribed by law, no auditors can be terminated, deprived of their salary and other rights or can be employed in any office other than those designated for them.
Access to the Necessary Information and Documents
TCA is empowered to communicate directly with the ministries, boards, governmental departments, accountants and other responsible officials. It is entitled to have access to and examine ledgers, records and supporting documents of public and private entities either by dispatching its auditors or having them delivered to the location which it deems suitable.
The Agencies and/or Accounts Subject to TCA's Audit
The agencies subject to TCA's audit can be listed as follows:
TCA's Audit Approach while Auditing Public Funds and Resources
TCA's statutory mandate is to perform regularity audit on the basis of examining 100% of transactions i.e. all vouchers, their supporting documents, journals, ledgers and financial statements.
However, with the 1996 amendment to the TCA Law; it is given the task to examine the extent to which the agencies under its jurisdiction use their resources with due regard to efficiency, effectiveness and economy. The results of these examinations is submitted to the Parliament with assessment reports.
These reports and the other reports cited in the TCA Law are reviewed on the Budget and Planning Committee and are submitted to the General Assembly of Parliament with the opinion of this Committee.
Presentation of Audit Results
Writs
The audit mandate is discharged in a two-phase process: The first phase is the Audit of accounts and the second is the trial of these audited accounts. The end product of the process is a legal document called writ.
Reports
Another form of presentation of audit conclusions are the reports to Parliament. These reports may be classified as:
The Statement of General Conformity
Under the Constitution TCA shall prepare the Statement of General Conformity, which is an overall certificate on the state accounts and submit it to Parliament. With this Statement TCA assures Parliament that the figures and disclosures shown in the Draft Final Accounts Law fairly present the actual results of budgetary implementation.
The Statement is drafted by a Special Unit at TCA and finalised by its General Assembly.
Other Reports
The law governing TCA does not refer to a general purpose report to the legislature, but does specify the circumstances in which TCA is to report to the legislature. The subjects of such reports are as follows:
Reporting under points (a), (b), (c) and (f) above is at the discretion of TCA, whereas reporting under points (d) and (e) is required by the law.
The Organisational Structure
Professional Personnel
The President of TCA is the highest officer of the Court and is responsible for its overall functioning. He chairs the meetings of the General Assembly and may also, when considers necessary, preside over the Board of Appeals and the Board of Chambers.
The Secretary General is the President's administrative assistant. Being a Member, the Secretary General may attend the meetings of the General Assembly and the Board of Chambers. He is assisted by three principal or senior auditors who are appointed by the President as Assistant Secretary Generals.
Members of the Court are essentially members of the General Assembly. Furthermore, every member is affiliated to one of the eight chambers and also either to the Board of Appeals or to the Board of Chambers.
The Prosecutor and his deputies act in the name of Treasury and give their written opinion to relevant chambers on the audit findings stated in audit reports.
Auditors, examine the accounts assigned to them by the President and give their opinion on the account in an audit report. They are organised in Audit Groups and Audit Supporting Groups.
Colleges
TCA as a collegiate body comprises the following judicial and executive organs:
Chambers
Chambers are at the heart of the TCA judicial system. Each chamber consists of a chairman and six members, and operates as a court. The principal work of a chamber is to try the acts and accounts of responsible officials. Trial is based on auditor reports. Thus the chamber decides whether these officials are to be acquitted or held liable.
General Assembly
The General Assembly consists of the President, the Chamber Chairmen and the Members. The General Assembly discharges the duties prescribed by the TCA Law.
Board of Appeals
The Board of Appeals offers a right of appeal to responsible officers against the decisions of the Chambers.
Board of Chambers
The predominant task of this Board is to determine the advisory opinion of TCA on the financial regulations of governmental departments. It also settles disputes arising from the pre- audit of public contracts. In the cases where the concerned department or agency objects to the decision of the relevant Chamber, the Board of Chambers examines the inquiry of the auditor and decision of the relevant Chamber, and takes final decision.
