Procedure : 2014/0802(NLE)
Document stages in plenary
Document selected : A7-0128/2014

Texts tabled :

A7-0128/2014

Debates :

Votes :

PV 25/02/2014 - 5.6

Texts adopted :

P7_TA(2014)0115

REPORT     
PDF 215kWORD 106k
19 February 2014
PE 528.020v02-00 A7-0128/2014

on the nomination of Oskar Herics as a Member of the Court of Auditors

(C7-0009/2014 – 2014/0802(NLE))

Committee on Budgetary Control

Rapporteur: Inés Ayala Sender

PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION
 ANNEX 1: CURRICULUM VITÆ OF OSKAR HERICS
 ANNEX 2: ANSWERS BY OSKAR HERICS TO THE QUESTIONNAIRE
 RESULT OF FINAL VOTE IN COMMITTEE

PROPOSAL FOR A EUROPEAN PARLIAMENT DECISION

on the nomination of Oskar Herics as a Member of the Court of Auditors

(C7-0009/2014 – 2014/0802(NLE))

(Consultation)

The European Parliament,

–   having regard to Article 286(2) of the Treaty on the Functioning of the European Union, pursuant to which the Council consulted Parliament (C7-0009/2014),

–   having regard to Rule 108 of its Rules of Procedure,

–   having regard to the report of the Committee on Budgetary Control (A7-0128/2014),

A. whereas Parliament’s Committee on Budgetary Control proceeded to evaluate the credentials of the nominee, in particular in view of the requirements laid down in Article 286(1) of the Treaty on the Functioning of the European Union;

B.  whereas at its meeting of 17 February 2014 the Committee on Budgetary Control heard the Council’s nominee for membership of the Court of Auditors;

1.  Delivers a favourable opinion on the Council’s nomination of Oskar Herics as a Member of the Court of Auditors;

2.  Instructs its President to forward this decision to the Council and, for information, the Court of Auditors, the other institutions of the European Union and the audit institutions of the Member States.


ANNEX 1: CURRICULUM VITÆ OF OSKAR HERICS

Education

 

1976

Attended grammar school in Mattersburg and passed the examinations granting entry to university

1982

Law studies at the University of Vienna and award of Magister iuris

from 1992

Attended selected courses at the Economic University of Vienna

Attended specialist training and self-development courses at the Austrian Court of Auditors

 

Career

1982

Court experience at the Vienna District Criminal Court

1982/1983

National service in the Austrian Army

1983

Post Office and Telephonic Services Administration (Auditing)

1991

Joins the Austrian Court of Auditors (auditor in the Energy Department)

1995

Member of the Internal Audit Service of the Austrian Court of Auditors (until 2001)

1996

Senior Auditor in the Transport and Railways Department

1998

Senior Auditor in and Deputy Head of the Research Department

1998

Member of the Works Committee of the Austrian Court of Auditors (until 2003)

2003

Head of the Department for Banking and Debt Management

2006

Expert representing the Austrian Court of Auditors on the Committee on State Indebtedness (until October 2013)

2007

Representative of the Austrian Court of Auditors on the Standing Committee on the Estimates and Accounts of Local Authorities - VR Committee (until 2009)

2008

Deputy Head of Section 4 (Finance and Sustainability)

2011

Head of Section 5 (Finance and Economy)


ANNEX 2: ANSWERS BY OSKAR HERICS TO THE QUESTIONNAIRE

QUESTIONNAIRE FOR CANDIDATES FOR THE OFFICE OF MEMBER OF THE COURT OF AUDITORS

Professional experience

1. Describe the most important aspects of the professional experience you have gained in the areas of public finance, administration and government auditing.

Since joining the Austrian Court of Auditors in 1991, I have been involved with government auditing and the auditing of state-owned undertakings. In all the posts I held at the Austrian Court of Auditors - as auditor, senior auditor, head of department and head of section - I successfully performed all the types of audit carried out by the European Court of Auditors (financial audit, compliance audit and performance audit). In the course of conducting more than 100 audits, and through my involvement in the national and international activities of State audit institutions, I have acquired detailed knowledge of and wide-ranging experience in the area of auditing.

