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Annual reports

DokumentWe summarized the results of our work in our annual reports. Here you find these annual reports since 1997.

The current management team of the Swiss Federal Audit Office (SFAO) has been at the helm for six years now, the duration of a first term of office. As I write this roundup, much has been written and said about the publication of reports, media presence, SFAO resources or the tone of our publications.

These questions of form are important; getting a message across is all about the delivery. They have taken centre stage and attracted a great deal of attention. In this regard, the Finance Delegation took a clear stance on the SFAO’s publication practices, when it declared in its last activity report: "The Finance Delegation believes that, through the measures it has implemented, the SFAO has clearly improved its information and publication practices. (...) The DelFin rejects any further self-restriction of the SFAO in its information autonomy".

The questions of style having thus been addressed, let us turn to the substance. It, too, is important. Performing a perfect audit on a minor topic or ignoring major risks will probably have much more far-reaching consequences for the taxpayer than worrying about the contents of the SFAO’s Twitter feed.

So what have we done and achieved over the last six years? What priorities drove our work?

Our first priority was public corporations. We audited them systematically, with three areas of focus. First, we verified that governance tools were in place and functioning correctly. This was not the case for compliance management at RUAG, nor for risk management at Swiss Post. Happily, the situation has improved in the meantime. Second, we audited nationally important IT systems, such as the IT security in the tunnels of the Swiss Federal Railways (SBB), the national pricing system NOVA or, in the military domain, IT security at RUAG. Finally, relations between the Confederation and its enterprises. The SFAO looked at the merger of civil and military air traffic at Skyguide and the subsidies paid to SBB. Our objective: to ensure that the money set aside for one task was not diverted to another. These audits of federal enterprises naturally provoked a reaction. RUAG attempted, unsuccessfully, to cite a Zurich legal opinion from 2016 to avoid being audited. As for Swisscom: before our first risk management audit was even finished, a parliamentary motion had been launched to prevent us performing another one...

What is the SFAO’s trump card? We are the only body that can legally carry out checks in situ – even abroad – on whether the situation at an enterprise matches that reported to the Federal Council and Parliament. For example, we went to Hungary and Germany for RUAG, and to France and Liechtenstein for Swiss Post. These are what we call “boots on the ground” audits. In recent years, we have also favoured this approach for subsidy audits. These formed our second area of focus: visiting the recipient of federal aid to check what it is doing, whether this is a transport company, a foundation such as Pro Senectute, an NGO operating in Africa or a cheese dairy.

Our third area of focus over the last six years has been financial crime. In 2015, we observed that a number of federal offices and bodies play a key role in the fight against this type of crime. On the basis of a study commissioned from the former prosecutor Paolo Bernasconi, we identified around ten audit topics, ranging from sequestered funds to international legal assistance, from gold trading to the operation of federal courts, and from specific fedpol tasks to the restitution of state assets. In six years, we have built up a picture which has revealed numerous areas for improvement.

Fraud is not the sole preserve of white collar criminals, which is why social security insurance abuses have also been at the forefront of our activities. A risk analysis conducted in conjunction with our cantonal partners revealed the main risks and the areas to audit. After the results achieved in the initial stages proved conclusive, we decided to strengthen our data analysis capabilities. At federal level, this is the most effective way of identifying and combating systemic abuses.

At the request of the Parliamentary Finance Delegation, our fourth area of focus was cross-departmental offices. Over a three-year period, the SFAO systematically audited the federal offices in charge of finance, human resources, IT, risk management, logistics and buildings. The aim was to check that these offices, in addition to issuing directives, are also ensuring their application and have a system for sanctioning non-compliance. This is the only area in which we have not improved. Despite some serious findings by the SFAO, the Federal Council is sticking to department-level management of the Federal Administration without supervision and overall control, and does not want to strengthen the powers of cross-departmental offices. It therefore remains the responsibility of the seven general secretariats to check whether, for example, the IT security rules or procurement procedures are being adhered to in their own departments.

This brings us to the fifth and final point of our mandate: ICT projects. Following the resounding failure of the INSIEME project, a number of measures have been implemented, including regular auditing of key ICT projects by the SFAO. This requires considerable resources but the effort is justified, not just because of the investment volumes but also because of the potential savings linked to these projects – as demonstrated by the DaziT programme for Swiss Customs. This transformation is not just IT-related. It reviews processes and makes things easier for the administration, but also for the economy and users of customs services. However, this is only possible if the will to review procedures exists. The SUPERB programme will be an interesting test case. The transformation of Federal Administration support processes will only be achieved if those responsible for supra-departmental governance grasp the nettle of department-level administration management. Otherwise, several hundred million francs will have been spent without concrete results to show for it.

We will continue to monitor the situation closely and adjust our future activities as risks emerge.

Thank you to all those who support our activities!

Press release

Annual report 2019

Information:

Michel Huissoud, Director of the SFAO, tel. 058 463 11 11

In 2008, federal employees were not legally required to report the felonies they encountered to the courts. The experts of GRECO, a Council of Europe anti-corruption body, pointed out this shortcoming at that time in their evaluation report on Switzerland.

To remedy this shortcoming, the Federal Office of Justice, in close cooperation with the Federal Office of Personnel and the Swiss Federal Audit Office (SFAO), introduced on 1 January 2011 the new Article 22a of the Federal Personnel Act and the obligation to report felonies and misdemeanours prosecuted ex officio. This is when whistleblowing was launched at the federal administrative level. This article actually introduced the reporting right for other irregularities observed by a federal employee. Two important features: whistleblowers acting in good faith are legally protected against any professional disadvantage and the report must be made to the SFAO.

