Oversight of budgeting by parliament and the public is fundamental to democratic governance and trust in government. Parliaments should provide for an inclusive, participative and realistic debate on budgetary choices by offering key opportunities for the parliament and its committees to engage with the budget process at all key stages of the budget cycle. Supreme audit institutions and independent fiscal institutions (parliamentary budget offices and fiscal councils) can play a significant role in enhancing parliamentary oversight and raising the quality of debate on public finances. OECD countries have also found different ways to engage civil society more directly in discussions on budget policies.
Quality Budget Institutions
Developments in OECD Countries
Abstract
Parliament’s “power of the purse” remains a cornerstone of the separation of powers enshrined in constitutions around the world (OECD, 2023[1]). This means that only parliament can authorise tax and spending. The government can propose a budget, but it needs approval from parliament to execute it. At the end of each financial year, the government must demonstrate that public funds were used as intended, providing the basis for budget accountability.
Parliament’s scrutiny of the budget confers legitimacy on the government’s spending plans and improves policy. Parliaments represent a wider range of constituencies than the government and can convene experts and interest groups. Its deliberations and hearings contribute to public debate and helps to forge consensus over policy proposals. This process can improve spending by exposing policy proposals to a wide set of stakeholders.
Parliament plays an important role in holding the government accountable for its fiscal objectives and budget plans. To help parliament exercise this role, most OECD countries have created IFIs (independent parliamentary budget offices and fiscal councils) to scrutinise the government’s fiscal strategy and budget plans, ex ante. This responsibility supplements the longstanding role of SAIs to assess whether the government has spent money for the intended purpose, ex post.
However, the context in which parliamentary oversight is conducted is changing. Multiple crises have led to increased public debt at a time when spending pressures are also rising. Most citizens have low confidence that the government will be able to address complex spending challenges. Around 40% of citizens are not convinced that parliament will hold the government to account (OECD, 2024[2]).
These changes place new demands on budget oversight. Parliaments must oversee a wide set of issues and exercise their powers of scrutiny at all stages of the budget cycle. IFIs need to support parliament in this task, and should fully implement their role as independent advocates for fiscal sustainability. Countries must also look for ways to engage more effectively with citizens on budget challenges.
Parliaments should provide for an inclusive, participative and realistic debate on budgetary choices by offering key opportunities for the parliament and its committees to engage with the budget process at all key stages of the budget cycle. The parliament must have timely access to all the budget information it needs to be able to properly scrutinise and review the proposed government spending.
10.2.1. Legislative powers for amending the budget
The basic framework for legislature oversight of the budget is shared by OECD countries. It is characterised by the government proposing a budget to parliament. The parliament reviews the budget and passes legislation specifying spending limits for each budget entity. The government must then execute spending within these legal limits, or request a revised budget law. If spending limits are breached, parliament may authorise the spending as an excess vote or impose penalties.
Legislatures can assert authority over the budget using different mechanisms. They can delay or decline to pass the government’s budget. Alternatively, the legislature may be able to propose amendments. The scope for legislatures to influence budget policy varies considerably between countries. At one extreme, the United States Congress has extensive powers to rewrite the President’s budget proposal. In contrast, parliaments with a Westminster model have more limited amendment powers.
Parliamentary powers to influence the budget are usually constrained by rules established in legislation or parliamentary procedures.
By declining to pass a budget, parliament can remove the government’s ability to spend in the next fiscal year. However, a more likely course in most OECD countries is to adopt a “reversionary budget” to limit the impact of not passing a budget before the start of a fiscal year. A reversionary budget refers to a budget that takes effect if parliament does not approve the proposed budget.
A reversionary budget is subject to rules and limits, but is intended to maintain the stability and predictability of funding for government services. In Finland, the government can spend on the basis of the proposed budget for an interim period. Germany allows the government to continue spending at the level approved in the most recent budget.
Parliament can also propose amendments to the budget. In most OECD countries, these amendment powers have formal limits intended to support fiscal discipline (Wehner, 2010[3]). They usually work by limiting amendments so that they either: (i) do not increase the budget deficit; (ii) do not increase total expenditure; or (iii) can reduce but not increase specific expenditures.
Canada and Ireland are the only OECD countries where the legislature has no formal power to amend the budget. In other Westminster systems, the budget is treated as a vote of confidence in the government, which means that budget amendments are rare.
10.2.2. Oversight across the budget cycle
Parliament should have oversight of all important decisions related to the public finances. It should approve the government’s fiscal policy framework, fiscal strategy and budget. Debates should follow each key stage of the budget and should be structured so that decisions can recognise the government’s fiscal constraints and can support public understanding on the health of the public finances.
Approving the fiscal policy framework
The fiscal policy framework defines the rules, procedures and institutions that underpin the budget process. It provides the foundations for budgeting that have been described throughout this report, such as the content of fiscal objectives and how they are set and monitored.