The audits conducted or led by me covered a wide range of administrative bodies at federal and Land level, undertakings and other entities in the energy, transport, agricultural, cultural, research, banking and financial sectors. During my eight years as head of the auditing department responsible for banking and debt management, the audits I led focused on the assessment of (i) financial management at federal, Land and municipal level, (ii) specific investment operations in the federal Länder, (iii) high-risk financial transactions carried out by state-owned undertakings, (iv) the effectiveness of internal audit systems in the context of the financial management of local authorities, and (v) the operational efficiency of state-owned banks (including the Austrian National Bank) and the effectiveness of financial monitoring systems (financial market supervision, bank bailout package). The ensuing reports drawn up by the Austrian Court of Auditors, which identified a range of shortcomings, prompted a series of reform measures, such as legislation banning speculation or new arrangements for the supervision of financial markets, led the Austrian national and regional parliaments to scrutinise in detail political responsibilities in the area of financial management and financial supervision, and made a significant contribution to improving the performance by the relevant State bodies of their statutory financial management role.

In more than 10 years as a head of department and head of section, in addition to specific auditing tasks I was also responsible for staff management and training, the efficient use of resources and the organisation of auditing in the units I headed, defining approaches to auditing, quality control and representing the Austrian Court of Auditors nationally and internationally.

In addition, I was actively involved in developing and optimising cooperation in the area of public-sector auditing at bilateral, European and international level. This involved attendance at seminars and workshops and at meetings to exchange experience in this specialist field with other countries’ Supreme Audit Institutions (Croatia, Slovakia, FYROM) and supervision of parallel audits carried out with foreign auditing bodies (for example on the topics of ‘adjustment to climate change at European level’, ‘Eurofisc’ or ‘the cost of auditing’ in the Structural Funds IV working group of the Contact Committee of Presidents of the European Court of Auditors and the Supreme Audit Institutions of the EU Member States).

In the course of my work as head of the section responsible for EU finances, I dealt in detail with EU-related topics and familiarised myself with the working methods of the European Court of Auditors. I gained this thorough insight by drawing up the annual EU financial report, by assisting with audits conducted by the European Court of Auditors in Austria and by conducting independent audits on EU-related matters, such as the implementation of the LEADER Programme and agro-environmental measures (ÖPUL) over the period from 2007 to 2013. The auditing departments which make up the section I head deal or dealt with key expenditure areas under the EU budget, such as agriculture, rural development, the environment, regional policy, employment and social policy. The performance audits in these areas carried out under my supervision gave me a deep insight into the structure of the EU budget and the modus operandi of the Structural Funds and agricultural funds.

In addition, from 2006 to 2013, as a financial and budget expert, I was a member of the Working Committee of the Government Debt Committee, a body set up to advise the federal Austrian Government, and the Austrian Court of Auditors’ representative on the Standing Committee on the Estimates and Accounts of Local Authorities. In these roles I expanded my knowledge beyond the area of auditing to cover, in particular, budgetary management at federal, Land and municipal level and was able to use my auditing experience to assess the financial situation and analyse the sustainability and quality of the budgetary policies implemented by the Republic of Austria.

2. Which are the three most important decisions you have been involved in during your professional career?

The three decisions offer practical examples of my work as a senior auditor at the Austrian Court of Auditors:

1. As soon as the first signs of the world financial crisis began to emerge in 2007, and as the head of the Banking and Debt Management Department of the Austrian Court of Auditors, from 2008 onwards I initiated a programme of performance audits in the area of financial management at federal, Land and municipal level and was responsible for these procedures from the initial planning stage to the drafting of the final report. The wide-ranging audits focused on debt management, the use of financial instruments, in particular derivatives transactions, investment and risk management and the effectiveness of monitoring and internal audit systems. The reports, and the problems they identified, including the serious likelihood that the Austrian Federal Finance Agency, which is responsible for financial management at federal level, faced a loss of just over EUR 300 million as a result of risky financial transactions, had far-reaching consequences, in that the report (i) served as the basis for the decision taken at the highest political level (Federal Chancellor and Federal Finance Minister) to set up a working party, (ii) led to the enactment of legislation imposing new compliance rules on the Federal Finance Agency, (iii) was cited as evidence justifying the ban on public bodies conducting speculative financial transactions which was subsequently introduced, (iv) led to improvements in the internal audit systems and audit methods employed by local and regional authorities, and (v) helped to make public finances more sustainable.

