This year, our National Audit Office (NAO) will be commemorating a special milestone in its history, namely the 25th anniversary of its setting up as a fully independent constitutional entity, totally autonomous from the executive.
By way of historical background, it succeeded the Department of Audit, originally established way back in 1814 by the first British Governor, Sir Thomas Maitland, that, up to July 1997, fell under the responsibility and control of the Ministry for Finance.
As a result of unanimous agreement between the government and the opposition, the NAO was set up by virtue of the Auditor General and National Audit Office Act, 1997 as well as relevant amendments to the Constitution of Malta.
Thus, the office’s total independence, a sine qua non requirement for any reliable and relevant national audit institution, is enshrined in the Constitution of Malta itself.
This important development reflects the provisions of the 1977 Lima Declaration, which was the first INTOSAI document to comprehensively highlight the critical importance of independence, particularly by reminding all its members that national audit institutions can only be objective and effective if they are fully independent from the audited entity and are duly protected from outside influence.
Following the coming into force of these important legislative amendments on July 25, 1997, the National Audit Office obtained a clear and unequivocal mandate to enhance good governance across the public sector. This mandate is essentially being fulfilled through the various audit assignments the office carries out, with the primary objective of ensuring optimal management of public funds and resources.
Consequently, it provides assurance to parliament, and ultimately to all citizens, that public resources are being utilised according to prevailing rules and regulations and in the most economical, effective and efficient manner possible. When any gaps or shortcomings are identified, the NAO teams provide relevant and doable recommendations so that such findings are duly addressed, thus leading to enhanced service delivery by departments and other public entities.
Of fundamental importance, this new act provided practical and tangible safeguards to guarantee the fully autonomous operation of this office without any undue interference or hindrance from the executive.
To quote some significant examples, henceforth, the auditor general and his deputy could only be a pointed for a five-year period, renewable once, if the endorsement of at least two-thirds of the members of parliament is obtained.
In addition, the recruitment of all its staff became the exclusive prerogative of the NAO, thus ensuring that the only the best applicants, who possess the necessary skills, qualifications and knowledge, are chosen after a just and transparent selection process, managed by the office.
The NAO’s total independence is enshrined in the Constitution of Malta- Charles Deguara
Moreover, the NAO’s funding is formally approved by a purposely set up select committee, namely the National Audit Office Accounts Committee, chaired by the Leader of the House of Representatives, which scrutinises extensively the NAO’s audited accounts as well as its detailed business plan and financial projections for the following year.
Likewise, the NAO has total control over the selection of audit subjects, the timing of publication, as well as the choice of audit methodology, which is based on international standards and good practice. The organisation and management of the office is, likewise, not subject to the control of any other authority.
As expected, the NAO is working on various initiatives to commemorate such a significant milestone, including a book written to scholarly standards.
This publication will essentially document and reflect on leading themes and issues associated with state audit in Malta and beyond during the first two decades of the 21st century and into the future.
The main objective of this publication will essentially be to offer a variety of perspectives: thematic and chronological; professional and academic; technical and political; local and comparative.
It will be edited by Edward Warrington, who has extensive knowledge and experience of the workings of the NAO, having been actively involved in the preparation and editing of previous publications. These included the Guardian of the Public Purse – A History of State Audit in Malta 1814 – 2014 and the present NAO Strategy Plan 2019-2023.
We surely cannot commemorate such an important anniversary just by looking at the past. We are conscious that we need to plan adequately, particularly by exploiting new opportunities and overcoming emerging challenges.
For this reason, we are actively committed to continue giving the highest priority to the ongoing professional development of our staff, undoubtedly the NAO’s most valuable asset. Only thus can we ensure that, in the future, the office will remain in the best position to continue carrying out its constitutional mandate in the best manner possible.
Considering such new challenges, mostly brought about by extensive legal, technological and organisational developments, it is of fundamental importance that NAO staff members possess all necessary skills and competencies to continue producing very high-quality audit assignments, as our parliament and citizens rightly deserve.
Charles Deguara is the Auditor General.