LEGAL CONTROL AND AUDITING OF LOCAL AUTHORITIES’ ACTION: TURKEY

Firuz Demir YAŞAMIŞ*

 A BRIEF INTRODUCTION OF TURKISH LOCAL GOVERNMENT SYSTEM

The Turkish public administration system has been shaped up during the last 200 years. The present system has its roots in the early reformatory movements launched for the modernization, westernization and institutionalization of old and out-moded Ottoman administrative structure. Naturally, with the collapse of the Empire and with the initiation of the new Republic in the 1920s, the Country's administrative structure has been incremen­tally developed and improved to meet the challenges of rapidly growing population and the economy. However, no radical and wide-scale alteration has taken place in the system and the main framework has been preserved till today.

 The Turkish public administration system is basically com­posed of the central government and the decentralized authori­ties.

The central government, like any other unitary system in the continental European administrative structures, is comprised of the ministries at the Capital and their field organizations.

Within this framework, the Country has been divided into provinces (il), sub-provinces (ilce) and communities (bucak). There is no 'non-incorporated' area concept as it is a case in the Anglo-Saxon type of administrative structuralization and, consequently, all the Country has been divided according to this principle and governed by a respective public authority.

The governing authority for the province is the governorate (valilik) under the administration of a centrally appointed 'governor' (prefect); the governing authority for district (sub- province) is the sub-governorate (kaymakamlik) under the adminis­tration of a centrally appointed 'sub-governor' (sous-gouvernor) and the communities are supposed to be governed by a centrally appointed 'community director'. However, this latest one, al­though it is still legally valid on legislative papers, is prac­ tically nullified in practice and waiting for an official legis­lation in due regard.

All these tiers are hierarchically structured. The governors and sub-governors who are mainly responsible for the overall management and coordination of the field directorates of the central government ministries within their jurisdictional areas, are equipped with a 'management council', MC, (idare kurulu) which is composed of some provincial and district directors of the central government ministries as a decision making and coor­dination unit.

Meanwhile, as a result of large-scale popular demand for more and new public services and infra-structural investments emanating from the rapid economic development and demographic growth processes, some regional directorates and/or administra­tions (bolge mudurlugu-bolge idaresi) have been established by several ministries as their main field organizations. However, the Country has failed in developing a matching administrative structure for this new development mainly occurred after the 1960s by neither being able to establish regional governorates nor being able to establish reasonable and effective ties between the regional directorates and the provincial governorates.

 The regional governorate system has been recently estab­lished in the 80s to provide an administrative remedy to either to combat with terrorism; or, to combat with extra-ordinary economical crises or to combat with large-scale natural disas­ters. So far, only one regional governorate system has been established and is operational in the south-eastern part of the Country to combat with the seperatist terrorism.

In order to complete the picture for the central government, a quick look should be focused on the judicial system. Basing upon the idea of 'seperation of powers' and 'checks and balances' system, the Country has an independent judiciary. There are three types of judiciary in Turkey: civil, administrative and fiscal. The civil courts, in very high numbers, are located in the provinces and in the districts. These courts are divided into two main types: 'criminal courts' and 'civil liabilities courts'. 'The appeal court for civil courts' decisions (Yargitay) is located in the Capital. The administrative courts, taking place in the provincial centers and covering one or more provinces, are also divided into two: 'administrative courts' and 'regional administrative courts'. 'The administrative appeal court', AAC (Danistay), is also located in Ankara. 'The Fiscal Court' (Sayis­tay) is responsible for controlling, auditing and trying the public authorities' expenditures or financial decisions including the local governments. The Fiscal Court has no field branches.

As far as the decentralized authorities are concerned, there are two types within this category: 'the service based' decen­tralized authorities such as the 'Turkish Radio and Television', the 'Radio and Television High Council' and the 'Higher Education Council' and 'the spatial and/or areal' decentraliza­tion bodies, i.e., the local governments.

In Turkey, there are three types of local governments: at the provincial level and covering the area within the provincial border, 'the Provincial Special Administrations' (79), PSAs (il ozel idaresi); at the local level, 'the municipalities' (2.800), (belediye) and, at the communal level, 'the villages' (more than 40.0000, koy).

 The PSAs have three main bodies: the centrally appointed 'governor' who is also the chairperson of the provincial local government; the 'provincial general assembly' (PGA) basing upon the principle of general suffrage and acting as the main decision making body and the 'provincial permanent council' (PMC) composed of both elected and appointed officials acting as decision making body. The Governor is also the head of this council..

 The municipalities have also three main bodies: 'the mayor', 'the assembly' and 'the council'. The first two are directly elected by an universal suffrage and the election procedure is administered by the judiciary and the last one is composed of both elected and appointed officials.

The villages have also three main bodies: 'the village president', 'the village association' and 'the elderly council'. The president is elected by the village voters. The association is composed of all the members of the village in voting age. The elderly council is composed of both the elected members and some "natural" members.

 There are no hierarchical ties among these institutions; all of them are autonomous within their jurisdictional areas and are competent to carry out all the duties given to them by the statute.

