Croatian Ministry of Finance

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Welcome to Sweden
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SWEDEN - GENERAL FACTS

• Area 450,000 km2 (174,000 sq mi)
• 9 million inhabitants
• Average life expectancy men 78 years, women 82
  years
• Capital Stockholm (1,643,000)
• Major cities Göteborg 789,000, Malmö 518,000

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SWEDEN - GENERAL FACTS

• Language Swedish
• Religion Protestantism
• Form of government Constitutional monarchy,
  parliamentary democracy
• National day June 6
• Currency USD 0.11 1 SEK (Swedish krona)
  100 öre

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SWEDEN - GENERAL FACTS

• 71 live in nuclear families (1990 census)
• 80 live in urban areas and along the coast
• Post-retirement age (65) 17.4
• Very elderly (80) 4.9
• Fertility rate 1.5 children per woman
• Unemployment 5,7

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SWEDEN - GEOGRAPHY

• Forests 53
• Mountains 11
• Cultivated land 8
• Lakes and rivers 9
• Houses etc 3
• Distance north-south 1,574 km (977 mi)
• Distance east-west 499 km (310 mi)

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SWEDEN - GEOGRAPHY

• Average temperature
• IN JANUARY IN JULY
• Malmö -0.2C (31.6F) 16.8C (62.2F)
• Stockholm -2.8C (30.0F) 17.2C (63.0F)
• Kiruna -16.0C (3.2F) 12.8C (55.0F)
• Daylight (approx. values)
• JANUARY 1 JULY 1
• Malmö 7 hours 17 hours
• Stockholm 6 hours 18 hours
• Kiruna 0 hours 24 hours

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SWEDEN - ECONOMY

• GNP, total 2 245 billion SEK
• Inflation 2,1 (2002)
• Diversified economy
• Dependent on international trade.
• Exports 46 of GDP (2001)

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SWEDEN - ECONOMY

• Open unemployment 4,3 (2002)
• Enrolled in labour market programs 2,5 (2002)
• Tax-financed consumption and capital spending 27
  of GDP
• Large public sector. Growing private sector.
  Cuts and deregulations.
• Floating exchange rate

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SWEDEN - HOUSEHOLDS

• High food prices compared to the rest of EU
• Biggest expense housing. Modern houses.
• Average living area 47 sq. m/p. p.
• Some 22 of households own a weekend cottage
• Price differences countryside cities
• Well-developed, subsidized public transport.
  Cars essential outside urban centres
• 80 have access to a car

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SWEDEN - HOUSEHOLDS

• Employment ratio 78 of adult population.
• Universal state pension system
• Social assistance for those below the poverty
  line

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Swedish Government

• Unicameral Parliament, The Riksdag
• Direct parliamentary elections every 4 years.
  Right to vote from the age of 18.
• The Government governs the country but is
  answerable to Parliament
• Government decisions are prepared by the
  ministries

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Some general principles

• Transparency of public sector operations
• Wide delegation of powers, duties and
  responsibilities
• Traditionally focus on performance management and
  following-up and evaluation of operations
• No financial controllers in form of inspectors
• Management and control are seen as integrated
  with each other

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Organisation of government in most countries
and in Sweden

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The State public sector
The Parliament349 members
The Cabinet (22 members)
MoFinance2 ministers
MoAgricult.1 minister
MoJustice3 ministers
MoEnviron.1 minister
MoEducat.3 ministers
MoDefence1 minister
MoHealth3 ministers
MoForeignA3 ministers
MoIndustry3 ministers
ESV
249 Agencies
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Local Government

• Two types of local government body
• 289 municipalities (kommun) with responsibility
  for schools, social services, elder care, care of
  people with physical or intellectual
  disabilities, physical planning and building,
  certain environmental tasks and fire/rescue
  services.
• Financed by taxes/fees (85 ) and funds from
  Parliament (15 )

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Local Government

• 18 county councils (landsting) two health care
  regions and the municipality of Gotland are
  regional units. Their main areas of
  responsibility are
• Health care services at hospitals, outpatient
  medical care at local health centres
• Public dental services
• Psychiatric care
• Public transport
• Financed by taxes/fees (80 ) and funds from
  Parliament (20 )

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SWEDEN - TAXES

• Local and state tax on income from employment,
  real estate, companies, pensions, capital and
  capital gain
• Taxes on alcohol, tobacco, petrol etc
• VAT on goods and services
• Payroll fees on employees salaries paid by
  employers

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Financing of Central Government Agencies
operations

• Sources of funding
• Mainly appropriations that come from The State
  budget (83 )
• Also from certain fees (17 ) that Agencies are
  allowed to charge for their operations

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Documents from the Government to the Agency
Instruction
Valid for several years TasksBoard and/or D-G
Valid for one year Performance managementGoals
Requested reports Financial managementResource
allocation Financial restrictions
Government approval document
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The Government Approval document