The performance audit concerning ‘financing instruments for local authorities’ was classified by INTOSAI, the International Organisation of Supreme Audit Institutions, as a ‘paradigmatic audit’ in 2010, at which time only 12 audits worldwide had been recognised in this way. As examples of particularly effective national audits, they serve internationally as benchmarks for all INTOSAI members.

2. As the section head responsible I pushed for the Austrian Court of Auditors to take a more rigorous stance when auditing the financial statements of the federal authorities and introduced new measures in the area of financial audits, in keeping with international auditing standards (ISSAI and ISA). This involved, in particular, the introduction of tests of controls for certain budget accounting systems, such as financing processes or payroll accounting. The Austrian Court of Auditors successfully introduced these system-related tests of controls after prior consultation with the supreme audit institutions of Switzerland and the United Kingdom. On the basis of the findings of the tests of controls and the review of internal control systems in the area of the budget accounting, the competent auditing department in my section carries out additional, risk-oriented sampling of supporting documents with a view to achieving the objective laid down by the ISSAI 1200 standard, namely that of obtaining reasonable assurance that the financial statements are free from material misstatement.

3. As senior representative of the Austrian Court of Auditors I played an active part in the proceedings of the working party, set up at the instigation of the Supreme Audit Institution of Germany, on the establishment of an independent external Board of Auditors for the European Stability Mechanism (ESM). In the course of those proceedings, the Austrian Court of Auditors made a convincing case to Austrian decision-makers by keeping them properly informed at all times and advocating that appropriate provisions on independent and effective external public auditing should be incorporated into the ESM Treaty. These efforts bore fruit, since the ESM Treaty now contains a provision establishing a five-person external independent Board of Auditors. This represents a significant contribution to enhancing accountability and transparency in the context of the activities of the ESM.

Independence

3. The Treaty stipulates that the Members of the Court of Auditors ‘shall be completely independent in the performance of their duties’. What would you do to meet this requirement?

The high degree of importance attached to the independence of the Members of the Court of Auditors is reflected in the fact that this principle is laid down both in the Treaty on the Functioning of the European Union (TFEU) (Articles 285 and 286(1)) and in the Lima Declaration of Guidelines on Auditing Precepts (adopted at the IX INCOSAI in 1977), which the 2007 Mexico Declaration built on further. Rules laid down in the Code of Conduct, in the Ethical Guidelines and in the Implementing Provisions for the Rules of Procedure of the Court of Auditors flesh out the requirements as regards independence, which I endorse unreservedly. Their purpose is to ensure that public faith in the objective, independent and professional performance of its auditing tasks by the Court of Auditors can be safeguarded and enhanced.

In my view, the principle of complete independence is fundamental to effective and efficient public auditing and to its credibility and, therefore, public acceptance. In my long experience as an auditor I have come to understand that independence is intimately bound up with the integrity and impartiality of the individual concerned and with the avoidance of conflicts of interest. Members of the European Court of Auditors are role models and must meet the criteria referred to above to the letter.

In keeping with my personal convictions, I followed the principles outlined above in performing all my duties at the Austrian Court of Auditors – as auditor, senior auditor, department head and, finally, section head. I demonstrated this when dealing with exceptionally sensitive issues, such as possible breaches of the rules on subsidies and competition, and cases where there were grounds for suspecting that a criminal offence had been committed.

Should I be appointed as a Member of the European Court of Auditors, I will comply with the relevant rules to the letter – as I have done throughout my professional career – so that no doubt whatsoever can be cast on my independence. I would also do so if the risk of a conflict of interest were to arise in connection with an auditing task falling within my sphere of responsibility. After conferring with the President, I would hand that task over to another Member.

4. If such a procedure applied, have you been granted discharge in respect of the exercise of administrative duties?

I have never performed administrative duties, and in Austria there is no formal discharge procedure for persons performing such duties.

