Annual reports
Public enterprises come in all sizes and shapes. Often set up to provide a public service, they have evolved over the years, becoming important revenue sources for the communes, cantons and Confederation. In 2018, the Confederation received the tidy sum of CHF 820 million in dividends from Swiss Post, Swisscom and RUAG, despite the law prohibiting the acquisition of equity in profit-making enterprises for investment purposes.
These enterprises represent a huge conflict of interest for the state as shareholder. It is simultaneously owner, regulator, customer and occasionally subsidy provider to these public enterprises. In its excellent report of 8 December 2017, the Federal Council considered privatisation or an open tender process for contracts to provide universal services, in order to ensure free commerce but also because "potential conflicts of interest for the state would be reduced by transferring ownership to the private sector. As the state would no longer have to act as owner, it could focus on its mandate as regulator, supervisor, guarantor of universal services and performer of sovereign tasks". Privatisation would also avoid major financial losses associated with the public status of some of these enterprises. These are resources which could come in useful during a crisis.
As we wait for these broad objectives to be achieved, it remains essential to monitor these enter enterprises’ day-to-day management. In September 2020, this topic was the focus of the work of the Swiss Conference of Audit Offices, which is made up of the Swiss Federal Audit Office’s counterparts in Switzerland’s cantons and large towns. It took the opportunity to issue an initial official statement on behalf of its 30 or so members. This contained a key recommendation: greater monitoring of public enterprises is essential to ensure better coverage of the risks associated with their management. So what have we done and achieved in six years? What priorities have guided us?
The Control Committee of the Council of States also made a statement in the same vein in its report of 12 November 2019 on the PostBus affair: "The Committee welcomes the fact that the SFAO has reviewed its audit strategy with regard to Swiss Post from 2014 onwards. It expects that, in future, the SFAO will apply a standard and homogeneous practice as regards the auditing of enterprises affiliated with the Confederation, and that it will perform the entirety of the mandate conferred on it by law. Over the years to come, the Committee will continue to monitor the progress of the SFAO’s activities in this area."
It is also essential that public enterprises do not attempt to evade audit by the SFAO or supreme supervision by Parliament... Swisscom is a case in point. In 2019, the Obwalden State Councillor Erich Ettlin submitted a motion to amend the Federal Audit Office Act (FAOA). The aim: to ensure that partly privatised federal enterprises be exempted from the Act and that their finances no longer be subject to supervision by the SFAO. This amendment would mainly have concerned Swisscom, but also entities such as Skyguide or Identitas. It was adopted by the Council of States in 2019, but was ultimately shelved after being rejected by the National Council on 30 October 2020.
It might be interesting at this point to look at the arguments put forward by the National Council’s Finance Committee. Firstly, it does not see how the Confederation, as majority shareholder, would derive an advantage over minority shareholders when the SFAO performs an audit. The audits identify problems, and this is beneficial for all concerned, including the minority shareholders. There are also ways to keep them informed as necessary. The second argument centres around the role of Swisscom as a public service, since the company performs tasks of that nature. If the legislator removes the SFAO’s ability to examine the enterprise’s activities, Parliament and the Finance Committees will no longer receive information or explanations from the SFAO. Thirdly, it should be noted that the supreme financial supervision exercised by Parliament is linked to the SFAO’s supervisory powers. Given the linkages between the Parliament Act and the FAOA, limiting the powers of the SFAO would equate to limiting the supreme financial supervision exercised by Parliament.
Similar arguments prompted National Councillors of all political persuasions to support the motion by Thurgau National Councillor Christian Lohr. It demanded an end to the legal exemption that allows the Swiss radio and television broadcaster SSR to avoid financial supervision by the SFAO while receiving an annual subsidy of over CHF 1 billion, financed by the taxpayer. To be continued...
The SFAO staff managed to stay healthy over the course of 2020, while selflessly putting in the time and effort to audit the extraordinary expenditure linked to the COVID-19 crisis. Thank you to him, and to everyone who supports our activities!
Press conference Michel Huissoud
Press conference Eric-Serge Jeannet
Information:
Michel Huissoud, Director of the SFAO, tel. 058 463 11 11