The National Audit Office of Denmark is established by an act of the Parliament/Legislative body. The Head of SAI is appointed by the Speaker of Parliament with the approval of the Standing Order Committee of Parliament. The Procedure for terminating the appointment of the Head of the SAI is:
The Parliament’s Public Accounts Committee shall make the nomination for appointment and dismissal of the Auditor General to the Speaker of Parliament who, after negotiation with the deputy speakers, shall present the nomination to the Standing Order Committee of Parliament.
There is no prescribed qualifications for appointment of the Head of SAI, but the position as Auditor General is incompatible with being a Member of Parliament. The Head of SAI is appointed without a fixed tenure but up to a compulsory retirement age of 70 years.
The various conditions of service of the Head of the SAI to secure independence are:
Special procedure for appointment
Special procedure for removal
Control over resources/budget
Immunity/protection from actions by others in its performance of duties.
Independence of frame workplans
Eligible for any other appointment under Government
The National Audit Office of Denmark is an independent institution organizationally placed under the Parliament. The Public Accounts Committee is the only body that may request an examination to be carried out. The Public Accounts Committee makes use of the Auditor General’s reports etc. as the basis for its work. The Committee submits the reports to the Parliament. The Government must respond to the Committee’s recommendations. The SAI in Denmark has financial independence. The Auditor General recommends the budget to the Public Accounts Committee, who recommends it to the Chairman of the Parliament. At last it is the Parliament who votes as a part of the draft budget.
There are mechanisms to secure accountability of the SAI, such as:
A private audit company audits the National Audit Office of Denmark.
The Instruction for the Auditor General outlines the Auditor General’s relations with the public.
All reports, and any comments the Public Accounts Committee may have, are made public.
The SAI’s jurisdiction extends to following
Federal Government
Bodies not owned but substantially funded by the governments.
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 minority share holder.
The National Audit Office of Denmark has complete or partial access to limited liability companies’ account. The National Audit Office of Denmark has no power of access to the companies providing services for the Government on a contract basis. The National Audit Office of Denmark does not have access to audit the Crown, the Parliament and the National Bank (in the banks capacity as a central bank). In addition, the Auditor General has access to local governments’ accounts if expenditure is reimbursed by the state.
The SAI has jurisdiction over
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate, authority under the Auditor General’s Act. The SAI has no powers to enforce or initiate enforcement action to secure access to needed records, which are not produced. The SAI does not have power to seal documents and other related items considered necessary for audit and inspection. However, the SAI have powers to search and seize documents and other related items considered necessary for audit and inspection. It does not have power to seek testimonials of the persons concerned. But it can seek co-operation of persons other than agencies subject to audit and inspection. The National Audit Office of Denmark often seeks co-operation of the Department (ministry).
The SAI does not have powers to instruct government investigating agencies to perform activities considered necessary. But in their reports to the Public Accounts Committee SAI can criticize if such requirements are not accomplished. The National Audit Office of Denmark is not a court of Audit/tribunal. The SAI does not have the powers to decide on claims of interested persons in connection with official actions, duties and behaviors of persons subject to audit and inspection. Further it 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.
The SAI 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 the power to download and use electronic and use electronic data either in site or off site. The SAI have powers to review the development of computer systems by the auditees and suggest/enforce any controls. It does not have any role in the appointment and supervision of other external auditors engaged by the auditees for meeting any statutory requirements.
The SAI prescribes Financial, Compliance, Performance & EDP audit in its scope of audit. The power to perform these audits are mandated by the law governing the SAI. It is stipulated in The Auditor General's Act, Section 3: "The audit shall ascertain that the accounts are correct and that the transactions covered by the presentation of accounts are in compliance with granted budget appropriations, the laws and other regulations and with agreements made and customary practice. Furthermore, an evaluation shall be made as to whether sound economic management has been applied to the administration of funds and the running of the operations covered by; the accounts". SAI conducts special audit. Financial audit is largely systems based and is planned on the basis of materiality and risk. In recent years, the National Audit Office of Denmark has made a catalogue of products for financial audit. The National Audit Office of Denmark audits on the basis of internal guidelines in order to ensure quality and a homogeneously performed audit. The guidelines are tested up-dated and developed continuously.
SAI does not discharge judicial functions. The report (findings) is presented to the Parliament's Public Accounts Committee, which forwards it, with any comments, to the Parliament and minister concerned. The minister must respond within four months, however, two months for the Annual Appropriation Control Report, with a statement to the Parliament's Public Accounts Committee of the measures and consideration, which the report has given rise to. This statement is also forwarded to the Auditor General who must submit his comments to the Parliament's Public Accounts Committee within one month. The statement and the Auditor General's comments are included in the final report of the Committee to the Parliament.
The SAI does not require to follow any specific standards, practices and guidelines in conducting audit and reporting. The National Audit Office of Denmark audits on the basis of internal guidelines in order to ensure quality and a homogeneously performed audit. The National Audit Office of Denmark has worked out guidelines, which are tested, up-dated and developed continuously.
The SAI consult and /or collaborate with other countries/SAIs and International organizaions on matters relating to audit. eg.
The co-operation in INTOSAI, EUROSAI.
The co-operation with the Nordic-Baltic countries.
The co-operation with the European Union (EEC).
The SAI may engage consultants and/or obtain professional services in conducting audit, only to a little extent. The SAI can report on acts that infringe upon State economic interests like mass embezzlement of State assets, serious losses and wastes. The SAI require that, any fraud or embezzlement be reported mandatorly by the auditees, but SAI do not have power to oversee the ultimate disposal of such cases. The SAI has a role on the disposal or the action taken on the audit findings. The SAI reports form the basis for agencies' follow-up. The National Audit Office of Denmark reviews the agencies work and if necessary a follow-up review will be carried out. The SAI does not present an interim report before rendering an annual report on the examination of the closing of accounts of Federal, Provincial and Local governments. The SAI does not have powers to share its audit reports with the public and media. But the Parliament's Public Accounts Committee has power to share the audit reports with the public and media. The National Audit Office of Denmark can ask the ministries to amend accounts in case of financial statement audits, but it is their final decision.
The SAI has an advisory role. The Auditor General's Act requires the Auditor General to assist the ministries in the organizing of accounting and internal accounting control. The National Audit Office of Denmark offers advice and guidance on how to organize the accounts and the accounting control for state agencies. The National Audit Office of Denmark may offer advice on procedures in connection with presentation of accounts etc.
SAI is constituted as an audit office with monocratic status i.e. with an Auditor General or equivalent as head. It is stipulated in the Auditor General's Act that the Auditor General is independent in the performance of his duties. The Auditor General is responsible for the SAI's day-to-day functioning. The SAI is empowered to engage external auditors/agencies/consultants as required.
SAI can expend resources budgeted independently. It have full independence in forming its workplan. The Auditor General employs and dismisses his staff in accordance with the staff policy. However, employment and dismissal of civil servants in high-income brackets as well as the unsolicited dismissal of all civil servants requires the approval of the Standing Order Committee in the Parliament after previous presentation to the Parliament's Public Accounts Committee.
SAI is subjected to an independent financial and performance audit. The SAI required to submit a report on its activities. The Annual Report on the National Audit Office of Denmark's activities is submitted to the Parliament's Public Accounts Committee.