The fiscal policy framework is established through different mechanisms. Some elements will be legislated, including in the constitution. Others are set through guidance, such as budget circulars, and some are requirements of supranational bodies, like the European Union.
Pre-budget debates of the government’s fiscal strategy
Allowing parliaments to engage early in the budget process provides more scope for input into fiscal policy and supports more informed public debate. Many OECD countries publish a pre-budget report that outlines the government’s fiscal strategy and is supported by the latest official economic and fiscal forecasts. Analyses of fiscal risks and long-term fiscal sustainability may also accompany the pre-budget documents.
Some OECD countries, such as New Zealand, include a parliamentary debate of pre-budget fiscal strategy documents. A pre-budget debate provides an opportunity to debate budgetary priorities and trade-offs before the focus shifts to detailed spending allocations. Parliament can facilitate dialogue and receive input on the budget priorities of different stakeholders and debate long-term challenges facing the public finances.
Budget debates that recognises fiscal constraints
A mark of effective budget oversight is that it recognises the fiscal constraints facing the government. To reinforce commitment to fiscal responsibility, parliaments should review and approve the budget totals and medium-term expenditure ceilings before proposing amendments to detailed appropriations. This mirrors the top-down approach for deciding budget allocations within the government.
In some countries, the pre-budget report is used to establish top-down expenditure ceilings, as is the case in France. It was also a function of Sweden’s Fiscal Policy Bill before 2002. Sweden has since changed its procedures so that expenditure ceilings and detailed allocations are considered sequentially through the debates on the Budget Bill (Box 10.1).
Sweden overhauled its budget institutions in the late 1990s, ending a period of rising public debt and ushering in a new era in which the country is renowned for its fiscal management. The reforms started with parliament (the Riksdag) and its budget practices, and were subsequently followed by changes to the executive’s budgeting. This is an example of where parliament opted to devolve some powers over budget amendments in order to take greater responsibility for fiscal discipline.
Among the reforms, which included a new fiscal year and longer parliamentary terms, was a change to a “top-down” process for budget approval. Before the reforms, the government introduced appropriations bills to parliament over a six-month period. In the parliament, budget approval was conducted on a line-by-line basis, led by sectoral committees. There was little co-ordination of fiscal aggregates.
The top-down budget process divided budget approval into two stages. The Spring Fiscal Policy Bill was submitted to parliament in April. Through this, parliament agreed on budget ceilings for 27 expenditure areas. The Budget Bill followed in October, which determined the detailed budget appropriations within each expenditure area. This process later evolved to bring the approval of budget ceilings and budget details together as part of the Budget Bill.
The committee structure was centralised to reinforce the reforms. The finance committee took responsibility for aggregates and the “frames” for 27 spending areas. Sectoral committees could make proposals for budget amendments within the ceiling allocated by the finance committee. The final budget for each expenditure area was approved as a package, moving away from the line-by-line amendments. The reforms contributed to a significant reduction in the number and cost of parliamentary budget amendments.
Overseeing budget execution and audit reports
Once the budget has been passed, parliament’s oversight role shifts to focus on monitoring budget execution. It may be asked to authorise changes to the budget through supplementary appropriations. However, its oversight role comes to the fore again when it receives audit reports on the annual financial statements from the SAI.
To oversee budget execution, parliament should have the power to examine any interim financial reports that it deems necessary throughout the year. There should be a formal process to review the in-year reports. Parliaments may need to pay specific attention to the government’s use of budget reserves, contingency funds or excess expenditure procedures – mechanisms which give the executive flexibility to spend on activities without first consulting parliament.
In Germany, the Bundestag is notified of any excess or extra budgetary expenditure at least every three months. Rapporteurs of the budget committee can request additional information or updates at any time. The Budget Committee can also request the Court of Auditors to monitor or assess the execution of specific projects.
The year-end financial report is a key accountability document. Parliamentary scrutiny of audit findings assures citizens that public funds have been used for the purposes intended and that policies have achieved their intended results. Parliaments in many OECD countries have specialised audit or public accounts committees to deal with the reports produced by the SAI. In other countries, this review takes place in the budget committee or a sub-committee of the budget committee.
Recommendations made by parliament and its committees on audit reports should be monitored and integrated into the parliamentary debate on the subsequent budget, where appropriate. This works best where there is close collaboration between the budget committee and the public accounts committee.
Monitoring non-financial performance
Parliaments, particularly through sectoral committees, play an important role in overseeing the results of public spending. Governments are publishing increasing volumes of data and analysis that are used to develop budget policy and drive improvements in performance. SAIs also conduct and publish performance audits to help parliament monitor whether public spending represents value for money.
