The EU Contact Committee — A SAI story of the EU, of love and cooperation
The EU Contact Committee is the EU platform that was set up to facilitate and enhance cooperation between Member States’ SAIs and the ECA. What makes the cooperation between the Contact Committee members different from other fora? And how do the various partners live up to their commitments? Daniel Tibor is currently seconded from Germany’s Bundesrechnungshof to the ECA. He makes a compelling case for what the Contact Committee and… love… have in common.
By Daniel Tibor, Directorate of the Presidency
What’s love got to do with it?
‘Love is as unproblematic as a vehicle. The only problems are the drivers, the passengers and the road.’
I once read that all good stories need a hook, or an interesting angle early in the story. Mine shall be ‘love’. Not because most songs or poems deal with it, but mostly because love is … Well, see yourself. At least, it isn’t really an obvious theme when writing about cooperation between EU supreme audit institutions (SAIs).
Anyway, I imagine that most of you — maybe after shortly pausing for introspection and attempting to verify the proposition — would nod in agreement with this famous quote attributed to Franz Kafka. Even if you do agree, you might still wonder what it says about the Contact Committee of EU SAIs. For the time being, allow me to leave you pondering this question, which I will come back to below. If you’re still with me, I assume that you’re likely to read on…
The chicken or the egg ?
Historians tend to believe that history — and thus the existence of the egg and (then?) the chicken — can be explained by analysing the sequence of events to determine its inherent logic. For example, in 1951 — or, to be more precise, on 18 April 1951 — a group of wise men decided that it was about time to turn the page and to promote peace by sowing the seeds of a new European spirit. They signed a treaty founding the European Coal and Steel Community, which would set the ball rolling and bring peace and wealth to the continent of Europe in the decades that followed. Ever since, what is now the EU has oscillated between further integration and some type of intergovernmental cooperation, admittedly with persistent tensions between the national and supranational levels. However, no one would doubt that the European project, even with all its trials and tribulations, has provided the best answer to the essential question of how to bring peace to our continent.
Using the historian’s toolkit, there must therefore be a series of events that led to a question (or set of questions) to which the EU Contact Committee aims to be the answer. How about the following? SAIs are, to say the least, a very special kind of public institution — i.e. one per state, independent and with no others alike at national level (except maybe for some federal states) — that were set up to scrutinise and assess public expenditure and performance in order to help parliaments hold governments accountable. With the European ball rolling, cooperation between Member States became a sine qua non for developing the bloc further. National administrations also started to change, which made professional cooperation and dialogue between SAI heads an advisable — if not a necessary — activity to deal with national challenges and requirements more effectively.
Who could the heads of SAIs turn to if they wanted to discuss their mandates, methodologies and experiences? Who could best understand how the events set in motion in 1951, leading to the European Economic Community (EEC) and EURATOM in 1957, influenced national auditees and stakeholders? At national level, there was no one, and the International Organisation of Supreme Audit Institutions (INTOSAI), still in its infancy, was quite far away, not to mention the European Organisation of Supreme Audit Institutions (EUROSAI), which would be founded only 30 years later. So, in 1960, the heads of SAIs of the then six Member States of the EEC first met as the Contact Committee to discuss matters of common interest.
The nature of the beast
If you’ve looked at the EU Contact Committee’s website, you might have come across its mission statement. This describes the Contact Committee as ‘an autonomous, independent and non-political assembly of the heads of SAIs of EU Member States and the European Court of Auditors,’ which is committed to enhancing cooperation between its members and to contributing to effective external audit and accountability for the benefit of EU citizens. Unlike INTOSAI or EUROSAI, the Contact Committee is not an organisation but rather a platform for facilitating cooperation and professional exchange. It is based on its members’ voluntary contributions and individual engagement. Like any other type of international cooperation, this means that activities in the framework of the Contact Committee must compete with the SAIs’ daily work for scarce resources and specific competences (not to mention language skills), and sometimes even getting staff to work in their spare time.
Structure of the EU Contact Committee
- The Heads of SAIs make up the Contact Committee’s decision-making body, which provides strategic orientation and decides on common activities and positions.
- The Liaison Officers constitute a network of representatives of all Contact Committee members and help to ensure smooth and effective cooperation on a daily basis by preparing meetings and common positions.
- Working Groups and Task Forces are established to support activities in a specific, EU-related area that requires continuous cooperation, such as the Working Group on Value Added Tax or the Task Force on Banking Union.
- Networks are established to monitor specific areas, such as the Network on Europe 2020 Strategy Audit or on Fiscal Policy Audit, and to exchange best practices in the relevant field.