Qualifications Required in the Prospective Professional Personnel
The president, members and auditors, should be graduates of the Faculty of Law, Faculty of Political Science, Faculty of Economics, the Academy of Economics and Commerce or an educational institution, home or abroad, which has been recognised by the High Educational Council.
It is also essential that the president and members have worked successfully for a period of at least ten years in the fields of finance and economics. Additionally, they should previously hold one of positions listed in the Law of TCA.
Appointment I Election Procedures
The President and members are elected by the General Plenary of the Parliament.
Auditors are appointed by the President after passing a competitive examination. They start their career as assistant auditors.
The Prosecutor and Assistant Prosecutors are appointed, upon the proposal of Ministry of Finance, by a joint-decree.
I believe it possible to note the relative nature of the notion of 'independence". In real life none of the public or human institutions can enjoy absolute independence from the state or society respectively. Absolute independence is an abstraction that, as a rule, can be assumed for the purpose of philosophical speculations or debates. In the context of practical activities of various structures of power and management "independence" is not an abstract category, on the contrary, it is a very specific one. As applied to Supreme controlling bodies, to my mind, it is expedient to speak of their independence, first of all, from the point of view of availability or lack of prerequisites essential for the Supreme controlling bodies to function properly and complete the tasks they are faced with.
I suggest we review many facets of independence of the Accounts Chamber of the Russian Federation from this perspective.
The underlying principles of relations between the Accounts Chamber of the Russian Federation and the chambers of the Federal Assembly (the Parliament) of the Russian Federation are based on the Constitution, the Federal law "On the Accounts Chamber of the Russian Federation" other statutory norms and rules of procedure of the State Duma - the lower chamber of the Federal Assembly, the Federation Council - the upper chamber of the Federal Assembly and the Accounts Chamber. The above legislative and regulatory norms constitute a legal framework where the Chamber of Accounts carries out its activities and interacts with legislative authorities. The analysis of the boundaries and the content of the legal framework prompts the following conclusions on the extent of independence of the Accounts Chamber from legislature as seen in the multifaceted context of our work.
Establishment and organization of the Accounts Chamber
The very basic principles underlying the organization of the Accounts Chamber are defined in Art. 101, 102 and 103 of the Constitution.
Thus, according to Paragraph 5 Art. 101 of the Constitution In order to exercise control over the implementation of the federal budget the Federation Council and the State Duma shall establish the Accounts Chamber the composition and rules of procedure of which shall be determined by a federal law
Art. 102 (paragraph I, subparagraph "i") gives authority to the Federation Council "to appoint to the posts and relieve of their duties the Deputy Chairman of the Accounts Chamber and half of its auditors". These norms lay foundations to both dependence and independence of the Accounts Chamber from the Parliament.
The law on the Accounts Chamber adopted by the Parliament constitutes a legal framework for the Accounts Chamber to operate, thereby holding in check possible arbitrary rule of the Parliament and other government authorities. This provides a sound basis for relative independence of the Accounts Chamber.
It is critical that neither the Constitution nor other laws do not give to the legislature any authority over the personnel structure of the Accounts Chamber - inspectors and other specialists who carry out day-to-day activities. Such issues as the strength of work force, personnel structure within the limits of allocated funds, employment and dismissal of personnel, remunerations and penalties, organization of work are outside the competence of the Parliament and an internal business of the Accounts Chamber. Independence of the personnel of the Accounts Chamber from legislative authority is a solid foundation for relative independence of the Accounts Chamber on the whole.
Planning of the Activities of the Accounts Chamber
In accordance with Art. 10 of the law on the Accounts Chamber its activities are based on annual and current plans that are made by the Chamber independently. At the same time the law grants to the Parliament the right to give the Accounts Chamber assignments compulsory for being included in its plan. In accordance with the law the plan should also include assignments from not less than one fifth of the deputies in each chamber of the Federal Assembly. The law does not impose on legislators any limitations as to the number of assignments to the Accounts Chamber. Normally the number of assignments from the Federal Assembly stands at 10-15% of the scheduled audits and inspections, sometimes this figure is higher (20%). The Parliaments assignments can make the Accounts Chamber' work more complicated, since, as a rule, they call for prompt and sometimes numerous, complex and comprehensive audits that require participation of a large number of employees from different divisions of the Chamber.
