Slovak Audit Office in context of history

As early as in 1761 the Empress Maria Theresa has established the Accounting Chamber (die Rechen-Cammer) - the body with fairly wide powers both in the area of audit of accounts and the accounts management. Its special powers included the "right of preventive audit", i.e. the office prepared recommendations regarding all important financial matters coming to force upon Empress\'s approval.
After the period of changes in the scope of powers and even interim loss of its independence in 1773-1774, the Emperor Josef II subordinated the accounting and audit activities to the "Court Accounting Chamber" (der Hofrechenkammer) in 1782. In following years the audit activities passed through several transformations until establishment of the new audit body - the Supreme Accounting Court (der Oberste Rechnungshof) in 1866.
The office was supervised directly by the Emperor and "equal to ministries\'\'. Though the accounting was performed by specified ministries, the SAC influence on the accounting remained strong. The important changes, however, included a substantial widening of powers and control competence of the body. The Court not only examined the figures in the submitted accounts, but also, and above all, the economical use of the Empire\'s property. The Supreme Accounting Court and its functions remained unchange for the Austrian part of the country until disintegration of the Empire in 1918. After achieving its autonomy in 1967 the Hungary established identical Court in 1870.
After formation of the Czecho-Slovak Republic in 1918, the "supervision over the State economy, property and debt" was bestowed to the Supreme Account Auditing Office by the Act No. 175 of March 20, 1919 making it "an office equal in powers to the ministries and independent on them". It was also included in the first CSR Constitution in 1920 (Constitutional Act No. 121 of March 6, 1920). The body was organized on monocratic principle. The Office Chairman was appointed by the President of the republic. He was accountable to the National Assembly of the CSR.
The Supreme Office was authorized to control formal and economical aspects of finance management, it prepared an annual closing account of public revenue and expenditures, maintained "the state accounting as simple and beneficiary as possible, and organized in a manner enabling easy and full control". After formation of the independent Slovak Republic in 1939 the Act No. 186/1942 Coll. established the Supreme Control Office, and later in 1942 the Constitutional Act No. 110/1942 Coll. gave rise to formation of the Supreme Control Court. The Court supervised the finance management of the state departments, public corporations, institutes, funds, and societies, as well as the management of state assets, accounting and debt.
In 1945, after WW2 end and re-establishment of the Czechoslovak Republic two bodies existed simultaneously on our territory: the Supreme Audit Office domiciled in Prague, and the Supreme Control Court in Bratislava. In the course of 1945-1946 the relation between the two bodies modified: the Chairman of the 13
Supreme Control Court was subordinated to the Chairman of the Supreme Audit Office and appointed as his ~ce-Chairman for Slovakia. He was accountable to the Slovak National Council in the matters within the Council competence. In 1951 both control bodies were discharged and the new control body was established, the Ministry of State Control.
The subordination to the Government continued and the title of the body had had changed for several times. Gradually the office transformed into the body of people\'s control. Due to political liberalization in 1968 the Act No. 85/1968 had made the Central Committee of the People\'s Control a control office of the National Assembly. In Slovakia, the Commission of People\'s Control became part of the Central Commission of the People\'s Control.
The Constitutional Act No. 143 of October 27, 1968 on the Czechoslovak Federation authorized the National Assemblies of both republics to legislate the establishment of the a control authority of the National Assembly. The Slovak National Council materialized the provision of Article 107, par.l ch) of the above mentioned Act and passed the Supreme Control Office Act No. 70 of June 10, 1969. However, the supreme control body of the SNC existed only to December 28, 1970.
The Supreme Control Office competence included examination of the collection of revenue and the use of the State Budget, submitting statement on the State Budget to the Slovak National Council, control of management of tangible and intangible assets, and supervision over complaints, information and suggestions of citizens, and investigation of serious ones.
The existence of the body was, however, short. By the end of 1970 (SNC Act No. 150 of December 12, 1970) the Office was dissolved and a system of bodies of people\'s control was built. The supreme body of the people\'s control in the state was Committee of People\'s Control of the CSSR represented in both federal republics (Committee of People\'s Control of the SSR) and accountable to the govemments of individual federal republics. In 1990 the above control bodies were transformed into the control ministries.
Ministry of Control of the SR then existed between 1990-1992. In 1992 the Office of Government of the SR succeeded to the position of the central authority of state administration (with the exception of public finance management, examination of requests, proposals, information and investigation of complaints and clearing petitions). In the meantime the above powers were modified, however, beyond the subject of this article. The Office of Government of the SR prepared the draft of the SAO SR Bill.
On January 1, 1993 the Slovak Republic was created as an independent sovereign state. Its Constitution includes also the Act on the Supreme Audit Office of the SR As per Constitution the competence, powers and structure of the Office are regulated by Supreme Audit Office of the SR Act No. 39 of the National Council of the Slovak Republic of January 19, 1993.

