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Accountability and supervision of the performance and impact of arm's length institutions

Report | 16-05-2012

As part of our audit of the ministries' annual reports and accounts, we investigated accountability and supervision relationships at 25 institutions that report to 10 ministers.

Summery

We investigated: 

  • whether the ministers could fulfil their responsibilities for the performance and impact of their arm's length institutions;
  • whether the ministers enabled parliament to control them.

As can be read in our report the State of Central Government Accounts 2011, we concluded that not all ministries could or did. We found the following causes for this situation:

  • The ministries' operationalisation of the performance they expected from the institutions we audited was reasonable to good but most paid little attention to the effects of that performance. Where the impact had been operationalised, suitable indicators and target values had not been set. This makes it difficult for the institutions to account for their performance and for the minister to supervise them.
  • Supervision strategies are often not tailored to the institutions or are no longer up to date. Ministers explain in their supervision strategies how they intend to organise supervision so that they can fulfil their ministerial responsibilities.
  • Most ministries have not set up a clear system to supervise and hold the institutions to account. In some instances in which supervision and accountability were weak, the systems nonetheless functioned well in practice, but the opposite also occurred. 
  • The very close relationship between some ministries and institutions is at odds with the principle that the ministry must exercise independent supervision of the institution and it blurs the line between the end of the ministry's responsibilities and the start of the institution's responsibilities.

At a number of ministries the problems we found in the accountability and supervision relationships between ministries and arm's length institutions were so serious that we classified them as shortcomings. This was the case in the relationship between the Ministry of Economic Affairs, Agriculture and Innovation (ELI) and the Netherlands National Petroleum Stockpiling Agency (COVA), between the Ministry of Infrastructure and the Environment (IE) and Air Traffic Control The Netherlands (LVNL) and between the Ministry of Health, Welfare and Sport (VWS) and the Care Needs Assessment Centre (CIZ).

We consider these shortcomings in our reports on the ministries' annual reports. Our reports consider chiefly areas where improvements can be made at individual ministries. We show not only what can be improved but also, with the aid of examples, how.