The
Swiss Federal Audit Office (SFAO) is established on a legal base as the supreme
audit institution of the Confederation bound only by the constitution and the
law. SFAO’s head (Director) is appointed by the Federal Council with the
approval of the Federal Assembly. He is appointed for a fixed period of six
years tenure with the possibility of reappointment up to retirement age of 65.
The contract of the Head of SFAO can be terminated by the Federal Council
subject to reservation of an administrative court appeal to the Federal Court,
only in the case of a serious breach of official duty.
The
various conditions of service of the head of SFAO to secure independence are:
Special
procedure for appointment
Special
procedure for removal
Fixed
Tenure
Control
over resources/budget
Immunity/protection
from actions by others in its performance of duties
Independence
to frame work plans
Eligible
for any other appointment under Government
Competence
to decide on the appointment of the entire staff of the SFAO
Competence
to publish audit reports and an annual activity report.
The
SFAO supports:
a.
The Federal Assembly (Parliament) in the exercise of the latter’s
constitutional financial powers and supervision of the Federal Administration
and the Federal Courts
b.
The Federal Council (Government) in the exercise of the latter’s
supervision of the Federal Administration.
The
Director of the SFAO can authorize the giving of evidence and the handover of
documents in judicial proceedings. Prior thereto he shall obtain the consent of
the head of the department (ministry) in whose sphere of responsibility the
matter falls.
If the SFAO observes
in the execution of the financial supervision fundamental problems in the
financial management or deficiencies in the organization, the administrative
management or the execution of tasks, then
- depending on the area of problems - it informs the Federal Finance
Administration, the Federal Office of Personnel, the Federal Office of
Information Technology and Systems or the Federal Data Protection Commissioner.
If the SFAO determines deficits or deficiencies in the legislation, then it
informs the Federal Office for Justice. Those administrative units concerned
render a report of the preventive measures taken by them to the SFAO.
The SFAO has the
right to submit the draft of its annual preliminary budget proposal directly to
the Federal Council (Government). The latter passes it unchanged to the Federal
Assembly (Parliament). It is then the Joint Committee on Finance of the
Parliament who is to deliberate the SFAO’s budget proposal in the presence of
the Director. The SFAO submits an annual report on its activities both to
Federal Council and to the Joint Committee on Finance and has also the
competence to publish single audit reports.
The
SFAO’s audit competence extend to the following:
The
Federal Administration up to the level of the head of departments
(ministries), but not the Federal Council (Government)
Bodies
not owned but substantially funded by the governments
Subsidies
directed to public sector institutions as well as to the private sector
All
kind of organisations entrusted with the performance of public tasks of the
Confederation.
Preliminary
remark: The SFAO’s powers are limited to the federal level. Apart from the
certification audit (where applicable), the SFAO decides independently, based on
its own risk analysis, which federal offices, organizations receiving subsidies
etc. are to be examined (audited) more in detail in a given year.
The
SFAO has powers to enforce or initiate enforcement action to secure access to
needed records. There is a possibility of appeal to the Government in case of
disagreement over access to information. The SFAO has no powers to seal
documents and other related items, which it considers necessary for its audit
and inspection. The SFAO is entitled to get access to all data bases of the
audited entities even including personal data. Getting access to the computer
systems of the auditees, it has the power to download and use electronic data
either on site or off site and to review the development of computer systems by
auditees and suggest/enforce any controls in agreement with the auditees
concerned. It has powers to seek testimonials (appearance and answers) of the
personnel engaged in the audited entities. Such testimonials may be requested by
the SFAO, but without any powers of enforcement. Whoever is subject to the
supervision of the SFAO is obliged to give it all the necessary assistance in
the execution of its duties. The SFAO has no powers to seek co-operation of
persons outside the Federal Administration for presenting materials or provide
testimonials necessary for its audit and inspection. It has no powers to
instruct government investigation agencies to perform activities considered
necessary.
The
SFAO does not have the powers to decide on claims of interested persons in
connection with official actions, duties and behaviours of persons subject to
audit and inspection. The surveillance body of the Federal offices in such cases
is the department (ministry).
The
SFAO has no powers to take punitive action and/or impose surcharges. The SFAO
has a role in the appointment of other external auditors engaged by the auditees
for meeting any statutory requirements but it cannot supervise or regulate their
work. It may only comment on it.
The
SFAO includes Financial, Compliance, Performance and IT audit in its scope of
audit. It executes the supervision of finance according to the criteria of
regularity, legality and performance. It executes performance audits to clarify
whether:
1.
