12.12.2024

The Bulgarian National Audit Office will refer to the international professional community regarding a threat to its independence. The management of the institution will request the Development Initiative (IDI) of the International Organisation of Supreme Audit Institutions (INTOSAI) to launch a procedure under the SAI Independence Rapid Advocacy Mechanism (SIRAM). This is a well-established procedure that the members of the international organisation can use in cases where the fundamental principles for the independence of Supreme Audit Institutions (SAIs) are violated, namely the standards INTOSAI-P1 "The Lima Declaration" and INTOSAI-P10 "Mexico Declaration on SAI Independence".

The decision was made with regard to the Draft Act on the amendment of the Bulgarian National Audit Office Act, submitted to the 51st National Assembly of the Republic of Bulgaria on 10 December 2024. The proposed changes are intended to remove from the President of the institution the right to propose Vice-Presidents to the National Assembly, as has been the case so far, and to substitute it with direct nomination and election of Vice-Presidents by the National Assembly. A similar Draft Act was also submitted to the 50th National Assembly on 5 August 2024. The proposal to change the model for nomination of Vice-Presidents of the Bulgarian National Audit Office follows the change in Article 99, paragraph 5 of the Constitution of the Republic of Bulgaria, according to which the Vice-Presidents of the Bulgarian National Audit Office can also be appointed as caretaker Prime Minister. In this sense, the desire the Vice-Presidents of the Bulgarian National Audit Office to be appointed directly by the National Assembly for political and not professional reasons, is evident.

The claims in the motives to the Draft Act that the proposed new mechanism for nomination of Vice-Presidents of the Bulgarian National Audit Office is based on other bodies elected by the National Assembly, are not supported by factual examples. On the contrary, the chairpersons of bodies such as the Bulgarian National Bank, the Financial Supervision Commission, the Commission for Public Oversight of Statutory Auditors, etc. also propose the composition of the respective governing bodies to the National Assembly.

The re-introduction of a Draft Act that radically changes the approach to the nomination of Vice-Presidents of the Bulgarian National Audit Office threatens the independence of the Supreme Audit Institution in an unacceptable way.

A fundamental principle of the International Organisation of the Supreme Audit Institutions (INTOSAI): Principle 1 - "The Lima Declaration" states that "The Supreme Audit Institutions can accomplish their tasks objectively and effectively only if they are independent of the audited entity and are protected against outside influence."

As early as 6 August 2024, after the first Draft Act for the amendment to the Bulgarian National Audit Office Act was deposited, Ms Goritsa Grancharova-Kozhareva, Acting President of the Bulgarian National Audit Office, sent a letter to Mr Tony Murphy, President of the European Court of Auditors, informing him about the attempts to compromise the independence of the Bulgarian institution. In response, Mr Murphy pointed out that independence is a key prerequisite for the objective and effective functioning of the Supreme Audit Institutions. In the letter, he made the point that the international professional audit community has a Rapid Advocacy Mechanism to protect the independence of the Supreme Audit Institutions (SAIs). The mechanism has not been initiated to date and a follow-up visit by international organisations has not been carried out in the hope that the Draft Act to amend the Bulgarian National Audit Office Act, which remained not adopted by the 50th National Assembly, is an isolated attempt to use the Bulgarian National Audit Office for political purposes, and that the statesmanlike approach of the promotion of independent external audit in the public sector will nevertheless prevail over the narrow partisan interests.