The SAO: A powerful player serving the taxpayers - President of the SAO, Mr Miloslav Kala
Seminar - 20th Anniversary of the SAO, Senate of the Parliament of the CR, 25.7.2013
Ladies and gentlemen,
twenty years ago the Act on the Supreme Audit Office was born in dramatic circumstances. Parliamentary deputies had to vote by name to ensure that the act, whose existence is anticipated by the Constitution, passed. Many frowned, some raised their eyebrows... And perhaps few realised that this marked the end of the era of state control and laid the foundations for a modern accounting and audit institution.
Dr Lubomír Voleník and the members of the first Board infixed an immutable principle into its foundations: THE PRINCIPLE OF INDEPENDENCE. This clearly demarcated ground plan was the basis of a strong and respected institution that has been a partner to the government, the Chamber of Deputies and the public, and has often been called the watchdog of democracy.
During these two decades our society has undertaken a long journey - the powerful state that was the enemy of its citizens has gradually changed. Against the public´s expectations, it has gradually matured into a bureaucratic monster that is once again viewed as the enemy. An expensive, harmful enemy. The state is weakened by a number of reforms, reorganisations and various "bright ideas". Their authors never forget to stress that the state is the worst possible owner, custodian and administrator.
An endless series of scandals and affairs only reinforces their argument.
Excellently organised business groups we today liken to a "mafia" look after the state´s property and revenues. They are not merely linked to state structures. In many cases they have penetrated state structures. They adapt flexibly to the social and economic conditions they arise out of. The losses they cause to public budgets are calculated by a wide variety of research centres, whose estimates rarely dip below the figure of one hundred billion koruna a year. We can glimpse the shadows of these claims in the occasional news reports about the discovery of hundreds of millions of koruna, tens of kilograms of gold or billions in Swiss bank accounts.
And we have also glimpsed them recently in the audit conclusions of the Supreme Audit Office. The legacy we inherited from our predecessors binds us to adapt to the changing conditions and to side with the taxpayer. You may counter that the SAO should primarily hold up a mirror to the present political establishment and its governance of public affairs. I often hear that it tries to avoid looking in this mirror, preferring to claim that it is shows a distorted image.
For once and for all, let us be done with this interminable discussion whether the government and parliament take the SAO´s conclusions seriously or prefer to avert their gaze from the reflection of their own deeds. Politicians who do not change their attitude to public finances and to the concerns of taxpayers - their voters - are not up to the job. We are developing and will continue to develop cooperation with those who have the courage to look in the mirror - politicians, civic associations, non-government organisations. We will serve those who know what to look for in our conclusions. That is why I say that the SAO is and will remain a powerful force in the service of taxpayers. And everyone who is on their side.
When I joined the SAO I defined three simple principles. The first is to do no more than what we demand of our auditees. As an example I will mention a single figure - we have reduced the Office´s budget from CZK 650 million to this year´s figure of CZK 500 million.
The second principle is that we deliberately focus on those areas where we detect a high risk of uneconomical, inefficient and ineffective conduct. Forests of the Czech Republic, value added tax, tax indulgences granted by the ministry of finance, road tolls, the health system, motorways, information technologies - these are examples of audits that revealed fundamental information and constituted a milestone in the particular field.
The third principle is to apply modern work methods. The data of the state administration are today fully digitised, and our analytical systems, risk detection and approach to the information systems of public administration are paving the way for a fundamental change in the effectiveness of our audit work. We make full use of these technologies and methods.
The SAO is a modern, effective and powerful institution with an exemplary history of sound financial management.
An Office with a vision and belief: a vision that it can change the Czech state by its own example and determination; and a belief that the Czech Republic does not deserve mafiosi and their kilograms of gold in safes...
We are gathered here on the occasion of the SAO´s birthday and this is an opportunity to remember everyone who played a role in its birth and first steps and to thank everyone who shares the responsibility for its achievements to date. We also usually wish good health and success - and what about a gift?
We are guests in the Senate of the Parliament of the Czech Republic. It is here that the actions of senators recently derailed the promising progress being made in the legislative process to amend the Constitution and the Act on the Supreme Audit Office. The debate that preceded the rejection of the widening of the SAO´s powers revealed that a large part of the political representation does not understand - or does not want to understand? - the significance of independent external audit. In other words, the principle that all public financial operations, regardless of how they are reflected in the state budget, should be subject to audit. Yes, you are right to recognise the words of the Lima Declaration. The only gift our 20-year-old institution needs is for these words to be fulfilled.
In the same way that the Act on the Supreme Audit Office was born under dramatic circumstances twenty years ago and many frowned or raised their eyebrows while few realised that this marked the end of the era of state control and laid the foundations for a modern accounting and audit institution, today we have the opportunity to build on these foundations. To put in place conditions that are consistent with international recommendations and the current state of public governance. History will not forget this, whether you frown or raise an eyebrow...
Ladies and gentlemen,
thank you for your attention. I believe that you share our hope and trust...