Accountability: an EU perspective Raymond Hill European Commission March 2017

Content Accountability – more than just another buzzword! Managerial accountability – the answer to everything? Internal v External accountability So – you want to improve accountability then… Oh dear! There are some limitations to accountability

Accountability – an icon of good governance For PIFC reforms – what the EU is really looking for is an accountable civil service that aims to achieve national policy objectives in an efficient, effective and economic manner, and in compliance with the law. For those applying the COSO framework – decentralised managerial accountability is a cornerstone of the reforms. Nowadays, law-makers, tax payers and civil society are all demanding more and more accountability.

The EU uses the term "Managerial Accountability" Managerial accountability is a collective of Administrative performance (legality and regularity), and Managerial performance (achievement of objectives and efficiency). Accountability systems tend to evolve during an Internal Control reform process, moving from administrative accountability to managerial accountability.

Internal v External Internal No one person or single part of an organisation can deliver all organisational objectives. Needs a delegation framework that allows everyone to know what to do and what they are expected to deliver. External How should an organisation demonstrate its accountability to the public?

Internal accountability Responsibility – clear division of tasks within an organisation. Authority – achieved by the delegation of decision making power and by allocating resources so that managers have the right to decide (or at least influence) how to execute the tasks for which they are responsible. Autonomy - Strategic space. More autonomy implies clarity of objectives and responsibility for results.

What do external stakeholders want to know Information on quality and timeliness of results, improving service delivery, and mitigating risks linked to adverse aspects of operations. Operations are managed with integrity and in compliance with applicable law. Controlling costs and using government resources efficiently, effectively and economically.

Some benefits of managerial accountability Improved performance, More employee participation and involvement, Increased feelings of competency, More creativity and innovation, and Higher employee morale and satisfaction with the work.

Improving accountability sounds easy So what are the challenges to defining and implementing accountability systems?

Typical challenges encountered There are many types of accountability – how to define it? Lack of understanding of managerial accountability: managers try to control every detail. Lack of delegation or unclear delegation procedures do not allow to identify managerial responsibilities. Internal auditors and financial staff are not sufficiently independent – they may not feel able to tell 'the truth'.

Improving accountability - Policy recommendations Devise a managerial accountability framework Strategic planning that links the government's overall vision to organisational objectives Operational planning that links operational objectives to resource requirements Guidelines for risk management Guidelines for the use of discretion Protection of whistle-blowers Key performance indicators

Improving accountability – what the top manager can do Make annual objective setting a serious business function – not a bureaucratic exercise Align employee and organisational objectives Monitor progress on objectives Make candid staff evaluations Do not avoid conflict Be a role-model

Some limitations of managerial accountability Inconsistency of time Incompetence or negligence of staff Risks in public performance reporting Genuine errors

Conclusions Accountability reforms have shifted attitudes from reliance on rules towards discretion, flexibility and performance. Accountability is not just unidimensional or linear. There are different degrees of desired accountability in different EU Member States. Accountability reforms are often interlinked with public administration reforms and public financial management reforms.

Types of accountability Based on the nature of the forum Political Legal Administrative Professional Social Based on the nature of the actor Corporate Hierarchical Collective Individual Based on the nature of the conduct Financial Procedural Product Based on the nature of the obligation Vertical Diagonal Horizontal

Managerial accountability – measuring maturity levels Basic – Basic Internal Control mechanisms are present. Objectives are stated at a basic level. Developed – Managers can influence the scope of work in their area of responsibility. Funds are linked to some degree to performance targets Advanced – Managers maximise the added value of their service. Delegation of responsibility and authority is in place. Results and budget are very closely related.

Principles for effective accountability Clearly defined roles Clear performance expectations Balance between opportunity and risk Balanced expectations and capacities Credible reporting Reasonable review and adjustment