INDEPENDENCE and TURKISH COURT of ACCOUNTS

Prepared for EUROSAI Lizbon Seminar ( 24 - 26 June 1998, Portugal )

This paper attempts to convey how the concept of independence has been put into life in the case of TCA. It addresses the ‘’Independence of SAI as Regards Relations with Legislative Power‘’ but also touches on the topic entitled ‘’SAIs Independence as regards the relations with the Executive’’ due to interconnected and inseparable nature of the themes.

Here, it would be helpful to give brief information on the TCA . TCA is a collegiate Supreme Audit Institution. It was established as a court in 1862. It operates under the Constitution of 1982 and under the provisions of a law specific to TCA, most recently amended in 1997.

TCA has two main functions: judicial work and auditing. The judicial work is carried out by specialised chambers in which members of a chamber try accounts and either acquit or hold liable those responsible for their preparation and authorisation. The auditing work is carried out by auditors. The trying of accounts is based in large part on the reports of auditors.

TCA has a President, a secretary-general, 56 members of the court and about 1,500 staff including roughly 600 auditors.

Given that legislature is the main user of the SAI’s services and reports, it is normally expected to work closely with Legislative Power. Therefore, the SAI should, desirably, derive its mandate from the Constitution to ensure its independence.

The Turkish Constitution defines TCA as a Constitutional establishment and entrusts it with the task of auditing on behalf of the Grand National Assembly, the government accounts relating to revenue, expenditure and property financed by the general and annexed budgets.

Under the Constitution the following matters are governed by the Law specific to TCA:

• Organisation, functioning and auditing procedures ;
• qualifications, appointment procedures, duties, powers, rights and obligations of its staff;
• Tenurial safeguards of its president and members;

TCA is not subject to the directions of the Parliament in planning and conducting its work. The TCA Law makes it tangible by providing the following:

• TCA General Assembly has the power to make regulations for auditing.
• The assignment of Chairmen and Members to chambers; distribution of cases to chambers; establishment of auditing units are decided by the President of TCA.
• The General Assembly of TCA decides which accounts are to be brought to and audited at the headquarters of TCA.
• The kinds of ledgers, books and other documentation to be submitted to TCA and their submission periods are determined by TCA.

Freedom of reporting would mean freedom to decide what to include in the report, how to put audit findings into words and when to submit them. Publishing audit reports may also be considered within the boundaries of this freedom. However, reports on programs and projects in such high-profile areas as defence, education, health and employment brings the SAI face-to-face with matters of major public interest and concern.

It is stated in INTOSAI Auditing Standards that SAIs’ reporting to the legislature without restriction on content and timing of reports would support the maintenance of independence. There is no doubt that it is appropriate for legislation to specify minimum reporting requirements, including the matters subject to an audit opinion and a reasonable time within which reports should be made.

TCA produces two types of external reports.

Under the Constitution TCA shall prepare Statement of General Conformity to be submitted to Parliament. With this Statement TCA assures Parliament that the figures and disclosures shown in the Draft Final Accounts Law fairly presents the actual results of budgetary implementation.

The law governing TCA does not refer to a general purpose report to the legislature, but does specify the circumstances in which TCA is to report to the legislature. The subjects of such reports are as follows:

• legal and regulatory provisions which jeopardise the interests of the Treasury
• financial questions including accounting methods, practices and systems; and procedures concerning revenue accrual
• matters of concern
• audit findings concerning the property accounts of departments and agencies funded by the general and annexed budgets
• whether government bodies financed outside general and annexed budgets have operated within the “ objectives of their establishment ” during the previous year
• significant instances of failure to comply with legislation
• results of risk and performance auditing

The time for submission of the Statement of General Conformity is stated by the Constitution. The Constitution and the TCA Law do not establish any restrictions for the Statement of General Conformity other than its timing. As for the other reports to Parliament, there are no restrictions at all. In other words the timing, format and content of these reports are determined by TCA itself.