5. Do you have business interests or shareholdings or other commitments which might not be compatible with your future duties? Are you prepared to inform the President of the Court of all your financial interests and other commitments and publish a declaration of those interests and commitments? If you are involved in ongoing legal proceedings, could you please give details?

Pursuant to Article 126 of the Federal Constitutional Law, Members of the Austrian Court of Auditors are banned from any involvement in the management and administration of undertakings which are audited by the Austrian Court of Auditors or in the management and administration of other profit-making undertakings.

I have no business interests or investments or other commitments which might be incompatible with the performance of my future duties. In keeping with the Code of Conduct for the Members of the European Court of Auditors, when I take up office I will inform the President of my financial interests and other commitments so that the details can be published. I am not involved in any ongoing legal proceedings.

6. Following your appointment as a Member of the European Court of Auditors, are you prepared to resign from any elected office you hold or give up any position of responsibility in a political party?

I do not hold any elected office and have no position of responsibility in a political party. I regard it as self-evident that I should not take on any such role or position during my term of office as a Member of the European Court of Auditors.

7. How would you deal with a major irregularity or even fraud and/or corruption case involving persons in your Member State of origin?

Decision No 97-2004 of the Court of Auditors requires its Members to cooperate closely with the European Anti-Fraud Office (OLAF) in its investigations to combat fraud, corruption and other illegal activities detrimental to the financial interests of the Union. The Court of Auditors is required to notify OLAF immediately of any suspicion or evidence of possible fraud, corruption or other illegal activity uncovered during audits. This requirement is based on Article 287(2) TFEU, which states that, in the course of its auditing activities, the Court of Auditors shall report in particular on any cases of irregularity, and applies to both revenue (for example, evasion of duties and taxes) and expenditure (for example, misuse of EU funding).

In order to maintain the confidence of European citizens in the functioning of the European Union institutions, it is, in my opinion, essential to ensure that the Members of the Court of Auditors in particular notify OLAF immediately of any suspicions arising, irrespective of the individual or source, thereby helping to ensure immediate detection in any possible cases of fraud. The principles of independence and impartiality would obviously apply without restriction in any cases of irregularity, fraud or corruption, including those involving individuals from my own Member State.

In my previous post at the Austrian Court of Audit I took the necessary measures – where necessary against members of my own audit team – in response to any justified suspicion of irregularity, leading on occasion to disciplinary or criminal investigations. In a number of cases where justified suspicions of wrongdoing emerged in the course of audits that I was conducting or for which I was responsible, I also took steps to ensure that the public prosecution team assigned to the investigation was immediately notified and given access to the relevant audit findings. Such cases arose, for example, in connection with high-risk financial transactions and resulting losses to a state transport undertaking and in connection with potentially loss-making financial speculation by a state capital. I also took steps to initiate immediate action by the public prosecution services regarding suspicions of fraud and corruption on a massive scale involving an energy undertaking in my own federal state, bringing to light clear evidence of unjustified enrichment and irregularities in the award of contracts. This is proof of my determination to treat all cases of suspected wrongdoing equally, making no distinction based on regional factors or personal criteria.

As a Member of the European Court of Auditors, I would adopt the same unbending and uncompromising stance in response to serious irregularities and suspected fraud or corruption, independently of the nationality of those involved, even they were from my country of origin, and would, while respecting confidentiality requirements, unhesitatingly seek the involvement of OLAF.

Performance of duties

8. What should be the main features of a sound financial management culture in any public service?

As well as the reliability of accounts and the legality and regularity of EU expenditure, sound financial management and hence effective and efficient EU policy making are of great importance.

In examining whether financial management has been sound in accordance with Article 287(2) TFEU and Article 30 of the Financial Regulation applicable to the general budget of the European Union (Financial Regulation), the Court of Auditors must assess whether finances have been managed in accordance with the principles of economy, efficiency and effectiveness. These auditing principles are also guidelines for the management of EU funding by the executive bodies responsible.

