EUROSAI. Magazine N18 - 2012

> 77 < REPORTS AND STUDIES EUROPEAN ORGANISATION OF SUPREME AUDIT INSTITUTIONS www.eurosai.org No. 18 - 2012 The role of the external control bodies for public management has been acquiring an ever more important character for the proper functioning of democratic societies, especially on account of their importance for promoting efficacy and efficiency in that management, and also because of their active intervention and participation in improving the governance and transparency of the bodies responsible for developing the public economic-financial activity. As well as the serious economic and social problems occasioned among citizens as a whole, the extraordinary relevance of the international economic and financial crisis in recent years has led to a considerable deterioration in public finances, leading to high levels of deficit and borrowing, which is inevitably affecting the financial sustainability of the public sector. Within the scopeof the EuropeanUnion, the severity of the crisis in the financial system—which has been especially significant in the Spanish case—together with problems of access to the capitals markets for some member States, has made it necessary to reinforce mechanisms of economic and fiscal integration, among which special mention can be made of two very important instruments adopted in 2012 : the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, known as the Fiscal Pact, and the European Stability Mechanism (ESM), which constitutes a very important instrument for guaranteeing the financing of governments in difficulties, at a reasonable cost, with the aim of safeguarding the stability of the Euro zone as a whole. In relation to these questions, the role played by the external bodies in public control in economic-financial activity becomes essential, given that they have to direct their efforts towards evaluating the proper way to conduct that activity, not just from the point of view of complying with the law and the principles of good financial management but also placing special emphasis to make sure that the development of that activity accords with the aims of budgetary stability and financial sustainability. As well as covering the different phases of the budgetary cycle, this control must also extend and give priority to verifying the proper accountability of the activity developed by the public sector in each financial year. At the same time, it is necessary for the control work to extend to any kind of manifestation of public economic-financial activity, even when it is not being directly developed by public sector bodies. So, there has recently been a proliferation of the appearance of a large number of legal instruments in which it is more difficult to accredit their public nature, but which form part of that public activity. Among other examples, one can cite bodies which are mostly privately owned but which are effectively subject to control by the public sector, certain associative or merely instrumental figures, the new classes of public contracts, the instruments of public- private collaboration, etc. Therefore, so that the external control bodies can perform their role properly, it is necessary to take a closer look Reflections on the importance of strengthening the bodies for the external control of public economic-financial activity in the present context Ramón Álvarez de Miranda President of the Spanish Court of Audit and Secretary General of EUROSAI n It is necessary for the control work to extend to any kind of manifestation of public economic-financial activity, even when it is not being directly developed by public sector bodies. n