 As a recent development, in the 80s, the Country has put into effect a new understanding in municipalities: the greater municipality (GM) model for the big cities. The GMs are com­prised of the 'greater' (upper-tier) municipality which is responsible for city-wide municipal problems and the 'district and/or lower level' municipalities (lower-tier) responsible for the routine municipal services. Presently, there are 15 GMs in Turkey.

LEGAL CONTROL OVER LOCAL AUTHORITIES' ACTION IN TURKEY

General Principles Concerning the Legal Control of Local Authorities' Action

The main principles governing the public administration have been launched within the section on 'the Administration' between the articles 123-127 of the 1982 Constitution.

The Article 123 states the general principle of the "inte­gral nature of the administration" as has been stated below:

"Administration is an integral unit by its establishment and functions and will be regulated by law.

The establishment and functions of the administration will base upon the principles of central government and decentraliza­tion."

The Article 125 indicates the main principle of the "rule of law" which is also given below:

"Every action and operation of the administration is eligi­ble for and can be subject to judicial control.

The trying power of the judiciary is limited with the legal conformity of the administrative actions and operations. Judicial decisions limiting the implementation of the legal duties of the administration which is in accordance with the established rules, looking alike administrative decisions and operations in nature and nullifying the discretionary power of the administration can not be granted by the courts.

Implementation of the administrative decision can be post­poned (by the court) if irrevocable and irterrievable damages are possible to arise as a result of the implementation or the legal conformity of the administrative decision is openly in dispute with the law.

Postponement authority of the courts can be limited by law in emergency conditions, during the martial law implementation, during mobilization periods and during war and also for the sake of the national security, maintaining the law-and-order and protecting the public health.

Administration ought to compensate the damages caused by its actions and operations."

The main article on the local governments which regulates the overall principles for local governments and their relations with the central government authorities is the Article 127 as indicat­ed below:

 "Local governments are public legal personalities of which the establishment principles are regulated by the law, and the decision making bodies are indicated again by the law and the decision making bodies are formed through the voters to meet the local and common needs of the inhabitants of provinces, cities and villages.

The establishment conditions, functions and powers of the local governments will be regulated by the statutes in line with the decentralization principle.

The disputes over the legality of the elections of the elected bodies of the local governments can only be solved through judicial process. However, the Minister of Interior, as an interim measure, can temporarily remove the elected bodies of the local governments from the office for whom or which a crimi­nal investigation procedure is already initiated.

The central government, for the sake of maintaining the provision of local services in harmony with the principle of the integral nature of the administration, securing the unity in public services, protecting the public interest and meeting the local needs as deserved by the local conditions has the power of tutelage (i.e., administrative control) to be implemented accord­ing to the principles and procedures to be stated in the law over the local governments.

The establishment of the local government unions among the local governments with the permission to be given by the Council of Ministers for the solution of some certain public services, and the duties, powers, financial and municipal police functions and the relations and ties with the central government of these authorities will be regulated by a law. Sufficient amount of financial resources, vis a vis the public service duties given to them, will be secured for these authorities."

Since the above quoted articles of the Constitution is self-explanatory, there is no need for further explanation. However, it should be underlined that the Turkish local governments have some certain degree of local autonomy for local gover­nance and this autonomy is bound to an administrative tutelage exercised by the central government representatives.

Three main deficiencies affecting the control procedure over the local authorities should therefore be briefly indicated here. First of all, although the local governments are the public entities responsible for some certain local and common public services and the duties of the local governments are listed in the laws, there is no clear cut allocation of public services between the local governments and the central government agencies which causes confusion and ambiguities because of the ongoing centralization tendencies. Secondly, the principle of local self-governance which takes part in the article 127 of the Con­stitution as a very important concept in local government under­standing has neither been defined in the Constitution nor in any other law. Thirdly, again despite the Constitutional mandate for having a law indicating the rules and procedure to regulate the implementation of tutelage power there is no single and specific act put into effect so far. There are numerous laws, bye-laws, regulations and administrative circulars which pose certain regulatory controls over the actions of the local authorities.

The second important piece of legislation which underlines the administrative tutelage power (the legalistic description of the administrative control or oversight power) over the local authorities is the 'Province Administration Law', PAL, (No. 5442, dated 1949). This law basically covers the main rules of the administration of governorates and sub-governorates which also sets the foundation for administrative tutelage power to be exercised by governors and sub-governors. In addition to this law, some other laws also give an oversight, control or permis­sion power to several central government authorities which will be indicated later.

The PAL, in the articles 9 and 31, states the main princi­ples of the tutelage power for governors and sub-governors: "The Governor, (or, the Sub-governor for the district) .. controls and inspects the PSA, the municipalities, the villages and insti­tutions attached to them. This control and inspection duty can also be performed through the ... inspectors and the officials of the Central government agencies."

Administrative Control

As it has been indicated above, there is no single law regulating the administrative control procedure of the central government over the actions of the local authorities (tutelage) and such authorities are scattered out in several legislative documents designed for different purposes. Here, below, about 40 administrative control procedures have been briefly described and analyzed to provide an image on how the local authorities' action are administratively controlled by the central government agen­cies.

