ha roll presentation on legal entities 22jan2016

© OECD

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Legal Entities of Public Law

Dr. Hans-Achim Roll

22 January 2016Tbilisi, Georgia

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Problem of Terminology

• Comparative approach and terminology• No common vocabulary on public administration• Concepts and terms, for example the term

“agency”, have a different meaning and scope depending on the national context.

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Typology

• State organizational structures can be grouped in most systems broadly as follows: Ministries Departmental agencies Public law administrations or non-departmental

agencies

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Ministries

• The classical organizational form within the executive for policy development and implementation.

• No separate legal identity from the state and function under public law.

• Direct hierarchical control by the minister while the Permanent Secretary/Secretary General or comparable officials exercise operational control.

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Deconcentration

• Functional de-concentration of administrative responsibilities from ministries to separate bodies (often called agencies). Territorial bodies of state administration Specialised bodies of state administration

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Departmental Agencies (1)

• Broad variety of functions like delivery of non-commercial services to citizens or support services to other administrative bodies.

• Examples are Executive Agencies (UK), Agencies (Netherlands), Autonomous organisms (Spain).

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• Departmental agencies are direct subsidiaries of ministries.

• They function under public law, but have generally more managerial freedom.

• Often they function on the basis of targets negotiated with the respective ministry.

• This requires a well functioning monitoring and reporting system to control performance and outcome.

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• Departmental agencies do not have a governance board.

• Formal control by the minister (but less direct than in a ministry), sometimes process control, always legality control.

• Operational control by the director general. • Staff are part of the civil service but often with

some relaxation of civil service staff processes.

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• Departmental agencies are fully tax or partly tax/partly user fee financed.

• They have an annual budget and they can often carry forward surpluses.

• They usually have no power to borrow or lend funds.

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Non-departmental agencies (1)

• Non-departmental agencies (public law administrations, independent bodies) function under public law.

• They are either partially or completely institutionally separate from ministries; they can be even separate legal bodies.

• Governance structure which is substantially different from the “regular” administration in ministries.

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Non-departmental agencies (2)

• Examples: “Etablissements publics administrative”, “Etablissements public professionals” and “ Autorites Administratives Independantes” (France), “Öffentliche Anstalten und Öffentliche Körperschaften” (Germany), Entiti publici (ItalyExecutive non-departmental public bodies (UK).

• Examples regulatory bodies for health security or environment, public universities, museums, hospitals, bodies for financing arts and culture, sport and sciences.

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Arguments (1)

• Higher efficiency and effectiveness with regard to meeting clients needs by a less bureaucratic and more managerial organizational structure (governance boards);

• Separation of policy implementation from policy development to support de-politicization of implementation;

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Arguments (2)

• Reduction of state involvement and politics in service and product delivery;

• Control (financial, human resources management) environment can be tailored to the bodies functions;

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Art. 10 Albanian State Administration Law (1)

1. Autonomous Agencies are established and abolished by law. They have public legal personality when dealing with third parties in the realization of functions attributed by law.2. Autonomous agencies perform clearly singled out administrative functions that fulfill cumulatively the following criteria:a) do not require permanent and immediate direction and/or supervision from a minister or the Prime minister; b) require in-depth managerial specialization; c) are partially or totally financed by means other than the general state budget.

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3. Autonomous agencies shall be established only when the administrative functions provided for by paragraph 2 of this article shall be performed better by a such agency than by the ministry itself or then by an subordinated institution, in accordance with the principle of economy, efficiency and efficacy

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4. The activity of an autonomous agency is supervised by a responsible minister or by way of exception by the Prime Minister, as determined by the respective law of establishment. In case the activity of an autonomous agency encompasses competences of two or more ministries, the responsible minister shall be the one of the ministry within which area of state responsibility the functions of the autonomous agency predominantly fall. Other ministries shall be, proportionally, represented in the governance structures of the agency.

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• All the resources acquired or utilized by an Autonomous agency, whether budgetary or not, shall be deemed public funds and as such shall used in compliance with the rules of financial management of the public funds, the rules of financial reporting of the Government and are controllable by the responsible minister or respectively by the Prime Minister.

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6. The law on establishing an autonomous agency shall determine:a) the name and the seat of the agency, b) its mission and its administrative functions, c) the composition of its governance structure, the number of governance structure’ members, their terms of office as well as their powers; ç) the responsible minister or Prime Minister for the supervision, and the representation of other interested ministries, if the case; d) its financing sources.

