Inspection of sound financial management
The inspection of sound financial management, which is part of the internal audit, was introduced under article 77 of the OOBBC dated 23 February 2006. The relevant executive modalities are determined in the government decree dated 18 October 2007 with regard to internal inspection, and particularly the specialist internal audit, bookkeeping audit and the audit of sound financial management.
With regard to the Brussels Regional Public Service the government has decided to grant this inspection to the Board of Financial Inspection and sound financial Management.
The OOBBC has indeed determined that the inspection of sound financial management consists, at minimum, of an inspection of subsidies. In doing so, in 2013, the board created its first sample of expenditure made in 2012, which was then inspected a posteriori with regard to the application of the principles of sound financial management.
Sound financial management is about correct and "healthy" or "good" management, and not routine or legal practice. In practice this means evolving towards a culture of empowerment and performance.
The starting point for sound financial management as laid down in the OOBBC comes from article 27 from the European Union's financial regulation.
We include the fragment that interests us: "The budget credits are to be used in line with the principles of sound financial management, that is in accordance with the principles of economic use, efficiency and efficiency.
- The economic principle requires that the resources employed by the institution aimed at implementing its activities are provided punctually and in the appropriate quantity and quality, and at the best price.
- The efficiency principle focuses on the best ratio between the resources employed and the results achieved.
- The effectiveness principle focuses on the fact that the specific objectives set and the expected results are achieved."
By including these principles in the ordinance the Brussels legislator wishes to give a clear signal with regard to the management of government finances. In this way it is no longer about controlling government expenditure in pure comparison with the use of budget credits, but instead in comparison with set objectives, available means and anticipated results. This somewhat original and dynamic vision also implies that objectives (programmes), means (activities) and indicators need to be defined, in order to judge the results achieved compared to the objectives set.
In practice the board does not consider the OOBBC to be an additional reference framework for inspection, but rather as a complementary reference framework. In carrying out its duties the board does not simply review legal and regulatory criteria contained in the relevant legislative and regulatory texts, but also considers the respect of the principles of sound financial management. This means that expenditure can be routine and in compliance with legislation, without necessarily being economical, efficient and effective.
The ordinance is very clear on this matter and states the following: "For each record of a bookkeeping commitment the relevant authorising officer shall ensure that [...] the principles of sound financial management are respected". Given that the departments are responsible for the quality of internal control that they are to implement, it is important that they establish appropriate procedures allowing the principles of sound financial management to be guaranteed, similar to those applied for compliance with the law and regulations.
For a decade the concept "sound financial management" has already been referred to alongside budgetary principles as regards Economy, Efficiency and Effectiveness, also referred to in English as the "3 E's". Sound financial management goes hand in hand with the modernisation of government bookkeeping and more generally with the modernisation of public service. It is part of a general approach to improve the quality of financial information, management and policy-making. Ensuring sound financial management is an extra step towards good management and targeted efficiency in particular. It therefore also helps to inspire greater confidence among citizens that public services are capable of managing government money, sourced from their fiscal and non-fiscal contributions, in the most effective manner.