Audit and oversight plan 2024–2027

Description of the operating environment

Basic premises of the activities

The National Audit Office of Finland (NAOF) is Finland’s Supreme Audit Institution of central government finances. The NAOF is an independent authority operating in affiliation with Parliament, and it decides independently on the planning and implementation of its audit and oversight activities.

The basic premise of our strategy for 2024–2030 is to focus on performing the NAOF’s main tasks effectively and efficiently. In line with our strategic purpose, we ensure sustainable management of public finances and an efficient and transparent central government.

The NAOF’s audit and oversight activities

• strengthen government’s accountability to Parliament and the public

• produce reliable and relevant audit and oversight information about topics significant to central government finances and financial management

• support efficient and lawful government.

The planning of audit topics at the NAOF is based on monitoring the audit area. This means observing the financial management of central government authorities in order to establish that they manage their finances appropriately, cost-effectively, and in compliance with the legislation. The monitoring also identifies any hidden risks and problems in the management of central government finances. The aim of the monitoring is to produce useful information on the state of the management of central government finances for the purposes of directing the NAOF’s resources and selecting audit topics. The monitoring is organised so that it covers the essential parts of the audit area as regards legality, appropriateness, and cost-effectiveness.

The audit and oversight work is based on the audit and oversight plan adopted by the NAOF. The operational independence of the NAOF refers, for example, to planning audit activities and deciding on operating practices independently.

Descriptions of the different audit types, the general objectives of audit activities, resource plans, and quality management, as well as the staff’s competence development plans are presented in the NAOF’s operational and financial plan.

Legal basis of the audit and oversight activities

Under sections 1 and 2 of the Act on the National Audit Office (676/2000), the NAOF has the right to audit:

• the legality and appropriateness of the state’s financial management, compliance with the state budget, and transfers of funds between Finland and the European Communities

• central government authorities, agencies, state enterprises, state enterprise groups, and state funds

• state-controlled companies and other companies referred to in section 19 of the Act, particularly from the perspective of state ownership steering

• the legality and appropriateness of the financial management of the wellbeing services counties and the entities and foundations belonging to a wellbeing services county group; a corresponding audit right extends, as regards state funding, to other entities, foundations, and institutions where a wellbeing services county exercises control together with one or more wellbeing services counties, one or more municipalities, or the state

• the legality, appropriateness, and cost-effectiveness of the activities and financial management, as regards the state funding, of the City of Helsinki health and social services, and rescue services, and the entities that have been established to perform these tasks and are controlled by the City of Helsinki

• entities and legal persons that have received funding or other financial support or benefits from the state to determine whether the information provided in order to receive the funding or other financial support or benefits is correct, whether the terms and conditions laid out in the grant decision have been complied with, and whether the funding or other financial support or benefit has been used for the purpose for which it was granted. A corresponding audit right also applies to

  • corporations and other legal persons that have been authorised by the state to obtain funding for a specific purpose to be used by central government authorities or to be distributed further

  • credit institutions and other entities and legal persons managing central government’s payment traffic in order to examine the central government’s payment traffic or the management of state funds and assets, and

  • funds that belong to others but are held by central government authorities and for which the state is responsible.

The National Audit Office monitors compliance with section 7 of the Fiscal Policy Act (869/2012) and the provisions issued under it:

• the setting of and compliance with fiscal rules

• the drafting and implementation of the General Government Fiscal Plan

• compliance with the EU’s Stability and Growth Pact and the applicability of EU rules to Finland

• compliance with the medium-term objective set for general government finances and the related correction mechanism

• the realism of the macroeconomic forecasts on which fiscal policy is based and the reliability of macroeconomic and fiscal forecasts.

The NAOF oversees election campaign and political party funding, receives and publishes documents provided for in the Act on Political Parties and the Act on a Candidate’s Election Funding, and ensures that those subject to the disclosure obligation, such as the registered parties and their district and women’s organisations, as well as the elected candidates and appointed alternate members, disclose their funding (the Act on a Candidate’s Election Funding 273/2009, section 10, and the Act on Political Parties 10/1969, sections 9e, 9f, and 11).

The National Audit Office acts as the registrar of the Finnish Transparency Register, oversees compliance with the disclosure obligation, and reports to Parliament once during a parliamentary term on the operation of the Transparency Register (Transparency Register Act 430/2023).