The resources are being used economically;
2.
Costs and benefits are in a favourable proportion;
3.
The financial expenditures have achieved the intended objectives.
In
particular the SFAO performs the following duties:
a.
It examines the entire financial administration during all stages of
executing the budget and exercises controls through spot checks prior to
obligations being made.
b.
It examines the provision of the federal accounts.
c.
It takes care that the administrative units control the funds allotted to
them and it examines the management of the long-term appropriations.
d.
It examines the internal control system.
e.
It examines through spot checks the payment orders issued by the
administrative units.
f.
It carries out the auditing of the administrative units, including the
accounts and inventories.
g.
It examines the suitability of monopoly prices within the framework of
the purchasing administration of the
Confederation.
h.
It examines whether the EDP applications in the areas of financial
management exhibit the necessary security and ability to function, especially
whether the directives ssued by the Swiss Federal Office of Information
Technology and Systems are being followed.
i.
It carries out the control mandates of international organizations.
The
SFAO conducts ex-ante audits, concurrent and ex-post audits. Audit methodology
and audit procedures are mainly based on the Auditing Manual of the Swiss
Institute of Certified Accountants and Tax Consultants (these standards are
closely linked to ISA by IFAC) and INTOSAI standards. The SFAO does not
discharge judicial functions. The SFAO is required to follow specific standards,
practices and guidelines in conducting audit and reporting. The SFAO can consult
and/or collaborate with other countries / SAIs and international organisations
on matters relating to audit.
The
SFAO may engage experts whenever the execution of its assignment requires
special expertise or cannot be guaranteed with its regular staff (Article 3
Federal Law on the SFAO). The SFAO can report on acts that infringe upon State
economic interests like mass embezzlement of State assets, serious losses and
wastes. The internal audit units are required to notify the SFAO without delay
of all ascertained deficiencies of any fundamental or considerable financial
importance. Does furthermore the SFAO learn of cases of fraud or embezzlement,
it is entitled to require information on those cases. There is, however, no
general obligation to the auditees that they should inform the SFAO on their own
initiative.
The
SFAO compiles a report on every audit completed, which it then submits to the
Joint Committee on Finance of the Federal Parliament, including the comment by
the agency audited and a summary. It also submits the summary to the Head of
Department (ministry) concerned by the audit findings. The SFAO also compiles
interim reports on prolonged audits. After the Joint Committee on Finance of the
Federal Parliament has dealt with an audit report from the SFAO, it may publish
its report together with the comment by the agency audited and any evaluations
by the Joint Committee on Finance of the Federal Parliament.
The
SFAO has a role on the disposal or the action taken on audit findings. The SFAO
does not present an interim report before rendering an annual report on the
examination of the closing of the accounts of the Federal Government. The SFAO
has powers to share its audit reports with the public and media after the Joint
Committee on Finance of the Federal Parliament has dealt with the report. In the
case of Financial Statement audits, the SFAO has no powers to amend accounts in
case of financial statements audit. The SFAO has an advisory role. There isn’t
any requirement that the Government should consult with the SFAO. Its advisory
role is defined as follows. The SFAO participates in the drafting of regulations
pertaining to the internal control and auditing services, the accounting,
payment transfer and inventory systems. It shall advise on all matters, which
affect financial control. The SFAO may also be invited to participate in the
discussions of the committees charged with preparing the budget and the Federal
annual accounts. Its services may also be drawn upon with regard to
appropriations requests.
The
SFAO is constituted as an audit office with monocratic status i.e. with an
Auditor General or equivalent as head. SFAO is empowered to engage external
auditors/agencies/consultants as required.
The
SFAO can expend resources budgeted independently. The SFAO submits the draft of
its annual preliminary
budget
proposal to the Federal Council (Government). The latter
passes it unchanged to the Joint Committee on Finance of the Parliament, which
is treating the matter and submits its proposals to the Committees on Finance of
the Chambers. These bodies pass the budget proposal to the Federal Assembly for
approval. The head of a supreme cantonal audit body is mandated to audit the
annual accounts of the SFAO and to submit its report to the Joint Committee on
Finance.
The
Director of the SFAO is the electoral authority for the whole staff of the SFAO.
In as far as nothing to the contrary shall be stipulated in the law on the SFAO,
the employment law of the General Federal Administration are applied
analogously. The total number of persons employed is however determined by the
Federal Parliament.