Mission controller
On a cold and clear morning I approached the headquarters of NIK, the country's audit commission, having walked from the Marriott Hotel. The impression that we are about to leave the new world order, of which the American-owned hotel is a potent symbol, and move back to the old order era remains strongly with us. Not least is this caused by the popular consensus among certain business leaders and politicians that NIK in some way represents the old system of centralised control and enjoys far too many powers of access and interrogation.
As we enter the classical palazzo on ulica Filtrowa, the headquarters of NIK, the impression is quickly dispelled. The lobby is bright, the security guards friendly and helpful, and the cloakroom is self-service, indicating a high degree of trust among staff and guests. We are shown to the first floor and enter the office of Mirosław Sekuła, the president of NIK. Sekuła is a young (well, from my perspective anyway) technocrat, easygoing and with a smile on his face, who would easily fit into any western institution. He has a perfectly good knowledge of English, but his innate humility means that he prefers to speak in Polish. This is a man who is completely at ease with himself, a gifted communicator and I can't help feeling, the sort of charming and capable technocrat the French are so good at turning out. It's called style.
The interview moves off to a brisk start with Sekuła explaining that NIK has an 84-year-old tradition, having been set up in 1919 shortly after Poland regained its freedom and intended to control the three different systems of public administration inherited from Germany, Austria and Russia. He quickly goes on to say that the present NIK is very much aware of the change of direction it will face upon the country joining the European Union. To this end, NIK has been working very closely with the British National Audit Office on implementing necessary changes. The co-operation with Britain is in some ways appropriate, particularly as the offices of NIK face the waterworks built in the 19th century by British engineers and that still to this day serve Warsaw well.
Sekuła goes on to say that NIK has been subject recently to peer review by its EU counterparts, and that generally NIK got a clean bill of health. However, NIK is undergoing change and in future will concentrate far more on financial controls, moving slightly away from the current emphasis on performance. He states quite categorically that the remit of NIK is the public sector, and that contrary to popular belief, "it only investigates ministries, public institutions and those companies in which the state retains a shareholding." It is in the latter that conflict can arise with private shareholders, such as has recently been the case with KGHM Polska Mied. Sekuła reiterates that NIK's role in overseeing the whole privatisation process is significant, and that "where the state on behalf of the citizens of Poland has decided to retain a stake, NIK must ensure that proper rules of corporate governance apply." He adds that "of course, purely private companies can also be subject to investigation, but only to the extent that they benefit from state subsidies or contracts or as part of the investigation of the efficiency of tax offices in assessing taxes." And that is quite another story the Business Journal will be visiting soon.
Asked whom he considers his clients to be, Sekuła's immediate answer is that NIK is a constitutional body and as such has no clients. "Of course, NIK's work is addressed to parliament and to the citizens of Poland in whose name the government raises taxes and spends the proceeds, or in some measure spends future generations' money. Clearly, the constitution defines the framework against which the efficiency and probity of public expenditure is measured."
As part of the value-for-money ethos of public finance, Sekuła has instigated changes designed to ensure that control visits from its inspectors cause as little disruption as possible to the day-to-day work of the institutions and companies being controlled.
When asked about the role of the Polish Chamber of Auditors and the co-operation with that body, I got the impression that Sekuła believes this could be better. Clearly, the change of emphasis to financial control and systems evaluation will result in closer co-operation and NIK using far more financial auditors. He believes that public interest bodies, such as accountants, lawyers and other professionals, should be self-governing, but that there is always a danger that the bodies will be biased towards protecting the interests of their members. Conversely, however, he does not believe in direct state control of the professions as this leads to political expediency taking the upper hand over the public good.
