1. Audit and accountability in local government Sweden Presentation för lokal användning

2. The accountability system in local government
Municipal Council
Executive board
Committees
Auditors
Citizens
Elections every 4th year
Elected by
Accountable to
Only politically elected members of the executive board and other committees are accountable to the council
Municipal companies

3. Two levels of accountability in local government
Citizens  council general election every 4th year Council  committees/boards decision every year based on local audit

4. Local audit - characteristics in brief
The audit in local authorities is a democratic instrument; a part of the local self-government.
The audit shall contribute to protection and development of local democracy, efficiency and safety.
The Council elects at least 5 auditors, every four years. They are nominated by political parties or members of the Council.
The elected auditors are obliged to be assisted by professional auditors who conduct the audit.
Each elected auditor is an independent authority with the right to act and make separate statements. However, the Code of Audit states that the auditors should aim to cooperate in order to fulfill their task.

5. The Auditor in local government
Being an auditor in a municipal or county council is a position of trust. The aim is to examine the executives and committees with independence, objectivity and integrity.
The competence of the elected auditors is their political and democratic anchorage. They have the mission to judge if the politics and democratic directions from the Councils is fulfilled by the executives and committees.
The use of professional auditors is supposed to guarantee a well-founded audit that gives the Council enough and sufficient support for their decision in the matter of discharge from liability.

6. The Audit task The task is stated in the Local Government Act.
The auditors consider all activities/operations that executive board and other committees, as well as the companies (owned by the local government), perform every year.
The task is to audit and judge if: …operations have been conducted consistently with their purpose stated by the Council, and in a financially satisfactory manner. …the internal control has been adequate. …the accounts are correct.
The audit is to be carried out according to “Code of Audit in Local Government”.

7. Code of Audit in Local Government
The Local Government Act states that the audit is to be conducted in accordance to a Code of Audit in Local Government.
The Code states and documents the main principles for the audit.
The Code gives an commented interpretation of the audit task.
The Code is a guideline/audit standard for the audit process and the audit report – also the process of discharge from liability.
The Swedish Association of Local Authorities and Regions through the Audit Delegation renews the code every 4th year.

8. Code of Audit in Local Government

9. The rule of conduct/independence
The Auditors …choose independently what to audit …choose independently methods, ways and experts …make independent analyses and judgment.
The Auditors do not act party-political in their auditing role.
They do not perform consultant work in their auditing role.
They safeguard their integrity, therefore disqualification and eligibility concerning anyone of the auditors’ is pointed out in the audit report
They perform their task fulfilling the demands of both citizens and the Council in regard to objectivity, efficiency and competence.

10. The Auditors relationship with the Council
The council appoints the auditors’, who are nominated by the political parties.
The Council is the auditors’ principal and communicate local auditing regulations.
The Council decide on the auditors’ budget.
The Council is the receiver of the audit report and decide in the matter of discharge from liability.
The Council has to motivate their decisions.

11. What is audited?
 The accountability of boards, committees and politicians.
With focus on steering and management, internal control, corporate governance, comprehensive view, cooperation and interaction.
 Different activities of boards and committees With focus om result, quality/effects and economy according to missions, objectives and budget Effectiveness and efficiency. Organisation and leader ship. Comparisons, benchmarking.

12. What is audited?
 The local authority as one unit From a corporate governance perspective.
 Matters of trust Representation, travelling, cars….
Processes and funcions, systems and routines, security
Financial audit, compliance audit and performane audit

13. Judgement of accountability
Every member in the executive board and other committees is politically elected to the position and are accountable for their actions to the Council and to the citizens.
The accountability is collective for the whole executive board or committee as well as individual for each member.
The auditors judge their accountability - whether or not they can be discharged from liability. The auditors can also direct a remark to a board or committee.
The auditors express their judgement in the audit report
The council makes the final decision upon discharge or not.

14. Discharge from liability and remark; auditors judgement
Not to discharge liability
- obvious and major shortcomings in operations
- previously criticized shortcomings or remarks are not corrected
About 7 cases each year
Remark
- severe shortcomings in operations
- “warning” - if the cause for the remark is not corrected it can lead to a recommendation of not being discharged from liability the next year.
About 30 cases each year