The audit found no non-compliant transactions between the central government and persons and entities related to it. Final central government accounts do not include related party reporting. Therefore, it is not possible to verify from the final accounts prepared by the accounting offices in accordance with the current legislation whether the accounting offices have had transactions with entities that could be considered to be their related parties.
The audit was targeted at related party relationships and transactions in the central government in 2021 and 2022. The purpose of the audit was to provide information on the central government’s related party relationships and to verify that transactions with related parties have been carried out lawfully and under normal terms and conditions and that the internal control procedures related to them are adequate.
From the perspective of the principles of good governance, transparency and legality, it is important that transactions with related parties are legal and that the internal control procedures related to them are adequate and appropriate.
The significance of the concepts of related party relationships and transactions in the central government is not specifically defined in legislation, and the central government has no obligation to report them. In general, related parties refer to entities close to an entity under review and, for example, persons in the management and those close to them. Related party transactions refer to business transactions in which the other party is an entity or person related to the entity under review.
In this audit, related party relationships were examined by accounting office, and related parties were considered to include the senior public officials of the accounting offices. In addition, related parties were considered to include state-controlled companies. The audit of related party transactions was targeted at purchase invoices and government grant decisions. The audit found no shortcomings in the audited related party transactions between the central government and persons or entities related to it. From the perspective of good governance and transparency, it is recommended that a public official does not accept an invoice from an entity in which they hold a decision-making position.
The audit also examined compliance with the obligation to issue declarations of interests under the Act on Public Officials (750/1994), the up-to-dateness of their information content and the procedures of internal control. The audit found no material shortcomings.
The provisions on the content of final central government accounts or the final accounts of ministries, agencies and institutions acting as accounting offices do not include requirements for the presentation of related party relationships and transactions. Final accounts prepared by central government accounting offices according to current legislation do not make it possible to verify transparently whether the accounting office has had transactions with entities that could be considered to be its related parties.