• Objectives for the Agencys activities
• The size of funds at the agencys disposal
• Authorisation to charge fees
• Possible conditions that restrict the use of
  funds
• Performance targets and information to be
  provided to the Government

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Facts about ESV
Stockholm, 160
Appropriations 105 000 000 SEK (55 ) Fees 85
000 000 SEK (45 )
Offices, employees
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The Swedish National Financial Management
Authority www.esv.se
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ESVs instruction

• 1 The National Financial Management Authority
  (ESV) is the central management agency for
  financial management of government operations.
• Just like the Swedish Agency for Public
  Management and the Swedish Administrative
  Development Agency, ESV shall assist the
  Government with the data needed by the Government
  to ensure effective and appropriate public
  administration.
• ESV shall develop and manage bodies of
  regulations and methods for appropriate financial
  management at all levels of Government. The
  authority will also analyse and provide
  information about central government finances.
  Ordinance (2005861).

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ESVs vision

• To make Sweden richer
• To develop financial management in government to
  ensure that taxpayers funds are used efficiently
• To make financial management in government a
  model for other sectors and other countries

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Three strategic goals
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Working methods

• Regulations
• Advisory services
• Investigation and analysis
• Training
• Inspirational texts
• Assignments
• Good example
• Seminars
• Networking

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Tasks

• Budget process principles
• Performance Management
• Financial Management and Internal Control
• Financing Principles
• Accounting Principles
• Training and consulting
• Internal audit (CHU)

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Tasks II

• Forecasts for the State Budget
• Outcome of the State Budget
• Financial statistics
• Facts and figures for the central government
  annual report
• International reporting
• Procure business systems and HR systems

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Organisation
Director General
All ESV councils
Deputy Director-General
Operations Department
Function for training co-ordination
Financial Department
Function for international issues
IT systems
Special Projects
Operational management
Performance and Financial Management
Accounting Principles and internal auditing
Central Government accounting
Analysis and forecasts
Co-ordination of Hermes
EU Audit
Function for government procurement
co-ordination
Function for co-ordination of internal auditing
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The system and structure of internal control -
characteristics

• Decentralised public sector decentralised
  system and structure of internal control
• Wide delegation of powers, duties and
  responsibilities
• Transparency of public sector operations and
  performance
• Traditionally focus on performance management and
  following-up and evaluation of operations
• No financial controllers in form of inspectors
• Management and control are integrated with each
  other

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ESVs role as CHU for FMC and IA

• ESVs support to Central Government Agencies is
  practical in nature, for example
• Explaining notes to legal framework in
  guidelines, manuals, inspiration books etc.
• Practical training (courses, seminars, workshops)
• Information (newsletter, website, helpdesk,
  counselling etc)
• Lead benchmarking groups, informal networks and
  discussion groups
• Assist agencies in their own development of
  internal processes, management in general, FMC,
  IA etc.

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Financial Management and Control regulations
several levels, delegated

• Budget Act decided by Parliament
• sets the overall objectives of effectiveness and
  efficiency of operations
• Ordinances and regulations decided by Government
• sets out more detailed objectives for operations
• Supplementary directives to ordinances and
  regulations are decided by ESV
• gives detailed instructions
• Supplementary manuals to the above are also
  decided by ESV
• gives practical examples

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EU Audit

• Assignment to the National Financial Management
  Authority (ESV) in June 2006 to plan and organise
  the Audit Authority at ESV
• The audit assignment commenced in January 2007
  and covers the entire new program period
• The audit assignment does not cover prior or
  current program periods
• The audit assignment covers
• Final audit
• Systems audit
• Substance audit

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EU Audit

• Audit of EU funds for program period III 2007 -
  2013
• ESV will be audit authority for
• European Regional Development Fund
• European Social Fund
• European Fisheries Fund
• European Refugee Fund
• External Borders Fund
• European Return Fund
• European Fund for the Integration of
  Third-country Nationals
• Plus attested organs for
• European Agricultural Guarantee Fund
• European Agricultural Fund for Rural Development

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Fundamental structural ideas

• Integrated audit for Sweden of EU funds
• Integrated method and model work
• Integrated localisation of the audit
• Integrated audit teams
• Not authority/agency hotels for decentralised
  audit and controlling functions

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EU audit

• Total cost of audit for current period estimated
  to be approximately SEK 53 million per year
• A total of 39 manpower years (50 total)
• Operations today at about 17 locations in the
  country
• Relocation of systems auditors during 2008
• Operational transition of substance auditors in
  2009

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EU Audit

• Amended body of regulations
• Framework for internal control of EU funds (2005)
• Internal audit ordinance (2006)
• Ordinance on internal control (2007)
• Authority ordinance (2007)
• Certificate regarding EU funds