Sectoral committees of parliament usually take the lead in reviewing performance budgeting information or spending reviews relevant to their portfolios. These committees have more information on the policy challenges facing specific ministries and services, relative to budget committees, and they can use this knowledge to scrutinise budget allocations and spending choices. Sectoral committees also hold relationships with experts and stakeholders outside the government, which they can draw on to enrich the debate over budget policy decisions or the results of public spending.
Making effective use of performance information can also have an impact on the nature of the budget debate as has been the case in Austria (Box 10.2).
Austria implemented budget reforms between 2009 and 2013 that focused on advancing four principles: outcome-orientation, efficiency, transparency and “true and fair value”. An informal parliamentary reform committee was created to help build political consensus for the reforms. It also ensured that the role and responsibilities of parliament were well recognised in the final reform plans.
Among the many changes to the budget process, Members of Parliament were provided with performance information on the mid-term outcome objectives envisaged by the Federal Ministries, alongside financial allocations in the budget documents. New structures helped the parliament to make use of this information: a Subcommittee on Budgetary Performance and Execution within the Parliamentary Budget Committee and a parliamentary budget office (Budgetdienst).
The additional information and new structures encouraged a more outcome-focused discussion around the budget in Parliament; and questions by parliamentarians challenged line ministries to provide meaningful information regarding their performance objectives.
Source: Downes et al. (2018[5]).
10.2.3. Time, information and resources available for parliamentary scrutiny and debate
Parliament can only exercise its oversight role effectively if it has adequate time, information and resources with which to scrutinise the budget and propose amendments or corrective actions.
Parliament should receive the budget at least three months prior to the start of the year
Good practices issued by the OECD and other international organisations recommend that the parliament approves a new budget before the start of the fiscal year. Working backwards, the government should submit its budget proposal to parliament at least three months earlier in order to provide sufficient time for debate and for incorporating amendments,
Survey data from 2023 shows that 15 out of 35 OECD countries typically follow both good practices. In these countries, the parliament usually passes the budget shortly before the start of the fiscal year, having received the proposal three to four months earlier. A few countries approve the budget a month earlier having given their parliaments a similar period for review (Figure 10.1).
The practices among the 20 countries that do not fulfil one of the two criteria vary greatly:
In Austria, the budget is presented in October and approved before the end of November a month before the start of the fiscal year in January. A number of other countries give their legislatures a short 1-2 month review period before the budget is approved before the start of the fiscal year. They include Australia, Italy, Latvia and Portugal.
The United Kingdom: parliament receives the budget estimates after the start of the fiscal year in April and approves the appropriations bill in July, three months later. Some other countries with a Westminster style of government also pass the budget after the start of the fiscal year. That includes New Zealand and Canada.
The United States: the executive’s budget proposal is submitted to the legislature in February or March, and is then typically debated over nine to ten months before it is approved in December, two months after the start of the fiscal year in October.
Note: Data for Israel, Lithuania and Mexico are not available. Where timelines differ for the approval of tax and expenditure policy measures, the timeline for the approval of expenditure measures is shown. In Ireland all of the Estimates that have been voted by the legislature for the budget year are not finally implemented in legislation until the annual Appropriation Act is passed. It is usually one of the last pieces of legislation to be enacted each year. Statutory confirmation of the appropriation of moneys, pursuant to Article 17.1.2 of the Constitution, therefore, takes place after these moneys (or almost all of them) have been spent, almost 12 months after the start of the budget year.
Source: OECD (2023), Senior Budget Officials Survey on Budget Frameworks, Question 1.
Budget information provided to parliament should be comprehensive and timely
Effective parliamentary oversight depends on receiving adequate information in a timely fashion. This is true for both its ex ante role scrutinising fiscal policy and authorising government spending plans, but also for parliament’s oversight of budget execution, ex post.
Budget documentation submitted to parliament should be comprehensive, encompassing all government revenues and expenditures. Oversight should extend to the government’s economic assumptions, sustainability analysis, MTBF, revenue and expenditure policies, in-year financial reports and audit reports. For example, in France the adoption of the LOLF in 2006 reinforced parliament’s role in overseeing and monitoring budget execution as the budget structure was organised by missions and programmes, which improved the information available to parliament.
Information needs to be provided in a timely manner and in a form that is accessible to legislators. Budget documents should be shared with sufficient time for review, as just discussed. The same is true for economic forecasts, financial reporting, audits and performance reports.
Ultimately, parliament should have the powers to demand the information it needs to oversee spending. It can do that through by setting standards for budget reporting and transparency. Alternatively, it can direct the executive to provide information at the required level of detail to support budget oversight. Many OECD countries assign parliamentary committees the power to compel persons to testify in hearings or to summon papers and records relevant to the issues under scrutiny.
Analytical support can improve the quality of budget oversight
Parliaments need to be able to understand the contents of the budget if they are to play a meaningful role in the budget process. Most will not be experts in public sector budgeting and financial management. Nor do parliamentarians have access to the same level of information and resources available to ministers.