Having avoided the topic thus far, we move on to corruption. I ask the chairman what effect he believes Poland's entry to the EU will have on corruption. He voices the opinion that things might deteriorate in the short-term. He goes on to explain that corruption can only arise in a situation where public servants have the power to arbitrarily make decisions or to slow down the decision-making process or where there is inadequate control over the work of individuals. Sekuła is a firm believer in the "four-eyes principle," whereby at least two people independent of each other are responsible for a process. In his view, the country's entry into the EU will cause a transitional increase in the opportunities for corruption. The implementation of directives and regulations will dramatically increase the number of permits, concessions and decisions with which officials will have to deal. Invariably, the process of introducing systems of control and review will lag behind. In the area of the administration of grants, subsidies and the allocation of quotas, there will be further scope for corruption.
But what about the obvious problem here at home, and with one of the most spectacular stories since 1989 doing the rounds?
Sekuła believes that behind the public din the situation has improved dramatically, and is not as extensive as widely believed. In the consumer arena the situation is incomparable with the 1980s, when every citizen had to bribe shop assistants in order to buy anything. In specific areas, such as the health system and the railways, he instances the necessity for the tonic of the private sector, witnessed by the rapid expansion of private healthcare with modern standards of administration and financial controls. He is also very keen on the introduction of retrospective controls, such as has been the case with driving examiners where investigations following accidents caused by clearly incompetent newly qualified drivers have led to the prosecution of examiners.
Sekuła is also a firm believer in automated systems of control, particularly IT-based solutions. NIK is investing heavily in database interrogation software able to identify exceptions, such as variations in the time taken by officials to issue decisions. NIK has also changed its emphasis and now looks far more closely at areas of operation where there are significant control weaknesses and where opportunities for corruption exist. Using its powers of initiating legislation, NIK has tabled before parliament changes to legislation designed to simplify the decision-making process and to clearly define parameters which must be met by applicants for permissions.
On his ambitions for NIK, Sekuła says that he would like the commission to start an annual process of evaluating the state budget as a whole from the standpoint of value for money for the country's citizens.
When asked to comment on the fact that his name is being rather more than whispered around town as a candidate for the post of Commissioner at the EU, Sekuła employs that winning and disarming smile of his to deny such ambitions and states that at heart he is an administrator and not a political beast (which is, of course, exactly the official job description of a commissioner). Time will tell whether this is indeed the case, but frankly Brussels' gain would be a very severe loss indeed to the public administration of this country, and to an institution that in many cases is the only barrier to high-level corruption.
As we enter the classical palazzo on ulica Filtrowa, the headquarters of NIK, the impression is quickly dispelled. The lobby is bright, the security guards friendly and helpful, and the cloakroom is self-service, indicating a high degree of trust among staff and guests. We are shown to the first floor and enter the office of Mirosław Sekuła, the president of NIK. Sekuła is a young (well, from my perspective anyway) technocrat, easygoing and with a smile on his face, who would easily fit into any western institution. He has a perfectly good knowledge of English, but his innate humility means that he prefers to speak in Polish. This is a man who is completely at ease with himself, a gifted communicator and I can't help feeling, the sort of charming and capable technocrat the French are so good at turning out. It's called style.
The interview moves off to a brisk start with Sekuła explaining that NIK has an 84-year-old tradition, having been set up in 1919 shortly after Poland regained its freedom and intended to control the three different systems of public administration inherited from Germany, Austria and Russia. He quickly goes on to say that the present NIK is very much aware of the change of direction it will face upon the country joining the European Union. To this end, NIK has been working very closely with the British National Audit Office on implementing necessary changes. The co-operation with Britain is in some ways appropriate, particularly as the offices of NIK face the waterworks built in the 19th century by British engineers and that still to this day serve Warsaw well.
Sekuła goes on to say that NIK has been subject recently to peer review by its EU counterparts, and that generally NIK got a clean bill of health. However, NIK is undergoing change and in future will concentrate far more on financial controls, moving slightly away from the current emphasis on performance. He states quite categorically that the remit of NIK is the public sector, and that contrary to popular belief, "it only investigates ministries, public institutions and those companies in which the state retains a shareholding." It is in the latter that conflict can arise with private shareholders, such as has recently been the case with KGHM Polska Mied. Sekuła reiterates that NIK's role in overseeing the whole privatisation process is significant, and that "where the state on behalf of the citizens of Poland has decided to retain a stake, NIK must ensure that proper rules of corporate governance apply." He adds that "of course, purely private companies can also be subject to investigation, but only to the extent that they benefit from state subsidies or contracts or as part of the investigation of the efficiency of tax offices in assessing taxes." And that is quite another story the Business Journal will be visiting soon.
