The House legal committee on Wednesday begins examining a bill to reform the Audit Office. The legislation aims to modernise the office of the auditor general (AG) following the early termination of Odysseas Michaelides’ term. The bill, submitted by the justice ministry, proposes the creation of an Audit Council. This council would oversee the AG and review their reports. Its members would be appointed by the cabinet and would have the power to examine and challenge the AG’s findings.

Last year, on September 4, 2024, the cabinet approved the reform, including the establishment of the Audit Council. The following day, the Audit Office under Michaelides criticised the decision, describing it as a step that could limit the independence of the AG rather than modernise the office. Current auditor general Andreas Papaconstantinou has expressed similar concerns, arguing that the proposed council and its powers could directly challenge the authority and independence of his office. He is expected to address these issues in today’s parliamentary session.

At the same time, Papaconstantinou previously expressed support for modernising the Audit Office, provided the independence of the office and the AG is maintained. After his swearing-in on October 2, 2024, he said the reform should help staff perform their duties effectively while ensuring the office retains access to necessary information and the authority to report freely.

Under the bill, the Audit Council will consist of three members appointed by the cabinet following recommendations from an Advisory Council. Two of the members must have recognised expertise in finance, accounting, auditing, or related fields, while the third must be a lawyer qualified to serve on the Supreme Court. Members will serve five-year terms without the possibility of reappointment and will work full time. The Advisory Council responsible for proposing candidates will include the director-general of the finance ministry, the president of the Cyprus bar association, and the president of the association of chartered accountants.

The reform also includes measures to strengthen the office’s financial independence, allowing it to draft its annual budget without executive intervention. It establishes an eight-year term for the auditor general and deputy auditor general, with dismissal procedures equivalent to those applied to Supreme Court judges. Current officeholders at the time the law takes effect will continue under their existing appointment terms.

The parliamentary debate is expected to focus on the balance between modernising the Audit Office and preserving the independence and authority of the auditor general, as the creation of the new oversight council introduces a significant change in the supervision of the office.