Audit of Municipalities
A- Internal audit
Internal audit of a municipality is conducted by the municipal council, mayor and internal auditors.
The municipal council is both the decision-making body and the oversight body of a municipality. The council oversees the expenditures and activities of a municipality when it deliberates on the budget, annual report, strategic plan, land development plans, work programs and investment programs.
In addition, municipal councillors may pose questions to the mayor about the activities and decisions of the municipality.
A general debate may be initiated on municipal affairs upon the request of one third of councillors, or a motion of incompetence of mayor be tabled. The municipal council may decide that the mayor’s activities in the previous year are unsatisfactory. However, if this motion is affirmed by three fourths of the council and upheld by the Council of State, the mayor loses the office.
The mayor, as the head of municipal organization, is under obligation to always supervise every action of the municipality. S/he is also responsible for operating the internal control and audit processes of the municipality.
Internal auditors work directly under the mayor to improve work processes, eliminate risks and corruption. However, smaller municipalities do not have internal audit function.
Another means of internal audit is the audit commission of three or five councillors elected by and from among the municipal council (excepting town municipalities with population smaller than 10,000). The audit commission audits the municipality’s revenues and expenditures and related accounting records and transactions for the previous year, and submits its report to the municipal council by the end of March.
The audit commission report should be submitted to the municipal council before the council deliberates on the annual report in its April meeting. However, it is not possible to say that audit commissions conduct an effective audit.
Municipal council are not subject to the approval of any other authority with some exceptions. However, municipalities are under the tutelage of the central government for such reasons as protecting the public good and effective delivery of public services. Various ministries and central government agencies have tutelage power on municipal decisions and actions in the form of supervision, approval, permission, deciding on behalf, deferment etc.
Major areas of tutelage are as follows:
- The job position standards that shape the organizational structure of municipalities are defined by the Ministry of Interior and State Personnel Department.
- Secretaries-general of metropolitan municipalities and directors-general of affiliated entities are appointed by the Minister of Interior upon a proposal from the metropolitan mayor.
- The content of the strategic plan is defined by the Ministry of Development, and the format and content of the annual report by the Ministry of Finance.
- Regulations on preparing land development plans are issued by the Ministry of Environment and Urbanization which also monitors and oversees the land development plans and amendments thereto.
- The Ministry of Environment and Urbanization defines the environmental responsibilities of municipalities, and controls the public resources that municipalities may deploy to improve the environment.
- Since the remunerative rights of civil servants working in municipalities and in the entire public sector are linked to those of the state civil servants, the Ministry of Finance has a decisive role on this matter.
- Resolutions of municipal councils do not enter into force without being communicated to the respective governor or the district governor. Some resolutions of municipal councils are subject to approval by the Ministry of Interior.
- The Ministry of Interior is authorized to inspect the transactions of municipalities through the inspectors of the Ministry of Interior. Such inspection relates to the compliance of municipal decisions and actions with legislation.
- The Minister of Interior’s permission is required to launch an investigation on municipal officials for decisions and actions constituting crimes.
- Mayors and municipal councillors on whom investigation or prosecution has been launched may be suspended by the Minister of Interior until the completion of the investigation or prosecution.
- Where municipal services fail to such extent that public health and well-being are vitally affected, Minister of Interior may have the governor undertake such services.
- The Ministry of Interior may request the Council of State to dissolve a municipal council which fails to perform its functions or passes resolutions on political matters not relevant to the municipality. The council meetings may be suspended until the Council of State returns a decision.
C- Audit by Court of Accounts
Since municipalities disburse public funds, they are subject to audit by the Court of Accounts which audits on behalf of the Turkish Grand National Assembly (the national parliament). Turkey has no specific court of accounts for local governments. The Court of Accounts regularly reviews whether municipal revenues and expenditures comply with laws, whether municipal assets are protected. If it is found out during an audit that the public resources incurred a loss, a recovery decision is returned. The recovery decision of the Court of Accounts has the effect of a court order and not subject to appeal.