Audit topics

The audit activities of the National Audit Office consist of annually recurring audits of continuous nature and annually varying audits. The audits of continuous nature are financial audits and compliance audits conducted in connection with them. The varying audits are performance audits, fiscal policy audits, compliance audits, or combinations thereof, so-called multi-type audits. The NAOF selects an audit topic on the basis of its significance to central government finances and the risks to cost-effectiveness or legality identified in the topic.

Varying audits (performance, compliance, and fiscal policy audits)

New audit topics for the planning period 2024–2027 (23)

• Prolonged legal proceedings

• Support for non-governmental organisations’ development cooperation

• Anti-corruption activities

• Development programmes of the Finnish Defence Forces

• Informal care and family care for older people

• Family leave scheme and the activities of family centres

• Effectiveness of oral health care

• Security of electricity supply and promoting the operation of the power system

• Effectiveness of physical activity promotion

• Sustainable promotion of the fishing industry

• Procurements from in-house entities

• Preparedness for cyber threats in the central government

• Non-digital services and support for the use of digital services

• Ensuring effective logistics and transport chains

• The Senate Group as the manager of central government premises and facility services

• Ownership strategies specific for special assignment companies

• Promoting road safety

• Performance data in the Government’s annual report

• Steering and monitoring of the wellbeing services counties

• Procurement and contract management of the wellbeing services counties

• Appropriations carried over

• Eligibility for government grants

• Assessment and reporting of discretionary fiscal stance

Audit topics included in the audit plan for 2022 on which no audit has been launched (1)

• Planning and monitoring of investments, and the knowledge base used in investment solutions

Topics of ongoing audits previously incorporated in the audit plan (18)

• Preparation of projects and reforms extending beyond parliamentary terms

• Promoting the battery value chain

• Government funding for universities of applied sciences

• Effectiveness of the assessment procedure in balancing local government finances and safeguarding services

• Subsidies for agricultural investments

• Information system projects of the police and the judicial administration

• Prevention of money laundering

• National and EU-level RDI funding

• Centralisation of health services and functioning of service chains

• Organisation, financing, and effectiveness of the management of water resources and marine environments

• Targeting of agencies’ activities

• Funding of energy solutions for the green transition

• Services for young people outside employment and education

• Performance management in the developing public administration

• Mental health and substance abuse services for young people in the wellbeing services counties

• The 2019 agency reform in the administrative sector of the Ministry of Finance

• Methods of forecasting general government debt

• Information base of climate and energy polic

Audit activities of continuous nature (financial audits)

The annual financial audits conducted by the NAOF ensure that the state budget and the key provisions on the state’s financial management are complied with, and that the reports provide true and fair information on the revenue, expenditure, and financial position of the central government and its agencies and institutions.

The financial audits cover all ministries and accounting offices, which are obligated by law to prepare final accounts. They also cover three off-budget central government funds and the final central government accounts. In connection with the audit of the final central government accounts, the National Audit Office assesses whether the Government reports on the state of central and general government finances and on the operational performance in its annual report in accordance with legislation.

Financial audits are carried out both specifically per each accounting office and in a centralised manner across accounting office boundaries. A significant part of the financial audit of compliance with the budget and the common financial management processes is carried out in a centralised manner. Therefore, centralised financial audit also constitutes a significant part of the audits of the final accounts of accounting offices.

The objective of accounting-office-specific audits is to verify the accuracy of such items and the internal control of such financial management processes that cannot be audited in a centralised manner. In the audits, it is also possible to take into account various operational and financial special characteristics of the accounting offices.

The NAOF also conducts the financial audits of two institutions of the Nordic Council of Ministers and the Baltic Marine Environment Protection Commission (HELCOM), and audits of EU funds.

During the planning period, the NAOF will issue financial audit reports on the audits of the final central government accounts and the accounting offices’ final accounts. The financial audit reports on each accounting office and the final central government accounts present the NAOF’s opinions on the following issues:

• compliance with the budget (reasonable assurance)

• financial statements and notes (reasonable assurance)

• information on the operational efficiency (limited assurance)

• internal control (limited assurance).

Audits are resourced, planned, and implemented in such a manner that the above opinions can be provided.

Reporting on audit and oversight activities

Under the Act on the National Audit Office (676/2001, section 5), the NAOF is obliged to draw up an audit report on its audits and to submit the audit report for information and necessary action to the audited entity and the ministry responsible for the sector in question. In addition, the report is submitted for information to the Parliamentary Audit Committee and the Ministry of Finance. The NAOF may also submit the audit report for information to other parliamentary committees within whose mandate the audit topic falls. On financial audit, the NAOF issues at least a financial audit report to each accounting unit and an annual summary of the financial audits it has concluded. The NAOF also issues a financial audit report on the final central government accounts.

