Supreme Chamber of Control - The NIK
The Supreme Chamber of Control (SAI Poland) is established under the Constitution of April 1997, in the Act on the NIK. The President of the SAI is appointed by the Parliament for a fixed tenure of 6 years. The term expires before the end of the 6-year period in the case of the President's death or a ruling of the Tribunal of State depriving him of office. The parliament dismisses the President if:
- He/She has resigned from office
- Acknowledges that he is durably unable to perform his duties for health reasons
- Has been found guilty of a crime by a legally valid court verdict
- The Tribunal of State has ruled that he be excluded from executive positions or functions involving special requirement in state bodies
There are no qualifications prescribed for appointment of the Head of the SAI and there is no prescribed age limit. The conditions of service of the head of the SAI to secure independence of the SAI are:
- Special procedure for appointment
- Special procedures for removal
- Fixed tenure
- Control over resources/budget
- Immunity/protection from actions by others in its performance of duties
- Independence to frame workplans
The NIK is organisationally subordinate to the President (e.g. the President is appointed by the Parliament; Vice-Presidents are appointed and dismissed by the Speaker of the Parliament on the request of the President; the Parliament may order the NIK to carry out audits. The NIK is independent of the executive. As for the judiciary, the NIK audits its financial policies only.
It is the Council of the NIK that passes the draft budget of the NIK. It is then submitted to the Minister of Finance who cannot, however, amend it but just incorporates it into the draft state budget, and submits it to the Parliament. The Parliament is the only authority that can amend the NIK's budget. The NIK is obliged to submit to the Parliament the annual report on its activity and its major audit reports. In the Parliament, there is the standing Commission of State Audit watching the NIK's work.
The SAI's jurisdiction extends to following:
- Federal Government
- Provincial and local governments
- Bodies not owned but substantially funded by the governments
- Banks whose capital forms part of the Federal, Provincial and local governments and autonomous bodies substantially funded by the government
- Entities owned or controlled by Federal, Provincial and local governments and other entities owned or controlled by such government owned or controlled entities
- State joint ventures with foreign agencies and other enterprises
- Audit of Receipt of the Government
- Concession granted by the Government to agencies for exploitation of public resources
- Aid or grants provided by Foreign Government
- Audit of Government investments made in other countries as a minority share holder
The NIK audits: local government from the point of view of legality, economic prudence and diligence; businesses making use of public resources from the point of view of legality and diligence; other units (incl. the government) from the point of view of legality, economic prudence, efficacy and diligence.
The SAI's jurisdiction extends over regulatory bodies (e.g. Privatisation, Environment, Pollution Control, telecom etc.) and the agencies to whom performance and delivery of public services is contracted out.
The SAI does not have the powers of requisitioning all records of the auditee departments/organisations to discharge its mandate. Further, it also does not have powers to enforce or initiate enforcement action to secure access to needed records, which are not produced. However, the SAI has the powers to seal, search and seize documents and other related items considered necessary for audit and inspection. It has the powers to seek testimonials of the persons concerned (appearances and answers) of the persons concerned or those who are deemed to have been involved in the matter subject to audit and inspection. Auditors may order employees of the auditees to give oral or written explanations on the subject of audit.
As regards the powers to seek co-operation of persons other than agencies subject to audit and inspection, the SAI may call anybody to depose as a witness. The SAI has powers of instructing government investigating agencies to perform activities considered necessary. The SAI does not have the authority to re-examine its own adjudication. The SAI cannot decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection. The NIK is not a law enforcement body. It may notify the prosecutor's office if there is a suspicion of a crime. The SAI does not have the authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters. It does not have powers to take punitive action and/or impose surcharges.
The SAI has powers to access the computer systems of the auditees and to download and use electronic data either in site of off site. Further it can also review the development of computer systems of the auditees and suggest/enforce any controls. The SAI does not have any role in the appointment of other external auditors engaged by the auditees for meeting statutory requirements. Further if such external auditors are engaged, the SAI does not have powers to supervise and regulate their work.
Audit Procedures And Functions
The SAI prescribes Financial, Compliance, Performance and EDP Audits in its scope of Audit. The Act on the NIK regulates its audit scope. The SAI conducts Concurrent (usually international parallel audits related to environment protection and use of foreign funds) and Special audit (ad hoc audits). The audit procedures are regulated in the Regulation of the President of the NIK of 1 March 1995 on audit proceedings and they apply for all types of audit.
The SAI does not discharge judicial functions. After sending a post-audit statement containing recommendations to the auditees, the SAI expects it to reply within a specified time limit and inform the SAI about if and how the recommendations and audit findings have been made use of. The SAI is required to follow specific standards, practices and guidelines in conducting audit and reporting. The SAI can consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit e.g. parallel audits with SAIs of Slovakia, the Czech Republic, Lithuania, Germany. The SAI can engage consultants and/or obtain professional services in conducting audit.
The SAI can report on acts that infringe upon State economic interests like mass embezzlement of state assets, serious losses and wastes. The SAI requires that any fraud or embezzlement be reported mandatorly by the auditees.
Regarding the SAI's reporting procedure:
- An audit report signed by the auditor and the head of the audited unit (possibility to appeal)
- A post-audit statement (signed by at least the Director of the NIK Department) sent by the NIK to the audited unit and sometimes submitted to other bodies. (possibility to appeal)
- A post-audit information submitted to the Speaker of the Parliament, President of the Republic, or the Prime Minister (the auditee's comment attached, if any)
The SAI does not present an interim report before rendering an annual report on the examination of the closing of accounts of the Federal, Provincial and local governments. The Reports are made public after the formal reporting process. In case of Financial Statements audit, the SAI does not have the powers to amend accounts. The SAI does not have advisory role.
The SAI is constituted as a multimember collegiate body as a Chamber of Audit. The President manages the NIK's everyday work and makes most executive decisions. The Council passes e.g. audit plans, draft budget, approves of the most important document drawn up in the NIK like for example the analysis of the state budget execution to be submitted to the parliament, the NIK annual report.
The SAI has jurisdiction over both Federal and Provincial governments. The NIK has its Regional Offices all over the country - they are not linked with Regional Accounting Chambers which are audit bodies meant to audit local government only and are supervised by the Prime Minister.
The SAI is empowered to engage external auditors/agencies/consultants as required.
Administrative Functions And Miscellaneous
The SAI can not expend resources budged independently. It has full independence in forming its workplan. The SAI is absolutely independent while recruiting its staff - the general qualifications and employment conditions are described in the Act on the NIK. The Act guarantees the NIK's audit staff a very stable employment relationship of nomination, which secures auditor's independence.
The SAI is subject to an independent audit; the Act on the NIK provides for the Parliament's right to audit the NIK's activities. It is required to submit a report on its activities to the Parliament.