Working in committee is one way that parliaments build up expertise and knowledge. Having stable membership can reinforce these benefits. The capacity of budget committees is also strengthened by assigning dedicated staff and allowing the committee to consult or employ experts. In OECD countries the creation of specialised bodies assist the legislature with its oversight responsibilities, including parliamentary budget offices and research units.
10.2.4. The role of parliamentary committees
Budget oversight in parliament is led by a network of committees. Sectoral committees oversee the policies and budgets of spending ministries. Other committees co-ordinate parliamentary scrutiny of the executive’s budget proposal and public accounts. Harnessing the strengths of both types of committees is critical for establishing effective budget oversight. To do this, a growing number of OECD countries have a strong budget committee responsible for budget review which co-ordinates varying levels of input from sectoral committees and public accounts committee.
Most parliaments co-ordinate recommendations through a budget committee
The budget committee will typically co-ordinate recommendations from sectoral committees, which they use to produce a recommendation to the parliament covering the whole budget, as shown in Box 10.3. In other variations of this practice, the budget committee reviews the budget aggregates and leaves sectoral committees to consider the appropriations under their portfolios. Alternatively, the budget committee retains sole responsibility for budget oversight, but invites representation from sectoral committees as it discusses the issues under each portfolio.
Only a small group of countries following a Westminster tradition of government has no budget committee at all. In Australia and Ireland, for example, the budget for each ministry is approved by sectoral committees. The United Kingdom has no formal committee involved in the budget approval process. Instead, oversight of spending is backward looking and co-ordinated by the Public Accounts Committee.
Lessons for strengthening the governance of parliamentary committees
OECD country experience suggests that committee governance can be strengthened in several ways:
Defined roles: The budget committee’s role relative to the departmental select committees must be clearly defined to avoid tensions developing and minimise duplication of effort.
Effective co-ordination: The budget committee should work closely with other committees that oversee the public finances, such as a finance committee or public accounts committee.
Opposition chairs: Appointing the chair of the budget, audit or public accounts committee from an opposition party can help operate committees in a nonpartisan and consensual manner. This practice is observed in France, Germany, Hungary, Luxembourg, Portugal, and Spain.
Transparency: Opening proceedings to the public (in person or through broadcasts) and publishing of committee reports, which are both common practices for OECD countries.
Budget Committee of the Bundestag
The Budget Committee of the German Bundestag deliberates on the amounts of money the Federation is to spend and for what purposes during the annual budgetary procedure. The budget is legally referred to the Budget Committee, but the sectoral committees also review sections of the budget relevant to their portfolios. The sectoral committees provide feedback or make proposals to the Budget Committee and the Budget Committee has the ultimate decision-making power as to whether or not to include these proposals. In a sense, the relationship of the Budget Committee vis-à-vis the sectoral committees, mirrors that of the Finance Ministry vis-à-vis the line ministries, with the Budget Committee viewed as the guardian of fiscal discipline.
Rapporteur system for co-ordinating committee inputs
The Budget Committee organises its work through a strict rapporteur system. At the beginning of each electoral term the Budget Committee appoints a lead rapporteur and assistant rapporteurs (from different parties) to cover each departmental budget. The rapporteurs remain responsible for this portfolio for the full electoral term (or more, especially in the case of rapporteurs form smaller parties), allowing them to develop significant expertise. Again, the responsibility of the rapporteurs is considerable because in addition to their work within the Budget Committee, they are the principal source of information for their parliamentary groups and their advice generally forms the basis of their parliamentary group’s evaluation of the departmental budget in question.
Integrated oversight of the budget and public accounts
Uniquely, the Public Accounts Committee is a sub-committee of the Budget Committee. This means that expenditure authorisation and monitoring decisions are integrated in a single committee. Detailed knowledge of spending gathered through this subcommittee contributes to the relevance of the amendments suggested by the Budget Committee. It is also common practice for representatives from the Court of Auditors to join budget hearings with line ministries.
Source: Federal Ministry of Finance, Germany.
IFIs play a significant role in enhancing parliamentary oversight and raising the quality of debate on public finance by costing fiscal measures, informing the public about the outlook for the public finances, and making recommendations around policy plans.
10.3.1. The growing number of IFIs in OECD countries
IFIs are independent public institutions with a mandate to critically assess, and in some cases provide non-partisan advice on, fiscal policy and performance. This definition includes parliamentary budget offices as well as fiscal councils.
The growth of IFIs has been one of the most important changes in budget institutions in the past decade. The first IFIs date back to 1936 in Belgium, and the creation of similar institutions in the Netherlands (1945), Denmark (1962), Austria (1970) and the United States (1974), however, most IFIs were established to strengthen fiscal oversight following the 2008 Global Financial Crisis (Figure 10.2). By 2025, 30 OECD countries reported the existence of an IFI, and six OECD countries had more than one.
