Eye on public cash

Body of fiscal inspectors to tackle waste of state handouts

A new body of “fiscal inspectors” with broad investigative powers will soon start keeping tabs on the flow of public money.

The bill, to be submitted to Parliament within the next 15 days by Economy and Finance Minister Giorgos Alogoskoufis, calls for the formation of a “Fiscal Inspectors Corps” of fewer than 300 members, whose inspections will cover the Presidency of the Republic, Parliament, ministries, regions, prefectures and municipalities, as well as the Church of Greece and all other established religious institutions and private bodies or foundations that receives subsidies from the state. This latter category will include all those firms or agencies, such as state-controlled utilities, that borrow under state guarantees as well as those organizations managing funds whose management has been awarded to them by law. This includes, for example, fees gathered by a technical chamber or bar association.

The new body is modeled on the French Inspection des Finances, founded in 1797, and considered the elite corps of the French civil service. Like its French model, the Fiscal Inspectors’ Corps will have magistrates’ powers to investigate and file charges.

The draft bill has already been prepared by Deputy Economy and Finance Minister Petros Doukas and his aides at the General Accounting Office. Alogoskoufis wants the body to be up and running by the winter so that it can inspect expenditures from the 2007 budget.

The bill provides that the fiscal inspectors will not only investigate the legality of expenditures, something already being done for most state agencies by the Court of Auditors, but also their effectiveness. They will also investigate cases of public fund misuse by private individuals.

On top of the inspectors’ corps, the bill provides for the creation of internal auditing units at all ministries and regions as well as state agencies with an annual budget exceeding 3 million euros. If the internal auditors discover cases of misused funds within a ministry or organization, these funds can be used toward a different purpose at the same agency. If this discovery is made by the fiscal inspector, the misused funds are cut from the agency’s budget and used elsewhere.