The TCA Law provides that :

• On the issues related to its activities the General Assembly of TCA may decide instead of the Council of Ministers.
• All military commanders and superior officials are under the obligation to follow up the work of accountants who are in charge of preparing the accounts within the period indicated. They are also obliged to provide the necessary aid and facilities to the auditors, and to maintain the security of work.

Financial independence requires that the administration should not impose any undue limitations on both preparation and implementation phases of the SAI’s budget. The SAI should be provided with the financial means to enable it to fulfil its tasks. Any limitation on the SAI’s budget is a constraint upon its work and its independence. Of course absolute budgetary freedom is not possible. It depends on the budgetary and economical balances of each country. Another important point ,in this connection, is that the SAI should be entitled to spend out of the funds allotted to it under a separate heading in the budget of the State.

TCA fully enjoys the financial independence:

• It has a separate budget head within the general budget of the State.
• TCA prepares its own budget which it submits to the legislature without the intervention of the Ministry of Finance.
• The President is the expenditure manager of the TCA budget.

Another salient component of the organisational and functional independence is the free access to information. The auditor should not be hindered to obtain any information whatsoever needed for accomplishing his or her examinations. Even possible or real danger to the security of the state or damage to the peace and welfare of the people or any such pretext .should not be considered as an acceptable reason for not furnishing required information to the auditor. As well put in INTOSAI Auditing Standards, “the legal mandate should provide for full and free access by the SAI to all premises and records relevant to audited entities and their operations and should provide adequate powers for the SAI to obtain relevant information from persons and entities possessing it.”

To carry out its work TCA has a right of access to information. TCA can question responsible officials orally or in writing. At any stage the authorised audit personnel of TCA have the authority to examine records of goods, properties, activities and services of government offices and of the other institutions under TCA jurisdiction.

INTOSAI Auditing Standards addresses the issue in paragraph 72 and 73 observing the structural difference between the monocratic and collegiate SAIs. It states that: “ Conditions of tenure for the head of the SAI can contribute to the SAI’s independence from the executive , for instance through appointment for a lengthy fixed term or until a specified retirement age. Conversely, tenure conditions which put an SAI under pressure to please the executive would have an erosive influence on independence . For this reason it is in principle desirable that provisions relating to the termination of appointment or removal from office should be exercisable only by special process akin to that relating to the holders of judicial or like office” ( Par. 72 ) “ For those SAIs which exercise a jurisdictional function and which are most frequently organised in a collegial form, the independence of their members should be assured by various guarantees, particularly the principle of irremoveability of judges, the privilege of jurisdiction, the determination of the treatment by the law, and the independence of the examining magistrate.” (Par. 73)

The independence of Supreme Audit Institutions is closely linked to the degree of the independence of its president and staff. The procedure for appointment and removal from office is of vital importance, not only for the independence embracing these officials but also for the organisational independence. It is always desirable that appointment or removal from office should be laid down in the law.

The President and Members of TCA are elected by Parliament without any intervention of the executive. Professional staff other than the President and Members, i.e auditors are appointed by the President of TCA. The President can not be dismissed from office before his seven year term of office has been completed or age of sixty five and similarly, Members cannot be discharged from office or retired before the age of 65. TCA Law stipulates a special disciplinary and penal investigation for the President and Members which is akin to supreme judges. It also states that the auditors shall be subject to disciplinary and investigation procedures similar to those applied to magistrates. The remuneration of TCA professional staff, which includes the President, Members and auditors, is again identical with that of high judges.

IV- CONCLUDING REMARKS

In the words of a colleague ‘’ independence is both servant and master in shaping the SAI’s discharge of its responsibilities.’’ Independence is a privilege but it also calls for a great responsibility on the part of the SAI. Assisting the legislature and other governing bodies in holding the executive accountable for its managing of public funds, promoting transparency and good governance and combating corruption by well performed and reported audits are some of salient responsibilities that the SAI assumes.

Also Independence should be considered together with the SAI’s accountability to the public. It is the SAI’s responsibility to spend its own moneys not only properly but also with economy, efficiency and effectiveness, as one should put one’s own house in order first before criticising others.