Number of OECD countries with IFIs, by year established (1930-2025)
Source: OECD (2025), Independent Fiscal Institutions Database, updated by OECD Authors.
In general, IFIs influence budget policies in OECD countries through persuasion from independent, expert analysis. IFIs offer technical opinions on the government’s budget plans, including whether they are consistent with clear fiscal objectives. These opinions encourage the government to make more realistic and sustainable fiscal plans and to explain how they will manage uncertainty (Casey, 2024[6]).
Strong IFIs are characterised by some core values – independence, non-partisanship, transparency and accountability. They prepare competent, technical analysis that informs the public debate. IFIs are increasingly viewed as the main authority on the government’s compliance with its fiscal rules (von Trapp, Lienert and Wehner, 2016[7]).
10.3.2. Supporting parliamentary oversight and costing legislative proposals
Parliamentary budget offices are an independent body or department under parliament with a mandate to assist parliamentary oversight of the budget. The size and mandate of these IFIs varies, but often involves supporting the work of the budget committee with policy advice and independent costing.
Parliamentary budget offices range from small parliamentary departments with independent mandates, (e.g. Australia, Austria, Canada, and Portugal) to large independent bodies including the Korean National Assembly Budget Office (NABO) and the Congressional Budget Office (CBO). Staffing numbers vary (Table 10.1). The Congressional Budget Office in the United States is the largest and had around 264 secretariat staff in 2021.
Note: Number of analytical and corporate secretariat staff, excluding chair or head of institution and other council/board members.
Source: OECD (2021), Independent Fiscal Institutions Database.
As part of providing an independent view on fiscal sustainability, these IFIs can also have a role in highlighting the fiscal impact of prospective legislative proposals. The role of costing legislative proposals recognises that not all fiscal measures are limited to the budget and members of parliament can introduce bills during the year that have a fiscal impact. In Korea, the National Assembly Budget Office has responsibility prepare estimated costings of legislative bills to help highlight the potential fiscal impact (Box 10.4).
In Korea, the National Assembly Budget Office (NABO) was established in 2003 as a fiscal institution and is to check and monitor the fiscal outlook. Included in its responsibilities is to cost legislative bills that contain fiscal implications, in particular a net increase in spending or a net decrease in revenue will a bill is proposed to the National Assembly. Exemptions apply for small, non-material costs, national security, and where estimating is technically not possible, for example due to no available data. NABO is to prepare costings within 14 days of receiving a request. As part of its response, NABO is to identify whether the estimated costs relate to mandatory or discretionary spending. The cost estimates are subject to a quality review process and are published on the National Assembly’s Bill Information System webpage. Of note, NABO prepares costings when members of the National Assembly submit bills and again after the bills have passed the plenary session, which recognises that the content of the bill may have changed through amendments during consideration of the bill.
Source: National Assembly Budget Office, Korea.
10.3.3. Creating stronger fiscal advocates
Research suggests that the presence of a fiscal council can make economic assumptions more objective, strengthen the hands of the finance ministry and increase compliance with fiscal rules. It is also clear that these IFIs have fostered greater transparency over public finances (Beetsma et al., 2019[8]).
These trends show that IFIs have generally established themselves as strong fiscal “watchdogs” in OECD countries. However, there has long been a vision for IFIs to become stronger “advocates” for fiscal sustainability in the public debate (Casey, 2024[6]). Beyond simply monitoring the enforcement of fiscal rules, IFIs should be able to cost fiscal measures, inform the public about the outlook for the public finances, and make recommendations around policy plans.
Conditions and capabilities for effective fiscal advocates
To become effective advocates for fiscal sustainability, IFIs need to develop a presence in the public debate on the budget and use this presence to highlight the fiscal implications of different policy options. IFIs should also be more forward looking, urging the government to take actions to address challenges that will build over the longer term.
Fiscal advocacy will be more effective if there is a strong media sector, robust parliamentary debate, trust in institutions and a well-functioning economic and fiscal research community. The government and parliament should ensure that the IFI is sufficiently independent in order to challenge the government’s fiscal plans robustly and maintain the trust of parliament and the public.
Other factors are more likely to be under the control of IFIs themselves, including how they use their communications. IFI’s can develop their communications systems to help convey their message to different audiences, including through the media. These conditions and capabilities are reflected in the OECD’s fiscal advocacy index for IFIs (Figure 10.3).
Some IFIs are already performing the role of fiscal advocates
Across OECD countries, some IFIs stand out as effective fiscal advocates with substantial influence on the media’s coverage of the budget. Examples include the Canadian Parliamentary Budget Office, the Netherlands Central Planning Bureau, the United Kingdom Office for Budget Responsibility and the United States Congressional Budget Office (Figure 10.3).