Thus, we can not speak about full independence of the Accounts Chamber from legislators as far as the planning of its activities is concerned. Yet, it would be wrong to say that the Accounts Chamber is fully dependent on the Parliament in planning its activities. To our mind, at present requests from the Parliament correlate with the total number of scheduled audits and inspections most favourably. That gives the Accounts Chamber an opportunity to combine its independence with a certain degree of dependence on the chambers of the Federal Assembly.
organization and Performance Audits. Experts' Examinations and Analyses
The Accounts Chamber is fully independent in arranging and carrying out audits, expert's consultations and analyses, including those conducted upon requests from
the Parliament. It is true for preparation of a program (scheduling specific audits, appointing auditors, insuring audit management, prioritizing checks and audits, methodological support of audits, preparation of the final report). These routine issues are in the sole competence of the Accounts Chamber and the legislature does not have the right to interfere.
Summarizing of Major Findings, Decisions on Results of Audits, Experts' Examinations and Analyses
In accordance with Art. 21 of the law on the Accounts Chamber and its rules of procedure it is the Board of the Accounts Chamber which independently sums up and takes decisions on the results of audits and experts' consultations and analyses. However, if a measure has been taken in fulfillment of an assignment from the chambers of the Federal Assembly or upon request of one fifth of the deputies, then a final decision on its results shall be taken by the Parliament. Upon getting familiar with a report made by the Accounts Chamber, the chambers of the Federal Assembly may take it into consideration, take any political decisions regarding audited entities or give the Accounts Chamber another assignment - for instance, to carry out an additional examination. No need to argue that this procedure makes the Accounts Chamber dependent on the Parliament.
As to the organization of control over execution of decisions taken by the Board of the Accounts Chamber on audit results, the Accounts Chamber is fully independent -the law does not provide for the Parliament to have its say on the matter.
By and large, speaking of the practical matters the Accounts Chamber is involved in, it can be noted that it is sufficiently independent from legislative authorities, or to be more exact, its dependence on the Parliament does not prevent the Chamber from discharging its duties. It is in the accountability of the Accounts Chamber to the Parliament that its dependence on the legislators is markedly revealed. This issue should be dealt with in more detail.
The accountability of the Accounts Chamber to the Federal Assembly is defined in a subset of articles of the law on the Accounts Chamber.
For example. Art. 2 among other responsibilities of the Accounts Chamber stipulates a regular supply of information on the progress of budget implementation and audit results to the Federation Council and the State Duma.
Art. 9 imposes as a duty of the Accounts Chamber to develop and submit to the Federation Council and the State Duma proposals on elimination of violations and distortions from the budget process as well as opinions on the implementation of the federal budget and budgets of the federal extrabudgetary funds.
Art. 14 provides for the Accounts Chamber to submit to the Federal Assembly an operative report on the implementation of the federal budget on a quarterly basis.
Art. 5 stipulates that the Accounts Chamber shall inform the Federation Council and the State Duma on the results of audits and inspections and on the damage incurred to the state and on identified violations of the law.
In accordance with Art. 20 the Accounts Chamber prepares and submits opinions or replies in writing to assignments of the Federation Council or the State Duma and to requests from committees and commissions as well as from deputies of the chambers of the Federal Assembly.
According to the results of audits and inspections and to Art. 2 the Chamber of Accounts develops and presents for consideration of the State Duma proposals to amend the budget legislation and budget process.
Besides, as the government submits a draft law on the implementation of the federal budget for the past years to the lower chamber of the Parliament as well as a draft budget for next year the State Duma instructs the Accounts Chamber to give opinions on these drafts.
Thus, the legislator establishes the following compulsory and regular forms of accountability of the Accounts Chamber to the Parliament:
Financial autonomy is the basis of independence
The Accounts Chamber of the Russian Federation has its own finances that makes it independent in this respect. This is the more, 'important under budgetary squeezes the Russian Federation is undergoing.