Asked whom he considers his clients to be, Sekuła's immediate answer is that NIK is a constitutional body and as such has no clients. "Of course, NIK's work is addressed to parliament and to the citizens of Poland in whose name the government raises taxes and spends the proceeds, or in some measure spends future generations' money. Clearly, the constitution defines the framework against which the efficiency and probity of public expenditure is measured."
As part of the value-for-money ethos of public finance, Sekuła has instigated changes designed to ensure that control visits from its inspectors cause as little disruption as possible to the day-to-day work of the institutions and companies being controlled.
When asked about the role of the Polish Chamber of Auditors and the co-operation with that body, I got the impression that Sekuła believes this could be better. Clearly, the change of emphasis to financial control and systems evaluation will result in closer co-operation and NIK using far more financial auditors. He believes that public interest bodies, such as accountants, lawyers and other professionals, should be self-governing, but that there is always a danger that the bodies will be biased towards protecting the interests of their members. Conversely, however, he does not believe in direct state control of the professions as this leads to political expediency taking the upper hand over the public good.
Having avoided the topic thus far, we move on to corruption. I ask the chairman what effect he believes Poland's entry to the EU will have on corruption. He voices the opinion that things might deteriorate in the short-term. He goes on to explain that corruption can only arise in a situation where public servants have the power to arbitrarily make decisions or to slow down the decision-making process or where there is inadequate control over the work of individuals. Sekuła is a firm believer in the "four-eyes principle," whereby at least two people independent of each other are responsible for a process. In his view, the country's entry into the EU will cause a transitional increase in the opportunities for corruption. The implementation of directives and regulations will dramatically increase the number of permits, concessions and decisions with which officials will have to deal. Invariably, the process of introducing systems of control and review will lag behind. In the area of the administration of grants, subsidies and the allocation of quotas, there will be further scope for corruption.
But what about the obvious problem here at home, and with one of the most spectacular stories since 1989 doing the rounds?
Sekuła believes that behind the public din the situation has improved dramatically, and is not as extensive as widely believed. In the consumer arena the situation is incomparable with the 1980s, when every citizen had to bribe shop assistants in order to buy anything. In specific areas, such as the health system and the railways, he instances the necessity for the tonic of the private sector, witnessed by the rapid expansion of private healthcare with modern standards of administration and financial controls. He is also very keen on the introduction of retrospective controls, such as has been the case with driving examiners where investigations following accidents caused by clearly incompetent newly qualified drivers have led to the prosecution of examiners.
Sekuła is also a firm believer in automated systems of control, particularly IT-based solutions. NIK is investing heavily in database interrogation software able to identify exceptions, such as variations in the time taken by officials to issue decisions. NIK has also changed its emphasis and now looks far more closely at areas of operation where there are significant control weaknesses and where opportunities for corruption exist. Using its powers of initiating legislation, NIK has tabled before parliament changes to legislation designed to simplify the decision-making process and to clearly define parameters which must be met by applicants for permissions.
On his ambitions for NIK, Sekuła says that he would like the commission to start an annual process of evaluating the state budget as a whole from the standpoint of value for money for the country's citizens.
When asked to comment on the fact that his name is being rather more than whispered around town as a candidate for the post of Commissioner at the EU, Sekuła employs that winning and disarming smile of his to deny such ambitions and states that at heart he is an administrator and not a political beast (which is, of course, exactly the official job description of a commissioner). Time will tell whether this is indeed the case, but frankly Brussels' gain would be a very severe loss indeed to the public administration of this country, and to an institution that in many cases is the only barrier to high-level corruption.
