The principles of good governance are strong in the Finnish society, where attention has also been paid to risk management competence. This provides a solid foundation for operations even under exceptional circumstances. The National Audit Office of Finland (NAOF) performs its duty by auditing compliance with these principles and monitoring the fulfilment of Parliament's budgetary power.
Despite the pandemic, the National Audit Office will continue to conduct its audits, such as the financial audits of 2019, and plan new audits mainly as normal.
We will update our audit plan in May 2020, taking into account both the impacts of the exceptional circumstances and Parliament’s anticipated need for information. We will also consider the impacts of the current situation on the contents of both ongoing and planned audits.
In this exceptional situation, it is particularly important to assess risk management and the controls on the measures taken. State aid decisions and extended state guarantee operations fall in within the scope of the NAOF’s audit work.
Collecting information for future needs
The National Audit Office is preparing to meet Parliament’s and other stakeholders’ need for information especially after the acute phase of the pandemic. A monitoring group consisting of experts in different fields provides and updates a situation picture of the Government’s and public authorities’ operations amid the pandemic. The key issues monitored include the Emergency Powers Act and the decrees issued under it, the measures taken by virtue of them, the impact of these measures on expenditure, legislative amendments and their time span, decision-making processes, and EU actions.
The information obtained through the monitoring will help us to plan our audits and produce information for Parliament. The aim of the monitoring is not to identify audit topics immediately or provide a comprehensive analysis of the findings. Instead, we will utilize the information as separately agreed, for example when updating our audit plan.
The focus of fiscal policy monitoring will change
The exceptional circumstances caused by the coronavirus outbreak have an impact on general government finances through both the general economic development and direct fiscal policy measures. The NAOF’s fiscal policy monitoring will assess the measures taken by the Government during the pandemic.
Under the fiscal policy legislation, it is the NAOF’s duty to assess and monitor compliance with national and EU fiscal rules, the contents of the General Government Fiscal Plan, and the reliability of the forecasts on which fiscal policy is based. The NAOF’s fiscal policy monitoring is currently preparing to report in May 2020, as planned, on its assessment of the management of general government finances based on the decisions taken in this spring’s government discussion on spending limits and the General Government Fiscal Plan.
The assessment will naturally take into account the exceptional circumstances and measures. Under the escape clause of the EU Stability and Growth Pact, for example, the framework of the Pact is not valid, which provides Member States with the necessary national margin of manoeuvre for managing the crisis. In the exceptional circumstances, the focus of the monitoring will therefore shift from assessing compliance with the rules to assessing the measures taken by the Government as well as the outlook and risks of the national economy and general government finances, which are now essentially affected by the coronavirus crisis. In addition, the NAOF will issue conclusions and recommendations related to the procedures applied under the exceptional circumstances.
Cooperation supports the implementation of good governance
Our audit work and cooperation with our stakeholders have been running smoothly through remote connections. We have also managed risks related to the pandemic in our own operations. We are thus faced with the same challenges as all other organizations in this exceptional situation. Through our own role, we want to support the implementation of the principles of good governance and to ensure that Parliament is provided with the information it needs once the acute crisis over.
The National Audit Office has submitted a corresponding overview of its operations under the exceptional circumstances to the cooperation network of the Nordic Supreme Audit Institutions (SAIs). Despite the pandemic, international cooperation and exchange of information between the SAIs continue over remote connections. SAIs, particularly within Europe, exchange information regularly on the impacts of the exceptional circumstances on their operations and on their role in assessing national measures.