Q and A about SAO SR:

What is the legal status of SAO SR?

The Supreme Audit Office of the Slovak Republic was established by the Constitution of the Slovak Republic on 1 April 1993. Act of the National Council of the Slovak Republic No 39/1993 Coll. of Laws also confirmed its scope of competence and powers.

The Supreme Audit Office of the Slovak Republic (Office) is a state authority which is independent while carrying out its audit activities and is bound only by the law. The independence of the Office is guaranteed by the Constitution and Act on the Office, which define of competences of the Office and its relations to other state bodies.

What were the key changes in past 10-15 years?

Audit competencies of the Office were significantly changed by the amendment to the Act on the Office in 2005. The Office audits also the management of property, property rights, funds, obligations and public debts of municipalities, upper-tier territorial units and legal entities with capital participation by municipalities, legal entities with capital participation by upper-tier territorial units, legal entities established by municipalities or legal entities established by upper-tier territorial units.

What are the constitutional foundations for the activities of SAO SR?

Constitution of the Slovak Republic (Act No. 460/1992 Coll.) defines the role of the Supreme Audit Office of the Slovak Republic in articles 60 – 63. The status, operation, internal organizational structure and basic rules of auditing activity of the Supreme Audit Office define the Act of the National Council of the Slovak Republic No 39/1993 Coll.

What are procedures for election or appointment of the SAO SR head?

The Office is headed by President as a statutory authority. The President is deputised by the designated Vice-President. The President and two Vice-Presidents are elected and recalled by the National Council of the Slovak Republic by secret ballot. The term of office of the President and the two Vice-Presidents is seven years. The President and the two Vice-Presidents may be elected to their offices for no more than two consecutive terms. The President remains in office after the completion of his/hers term until a new President is elected.

How is administrative and financial independence of SAO SR ensured? Is its budget approved as a separate chapter within the State budget? How the wages of SAO SR employees are set?

Budget of the Office forms a separate budget chapter in the State budget. The Office submits a draft for approval by the competent committee of the National Council of the Slovak Republic. This committee submits the approved draft of the budget chapter to the Office of the Government on or before 30 June of the current year. The Government decides on the draft of the budget chapter of the Office. If the Government makes any changes in the draft of the budget, it gives reasons for such changes at the time when the bill on the State budget is submitted to the National Council of the Slovak Republic.

SAO SR employees’ wages are guaranteed by the Act of the National Council of the Slovak Republic No 39/1993 Coll. on the Office. The Act defines activities and determines auditors’ wages.

What are criteria for auditees’ selection?

The planning of audit activities of the Office is performed via triennial plans of audit activities and the respective annual plans of audit activities.

In the proposal for audits, departments and regional branch offices are obliged to respect the compliance of the proposal with strategic goals of the Office and its compliance with the triennial plan of audit activities. In addition, the proposal complies with the Act on the Office, the proposed audit topic has to be significant and current ensuring formal and content quality should be interlinked to previous audits and/or planned audits and use the risk analysis and analysis of economy, effectiveness and efficiency.

Significance of the audit topic and requirements for every audit have to be a guarantee that it will contribute to the mission of the Office and audit realization will be efficient and economical.

At the time of proposing audits, departments and branch offices are obliged to use information from auditees´ information systems, follow the economical situation of the Slovak Republic, relevant information and recommendations by the National Council of the Slovak Republic, use information relating to the agenda of public complaints and initiatives addressed to the Office, the risk analysis outputs, information on measures taken by audited entities to remedy weaknesses, errors, omissions, shortcomings, irregularities or non-compliance identified by previous audits and results of previous audits.