Unfortunately, the disadvantage of enshrining this provision in the Federal Personnel Act is that it does not apply to persons employed under the Swiss Code of Obligations, e.g. those at RUAG, Swiss Post or some SBB staff. The SFAO welcomes reports and treats them confidentially in all these cases, but it cannot ensure that whistleblowers acting in good faith are legally protected against unfair dismissal.

We have seen a steady increase in the number of reports since 2011, especially since the introduction of our IT platform www.whistleblowing.admin.ch. It is now the IT system that ensures the anonymous processing of reports. These reports come from federal employees, but also from third parties who have witnessed irregularities.

For the SFAO, processing this information is not simple. It is necessary to sift through the information and critically verify onsite whether it is plausible. Some reports may actually be intended to harm someone. It is then necessary to identify the appropriate time to initiate possible criminal proceedings and avoid obstructing them by alerting the perpetrators of an offence. In any case, nothing that could put the whistleblower in danger should be done. Finally, information that may later prove to be important should not be neglected.

Far from constituting the establishment of a "police state" as feared by some, this system allows the population to participate actively in the supervision of its administration. It also provides the opportunity to verify and perhaps refute certain accusations.

Some specific examples? Following several reports, the SFAO examined the financial management of the SBB transport police. The good news for them is that we did not have another PostAuto affair. The accounting errors were not of the same magnitude and the cost transfer was in favour of the subsidised sectors of the SBB rather than against them. Another example concerns RUAG’s margins. Following a whistleblower’s accusations reported in the press, RUAG asked the SFAO to audit its accounts. The aim of the audit was to clarify definitively this issue of the profitability of RUAG’s sales to the Confederation.

In the SFAO’s opinion, this development has not yet been completed. In 2013, the audit offices of various countries adopted a new standard that deals with their relations with the public. It has been found that establishing dialogue between the audit institution and the public has a positive impact on trust in public administrations.

In typical Swiss fashion, we want to develop this dialogue by giving the public the opportunity to make a contribution or participate in our work. We believe that we are here to ensure that all taxpayers’ money is spent efficiently and to avoid waste. The area we have to supervise is massive. If you have any questions that you feel are important, or if you have any doubts about the management of a subsidy or project, please contact us (This email address is being protected from spambots. You need JavaScript enabled to view it.). We will incorporate this information into our considerations and assess the appropriateness of conducting an audit in that area.

We would like to thank everyone who supports us in our work.

Press release

Annual report 2018

Information:

Michel Huissoud, Director of the SFAO, tel. 058 463 11 11

The Swiss Federal Audit Office (SFAO) has a significant audit portfolio. Few people know it, but the portfolio extends far beyond the confines of the Federal Administration. It includes the beneficiaries who receive CHF 40 billion in subsidies each year and also comprises the companies with the Confederation being the majority shareholder and other organisations which carry out public functions.

These all form an area, a field, for the SFAO to audit; a field which shares the same profile as that of the Parliament’s supervisory committees. Legally, Parliament’s legislation is based explicitly on the Federal Audit Office Act. This is coherent as the SFAO assists the Federal Parliament in its supreme supervisory functions.

Our field may be marked out but where are we to work? Today, nearly half of our resources are committed to compulsory mandates. These include unavoidable tasks such as auditing various annual accounts, key IT projects and fiscal equalisation in the cantons. Our remaining resources are allocated according to the SFAO’s annual risk analysis. The risks vary greatly (fraud, reputation, waste, poor use of subsidies, IT risks, etc.). Of course these risks are present in Switzerland but humanitarian aid, subsidies to eastern countries, the activities of foreign subsidies of RUAG and Swisscom mean they also exist abroad.

We are faced with the essential question: is the SFAO big enough to cover these risks?

If we consider what the history of the SFAO has taught us, the answer is no. Since its creation 140 years ago, our institution has seen its size shrink relative to the size of the central Federal Administration. The growth in the Confederation’s personnel and financial volume would require a workforce of around 160 people, excluding the supervision of the companies which are majority-owned by the Confederation. Today, the SFAO “only” employs 110 people.

The situation can also be compared internationally. Again, the SFAO is clearly not one of the national audit offices with an excess of personnel. In European countries of a comparable size, our counterparts in Denmark employ 254 people, in Austria 323 and in Belgium 550 which, like Switzerland, has the distinctive task of auditing a multilingual administration.

However, the real question is: which risk cover is acceptable for the two institutions we work for: the Federal Council and Parliament?

We can only provide an outline response to this question. Parliament has supported the management of the SFAO since 2014. In their opinion, their resources do not allow them to ensure acceptable risk cover. Less than half of the greatest risks could be audited. Since then, the results of our audits and current affairs have revealed one thing: fraud and IT risk cover still remains too simplistic. The insufficient cross-departmental supervisory powers also contribute to increased risks, in particular in the area of procurement and IT.

In 2015 and 2016, the 11 additional staff positions approved for the SFAO allowed key IT projects to be audited. During the same period, the list of these projects was extended from 13 to 19. Initial audits in the federal companies also took place. On reading these reports, it can be seen that these choices were justified. However, they were unfortunately made at the expense of subsidy audits.

In the coming years, the SFAO will recommend that its grows at a moderate rate in order to better cover the risks. It should be remembered that the SFAO audits have been providing the Confederation with receipts for ten years; almost half a billion Swiss francs, enough to easily cover the costs of our institution.

We thank everyone who supports us in our work!

Press release

Annual report 2017

Information:

Michel Huissoud, Director of the SFAO, tel. 058 463 11 11