In addition, the NAOF submits the following reports to Parliament each year:

• the National Audit Office’s annual report (Act on the National Audit Office 676/2000, section 6)

• separate report on the audit of the final central government accounts and the Government’s annual report for the previous year (Act on the National Audit Office 676/2000, section 6).

On its oversight activities, the NAOF submits the following reports to Parliament:

• fiscal policy monitoring report (Fiscal Policy Act 869/2012, section 7)

• report on the oversight of political party funding (Act on Political Parties 10/1969, section 9e)

• report on the oversight of election campaign funding (Act on a Candidate’s Election Funding 273/2009, section 10).

• report on the operation and oversight of the Finnish Transparency Register (Transparency Register Act 430/2023, section 9).>

The audit reports implement the interaction between an external auditor and the supreme decision-making body as laid down in the international audit standards. The purpose of the reports to Parliament is to serve the needs of Parliament as well as possible in its duties laid down in the Constitution. The reports to Parliament highlight those findings and conclusions of audit and oversight activities that are the most relevant for parliamentary work.

Follow-up of audits 2024–2025

A follow-up of an audit examines what measures the audited entity has taken on the basis of the conclusions and recommendations presented in the audit and whether the NAOF finds these measures adequate to correct the shortcomings found in the audit. With the exception of financial audits, a follow-up is conducted on all audits on which an audit report has been issued. Follow-up activities related to financial audits are carried out as part of the annual financial audits. Follow-up is no longer continued if the shortcomings have been corrected adequately. If the shortcomings have not been addressed adequately, the follow-up may lead to a proposal to re-audit the subject matter. Follow-ups also provide information for the purposes of planning audit activities. In addition, the results of follow-ups are used to assess the effectiveness of audit activities.

Follow-up of audits 2024–2025 (Excel)

Monitoring and oversight activities

Fiscal policy monitoring and audit

The National Audit Office monitors and assesses fiscal policy in its role as a national independent fiscal institution (IFI) as referred to in the European Union’s Stability Pact (Fiscal Compact) and the European Union law. Provisions on the monitoring task are laid down in the Act on the National Audit Office (676/2000) and the Fiscal Policy Act (869/2012).

The fiscal policy monitoring and audit plan is presented in Appendix 1. Because of the independence of the monitoring function, the plan is decided on and signed by the director responsible for fiscal policy monitoring. The same plan also deals with the implementation of fiscal policy audit, which supports the objectives of the monitoring function and is also organised in the same unit as fiscal policy monitoring. The new topics of fiscal policy audit are also presented as part of the audit plan.

Processing of complaints and reports on irregularities

The National Audit Office processes complaints submitted to it concerning compliance with the state budget, the legality of the state’s financial management, or election campaign and political party funding. It also processes reports on irregularities submitted to it by the authorities under section 16 of the Act on the National Audit Office of Finland (676/2000). The function responsible for complaints and reports on irregularities is also responsible for maintaining the NAOF’s internal whistleblower protection channel and for receiving reports through it. In the IMS information system, the NAOF also monitors abuses and other irregularities reported to the European Anti-Fraud Office (OLAF).

The NAOF prepares for processing complaints and responding to other citizen contacts according to the quantitative performance of previous years. The function responsible for complaints and reports on irregularities will also continue to be developed by means of extra resources. The aim is, for example, to streamline the processing of complaints and reports and to promote the use of information obtained through the function in the monitoring of the operating environment and in audit activities.

Maintenance and oversight of the Finnish Transparency Register

The National Audit Office is the registrar of the Finnish Transparency Register. The Transparency Register contains information on activities aiming to influence decision-making and its preparation, i.e. lobbying. The purpose of the Transparency Register Act, which enters into force on 1 January 2024, is to supplement Finland’s legislation on openness and to strengthen the principles of open government, to which Finland is committed.

Under the Transparency Register Act, legal persons and private entrepreneurs are obliged to disclose to the Transparency Register lobbying activities or professional lobbying consultancy directed at Parliament and the ministries. Legal persons or private entrepreneurs shall register when they start professional and long-term lobbying activities. After registration, the actors shall submit disclosures of their lobbying or lobbying consultancy activities every six months. From the beginning of 2026, they shall also report once a year on the financial resources they have used for lobbying activities.

