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To reform public administration: between ethics and effectiveness. Dr. Tuomas Pöysti, Auditor General of Finland. About the speaker and National Audit Office. Dr. Tuomas Pöysti is the Auditor General of Finland.

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To reform public administration between ethics and effectiveness

To reform public administration: between ethics and effectiveness

Dr. Tuomas Pöysti, Auditor General of Finland

About the speaker and national audit office
About the speaker and National Audit Office effectiveness

  • Dr. Tuomas Pöysti is the Auditor General of Finland.

  • Previously he has been working as Government Controller General, who is the highest adviser and co-ordinator of the Government’s executive branch in Finland on the issues of government governance, internal control and riks management, evaluation and accountability. He has prior work experience from various positions in the Ministry of Finance, Universities of Helsinki and Lapland and National Audit Office and from the private sector.

  • Auditor General of Finland is the President of National Audit Office and is elected by the Parliament for a term of 6 years. Term is renewable.

  • National Audit Office is an independent authority in affiliation with the Parliament. According to the section 90 (2) the National Audit Office is the external auditor of the Finnish central government (including underlying agencies, funds and public enterprises).

    • Financial audit

    • Performance, i.e. value-for-money audits.

  • The ultimate mission of National Audit Office is to promote good performance and high quality management in Government finances

National audit office of finland
National Audit Office of Finland effectiveness

  • Through its audit activities and audit related expert services the Office supports the Parliament in its exercise of legislative and budgetary power as well as power of control over Government finances and, strives to

    • ensure compliance with the budget and rules and regulations concerning financial management

    • ensure that the information in reports concerning the Government finances and the development of the governmental policy effectiveness (policy outcomes) and Government’s operational performance provides a true and fair view

    • in its part promote governmental policy effectiveness as well as good operational performance in central government financial management and operations of administration

    • supports the implementation of general principles of good governance and good financial management

Case study ethics and modern control in enabling reform and effectiveness of public administration
Case study: Ethics and modern control in enabling reform and effectiveness of public administration

  • How modern ethics of administration promotes effectiveness and reform

  • How modern techniques of accountability and control enhance good ethics, reform and effectiveness of administration

  • Case study is based on the experiences of Finland and on the reform of the European Commission

    • Finland: best ranking (the least corruption) in the Transparency International Corruption Perception Index, surplus in the government finances, in the average good level of public service

    • European Commission: ambitious reform programme with an aim of more efficiency and increased citizens’ trust

Main messages arising from the case study
Main messages arising from the case study: effectiveness of public administration

  • High level of effectiveness and successful reform of public administration require building up and maintaining good ethics of administration.

  • Administration ethics cannot only be based on legislation and judicial control even though they lay the fundamental foundations.

  • Active promotion of ethics and values in the daily-life of administration is needed. Involvement of the management is decisive.

  • Modern internal and external control should enhance the building and respect of ethical values and integrating them to the daily practises of administration. Modern internal control consists of structures and procedures. Modern internal control techniques, such as the declarations of assurance by chief executives (ministers, directors-general), provide good management and communication tools to assess and enhance ethics and values and to promote reform of administration

  • By helping to establish good ethics and enhancement of the ethics by senior management the external auditors contribute to the creation and maintenance of a culture of effectiveness and performance

Effectiveness performance finnish government performance prism performance criteria
Effectiveness – performance: Finnish Government performance prism (performance criteria)

Finnish central government accountability and internal control framework
Finnish central government accountability and internal control framework

  • Wide transparency and openness requirements in Finland

  • Access to government documents and information guaranteed as constitutional rights

  • Financial and performance accounting and reporting is available via internet on a single portal

  • Duty to report true and fair view on finances and performance on public reports

  • National Audit Office as an independent external auditor audits the financial and performance statements at agency and Government level and reports to the Parliament, Government and to the general public. National Audit Office enhances transparency and access-to-information in substantial meaning by assuring and promoting the quality of information produced and reported by the Government and government agencies

  • Senior management (ministers in the ministries and chief executives, usually Director-General) has the duty to provide a statement of assessment and assurance concerning internal control and risk management in the annual accounts and performance report.

To reform public administration between ethics and effectiveness
Internal control and risk management framework of the Finnish central government ministries, agencies and funds

  • Fundamental rules in budgetary legislation

  • Based on the COSO-ERM model but modified to public sector needs

  • Detailed guide on good practise and evaluation issued as the recommendation by the Government Controller General & Government Advisory Board for Internal Control and Risk Management


  • Requirement of self-critique openness, honesty in assessing organisations strengths and weaknesses

  • Internal control means all arrangements and procedures set up in order to have reasonable assurance on:

    • (1) the legality and regularity of operations and finances,

    • (2) performance, that is meeting the performance targets and

    • (3) reporting true and fair view on finances and performance

To reform public administration between ethics and effectiveness
Elements of the internal control and risk management framework: areas of evaluation in the statement of assurance and assessment