From my experience acquired at the Austrian Court of Audit in auditing federal and state administrative bodies and public companies, I have concluded that a culture of sound financial management requires tried and tested procedures and a functioning control system. I believe it necessary to comply with the following basic criteria in order to ensure that EU funding is used not only in a legal and proper manner but also in such a way as to be as effective as possible:

-          clear legal framework provisions governing administrative procedures accompanied by a straightforward and comprehensible set of rules governing financial management and programme implementation;

-          clear and specific policy objectives based on comprehensible needs assessment;

-          clear terms of reference for administrators, accompanied by a transparent establishment plan and adequate funding and staff;

-          specification of projected results and reliable performance indicators for assessment thereof;

-          transparent accountability mechanism for the deployment of public funds, in particular recognised accounting and reporting rules and standards;

-          a functional internal control system to ensure proper compliance with procedures;

-          cost-effectiveness checks by external public auditors in order to provide democratically accredited institutions (parliaments) and members of the public with relevant information which is as objective as possible and obtained from independent sources regarding the standards achieved by accountable bodies in performance of their tasks, measured against the auditing standards of economy, efficiency and effectiveness.

In this context, the European Court of Auditors must in particular establish whether:

-          the measures adopted are suitable for achievement of the desired objectives and adequate budget appropriations have been earmarked for this purpose;

-          existing compliance standards are conducive to efficient implementation and targeted performance, focusing on the provision of services and meeting customer requirements;

-          the responsibility of the administrative bodies for performance, expenditure and funding is effectively established in order to promote ownership and good governance;

-          a reasonable budget and timeframe has been established, that they are respected and that budget implementation is sufficiently transparent;

-          the public funds deployed achieve their intended effect. The announcement of results should take account of not only short-term objectives but also the particular need for sustainability. Relevant and reliable data are necessary to assess output (what is to be achieved by the programme), results (changes immediately resulting from the programme) and impact (longer-term changes resulting from EU measures);

-          accounting and reporting systems are sufficiently reliable in order to verify whether the results obtained match the objectives and indicators set out in the management plan;

-          the internal control system has been properly designed and that its management, control and monitoring instruments function effectively.

As a Member of the Court of Auditors, I would attach great importance to the above requirements and compliance therewith so as to ensure that, in the final analysis, public funds are deployed as effectively as possible, reducing costs and/or improving results. This is all the more important given the current financial pressure on the budget of the European Union and the Member States, making it all the more necessary to ensure that the management of public finances is efficient and focused on results.

9. Under the Treaty, the Court is required to assist Parliament in exercising its powers of control over the implementation of the budget. How would you describe your duties with regard to reporting to the European Parliament and, in particular, its Committee on Budgetary Control?

Reports by the Court of Auditors are intended in particular for Parliament, as the budget discharge authority and in particular its Committee on Budgetary Control, in view of Parliament’s heavy reliance on reports by the Court of Auditors in assessing budget implementation, deciding on discharge and issuing recommendations. Reports by the Court of Auditors must be objective, complete, clear, convincing, relevant, accurate, constructive and concise, so as to comply fully with the instructions contained in its audit manual.

In monitoring implementation of the EU budget and in particular for purposes of the discharge procedure, Parliament needs up-to-date and usable assessments of efficiency and effectiveness regarding the use of EU funds. This can be done by focusing more intensively on economy and effectiveness when carrying out audits with a view to issuing the Statement of Assurance. Special reports by the Court of Auditors may also focus on specific criteria in varying combinations (legality and regularity, economy, efficiency and effectiveness), together with systemic issues. In my opinion, it would be very useful for Members of Parliament and in particular the Committee on Budgetary Control if all major criticisms by the Court of Auditors were consistently accompanied by constructive recommendations, thereby focusing on results. I would personally verify relevance, quality and focus on results of work carried out by my audit team in all areas falling within my future remit and do all in my power to ensure that the findings and recommendations contained in annual and special reports were both relevant and consistent.

If pushed to give an example from my career to date of successful and relevant audit procedures, I would refer to the major findings and recommendations for political decision makers contained in the report on my evaluation of financial market supervision. The report, which was submitted to the Austrian ‘Nationalrat’ (National Council) over a period of ten months, together with its findings and recommendations, was closely consulted for the purpose of legislating on the reorganisation of financial market supervision in Austria.