As the registrar of the Transparency Register, the NAOF maintains and develops an electronic register, oversees compliance with the disclosure obligation, and advises and guides the actors subject to the disclosure obligation in the fulfilment of their statutory obligations. It also appoints an Advisory Board for the Transparency Register and reports on the operation of the Transparency Register in an annual report and in a report submitted to Parliament once during a parliamentary term.

In 2023, the NAOF appointed an Advisory Board for the Transparency Register under section 11 of the Transparency Register Act. The Advisory Board is tasked with monitoring the operation of the Transparency Register, taking initiatives to develop the activities, and acting as an official cooperation body for the stakeholders. The Advisory Board also draws up recommendations on good lobbying practice. The main task of the Advisory Board is to commit stakeholders to the implementation and monitoring of the Transparency Register Act and to develop a good lobbying culture. The Advisory Board meets approximately 4 to 6 times a year.

Actors professionally engaged in lobbying or lobbying consultancy start to register with the service at the beginning of 2024. For the purposes of the registration and disclosure procedure, the National Audit Office put out a tender for an electronic online service through which the disclosers can fulfil the obligations laid down in the Act. The Finnish Transparency Register is a public register, and all information reported to it is published in the www.transparencyregister.fi service, maintained by the NAOF. The electronic register will be built gradually by the end of 2025. After that, the NAOF’s task is to maintain and develop the operation of the Register.

In addition to maintaining the online service, the NAOF is responsible for drawing up guidelines for the actors subject to the disclosure obligation and for providing training and training videos for the stakeholders. The scope and objectives of the Transparency Register are extensive, which is why the NAOF’s duties as the registrar focus on providing guidance and advice. By its extensive guidance and advisory role, the NAOF aims to help to ensure that the actors subject to the disclosure obligation meet their obligations. By providing guidance and advice, the NAOF also aims to prevent defaults with features of misunderstanding, negligence, or non-intention. In addition to emphasising the NAOF’s role in providing guidance and advice, the Act also provides the NAOF with sufficient rights to address various cases of suspected neglect. In this respect, the registrar’s role is a very natural part of the NAOF’s oversight tasks.

Oversight of the legality of election campaign and political party funding

The National Audit Office oversees election campaign funding and political party funding. Oversight activities can prevent and find procedures that are in violation of the Act on Political Parties and the Act on a Candidate’s Election Funding and thus influence the transparency and legality of political party and election campaign funding. The NAOF’s oversight tasks are based on Section 9e of the Act on Political Parties (10/1969) and section 10 of the Act on a Candidate’s Election Funding (273/2009).

The NAOF’s task is to receive documents related to election campaign funding and political party funding from those subject to the disclosure obligation and to see to it that they are published without delay. The NAOF provides timely instructions and information to those subject to the disclosure obligation about their statutory obligations to submit documents and information concerning their funding to the NAOF.

The NAOF also oversees the legality of election campaign funding and political party funding. In performing this task, it takes control and inspection measures to verify compliance with the restrictions laid down in the law. The NAOF has a purpose-built information system for the document management and the publication of disclosures.

The combined municipal and well-being services county elections in 2025 will cause additional costs, as the number of persons subject to the disclosure obligation in the elections will be tens of thousands. The NAOF prepares for this task by updating the information system it uses in the oversight of election campaign and political party funding so that the system can deal with a completely new type of election and process the large mass of candidates and persons subject to the disclosure obligation. In addition, the National Audit Office prepares to provide instructions and carry out its statutory duties without delay.

The content and schedule of oversight reports are governed in essential respects by the Act on Political Parties and the Act on a Candidate’s Election Funding. The reports highlight the oversight findings related to compliance with the law or any shortcomings. In its reports, the NAOF also raises potential needs to develop the legislation.

The NAOF reports to Parliament annually in March on the results of the oversight of legality based on the Act on Political Parties. Under the Act on a Candidate’s Election Funding, the NAOF will report to Parliament as follows:

• A report on the 2024 presidential elections will be submitted in September 2024.

• A report on the 2024 European Parliament elections will be submitted in February 2025.

• A report on the 2025 county and municipal elections will be submitted in December 2025.

• There will be no regular elections in 2026.

• A report on the 2027 parliamentary elections will be submitted in December 2027.