The Icelandic National Audit Office is an independent body, working undir the auspices of Althingi in accordance with the Act on the Auditor General and the auditing of government accounts no. 46, 25 May 2016.
The role of the Auditor General is to oversee the finances of the State, its institutions and State enterprises under a mandate from the Althingi. The Auditor General shall monitor the revenues of the State and observe whether appropriations and assets are used and allocated in an efficient and proper manner in accordance with the conditions and decisions of the Althingi.
The Auditor General shall inform the Althingi and the government, of any affairs relating to the operations and finances of the State, uncover any deviations from law and rules in that regard and submit proposals for corrective actions, improved administration, clearer accountability and better use of State funds.
On the basis of the Act on the Auditor General and the auditing of government accounts and the International Standards of Supreme Audit Institutions (ISSAI) the INAO has defined its main tasks in the following manner:
Financial auditing: The auditing of the Central Government Accounts and the accounts of public bodies and enterprises in which the State owns majority share. The auditing of the accounts of entities that operate under the auspices of the State or provide statutory services or undertake other projects in exchange for payment or contributions from the State Treasury. Suggestions on what improvements may be made to accounting, the preparation of financial statements, internal controls, the security of IT-systems and financial management in general.
Performance auditing: The auditing of the performance of public bodies, state-owned enterprises and parties that accept contributions from the State. Assessments of economy, efficiency and effectiveness. Suggestions on how performance may be improved.
Monitoring the implementation of the Government Budget: Monitoring whether public bodies operate in accordance with the Budget, the Government Financial Reporting Act and the Regulation on the Implementation of the Government Budget. Monitoring the execution of contracts that the State has made with private entities (PPP/PFI), including for the purchase of services. Examination of the manner in which Government grants to private entities are disposed of.
Monitoring the finances of self-owned organisations (foundations): Monitoring the accounts of self-owned organisations operating in accordance with approved charters.
Monitoring the finances of political parties and political candidates: Collecting, processing and publishing information on revenues and costs of political parties and individuals in pre-elections.
It must be noted that the above tasks often overlap and are connected in various ways. Moreover, the definition of main tasks may change in accordance with the Office’s change of focus from time to time.
The Office’s remit covers all ministries, agencies and other state bodies, including public companies where the state has majority share, and all budgetary chapters. The Office is also authorised to audit private companies, associations, self-owned organisations or any other bodies that receive government funds or guarantees. The Office’s remit does not cover municipalities.
The Act on the Auditor General stipulates that the Office shall have access to all data important for the performance of its tasks. It may call for financial and performance related data from all state bodies. It is also permitted access to original documents and reports prepared in relation to invoices issued to the government, in order to verify the content of the invoices and the Treasury’s payment obligations. Furthermore, the Office may request reports on the disposal of grants and other contributions from government funds, and assess whether such payments have achieved the intended results.