In addition to the reports, which are the core responsibility of the Court of Auditors, I can see a further possibility of assisting and advising Parliament and the Committee on Budgetary Control in the form of own-initiative opinions on projects or draft legislative proposals under discussion and in the drawing up of information notes and general reports on various topical issues. In the light of my previous experience I am convinced that, in drawing up its programme of work, the Court of Auditors should give as much consideration as possible to the recommendations and interests of Parliament and the Committee on Budgetary Control, which are major stakeholders.

One of my principal duties in the Austrian Court of Audit was to assist the President in presenting reports to various committees of the Austrian Parliament and personally present reports to the state parliaments. In addition, I was on occasion required to appear before committees of investigation examining the Court reports to answer questions from MPs. Working together with parliamentary bodies gave me a valuable insight into Parliament’s work as well as the interests at stake and special requirements relating to parliamentary control. The regular meetings and discussions with the members of the committee, in which in which such reports were discussed (Court of Audit Committee) proved extremely useful for the purposes of cooperation between the Austrian Court of Audit and Parliament. It also made it possible to take account of Members’ recommendations and requirements regarding the substance of the audits and reporting procedures. As a future Member of the Court of Auditors, I would recommend and implement where possible constructive dialogue along these lines and do everything else in my power to promote and support effectively and sustainably close cooperation between the European Court of Auditors and Parliament and in particular the Committee on Budgetary Control.

10. What do you think is the added value of performance audit and how should the findings be incorporated in its management?

In the course of the discharge procedure for the Commission in respect of the 2011 financial year, the European Parliament took the view in April 2013 that conformity checks should be supplemented with performance audits to evaluate the economy, efficiency and effectiveness of the Union’s policy instruments. The Committee on Budgetary Control took a similar view in its report of 8 January 2014 on the future role of the Court of Auditors.

The audits carried out by the Court of Auditors focus on both regularity and effectiveness. Financial and compliance audits are of fundamental importance regarding the discharge procedure and in particular for determining the legality and regularity of EU expenditure. Performance audits, on the other hand, yield information on the economical, efficient and effective use of public funds. In my view, it is essential on the one hand to provide decision makers with information from audits on the results achieved using EU funds, and on the other hand to make concrete, feasible recommendations on how to improve them.

So essentially I feel it is not so much a matter of ‘either/or’ (performance audits instead of financial audits or vice versa), but of weighting and combining the two appropriately with the aim of enhancing the overall effectiveness of the Court of Auditors. The audits the Court of Auditors carries out with a view to issuing the Statement of Assurance can for example enable it to investigate simultaneously in what individual areas there is a higher risk to performance, and to undertake focused performance audits on that basis. Conversely, performance audits can reveal important clues to shortcomings in terms of legality and regularity, which should certainly be investigated if they materialise. This goes to show, despite their differences, the importance of close interaction between these two types of audit. As far as it is possible for me to judge from the outside, the Court of Auditors should put still greater emphasis on

carrying out performance audits.

Resources, which are in short supply for the Court of Auditors too, must be used effectively. In my opinion, therefore, there is a need, when planning audits, to highlight those areas in which there is a high likelihood (i.e. a high risk) of uneconomic or inefficient action, with the aim of taking a more risk-based approach to auditing, in other words improving the evaluation of possible risks to sound financial management. Of comparable value is the approach of targeting specific areas which may be expected to generate significant benefits for the body being audited as well as for the public purse. By focusing on risk areas and topics of major interest to stakeholders, performance audits offer wide-ranging opportunities to add value.

Performance audits generate a variety of benefits: (i) they draw the attention of the bodies being audited to possible sources of revenue and savings, quantitative and qualitative improvements, avoidable shortcomings and achievable benefits; (ii) by means of well-prepared facts and convincing recommendations, they provide Parliament and the Committee on Budgetary Control with a valuable basis for decision making and alternative courses of action for the collection and optimal use of funds; (iii) they provide the public with transparent information on the collection and use of public funds. Auditing by the Court of Auditors has a preventive effect, forestalling waste and mismanagement and helping to prevent corruption.