  • Internal environment

    • internal culture & organisation, resources

  • Setting of the objectives

    • definition of mission and tasks, planning

  • Risk identification

    • comprehensiveness and robustness of risk identification

  • Risk assessment

    • regularity and objectivity of risk assessment, reporting to the management

  • Risk response

    • risk classification, identification and putting in place risk responses

  • Controlling activities

    • planning, co-ordination and following-up of controls, follow-up of operations

  • Information and Communication

    • management accounting, internal & external communication, information systems

  • Monitoring

    • continuous monitoring, internal & external evaluations and audits, follow-up of evaluation and audit recommendations

  • Finnish government internal control and risk management framework


Ethical values behind the internal control and risk management framework
Ethical values behind the internal control and risk management framework

  • Legality – sound administration - good governance

  • Fairness and impartiality

  • Accountability

  • Objectivity

  • Courtesy – service principle

  • Reliability – also in the delivery of high performance

  • Performance: Effectiveness and efficiency, economy

  • Quality and expertise

  • Openness

  • Equality

  • Legality, fairness and impartiality are currently deeply rooted in civil servants’ daily activities. This allows reinforcement of new values – such as reliability, quality and expertise, openness and equality (Finnish Ministry of Finance survey. Values in the daily work of the civil servant, Research and studies 4/2007)

Statement of assessment and assurance in the promotion of ethics and effectiveness
Statement of assessment and assurance in the promotion of ethics and effectiveness

  • Comprehensive and honest assessment of the state of administration.

  • Statement forces the senior management to assume responsibility and report weaknesses. Publicity provides an incentive to rectify weaknesses.

  • Can be a tool for internal discussion and internal development

  • Helps the management to communicate ethical values and connect them to the performance delivery.

  • Risk assessments are a tool to gather information and communicate externally eventual obstacles to good administration. Openness increases public trust which is necessary for reform and efficiency.

  • Establishes a clear declaration of assuming responsibility on the arrangement to a systemic level and provides also a framework for integrating management development to active enhancement of ethics

  • Several reforms recognised and initiated in the statement of assessment procedure. Statements have also increased management’s knowledge and focus on issues of governance and internal control

Experiences on the european commission reform on strengthening control and accountability
Experiences on the European Commission Reform on strengthening control and accountability

  • New accountability and control mechanisms were introduced after long public critique on fraud and bad management in EC financial management system. The resignation of Santer Commission accelerated reforms.

  • Each Commission directorate-general follows, on the basis of annual management plan, the realisation of policy objectives. Activity report is also each director-general’s management report to Commission concerning the performance of his/her duties. In the Synthesis report the Commission presents a synthesis of the main policy achievements towards realising its strategic and policy objectives

  • Commission Director-Generals give also a statement that the procedures of internal control put in place provide reasonable assurance that the underlying transactions are legal and regular. In the event of material internal control weaknesses or irregularities, they qualify the declarations and issue reservations

  • DG’ annual activity reports and Commission synthesis report available in the internet:

  • Focus is more on the compliance issues than in the equivalent Finnish statements

Experiences on the european commission reform
Experiences on the European Commission Reform… strengthening control and accountability

  • Activity reports and statements of assurance have helped to improve transparency on the management performance and increased significantly sensitivity on the management responsibilities

  • System provides a tool to follow how management and administration sees the level of assurance concerning effectiveness and legality and regularity of the management system. System provides, in particular, a tool to assume responsibility and also to recognise openly weaknesses in the system of management.

  • Statements of assurance have de facto been used as arguments for systemic reforms. However, they may have increased the level of caution and thereby risk aversion.

  • Still, there is inadequate information on the EC policy outcomes and thus also on the risks on the policy effectiveness

  • Better quantification and more uniform and open assessment of materiality of weaknesses would be needed as well as more information on the quality of the management and control system itself

Openness transparency and ethics and effectiveness
Openness, transparency and ethics and effectiveness strengthening control and accountability

  • Easy access to government information and public information systems such as Netra, if combined with modern internal control and external audit guaranteeing the quality of information, provides a very powerful and efficient incentive to improve performance and develop good ethics

    • administration is constantly accountable to citizens

    • each citizen has a right to build trust, based on reason and information, towards the management system

    • access to information establishes wide de-centralised control

    • administration has an incentive to provide reasons for its actions and stick to established policies and procedures thereby reducing the risk of corruption

  • Ethics and effectiveness inter-related. High level of ethics creates public trust towards administration which, in turn, makes even painful changes more acceptable

  • Ethical administration has more service-ability and functions with better effectiveness

Concluding remarks
Concluding remarks strengthening control and accountability

  • Modern internal control of administration should aim at the promotion of good administrative ethics and service culture based on rule of law and democracy but extending beyond that

  • Openness and transparency are best served with wide citizen-access to information and assurance of the quality of official information

  • Good ethics and effectiveness are inter-linked: thus, in the reform of public administration efficiency seeking reforms and strengthening of sound ethical culture and democratic, constitutional values should go hand in hand.