Status and Powers
One of the indispensable prerequisites for good functioning of a modern democratic state is the existence of an independent audit body that audits its economic activities. In the Czech Republic, this function is performed by the Supreme Audit Office, the present concept of which is based on the experience of similar audit institutions in Europe. The SAO represents one of the irreplaceable pillars of parliamentary democracy.
The existence of the SAO is enshrined in the Constitutions of the Czech Republic and its activity and powers is given by Act No. 166/1993 Coll., on the Supreme Audit office. The SAO performs its function sovereignly and is independent from the legislative, executive, and judicial powers. Its independence protects the SAO from political influences to the maximum degree. The institutional independence is also supported by adequate financial independence. The only decisive body in this matter is the Chamber of Deputies of Parliament of the Czech Republic who also supervises SAO´s management. The SAO President submits a financial report on the state budget chapter “Supreme Audit Office” to the Chamber of Deputies and to the Ministry of Finance every year. This report is also verified by an independent auditor.
The Supreme Audit Office audits the financial management of state property and financial resources received from abroad. It expresses its opinion on the state final account and oversees the state budget implementation. The SAO is not authorized to audit either finances of municipalities, towns, and regions or to audit companies co-financed by the state or by a self-government.
The collective principle of management ensures the highest possible degree of objectivity and independence in decision-making about audits and about important issues regarding the SAO. The collective bodies of the SAO – the Board and senates of the SAO - approve an audit plan and results of audits (“audit conclusions”). The Board consists of the President, the Vice-President, and 15 members of the SAO. Senates are made up of three or more Members of the SAO. The president of the Czech Republic appoints the President and the Vice-President upon nomination by the Chamber of Deputies of Parliament of the Czech Republic. The term of office of the President and the Vice-President is nine years. The Chamber of Deputies of Parliament of the Czech Republic elects Members of the SAO upon nomination by the President of the SAO. The term of office of a Member of the SAO is up to his/her age of 65. As regards the Members of the SAO, the institutional independence of the SAO is secured by disciplinary proceeding of the Disciplinary Chamber of the SAO. The President of the SAO and two judges of the Supreme Court of the Czech Republic form the Disciplinary Chamber of the SAO.
The concept of SAO meets the basic principles and recommendations of the Lima Declaration of INTOSAI. The "Lima Declaration of Guidelines on Auditing Precepts" is understood as a basic document summarizing principles of an independent audit activity. In the "Mexico Declaration on SAI Independence", the XIX Congress of INTOSAI defined requirements on such independence of SAIs in more detailed terms and identified eight pillars for the independence of external government auditing.