When selecting the topics for performance audits, it is necessary to carry out both cost-benefit and problem-and-risk analyses. The main points to consider are relevance to financial management (financial impact on the EU budget, savings, enhanced efficiency), potential risks, extent of possible improvements, topical events, economic indicators, the public interest and preventive effect. The aim must be to make well founded statements and recommendations, in the reports of the Court of Auditors, for improving performance and effectiveness, to create transparency and promote accountability. Subsequently, in follow-up audits, the Court of Auditors should gauge the effectiveness of its auditing activity against the implementation of its recommendations. In so doing, it can enhance its own effectiveness.

During my time at the Austrian Court of Audit, I was involved with all kinds of audits. As Head of Section I was instrumental in improving the financial control system in connection with auditing the Federal Government’s end-of-year accounts and drawing up the Federal Statement of Clearance of Accounts. It was at this time that the Federal Government’s auditing system was changed from single- to double-entry book-keeping, coinciding with the auditing of the Republic of Austria’s opening balance.

My auditing activities in the Austrian Court of Audit focused on performance audits, concerning nearly all areas of federal, regional and local authority administration, such as research, agriculture, employment, public expenditure, property, transport, energy and financial management. I also helped – mostly in a senior capacity – to audit the financial management of major undertakings such as the Austrian National Bank, the Austrian Railways, the Austrian Electricity Company, the Motorways and Highways Financing Company (ASFINAG) and Austrian Broadcasting. This not only resulted in greater efficiency and economy within the organisations concerned, but also generated savings to the tune of millions of euro. I would be able to make use of the knowledge and experience I gained in these posts in my future job to enhance the efficiency and effectiveness of public finances in the interests of EU citizens and thus create a significant added value for the public purse.

11. How could cooperation between the Court of Auditors, the national audit institutions and the European Parliament (Committee on Budgetary Control) on auditing of the EU Budget be improved?

The regular and economic use of EU funds is just as much in the interest of the EU as of its Member States. More than 80% of EU budgetary appropriations are subject to shared management, whereby both the Commission and the Member States are responsible for regularity in the implementation of the budget. Consequently, the Court of Auditors and the national external audit bodies are partners in the external control of the appropriations spent.

The audits by the national auditing authorities are also very important in the field of EU funding because early detection and rapid correction obviates the need for any financial adjustments on the part of the Commission. The national auditing authorities are also able, in their capacity as national experts, to make a valuable contribution to the quality of national administrative and control systems, particularly by systematic audits of the organisation of their structure and operations. However, this calls for greater awareness of the specific characteristics of the management of EU funds and greater integration of EU issues into the audit planning and activities of the national audit authorities.

To improve cooperation between the European Court of Auditors, the national audit authorities and the European Parliament, the following might be considered:

-          coordinating resources and intensifying coordination between the audit activities of the European Court of Auditors and the national audit authorities in evaluating expenditure and the sound management of the EU budget, in order to prevent duplication of audits, which will lead to greater effectiveness at every level of auditing;

-          exchange of auditing and control data and auditing information between the European Court of Auditors and national audit authorities to the extent legally possible;

-          the national audit authorities in the Member States could step up their auditing of EU spending in the context of their own joint coordinated performance and effectiveness audits, either without the involvement of the Court of Auditors or in cooperation with it;

-          the Court of Auditors and the national audit authorities should seek to simplify, in an appropriate manner, the rules on the management of EU funds and to ensure the proportionality of the costs of internal management controls on EU funds spent and/or the benefit obtained therefrom;

-          the Court of Auditors could do more to build on national audit authorities’ findings and thus carry out fewer in-depth audits, though a binding ruling would first be needed on the issue of uniform standards and auditing principles. These results could usefully be incorporated into Parliament’s discharge procedure;

-          a systematic exchange of knowledge and experience should be firmly encouraged: the contact committee of the Presidents of the Court of Auditors and of the national audit authorities, with its working groups and initiatives, offers ideal opportunities for the exchange and development of useful auditing methods and standards.

Cooperation in partnership and trust between the Court of Auditors and the individual national audit authorities, while preserving their independence, will promote comprehensive, necessary and efficient control.