What are preferred types of audit (financial, compliance, performance), what is their scope?

The Office usually performs compliance audits, performance audits and financial audits. The Office also performs specific audits like IT audits and forensic audits.
The most frequently performed are compliance audits and financial audits. Lately, the Office increased the number of the performance audits with aim to assess the economy, effectiveness and efficiency of the audited entities management.

What is the organizational structure and approximate number of the staff?

For organizational structure see separate file on this web site.

How is ensured SAO SR staff´s professionalism and expertise?

To achieve the best audit quality as one of the basic requirements, the adequate qualification, professional capability and preparedness of its employees have to be ensured. The Office, in compliance with the contemporary managing principles, creates adequate conditions for systemic education and exchange of knowledge, experience and information with other SAIs.

Within its budgetary possibilities, the Office management supports regular education of its employees and knowledge exchange. The goal is to assure the employees have suitable approach and possibilities to get appropriate information and knowledge necessary for their work. This goal was reached by the Educational project “Modern and flexible Office – building human resources capacities of the Office” and financed with the support of European Union. The project was worth several millions EUR and focused on the implementation of educational programs, professional education in the specific areas of audit, increasing human resources quality. The project was finished in 2012. For another project (Audit Information System Project) see this web site in Events and Projects file.

What is SAO SR interaction with State bodies and Government entities while enforcing financial control?

The Office is independent while carrying out its activity and is bound only by the law. The Office submits to the Parliament a summary report on the results of audit activities for the previous calendar year not later than the end of March. The Office is obliged to submit an audit report whenever requested by the Parliament. Based on the informal agreement, the Office submits the report on the results of each audit to the Parliament Committee for the Finance, Budget and Currency. At the same time, depending on the audit theme, the Office submits the report to the relevant Parliament’s Committee and other involved authorities.

The Office also submits its Opinion on State Budget Proposal that includes the evaluation of the proposal of the public administration budget. Another opinion submitted to the Parliament is Office’s opinion to the State Final Account of the Slovak Republic.

What is SAO SR role in fighting corruption and money laundering?

In a case of reasonable suspicion of criminal activity, the Office is obliged to inform the competent body acting in criminal proceedings about audit findings. The Office representatives meet representatives from criminal proceedings bodies with aim to make the mutual co-operation more effective. In a case of financial discipline breach, the Office is also obliged to inform the competent body that is authorized to impose a penalty set by law.

SAO SR heraldic symbol

The coat of arms (heraldic symbol) of the Supreme Audit Office of the Slovak Republic (SAO SR) is composed of the state symbol of the Slovak Republic (a shield with three mountain peaks and double-cross on the middle peak) placed on the breast of an eagle with spread-out wings and holding the St. Thomas´s spear with silver tip. Above the eagle´s head, there is the SAO SR name in Slovak – Najvyšší kontrolný úrad (Supreme Control Office). The coat of arms has a golden ribbon lined with red fabric and words Parsimonia (Economy or Thrift), Effectivitas (Efficiency) and Commodum (Convenience). In a letter from 16. 04. 2007, the Ministry of Interior, its Heraldic Commission, stated that the said coat of arms fulfilled all the conditions for heraldic symbols to be accepted and listed in the heraldic register of the Slovak Republic.   

The coat of arms has a golden ribbon lined with red fabric and words Parsimonia (Economy or Thrift), Effectivitas (Efficiency) and Commodum (Convenience). In a letter from 16. 04. 2007, the Ministry of Interior, its Heraldic Commission, stated that the said coat of arms fulfilled all the conditions for heraldic symbols to be accepted and listed in the heraldic register of the Slovak Republic.














Brief history of the State Audit in Slovakia

Austro-Hungarian era

The audit office or chamber belongs to the historically oldest state bodies in today´s Slovakia. It was founded by the Empress Maria Theresa in 1761 as Chamber of Accounts (dei Rechen-Cammer). It was an organ with wide powers not only in the area of accounts audit but also in the area independent management of accounting. Its distinctive characteristic was the right of prevention audit (ex-ante in modern language) – in all important financial matters, this institution worked out an approval with delayed validity awaiting the Empress´ final decision.   

