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FOCUS - Public Finances and the New Fundamental Law of Hungary

Culmination of the Powers of the State Audit Office of Hungary within the Scope of New Legislation on Public Funds

László Domokos
President of the State Audit Office of Hungary

Published in: Public Finance Quarterly 2016/3 (p. 291-311.)


SUMMARY: The regulatory framework serving the renewal of domestic public finances comprises the Fundamental Law and cardinal acts entering into effect following its adoption. Among cardinal acts, the first one to be adopted was the new SAO Act. In addition to its full consistency with international requirements, the act consolidated the SAO’s independence and audit powers and, by clearly declaring the publicity of reports, improved the transparency of audits. Among the SAO’s new powers, the power to sanction failure to fulfil the action planning and cooperation obligations, coupled together with general empowerment to issue administrative warnings has lent weight to the SAO’s interventions and transformed its operation. The new act also vested new roles and rights related to preparing studies and analyses in the institution, as well as performing advisory and consultative activities. The SAO is free to avail itself of these tools within regulatory provisions having as its only mandatory task to prepare analyses in support of the Fiscal Council’s work. By means of its new roles and leveraging publicity, the SAO has been effective in focusing its efforts on facilitating controlled behaviours to ensure the regular and efficient use of public funds.

KEYWORDS: SAO Act, obligation to cooperate, action planning, consultancy, analysis

JEL CODES:
K19, M48


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