In my view, audit planning and coordination between the Court of Auditors and the national audit authorities is susceptible of improvement, particularly with regard to pinpointing subjects and areas for auditing, and is desirable particularly with a view to the efficient use of resources. In addition, a more intensive exchange of views on issues relevant to decision making and taxation, such as the operating methods and quality of internal supervision and systems for the control of EU funds, and the origin, frequency, type and financial impact of errors observed, together with recommendations, would be useful. The insights thus obtained could enhance the quality of the reports sent to Parliament and have a useful effect on the discharge procedure.

The Austrian Court of Audit has hitherto cooperated with the European Court of Auditors, including when it regularly exercised its right under Article 287(3) of the TFEU to take part in the audits of the European Court of Auditors in Austria. I consider this type of cooperation to be beneficial, as it gives the national audit authorities first-hand information about the auditing activity of the European Court of Auditors, thus also gaining opportunities to focus own-initiative audits on the management of EU funds, obtaining knowledge about the operating methods of the European Court of Auditors, and having a coordinating effect between the audit teams of the European Court of Auditors and the national bodies.

During my time as Head of Section for EU Finances in the Austrian Court of Audit, my constant concern was to develop independent priority audits from the insights and indications gained from our participation in audits of the European Court of Auditors. This was particularly successful in the area of agricultural funds with the management audit on ‘LEADER 2007-2013 funds’, ‘Agricultural environment measures ÖPUL 2007’ and ‘Financial corrections in the agricultural sector’.

A number of new challenges for the external financial control bodies (the European Court of Auditors and the Member States’ national audit authorities) emerge from the reform of the EU budget and the new EU economic and fiscal governance measures (such as the ‘Six-Pack’ and ‘Two-Pack’) in the wake of the economic and financial crisis. The single supervisory mechanism, which is intended to guarantee the supervision of credit institutions in the euro area, and financial and economic policy surveillance in the context of the European Semester, are examples of cases where closer cooperation is needed between the audit authorities, so that Parliaments and EU citizens can gain a full picture of the results of performance auditing. I therefore consider that coordinated action by all relevant audit authorities is necessary in order to establish appropriate control structures to assist the emerging new economic, fiscal and budgetary structures in a harmonised manner. In order to achieve the best possible support from Parliament in the supervision of the implementation of the EU budget, more weight should be given to a constructive dialogue and exchange of views between the European Court of Auditors and Parliament and/or its Committee on Budgetary Control on the basis of the Lisbon Treaty.

Other issues

Would you withdraw your candidacy if Parliament

opposed your Membership of the Court of Auditors?

In my opinion, constructive cooperation between, on the one hand, the Court of Auditors in general and myself in particular and, on the other hand, Parliament and its Committee on Budgetary Control requires a basis of trust. In my above comments I have tried to show that it is my personal concern as a future Member of the Court of Auditors to bring my many years of auditing experience to bear and to contribute, in close cooperation with Parliament and with its Committee on Budgetary Control, to improving the EU’s financial management and the implementation of its budget.

Should I be unsuccessful in convincing Parliament of my specialist and human competence, as well as of my independence, impartiality and integrity, the relationship of trust would be damaged and fruitful cooperation between the two institutions would be impaired. Since the independence and professionalism of Members of the Court of Auditors is an essential foundation of successful activity in the interest of the Union, I would take a negative vote in Parliament as a reason to withdraw my candidacy.


RESULT OF FINAL VOTE IN COMMITTEE

Date adopted

17.2.2014

 

 

 

Result of final vote

+:

–:

0:

15

2

1

Members present for the final vote

Marta Andreasen, Inés Ayala Sender, Tamás Deutsch, Martin Ehrenhauser, Jens Geier, Ingeborg Gräßle, Rina Ronja Kari, Jan Mulder, Paul Rübig, Petri Sarvamaa, Georgios Stavrakakis, Michael Theurer

Substitute(s) present for the final vote

Thijs Berman, Jorgo Chatzimarkakis

Substitute(s) under Rule 187(2) present for the final vote

Birgit Collin-Langen, Doris Pack, Thomas Ulmer, Manfred Weber

Last updated: 20 February 2014Legal notice