Larger budgets and more staff in these IFIs mean they can dedicate more resources its communications activities. It also allows these organisations to broaden the focus of their analysis to include long-term fiscal projections, fiscal risk reporting and (in some cases) the costing of political manifestos during elections. However, smaller IFIs can have an impact too, as shown by the Irish Fiscal Advisory Council and Portugal’s Public Finance Council.
Measuring the conditions for stronger fiscal advocacy in IFIs
Note: The methodology for the 2024 OECD Fiscal Advocacy Index is presented in Annex C.
Source: OECD (2021), Independent Fiscal Institutions Database and OECD calculations of communications impact (2021-23); Casey (2024[6]).
SAIs audit the government’s use of public resources. Their core function is to audit that the government has executed spending in compliance with parliamentary authority and the laws of public expenditure. Increasingly, SAIs are auditing the results of public spending and the processes of financial management in order to identify opportunities for improving value for money and ensuring long-term fiscal sustainability.
10.4.1. The roles and responsibilities of SAIs
SAIs are often categorised into one of three types, each with its own variants: the parliamentary, board and judicial models. Each model has a different organisational structure or constitutional status, which influences the SAI’s responsibilities and its relationship with parliament.
In the parliamentary model (e.g. Australia, Chile, Denmark) and board model (e.g. Germany, Japan, Norway) the SAI audits the government’s accounts and submit reports to parliament, usually to a dedicated committee for the public accounts. In the parliamentary model, the auditor general issues an opinion on the government’s accounts. In the board model, the opinion is issued jointly by the audit board. This opinion is used by the legislature to hold the government (and individual accounting officers) to account for the use of public money.
In the judicial model (e.g. France, Portugal, Spain) the SAI is part of the judiciary and has both audit and judicial powers. The SAI audits the annual financial statements prepared by individual accountants and holds them responsible for unauthorised or irregular spending. It can either impose a penalty or discharge the accountant from further responsibility. The SAI prepares a report certifying the government accounts, which parliament can use to discharge the government’s responsibility for spending in the previous financial year. However, the SAI is more independent from parliament than it is in the parliamentary model.
As well as these general models, there are other notable differences in the role and responsibilities of SAIs in OECD countries. The SAI is generally responsible for auditing central government, social security funds and state-owned enterprises, but in some countries, like Italy, the SAI also audits subnational governments. In Finland, the SAI also functions as an IFI, with responsibilities for monitoring fiscal policy and overseeing political party and election campaign funding. However, for most SAIs in OECD countries, the main responsibilities are to audit financial management and the value for money of public spending, which provides an important input for parliamentary oversight.
10.4.2. SAIs perform a range of different audits
The core work of the SAI is to conduct financial and compliance audits. The financial audit process provides an opinion on whether the government’s accounts are accurate, while the compliance audit checks whether spending has been executed in accordance with the law and parliamentary authority. In international public sector auditing standards, the audit opinion on the financial statements may be unqualified or modified, which means that the audit either identified material misstatements, or did not have sufficient evidence to conclude otherwise. Modified opinions range from qualified to adverse to disclaimer.
SAIs also perform performance audits, which assess whether the government is meeting its objectives with the resources available and identifies opportunities for improvement. Performance audits consider the value for money of specific programmes or types of spending, such as large infrastructure projects. Performance audits are also routinely used to assess the strengths and limitations of budget processes, such as performance budgeting, spending reviews or the management of different forms of expenditure. A number of countries have also deployed specialised IT audits and environmental audits.
This means that while audits are often associated with the detailed scrutiny of financial transactions, they have become a much more varied tool – as illustrated in the different roles that SAIs play in supporting performance budgeting in OECD countries (see Figure 10.4). Audit findings are a focus for parliamentary scrutiny and can lead to recommendations for strengthening government policies and practices. Audits of tax expenditure management in the United Kingdom, for example, supported improvements in policy monitoring, reporting and evaluation by HM Treasury and HM Revenue and Customs (National Audit Office, 2020[9]).
Number of countries reporting each practice by SAIs
Source: OECD (2023) Survey on Performance Budgeting, Question 13
10.4.3. Strengthening SAIs as organisations
Reflecting their broad audit responsibilities, SAIs are large organisations compared. Total staffing was around 1050 in Germany’s Bundesrechnungshof in 2022, around 800 in France’s Cours des Comptes in 2022 and around 970 in the United Kingdom’s National Audit Office – three countries with different audit models and similarly sized economies. Even in countries with smaller populations, the SAI can have similar staffing levels as the CBA.
From the 1980s to the 2000s many OECD countries took steps to strengthen the independence of the SAI from the executive and to clarify its relationship with parliament. Rules were established to govern the appointment (and removal) of the auditor general or audit board, the selection of audit topics and the reporting lines to parliament. This period also increased the use of performance audit, complementing the broader shift towards performance budgeting and management.
