Mechanisms for financial oversight of local governments

The law defines the procedure for regular internal audit systems and reports of local governments

Review of legislation to check whether it stipulates the procedure for regular internal audit systems and reports of local governments. The law establishes that local governments are subject to regular internal audit and reports are available.

The law stipulates the responsible authority for local government financial oversight

Review of legislation to check whether it establishes the authority or authorities responsible for financial oversight of local governments.

The law defines procedure for local budget audit by independent auditors and/or by central auditing authority (public authority)

The law stipulates the procedure for local government audits. Review of legislation to check whether local governments are subject to a public authority (central auditing) for scrutiny and/or whether it establishes that audit of local budgets is carried out by independent auditors.

The law stipulates responsibility and sanctions in case of breach of fiscal rules

Review of legislation to check whether there are sanctions for local government authorities in case of breach of fiscal rules. The law stipulates who is responsible in case of financial malpractice, meaning that those responsible for the financial issues should be sanctioned to the extent of their responsibility.

External audits conducted in local governments (%)

Review of central administration data on the percentage of local governments where external audit was conducted for the year previous to the assessment. Data collected from national audit offices/ministries of finance. Points are allocated based on the percentage of local governments that were externally audited (x): • x < 10% = 0 points. • 10% ≤ x < 30% = linear function. • x ≥ 30% = 6 points.