NAO is an independent audit institution: its independence is entrenched within the Maltese Constitution and embodied in the Auditor General and National Audit Office Act 1997.
The Office follows the INTOSAI principles of independence as set out by the Lima Declaration of Guidelines on Auditing Precepts and the Mexico Declaration on SAI independence. It strives to maintain organisational, administrative, reporting and financial independence.
Organisational independence is achieved through the granting of powers by national audit legislation to the Auditor General to determine the organisational structure of NAO. In fact, the Auditor General is empowered to appoint, on terms as he may determine, such number and such classes of officers as he may consider necessary to assist him in the discharge of his functions according to law.
Administrative independence is manifested through provisions in national audit legislation relating to the independence of the Auditor General and his Deputy and NAO staff. The Auditor General, who is NAO head, and his Deputy, are officers of the House of Representatives and are appointed by the President acting in accordance with a resolution of the House of Representatives supported by the votes of not less than two-thirds of all the members in the House. Both the Auditor General and his Deputy are appointed for a period of five years that may be renewed for one further period of five years.
Moreover, the Auditor General and his Deputy may only be removed or suspended from office by the President, upon an address from the House of Representatives, supported by the votes of not less than two thirds of all members in the House, on the grounds of proved inability to perform the functions of their office (whether arising from infirmity of body or mind), or proved misbehaviour.
National audit legislation also stipulates that the Auditor General and NAO Malta are not subject to the influence of any entity or body. Moreover, NAO staff members adhere to the Professional Code of Ethics, with independence being a key requirement to the effective planning and conduct of any audit.
All NAO authorised officers are further entitled (as may be required for the proper exercise of their functions according to law) to free access at all reasonable times to information requested from officers and other staff members of government departments or offices, or of bodies subject to audit.
Reporting independence is also incorporated within state audit legislation. In fact, the latter imparts the necessary powers to the Auditor General to carry out any type of audit, including financial and compliance audits, performance audits, investigative audits, as well as any other reviews the Auditor General may decide to carry out. All audits are reported upon to the Speaker of the House of Representatives. The annual audit report on public accounts, in particular, contains an independent opinion on whether the Government financial statements and accounts are fairly presented and are in accordance with the stated accounting policies of the Government of Malta. There is no interference from users of NAO reports in the planning, execution and reporting of audit results.
Financial independence forms an essential element of NAO independence. The financing of NAO is also regulated by national legislation. The Auditor General prepares an estimate of the sum he considers necessary to be required to run the Office. Such a sum is examined by the National Audit Office Accounts Committee. If such funds prove to be insufficient to meet all expenditure, the Auditor General may prepare supplementary estimates for examination by the above Committee. The above amounts are considered by the House of Representatives, and if approved, are adopted by a Parliamentary resolution.