With these changes now well-established in most countries, SAIs have been strengthening their management and staffing in order to improve the quality of audits and deliver an increasingly workload. In France, the Cour des comptes has changed from publishing a single annual report to producing as many as 180 reports in a year. Slovenia’s audit office has increased the number of performance audits published from 3-7 in a typical year before 2016 to between 14-28 in the years from 2021 to 2024. The Office of the Auditor General of Canada has bolstered staffing numbers from 567 full-time equivalent staff in 2019/20 to 780 in 2023/24 in order to strengthen its capacity to deliver high-quality and timely audit reports.
The growing importance of performance auditing and other specialised audits is changing the staffing needs for SAIs. Around 40% of the total budget resources used by the Office of the Auditor General in Canada in 2023 were dedicated to performance audits, while 47% was used on financial audits. The Swedish National Audit Office also divides staffing roughly evenly between performance and financial audits, organised into two different departments. Performance audits or specialised audits can take up to 18 months to complete in some countries, and require different skillsets than a financial audit.
Managers in SAIs require effective strategies to develop staff and strengthen output. Professionalisation programmes are now common practice in SAIs, including for performance and other specialised audits. Some SAIs, including the Office of the Auditor General of Canada, have reviewed processes for selecting and prioritising audit work in order to make better use of their resources. Australia’s National Audit Office participates in the Australian Public Service Employee Census which provides insights into how staff view the quality of leadership within the organisation.
10.4.4. Increasing impact
SAIs are critical for budget accountability and their practices continue to evolve to increase their relevance and impact. Selecting the right topic is particularly critical for performance audits, which are focused and resource intensive. In Australia, the National Audit Office uses a six-step process: environmental scan, topic development, coverage review, consultation, final review, and audit selection. This process ensures that audit topics are selected based on criteria such as risk, importance, materiality, auditability, and previous coverage. Stakeholder engagement, including consultations with the Joint Committee of Public Accounts and Audit, government entities, and the public, helps identify emerging issues and aligning audit priorities with parliamentary interests. The National Audit Office of the United Kingdom has developed a framework for tracking the impact of its audits, which helps inform decisions over the future audit programme.
Ensuring impartiality while also being responsive to parliamentary interests can be a delicate balancing act. In most OECD countries, the SAI consults parliament or other stakeholders in order to identify issues of public interest. In some cases, the SAI is legally obliged to follow parliamentary audit requests. Where the SAI is also actively trying to engage with the public on its findings, it may be criticised for being partial. However, a SAI’s reputation also depends on identifying and raising challenges before they become unmanageable and to communicate these effectively to the public. SAIs in many countries have also played a high-profile and responsive role overseeing emergency spending during times of crisis, for example during the COVID-19 pandemic or cost-of-living crisis that followed.
SAIs are also changing how they communicate audit findings to parliament and the public. Audit reports have become shorter and more accessible compared to 20 years ago, and are accompanied by summaries and other products such as video explainers. Some SAIs offer parliamentarians personal briefings on issues or training on how to scrutinise departmental reports; and others engage closely with the media to explain their findings. In the Netherlands, the Rekenkamer has also followed the publication of the main audit report with a small number of budget letters summarising findings on specific issues. This provides timely inputs for parliamentary debates on the budget and encourages more systematic follow-up of the findings and recommendations of past audits.
Engaging citizens in the budgetary decision processes should be actively encouraged, facilitating feedback and debate on key policy priorities and trade-offs. Most governments continue to rely on established mechanisms for participation, such as public consultations or hearings. However, both finance ministries and legislatures are increasingly looking for new ways to engage with citizens (OECD, 2023[1]).
10.5.1. Finance ministries are providing more space for deliberation on budget policy
Governments in OECD countries have a wide range of tools to allow the public (including organised interest groups) to shape budget policy. This is particularly true for local governments, but line ministries also engage actively with citizens and key stakeholders in order to improve the design and delivery of services.
In this landscape, the finance ministry has traditionally played a modest role. It may set standards for consultation that need to be followed in the budget or help the centre of government to enforce common standards, such as the guidance prepared by the Australian Department of the Prime Minister and Cabinet (Department of Prime Minister and Cabinet, 2020[10]). Sometimes the budget will be used to announce the start or conclusion of consultations on significant policy proposals. Where a policy change is the direct responsibility of the finance ministry, it will usually lead the consultation. For example, if there will be a major change to the tax system.
Finance ministries are increasingly stepping up their public engagement. While budget processes must provide appropriate space for ministers to make decisions, the decision-making process and the points where engagement is possible need to be transparently communicated to stakeholders and the public more generally.
Online consultations
A number of finance ministries have experimented with crowdsourcing suggestions for budget policies. For example, France’s Great National Debate (Grand Débat National) asked citizens for views on tax and spending. Between January and March 2019, the government received nearly 350 000 questionnaire responses. The results of the Debate were published online and influenced several changes to tax and pension benefits (OECD, 2024[11]).