After several changes in this institution mandate, even after temporarily losing its independence (1773 – 1774), the Emperor Joseph II trusted the State accounting and audit matters to Audit Chamber (Der Hofrechenkammer) in 1782. The Chamber underwent several transformations in the following decades. In 1866, a new controlling organ was born – The Supreme Accounting Court (Der Oberste Rechnungshof).

This institution was under Emperor´s direct supervision and management and its position was equal to any ministry. The State accounting and accounts management were performed by individual ministries, but the Supreme Accounting Court´s influence in those fields remained strong. Its audit remit was gradually enlarged and its audit competencies were widened. The control/audit was not to concentrate on numerical correctness of the accounts only, but primarily on economy of the State assets and accounts management. The Supreme Accounting Court existed in such format up to 1918 in Austrian part of the Austro-Hungarian Empire. In the Hungarian part of the Empire, similar accounting court was created in 1870.

Czechoslovak era – First Republic

After creation of the Czechoslovak Republic in 1918, the Law 175 from 20 March 1919 established the Supreme Accounts and Control Office. It was “to oversee the State economy, State assets and State debt”. The said Law characterised the Office as “equal to ministries and of them independent”. The Office´s position was further strengthened by specifying its position in the first Constitution of the Czechoslovak Republic (Law 121 from 6 March 1920). The Office was organised and based on monocratic principle. The President of the Republic named the Office Head (Chairman) on the State Government proposal. The Chairman was responsible and answerable to the National Council (Parliament). The Office audited the formal processes (compliance audit) as well as the economy (performance audit). The Office made final accounts and yearly balance of the State expenditure and income. The Office was obliged “to have the State accounting as simple as possible and organised in such manner that allowed easy and complete control/audit”. The Office oversaw “the accounts of the State Administration and State enterprises that concerned the monies, materials and other values managed by the State organs as well as funds and foundations, organisations and enterprises receiving finance from the State or managed by the State organs”. The Office also had the right to audit “the establishments that were receiving subsidies from the State”. 

Slovak Republic era

After creation of the independent Slovak State, the Supreme Control Office was established by the Law 186/1939 Sl. z., and later, in 1942, the Supreme Control Court was founded by the Constitutional Law 110/1942 Sl. This control organ oversaw the financial management of the State Administration, State enterprises, funds and facilities and institutions, as well as the State assets, State accounting and State debt.                 

Czechoslovak era – Second Republic

After the end of the World War II and existence of the Slovak State in 1945, both the Supreme Accounts and Control Office with its seat in Prague and the Supreme Control Court with seat in Bratislava were active in parallel. During the years 1945 and 1946, the relations between these two institutions were gradually adjusted. The Supreme Control Court Chairman was subordinated to the Supreme Accounts and Control Office Chairman and, at the same time, he was his deputy in Slovakia.

In 1951, both these control institutions were abolished and a new control organ was created – the Ministry of State Control. Its subordination to the Government lasted in the following years when the Ministry changed its name on several occasion and was transformed into an organ of public control. As consequence of democratisation events in 1968, the Central Commission of People’s Control became an organ of National Assembly (Parliament) as established in Law 85/1968 Zb. In Slovakia, Commission of People’s Control became a control organ of the Slovak National Council (Slovak Parliament) and functioned as regional organ of the Central Commission of People’s Control.

The Constitutional Law on Czechoslovak Federation 143/1968 Zb. from 27 October 1968 allowed both the Slovak and Czech National Council (regional Parliaments) to establish in Law their respective control organs. The Slovak National Council fulfilled the provision of the cited Constitutional Law and created the Supreme Control Office as the Slovak National Council´s control organ by Law 70/1969 Zb.  

Its mandate included assessing the creation and use of the State Budget means, assessing the State balance sheet and tabling its opinion about it to the Parliament, handling of tangible and other assets of the State; its duties also included to control and verify the status quo and methods of handling the complaints, submissions and incentives by citizens and investigate the more serious ones.

