1. Meeting of the „Resolution 6” CC Task Force
Potential responsibilities of the EU SAIs in the area of the EU statistics
Meeting of the „Resolution 6” CC Task Force
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND
Tallin, Estonia, January 2013

2. Changes in the European statistics
January 2010 was a milestone for EU statistics Eurostat declared that the Greek authorities must have "deliberately misreported" their deficit data.
It was a spur to the changes in the European statistics.
Impact on the EU SAIs – therefore the issue of the Commission’s investigations concerning the manipulation of national statistics has been included in last year’s Contact Committee Resolution No 6.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

3. Content of the presentation
Current developments in the area of the EU statistics (issues concerning the SAIs).
Potential impact of these developments on the activities of SAIs.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

4. Assessment of data quality
In the context of the excessive deficit procedure exercise, the Commission has been entrusted with the task of assessing the quality of data reported by Member States.
The inaccuracy of the Greek statistics (and similar minor cases in Portugal and Spain) demonstrated that the existing system did not sufficiently mitigate the risk of providing Eurostat with the substandard data.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

5. Eurostat’s new strategy
Focused on the prevention of the risk of irregularities in accounts of the general government of Member States.
Eurostat strives for ensuring that the SAIs take part in audits of regularity of upstream data which are basis for those accounts.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

6. Participation of SAIs
New legal acts provide for the SAIs’ participation - rather little specific, refer mainly to the SAIs of the euro area, but a general tendency for imposing tasks on the SAIs is clear.
This situation will be described on basis of two examples:
valid legal act: Commission delegated decision
Eurostat’s practice related to the Upstream Dialogue visits.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

7. Commission delegated decision
Commission delegated decision of 29 June on investigations and fines related to the manipulation of statistics, etc. (EU Official Journal L 306/21 of ).
Article 2, section 2:
each supreme audit institution of the euro area may be invited to assist and participate in the investigation conducted by the Commission (Eurostat) in the Member State in case of a suspicion that the Member State misrepresents actual deficit and debt data.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

8. Commission delegated decision (cont.)
Article 2, section 2 cannot be interpreted in a way that there is any obligation imposed on the SAIs, because it refers to the „possibility of inviting (…) supreme audit institutions”.
Provisions do not provide for any consequences when an SAI refuses to accept the invitation nor for any other responsibilities (activities) to be performed by the SAIs.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

9. Ambiguity of provisions
No threat to the SAIs’ independence but some difficulties and problems might result from the ambiguity of the provisions (delegated act fails to give more specific indications on the role and tasks of SAIs in this context).
Many questions arise like those from the position paper developed by the Austrian Rechnungshof:
the procedure (e.g. What do the wordings “assist and participate in the investigations” concretely mean? Who audits? Who authorises whom?);
the audit methodology (e.g. Which auditing standards and methods?)
reporting and responsibility of SAIs (e.g. Who bears responsibility? Who is therefore accountable to whom?).
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

10. Commission draft regulation
The same comments may refer to Article 7, section of the Commission draft regulation (COM(2011) 0821) that concerns Member States in the euro area with an excessive deficit („two-pack”).
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

11. Invitation to UDV
2010 revision of Regulation on quality of statistical data in the context of the excessive deficit procedure, grants Eurostat powers to operate a system of regular monitoring of upstream public finance data.
Eurostat conducts more intense visits and extends them to public entities supplying upstream data to the National Statistical Institutions (so called “Upstream Dialogue visits”).
Participation of SAIs in Upstream Dialogue Visits concerns all Member States.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

12. Objective of UDV
Visits are designed to identify risks or potential problems with respect to the EDP reporting system.
Their main objective is to assess practices regarding the management and control of the flows of public finance data that come from public entities to National Statistical Institutions and are used to compile the budgetary deficit and public debt.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

13. Cooperation between Eurostat and SAIs
The cooperation with SAIs can be of importance for the Eurostat as regards the level of assurance that could be assigned to this data.
At the beginning of each visit in a given country, the Eurostat’s delegates want to visit the SAI – if the SAI agrees – to obtain information on the risk level, and then meet with selected institutions (also with the SAI’s participation).
Such visits are to be organised by the NSIs, but Eurostat decides on the agenda and chairs all meetings with the upstream data providers.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

14. Optional participation
SAIs are not obliged to participate in Eurostat’s visits.
SAIs cooperate on a daily basis with other state bodies – on issues of auditing or others, such as enhancement of the public finance system.
The Treaty defines general rules for cooperation of the Member State’s institutions with the EU bodies.
Therefore, it would be hard to imagine a situation in which a National Statistical Institution invites a SAI representative for a meeting with Eurostat representatives, and the SAI refuses to attend unless there are some serious obstacles difficult to overcome.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

15. Imposing further tasks requires considering a specific situation.
Impact on the EU SAIs
SAIs have been established as national bodies which operate within the national legal order to the benefit of Parliament and other bodies of its Member State, and its citizens.
Imposing further tasks requires considering a specific situation.
In some cases, adding new tasks is not an issue, in others – it may cause serious problems.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

16. Limited resources
There is a question of SAI resources which are always limited and which – typically – are hardly enough to carry out “normal obligations”.
Risk that undertaking tasks for EU bodies can make it difficult for the SAIs to perform their main tasks.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

17. Required deep analysis
We - as the European Union citizens – are aware that the integration influences, at least indirectly, all public bodies in our countries.
However, it does not mean that we approve uncontrolled processes of imposing additional tasks on national bodies, not based on deep analysis and assessment.
Presented situations lack such analysis.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

18. Conclusion
The EU SAIs should have the possibility to assess and present their position on draft EU legal acts which may directly or indirectly influence their status, rights or obligations, or which deal with other issues of the public external audit or audit system in Member States.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND

19. Thank you for your attention.
Dr Jacek Mazur / Advisor to the President of the NIK
SUPREME AUDIT OFFICE OF POLAND