In a few OECD countries, finance ministries now run online consultations routinely as part of the budget process. For example, in Australia the Department of the Treasury conducts pre-budget consultations annually to gather public input on priorities for the upcoming federal budget. The Treasury website hosts an online survey where individuals, businesses and community groups are encouraged to share their priorities and suggestions for the budget. The Treasury reviews all submissions and considers the feedback during the budget formulation process.
Stakeholder dialogue
It is also possible for governments to take a more deliberative approach to pre-budget consultations. This means talking face-to-face, in a “town hall” forum or similar format. These formats can allow more meaningful debate than an online consultation, but they have other limitations as not everyone can attend in person or be given time to speak.
OECD countries have deployed a more deliberative approach in different ways:
Discussions on the budget: Ireland’s National Economic Dialogue, for example, supports a broad-based discussion on the annual budget. It helps to build a shared understanding of the economy and public finances, and the competing priorities facing the country (Box 10.5).
Consultations linked to specific reports: In a few countries, dialogue will shape other important planning documents developed by the finance ministry. New Zealand publishes a Statement on the Long-Term Fiscal Position at least every four years. As part of the preparation for this report, the Treasury gathers views from a diverse range of stakeholders, including indigenous Māori and Pacific communities, youth representatives and academics.
Started in 2012, the National Economic Dialogue is the principal institutional forum for public consultation and discussion on the Budget. This annual stakeholder engagement event is hosted jointly by the Department of Finance and the Department of Public Expenditure, NDP Delivery and Reform.
The Dialogue provides a deliberative forum for stakeholders to participate in an open and inclusive exchange on the competing economic and social priorities facing the government. It is not intended to produce specific budget proposals or recommendations, but should assist participants in preparing their own pre-budget submissions.
The Dialogue is usually held over one day, around June, to feed into preparations for the next budget which is submitted to Parliament (Oireachtas) in October. It brings together a diverse range of stakeholders, including:
Ministers and MPs
Representatives from business associations, trade unions, and civil society organisations
Social partners (employer and employee representatives)
Economic and social policy experts
Public interest groups
Individual citizens (through online submissions)
The themes and structure of the dialogue vary from year to year. They can involve plenary scene setting sessions (led by a Taoiseach and the ministers responsible for finance and for public expenditure) that are broadcast to the public as well as thematic breakout sessions that are not usually livestreamed. Conclusions are summarised in a report by the chair.
Source: OECD (2024[11]).
10.5.2. Parliamentary-led engagement
Public engagement is usually organised through parliamentary committees. The main tool for engagement is public hearings linked to budget approval and ex post accountability. However, parliaments can complement these with other practices to facilitating engagement with a wider group of people across the budget cycle. Examples from OECD countries include:
Public hearings in Germany: The Bundestag has established public hearings related to the approval of the annual budget and invites specific individuals or groups to testify or provide input. More specifically, the Parliamentary Budget Committee (Haushaltsausschuss) organises some "Public hearings and expert discussions” (Öffentliche Anhörungen und Expertengespräche).
Pre-budget hearings in Canada: The Standing Committee on Finance organises extensive pre-budget hearings to complement those run by the Department of Finance. It runs an online consultation, holds public hearings across the country and presents a report to the House of Commons and Minister of Finance (Box 10.6).
Accountability hearings in the Netherlands: Since 2017, the House of Representatives (Tweede Kamer der Staten-Generaal) has used a participative process called the V-100 in its review of the government’s annual accounts and outcomes. Parliament invites one hundred individuals to come up with questions about the annual reports of the ministries based on pre-selected themes. Parliamentary committees can then put the questions to the ministers during a plenary debate.
Budget approval hearings in the United States: The House and Senate legislature engages with citizens on budgetary matters through the committee hearings process. Committees, increasingly use social media to inform and interact with citizens. For example, the House Committee on Ways and Means collects "Submissions for the Record" and posts them to its website.
The Canadian Parliament has conducted pre-budget consultations since the mid-1990s. The House of Commons Standing Committee on Finance leads the consultations every year to gather input on the upcoming Federal Budget.
The pre-budget consultations start by inviting the public to share written submissions through an online questionnaire. These submissions are reviewed by the Standing Committee on Finance which then holds a number of public hearings across Canada. Invitations to the hearing are sent to some of the individuals and organisations that contributed written submissions. Other contributions are encouraged through the ‘open mic’ sessions at each meeting.
In recent years the Standing Committee on Finance held around 9 hearings, building on more than 700 written submissions. The main themes and recommendations of the consultations are summarised in a report, which is presented to the House of Commons and sent to the Minister of Finance to consider alongside the Government’s own consultations when preparing the budget.
Source: House of Commons Canada (2025[12]).
References
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