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7. The law establishing an autonomous agency should also define the juridical regime applicable to:a) the staff, in accordance with the principles of management of the civil service; b) financing and expenditures;c) asset administration, ç) the procedure for the approval of the tariffs for the services, if applicable.

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1. The governance structure of an autonomous agency shall consist in a management board and executive director, or a general director, and a supervision board. There shall be no less than three and no more than seven members in the above mentioned boards.

2. The executive director or the general director of an autonomous agency is a member of the corps of top-level management civil servants and shall be appointed by the Prime minister or the responsible minister for the supervision, in accordance with the law on the status of civil servant

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3. The members of management and supervision boards are appointed by the Prim minister, the responsible minister and other interested ministers in the cases in which several ministries are concerned, in accordance with the law of establishment

4. The managing board shall:a) adopt the action programme, the financial plan, the annual report and other reports issued by the agency; b) propose candidates for the appointment of the agency director and propose his dismissal; c) provide the agency director with guidelines and working instructions;ç) decide on other issues, as provided the by the law of establishment of the agency.

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5. The supervision board shall supervise the work of the director in the management of the agency, and decide on other issues, as required by law.

6. The executive director or the general director shall manage and represent the autonomous agency.

7. The rules on internal organization provided by this Law for the organization of subordinated institutions shall apply accordingly to the internal organization of autonomous agencies, to the extent is not otherwise provided for in special law.

8. The Council of Ministers approves detailed rules on compensation to members of steering and advisory councils.

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German States (1)

§ 18 Errichtung und AufhebungKörperschaften des öffentlichen Rechts mit eigener Rechtspersönlichkeit (Körperschaften) können nur durch Gesetz oder auf Grund eines Gesetzes errichtet und aufgehoben werden.§ 19 Mitwirkung bei der Landesverwaltung (1) Die Körperschaften wirken bei der Landesverwaltung nach Maßgabe der geltenden gesetzlichen Vorschriften mit.(2) Körperschaften können Hoheitsaufgaben des Landes nur durch Gesetz oder auf Grund eines Gesetzes übertragen werden, das die Übertragung auf Körperschaften ausdrücklich vorsieht oder zulässt.

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German States (2)

§ 20 Aufsicht (1) Die Aufsicht über die Körperschaften beschränkt sich darauf, dass sie ihre Aufgaben im Einklang mit dem geltenden Recht erfüllen (allgemeine Körperschaftsaufsicht). Die §§ 125 bis 131 und 137 des Kommunalselbstverwaltungsgesetzes gelten entsprechend, soweit gesetzlich nichts anderes bestimmt ist.(2) Soweit die Körperschaften ihre Aufgaben nach Weisung erfüllten, richtet sich die Aufsicht nach den hierfür geltenden gesetzlichen Vorschriften (besondere Körperschaftsaufsicht).

http://www.saarheim.de/Gesetze/ksvg.htm#125



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Trends (1)

• The de-concentrated bodies now account for between 50% and 75% of public expenditure and public employment in many OECD countries.

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Trends (2)

• Restoring departmentalization (keeping the whole responsibility within a ministry)

• Weaknesses of agencification. Limited resources in small states Fragmentation (blurs clear accountability lines,

undermines the coherence of the administrative system)

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„Unnecessary agencies“

• Tool to avoid setting up an unnecessary “agency” separated from the regular ministerial administration is a sound cost benefit analysis of each respective proposal.

• Council Regulation (EC) no 58/2003 of 19 December 2002

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Excerpt from Council Regulation 58/2003

The cost-benefit analysis shall take into account a number of factors such as identification of the tasks justifying outsourcing, a cost-benefit analysis which includes the costs of coordination and checks, the impact on human resources, possible savings within the general budgetary framework of the European Union, efficiency and flexibility in the implementation of outsourced tasks, simplification of the procedures used, proximity of outsourced activities to final beneficiaries, visibility of the Community as promoter of the Community programme concerned and the need to maintain an adequate level of know-how inside the Commission.

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Conclusions

• Clear criteria for establishing LEPLs• Clear pattern for internal structure of LEPLs• Supervision/control by the responsible

minister

ha roll presentation on legal entities 22jan2016

Government & Nonprofit