The Amendment to the Constitution of the Slovak Republic from 27 September 2005 strengthened supervision authorities of the Supreme Audit Office (NKÚ) of the SR. NKÚ competences were limited only to supervision of the management with that property and financial resources of communities, towns and Higher Regional Units which they obtained for the reimbursement of costs for the transferred execution of the state administration (nearly 50% of all incomes of local and regional self-governments). According to Constitution Amendment presenters from the Ministry of Justice, there arose a situation that after decentralisation of competences from the state administration to local and regional self-governments, including transfer of a significant volume of financial resources, financial supervision, executed by an independent state body, was provided for insufficiently. According to the Ministry of Justice, the public administration reform required to introduce a more effective mechanism for supervising total public finances, since the state cannot get rid of its responsibility for the efficient functioning of the whole public administration and for the efficient public finance management.
According to this Amendment, communities and Higher Regional Units should be supervised by the NKÚ in a full range. With its supervisory activity in self-governments, the NKÚ takes no decisions on the use of resources in self-governmental units, but it examines whether these resources were used efficiently in accordance with the law, so in concern of the whole community of citizens within a self-governmental unit. According to the Ministry of Justice, citizens must become sure that along with the internal supervisory mechanism on a local and regional level (main supervisors of communities), there also exists an independent supervisory authority (external supervision - NKÚ) which watches their interests, and, if needed, it is able to interfere, or signalise an objectively existing threat of their interests and needs. The presenters were sure that extending the NKÚ supervisory competences did not disturb the right of citizens to participate in management of public matters, it did not interfere with the autonomous decision-making of self-governmental bodies, limit application of their competences, or reduce the establishment of resources needed for the execution of self-governmental functions.
The Amendment contained an addition of NKÚ’s factual activity in areas which had been covered with supervision insufficiently. According to the Amendment, the NKÚ is an independent body, which supervises the management of:
• budget resources, which are passed by the Slovak Parliament or Government according to law,
• property, property rights, financial resources, liabilities and receivables of the, o State
o public service institutions, o National Property Fund of the SR, o communities,
o Higher Regional Units,
Evaluation of Economic and Social Measures Transparency 2005
o legal entities with property participation of the State, public institutions, National Property Fund of the SR, communities, Higher Regional Units,
o legal entities founded by communities or Higher Regional Units,
• property, property rights, financial resources and receivables, which have been provided to the SR, to legal entities or natural persons within development programmes or for other similar reasons from abroad,
• property, property rights, financial resources, liabilities and receivables, for which the Slovak Republic took over a guarantee,
• property, property rights, financial resources, liabilities and receivables of legal entities executing activities in public interest.
The fulfilment of new tasks should have been provided for by the NKÚ with supervisory capacities available at that time. The increase in expenditures in 2006 was estimated to the amount of nearly SKK 23m. The Amendment assumed that disputable issues would be solved by the Constitutional Court of the SR in well-founded cases. Some oppositional political parties (SMER-Social Democracy, Free Forum (SF)) wanted to amend the Constitution in order for NKÚ to obtain a chance of also supervising the financing of political parties.
Evaluation of the Experts' Committee:
50.0%
33.3%
4.8% 2.4% 2.4% 1.2%
6.0%
0%
10%
20%
30%
40%
50%
Absolute Approval
Moderate Approval
Minor Approval
Status quo Minor Disapproval
Moderate Disapproval
Absolute Disapproval Regarding the essential transfer of state administration competencies to the local and regional self-government, to a continuously bigger domain of institutions executing achievements in the public interest, administrating and re-distributing public property and resources and regarding a relatively high corruption rate in public administration, the aim of extending Supreme Audit Office’s (NKÚ) supervisory competences was assessed by the professional public highly positively.
The corruption decentralisation, as well as a relatively smaller amount of experience (possibly also a relatively lower professional qualification rate) with manipulation with public finances on a local and regional level represent a considerable risk regarding an efficient public finance management.
Strengthening supervision could increase the transparent and efficient use of public resources, which is an important argument for the introduction of an independent qualified supervision.
Another reason for as wide a state supervision as possible over manipulation with financial resources, which the self-governmental bodies obtained from citizens, is a legal framework which determines self-government’s functioning and authorities, including the execution of sanctions (police, courts, remand homes) for rejection or violation of obligatory regulations of self-governments in the area of public order and especially taxes on a local level, which is provided for by the State.
European supervision standards require to establish an internal and external supervision system for any public subject. After the state administration decentralisation, the self-governments administer a high rate of public resources and no external supervision system was created on their level, which was no optimum status according to majority of assessing experts. Furthermore, internal supervision quality is more than disputable. Community supervisors are often just puppets in the hands of the mayors who pay them. Regarding the fact that the local and regional self-government itself takes a lax attitude to the application of its own supervisory mechanism, which causes suspicions about effectiveness, the extension of the NKÚ authorities appears to be a beneficiary measure.
On the other hand, according to an respondent, the quality of supervision executed by the NKÚ and the emphasis on accordance supervision, and not on result supervision, is a limiting factor for the positive impact of NKÚ competences extension. According to an another opinion, it is disputable whether 20 further NKÚ employees will be enough for the extended competencies.
A solution could be that community supervisors would be in a contractual relation with NKÚ which would pay and supervise them.
Arguments that the Amendment to the Constitution would threaten the independence of local and regional self-governments and statements of Association of Towns and Communities of Slovakia that it is about the introduction of communist "national committees" into the self-government, does not have a rational basis. NKÚ will not interfere with the decision processes of communities, it will only supervise the management of public money and those should not be left to an often intentionally non-transparent and inefficient decision making of self-governmental bodies. There was expressed an opinion that some protagonists of self-governments might, due to a more strict supervision, lose their "grey zones", where they wasted money without any limits, and therefore they fought against the acceptation of the Constitution Amendment. It was important to subordinate supervision of money, coming from national resources, also to national supervision.
The local and regional self-government has to feel pressure of supervision because it is naive to rely only on media or the citizens that they would watch the local level. Even the NKÚ supervision does not need to discover any mistakes, but many assessors assumed that the supervision on a central level may be more effective than own self-governmental supervisory mechanisms. This is true especially in smaller communities, where people know each other, and therefore there exists a higher risk of impact on internal supervision and tendency of deflection from democratic procedures directed to a clan-based, persons-accepting or "group-mafia" way of decision making.
For some interviewees, it was disputable as to what extent the self-government should be supervised directly by the State. If self-governmental subjects manage with their own resources, according to this opinion, they should not be supervised by the NKÚ. But currently, it is necessary to defend the interests of tax payers also through the NKÚ. But according to an evaluator, the best solution would be an achievement of status, in which the mentioned subjects would provide for supervision funding for themselves from their own incomes.
According to an expert, it is of no benefit to "feed a useless dinosaur" - NKÚ – with new competencies, s/he says there should be an opposite trend. Some suggested that the institute of town or community supervisor should be reformed instead, i.e. own internal supervisory mechanisms, or competences of state prosecution, financial police, tax offices, etc. should be strengthened.
Evaluation of Economic and Social Measures