Though, the existence of this office was short lived. By the end of 1970, following the Law 150/1970 Zb., the Office was abolished and a system of people´s control organs was created. The top people´s control organs were in the State (People´s Control Commission of the Czechoslovak Socialist Republic) and in both republics (in Slovakia it was the People´s Control Commission of the Slovak Socialist Republic) subordinated to the respective Governments.

Era after 1989

Following the events in 1989 and subsequent creation of the Slovak and Czech Republics, People´s Control Commission of the Slovak Socialist Republic and People´s Control Commission of the Czech Socialist Republic were transformed into the Ministries of Control.

The Ministry of Control of the Slovak Republic existed between 1990 and 1992. After its dissolution, The Office of the Slovak Republic Government became the central organ of the State Administration for State control. This Office made preparations for the Law on Supreme Audit Office of the Slovak Republic in 1992. The Law on Supreme Audit Office of the Slovak Republic came into the force on 15 February 1993 and the Supreme Audit Office of the Slovak Republic was established as of 1 April 1993.  

First 20 years of the Supreme Audit Office of Slovak Republic 1993 - 2013

Twenty years is likely time for a child to grow into an adult who is more or less prepared to take responsibility for his/hers life. Twenty years for an institution, especially if involving a state organ, is a different matter. It is expected from such an institution, it would take up on fulfilling its goals and mission from the very beginning and it will cater for the citizens´ benefit responsibly and in high quality. If looking back and turnimg the pages in the individual chapters of the Supreme Audit Office of the Slovak Republic (SAO SR), it could´ve been observed that:

  • SAO SR position and its independence were sufficiently guaranteed by the Slovak Republic Constitution;
  • SAO SR respected all the relevant INTOSAI audit standards while planning, preparing, executing and presenting all results of its audit activities. During those twenty years, the SAO SR worked out its internal legislative framework concerning the audit activities methodology while taking into account already mentioned standards. The SAO SR has considered this task as the key one. 
  • SAO SR have successfully concluded the effort to achieve such definition of the factual and personal terms of reference to execute the audit that it covers all the public funds as well as handling the public property in the whole complex of the public resources including the local governments, municipalities and foreign help.
  • SAO SR was active while introducing the system and audit of the EU funds financial management, it raised several experts for the tasks of a body issuing declarations on winding-up the assistance granted under EU Structural Funds and the tasks of the body issuing declarations on the winding-up the assistance granted under the EU Cohesion Fund for the Slovak Republic; the SAO SR also applied its knowledge in the said area for the benefit of the countries involved in the EU accession negotiations;
  • SAO SR fully developed its international relationships, carefully selected the offered foreign forms of help and cooperation in the audit activities, methodology, experience exchange and implementation of effective methods applied to the audit and management activities; the SAO SR increased number of its representatives and its presence within the INTOSAI, EUROSAI and V 4 + 2 working groups, and at the end of 2012 it took the chair of the INTOSAI Capacity Building Committee´s Sub-Committee 3 to Promote best practices and quality assurance through voluntary peer reviews (later renamed to Sub-Committee on Peer Review) which meant the SAO SR became part of the INTOSAI managements structures;
  • SAO SR developed use of the new approaches to the selection process for the audit activities strategic planning and invited to the brainstorming sessions experts from the scientific institutions and actual real life to apply the risk analysis and uncover possible negative areas in the economy and wider society;
  • SAO SR outlaid effort to increase the number of the performance audits and paid them increased attention;
  • SAO SR managed to execute two projects paid for by the EU structural funds in the last years; they significantly contributed to the SAO SR auditors´ professionalization. One of them was a project paid by the European Social Fund, and the other one was a project improving the informatisation of the SAO SR known as Audit Information System.
  • the managing processes were set at optimal levels as much as the rationalisation measures aiming to better the working environment including the management of the office building; the SAO SR regional branches were set up in all regional seats and an educational centre with closed video and conference circuit was built in the SAO SR headquarters.
  • SAO SR managed to heighten the attractiveness of the state employment service among its employees while lowering the auditors´ average age. 

The SAO SR managed to do many things in its first twenty years. In effort to assess the SAO SR past and future goals, SAO SR have turned to four selected Supreme Audit Institutions from the EU. They were asked to review the processes used and their completeness. The Peer Review was positive with recommendations of possible improvements in the area of communication about the audit activities results, human resources and methodology.