Instituting Improvement

Krzysztof Kwiatkowski, President of the Supreme Audit Office (NIK), talks with WBJ Observer about NIK’s activity in improving the functioning of the Polish government and other public institutions, meanwhile stressing the importance of the apolitical nature of NIK’s reports Interview by Ewa Boniecka WBJ Observer: Many Poles complain about poor functioning of the Polish government and other public institutions.How do you find the condition of public institutions in the light of NIK audits? Krzysztof Kwiatkowski: I don’t agree with this black vision. The present situation in Poland should be viewed from a broader perspective. In my opinion, the point of reference is the year 1989 when Poland set the course for democracy. Nowadays, we are part of the European Union and NATO. Poland has a strong international position as well as a stable and developing economy. These are the facts. But NIK is there to highlight areas for improvement – this is the core of its activity. Our audit reports and recommendations translate into numerous changes in legal provisions. Many institutions are eliminating irregularities identified by NIK and as result are better primed to serve the citizens. We help improve the state. Studies show that NIK has earned Poles’ trust and is considered the most credible of all public institutions in Poland. It turns out that Polish courts, the Constitutional Tribunal and also public institutions in the European Union and other countries value your activity as very objective and reliable. How does that credit of trust help you change the legal system and the functioning of public institutions? We cannot force any changes, we may only propose them. Our recommendations – as is the case with any other audit institution worldwide – are not obligatory. However, the credit of trust we have is a powerful argument to convince the Parliament and other public institutions to implement changes in the law and public administration. The auditees carry out 90 percent of the recommendations already during the course of NIK’s audits, others are implemented in the following months. The changes proposed by NIK are often the subject of legislative processes in the Parliament. For instance, recently we have published a very critical report concerning safety on Polish roads. There was a postulate to take away the municipal guard’s right to control the speed of vehicles. Now the Parliament has taken the initiative to follow that recommendation. Some time ago, we presented a report on the lack of regulations concerning the extraction of shale gas in Poland. A law was passed as a result of our audit which regulated many matters related to that area. When we reveal crimes or corruption incidents in public institutions, we refer the cases to the Prosecutor’s Office or specialized law enforcement bodies, such as the Central Anti-Corruption Bureau, which then take proper actions. [caption id="attachment_86239" align="alignleft" width="300"] Image: Jan Malinowski/WBJ[/caption] But changes in the law need majority support in the Parliament and in many cases you are dependent on the moves of the political class. Some of your very important reports – like the one regarding the healthcare system - do not lead to any changes. In such cases, the political reality prevails. NIK is an apolitical body. The majority of our post-audit recommendations are carried out by the National Health Fund (NFZ) or hospitals. And the proposals we make have nothing to do with politics. They are an outcome of objective, in-depth analyses. Even if controversial, they are usually accepted by parliamentary commissions (composed of members of all parties), which among other things look into NIK reports. Publishing our reports in the media provides fertile ground for improvements. The apolitical nature of the Polish Supreme Audit Office is guaranteed by the Polish Constitution. All audit bodies in any democratic country are ensured political independence. And international statistics show that the post-audit recommendations of NIK are followed more often than is the case in many other countries. Can NIK also audit Polish private companies and institutions and foreign entities operating in Poland? Yes, we can audit private companies and institutions, Polish or foreign, on one critical condition: if they use public money. We have the right to audit any Polish or foreign private company operating in Poland which received even one złoty from the state budget or from the EU. At the moment we are running a very interesting audit, in which we check whether our tax system treats Polish and foreign entrepreneurs on equal terms. The audit objective is to check whether the Ministry of Finance and tax offices have a proper and transparent approach to companies paying taxes. The question is whether tax offices have properly implemented all tax provisions. Our audit will answer this question. What kind of audits do you consider to be the most demanding? Each and every audit is demanding in its own way. We conduct 200 planned audits and about 200 ad hoc checks every year. There are about 7,000 requests for auditing. Unfortunately, due to the limited number of auditors, we are not able to meet all requests. But sometimes we combine similar requests and run a single, joint audit of a given area. NIK’s most important audit is the annual state budget audit. We enter ministries and central institutions selected at random to check how they spend public money. I want to stress that we not only want to know if they comply with legal provisions but we also look into the effectiveness of public expenditures. One of the issues in that area, identified in some of the audited institutions, was the improper handling of public tenders. It was at the request of NIK that the Polish Parliament changed various acts in that area so as to make the public procurement procedures transparent and reliable. [negative]International statistics show that the post-audit recommendations of NIK are followed more often than is the case in many other countries[/negative] Do you receive requests for audit from individual citizens, social groups or small institutions? Each citizen and every small or big institution has the right to lodge a complaint or a request for audit to NIK if they believe public money is spent improperly. We have a special unit of experts at NIK dealing with such requests. We have, for instance, received many individual and group requests concerning the installation of electric windmills. Based on those requests and complaints, we have conducted an audit in a dozen or so municipalities as to the adequacy of decisions concerning the location of windmills, which was brought to light by citizen protesters. Our recommendations deal with changes in the law. Several laws and ordinances need to be changed to make sure the clean energy sector develops properly and is safe for citizens. How do you audit the flow of funds granted to Poland by the European Union? We have conducted a series of audits checking whether agreements for EU grants are implemented in line with their assumptions. So if subject A received money to conduct activity in domain B, we check it in terms of its task performance and the use of funds, that is if the whole amount was used as intended. Recently, NIK was the first of all the EU national audit institutions to check how the state is prepared for the new EU financial perspective for the years 2014-2020. Poland appeared to be one of the first three EU member states, who have signed the partnership agreement with the EU for the new financial perspective. And only on the basis of such an agreement is it possible to announce competitions for the use of EU funds. You have put politics aside now. But your present role in shaping the political environment in Poland is seen as very active and significant. How do you see yourself? I am an auditor who helps improve the Polish state.