The given independence is predetermined by the fact that in fulfillment of Art. 30 of the law on the Accounts Chamber each federal budget provides a separate line for the costs essential for the Accounts Chamber's operations. To prevent shortfalls or delays of funds set aside to finance the operations of the Accounts Chamber, Art. 113 of the law on the federal budget for 1998 states that funds to the Accounts Chamber shall be paid on the 10th day of each month in equal amounts of 1/12 of the total sum stipulated by law. In the event these funds are not paid or fall short of the established amount, the Accounts Chamber has the right to write off the sums in question from the account of the Main Administration of the Federal Treasury in an indisputable order.
Legal Framework of the Accounts Chamber's Operations - the Sore Spot in its Independence
Legislative support is the weakest element of our independence. The legal status of the Accounts Chamber, its rights and capabilities, its place in the institutional setup and among authorities of financial control, specifically, the rights of its auditors and employees can not be considered adequate. Practically all operations of the Chamber are governed by just one Law on (The Accounts Chamber adopted in the beginning of 1995 when we lacked any relevant experience of how similar institutions should work, since in the past they did not even exist in this country. By now it has become evident that the law is far from being perfect. Though its basic norms have proved to be the right ones, the law itself lacks scope to cover all problems that life has to pose. This is normal and can take place in any country. As a rule problems of this kind are solved by amending a law more sensibly. However, Russia has not yet fully mastered the procedure to incorporate amendments to its laws. As it is now, the procedure is too complicated and overburdened with formalities and numerous considerations of momentary political advantages that more often than not do not have anything to do with the essence of amendments.
Thus, since the Accounts Chamber of the Russian Federation can not today get adequate legislative support to be functional in meeting all its targets, since adoption of new statutory acts and amendments to the effective ones is, first of all. a privilege of legislature, a complex system of relations between the legislator and the Accounts Chamber is put in place, and the Accounts Chamber is rather vulnerable within.
A possibility to adopt amendments that would extend the authority of the Accounts Chamber or improve its performance depends on deputies of the Federal Assembly. The above factors make the Accounts Chamber vulnerable to parliamentaries views.
The Accounts Chamber can not directly affect the law-making process, since the Constitution does not grant it any legislative initiative.
Today on the strength of all conditions the independence of the Accounts Chamber of the Russian Federation is on the whole sufficient to maintain a proper level of audits and inspection. But it is not sufficient to meet all the standards of the Accounts Chamber in eliminating identified shortcomings. There is not enough autonomy to be fully independent to determine a list of facilities to be audited, content of audits and inspections and to interpret their results. To our mind, considerable dependence of the members of the Board (the Chairman, Deputy Chairman, auditors) on the chambers of the Federal Assembly is the main reason for possible misrepresentation of audit results, it puts in jeopardy the continuity of the Chamber's operations and seems to be the main reason of conflicts arising within the Accounts Chamber. The members of the Board can be relieved from their duties ahead of time by the chamber of the Federal Assembly that appointed them, if not less then two thirds of its deputies vote for such decision. With the present rate of vote, members of the Board have to take into account the interests of influential deputies and groups of deputies and to be loyal to them, though such loyalty sometimes can be detrimental to the principles of independent audit.
To strengthen independence of the Accounts Chamber, to our mind, it is essential to consider the following proposals:
Another way to consolidate independence could be prolongation of the term in office. The effective norm of 6 years could be extended up to 12 years. The appointment could be even made life long as is the case in some countries.
- one third of auditors and the Chairman are appointed by the State Duma; one third and the Deputy Chairman - by the Federation Council;
- one third and another Deputy Chairman - by the President.
The more balanced composition and the combined scheme of organization would, to our mind, ensure the Accounts Chamber greater independence.
By and large, taking into consideration the fact that in its relations with legislative authorities the Accounts Chamber of the Russian Federation feels rather dependent, we are interested in strengthening our independence by progressively adjusting the legal framework within which the Accounts Chamber rjas to operate. In this respect, well aware of the great experience that ASOSAI has in strengthening independence of supreme authorities of financial control, we would appreciate any recommendations and ideas you find possible to share with us.