The audit of EU funds is an explicit responsibility of the European Court of Auditors (ECA), as enshrined in Article 287 of the Treaty on the Functioning of the EU. At the same time, more than 80% of EU funds are spent by national and regional authorities in the Member States, with overall political decisions being taken at EU level.
However, Article 287 also calls for cooperation between Member States’ SAIs and the ECA ‘in a spirit of trust while maintaining their independence.’ Otherwise, there is no legal obligation for EU SAIs to work together. However, as the EU and its Member States are closely intertwined, action is eventually needed between Member States, and between Member States and the EU. With an ever closer and larger Union, trans-border challenges such as climate change, security and capital flows cannot be handled by individual national administrations, but require well-coordinated and concerted action to provide an appropriate response. If SAIs want to remain relevant, they must mirror these structural changes and adapt in their daily work to find appropriate solutions. Thus, you could call the Contact Committee a bridge, a rational imperative to bridge audit gaps by facilitating cooperation in order to respond to challenges that cross national borders.
The beast in action
A good example of such cooperation is the audit activities of the EU Contact Committee’s task force on the Banking Union. This cooperation recently led to a common report and statement urging EU and national legislators to close the audit gaps in EU banking supervision. What had happened? The Single Supervisory Mechanism (SSM), which had been established in response to the financial crisis and became operational in November 2014, entailed a fundamental change in the architecture of EU banking supervision. Almost 130 ‘significant’ banks came under the direct supervision of the European Central Bank (ECB), with a total asset value of €21 trillion, i.e. 80% of the total asset value of banks in the euro area. Several thousand ‘less significant’ (i.e. medium-sized and small) banks remain under direct national supervision, albeit under the ECB’s responsibility.
This had a direct impact in terms of audit responsibilities for EU banking supervision. SAIs of euro-area countries that previously had a comprehensive mandate to audit the supervision of banks are no longer able to perform this role for ‘significant’ banks. At the same time, the ECA’s mandate does not explicitly include the right to audit the ECB’s supervisory mechanism for ‘significant’ banks. This gave rise to a paradoxical situation where audit powers over banking supervision are now more limited overall than before the SSM was introduced. Consequently, the Contact Committee set up its task force to identify and eventually help to close any audit gaps which put at risk the proper use of public funds. After finalising its work on the SSM with the aforementioned report (2017) and statement (2018), the Task Force is now looking into the functioning and impact of the second pillar of the banking union, i.e. banking resolution (the Single Resolution Mechanism, or SRM). For more information, see page 35.
A love story?
Still interested, but wondering what love has to do with all this? Generally speaking, one could say that both love and cooperation (never take one for the other!) require willing and responsive partners in order to successfully realise them, i.e. individual capacity and commitment. On this account, your eternal bond and the Contact Committee do not differ too largely. But while love is a concept that works regardless of the objective characteristics of the partner — it actually rather helps to bear them — and does not aim at a specific result other than its realisation, cooperation tends to take place only because of the partners’ qualities, specific interests and expected outcomes. This makes cooperation nearly — you may have guessed already — as unproblematic as love — the only problems being the ‘drivers, the passengers and the road.’
The fact that there are 29 independent supreme audit institutions in the EU and its Member States, all with different mandates, structures and resources, does not make it always easy to define common fields of action. In a demanding environment such as the EU, and with the global developments we are witnessing today, it is always a challenge to use scarce resources for international cooperation, especially for smaller institutions, without compromising the fulfilment of statutory tasks and (legal) obligations.
Despite all challenges and limitations, the EU Contact Committee has cooperated surprisingly well during a period which has seen the EU expand from six to 28 Member States. The Contact Committee’s track record of common achievements speaks for itself, to name but a few: the continuous cooperation with SAIs of candidate countries and potential candidates, the work performed by its Working Group on Value-Added Tax (in its current form since 2002) or by the Working Group on Structural Funds over a period of 17 years (see article on page 32), the regularly updated guidance on procurement audits, or the establishment of the Board of Auditors of the European Stability Mechanism.
During all these years, the EU SAIs have remained committed to make external audit and accountability more effective for the benefit of EU citizens. But as in any long-term relationship, you might sometimes wonder whether it is still worthwhile continuing when faced with difficulties. Personally and professionally, as one who has worked both for a Member State SAI and the ECA, I would always say ‘Yes!’ After all, who would give up on love only because of some holes in a rocky road?
This article was first published on the November-December 2018 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.