Municipal Budget: Permission for Personnel Expenditures

According to the article 117/16 of the 'Municipal Law', (No. 1580 , dated 1930) the personnel expenditures of any municipality can not exceed the 30 per cent of the annual municipal income. This limit can only be exceeded with the permission of the Minis­try of Interior.

 Privatization Law: Permission for Economic Enterprises of the Local Governments

'The Municipal Law', in its articles 15 and 19/1, gives an absolute power to the municipalities to carry out all necessary duties after completing the legal duties including the establish­ment of economical and commercial enterprises. Also, parallelly, 'the Law for Provincial Special Administration' (dated 1913) gives similar authority to the PSAs to set up economical and commercial establishments. Similarly, the unions of local gover­ments has the same right to act accordingly.

However, 'the Law on the Regulation of Privatization Activi­ties', (No. 4046, dated 1994) with its article 26/final has brought up a new permission system for the local governments' economical and commercial enterprises. Those local governments who are planning to establish such an enterprise or form a part­nership to that end must obtain a permission from the Council of the Ministers.

Permission for Establishing Wholesale Grocery Markets

According to 'the Decree Law on the Regulation on Fresh Vegetables and Fruits Trade and the Management of Wholesale Markets' (No 552, dated 1995), article 4, the municipalities which have the legal power given to them by the Municipal Law to establish wholesale grocery markets, can do so upon the permis­sion of the Ministry of Industry and Trade which will be issued after the opinion is secured from the Ministry of Interior on the municipal application.

The Ministry, while issuing the permit will take into con­sideration the following criteria: securing the full competition at the market, protecting the consumers and the producers, number of wholesale grocery markets in the region, the size of the consumer market, transportation facilities and the geographical situation.

The only remedy for the municipalities is to seek the ways and means of the administrative courts.

Permission for Establishing International Sister City Relations

Although no legal base has been established by any legisla­tion, the Ministry of Interior, by a general circular issued to the local governments, has set up new rules for sister-city rela­tions between the Turkish local governments and the cities of other countries. The Ministry of Foreign Affairs has indicated that in order to avoid somewhat undesired consequences, an assessment should be carried out on the condition of the Turkish city as well as the town abroad in terms of demographic, commer­cial and economical conditions and touristic and cultural situations of both cities. The Ministry of Interior, in its circula­tion to the local governments, stated that, furthermore, these kinds of international relationships will be established upon the 'a priori' permission of the Ministry.

Permission for the Mayor's Visit Abroad

As it has been indicated above for the sister-city rela­tions, the visit of the locally elected bodies abroad is also linked to the permission to be obtained by the Ministry of Interior.

The Ministry has handed over this authority, although there is no legal base, to the governorates for the elected officials of the district municipalities but kept the same authority for the Ministry for the provincial center municipalities and the GMs. The Ministry also set up the criteria for the permission to be given by the governorates by a circular.

Permission for the Procurement and Selling of Light Duty Vehicles

 'The Public Vehicles Law' (No 237, dated 1961), in its arti­cle 10, indicates that all the public agencies, including the local governments, are required to obtain a permission through a decree of the Council of Ministers which has to be ratified by the President to buy light duty vehicles for their service needs. Severe penal sanctions are also put into effect for the violators. Obviously, there is no remedy in the Law for the local governments to be pursued.

On the other hand, selling the municipal vehicles to other parties is also restricted. According to the same law, the public agencies including the local governments can sell their vehicles after securing a report that the vehicle is completed its economic life signed by a group of experts. This report has to be approved by the Ministry of Interior. The Ministry has delegated this authority to the governorates recently.

Permission for the Local Government Unions

The local governments, according to the articles 133-148 of the Municipal Law, may establish unions to commonly manage their legal duties. According to the article 127 of 'the Constitu­tion', such a union can only be established if permitted by a Decree of the Council of the Ministers which has to be ratified by the President of the Republic.

Permission for the Delegation of Municipal Concessions

'The Municipal Law', in its article 19/5, states that the public transportation as well as the transportation of the diary products within the municipal boundaries are municipal concessions. The municipalities can only delegate or rent these conces­sions to other institutions if permitted by the Ministry of Interior.

Approval Procedure for Domestic Borrowing/Lending

The municipalities are entitled to inquire for domestic borrowings which may take three different formats: the credits obtained from the Bank of Provinces which is counter-guaranteed by the municipality's expected income from the State tax revenues to be distributed by the same institution, the credit to be obtained from other public or private credit institutions and the municipal bonds to be issued to the public.

For the first possibility there is no administrative control procedure so far has been regulated. However for the last two options some certain types of administrative control procedures have been formulated.

According to 'the Municipal Law', articles 71 and 72, the municipal assembly decision for the borrowings has to be approved by governors and subgovernors. If the expiry period exceeds 25 years, the municipal assembly decision has to be reviewed by the PMC, upon the endorsing decision of the PMC the decision has to be approved by the governor. The decision will be finalized by e decision of the AAC.

Finally, the municipalities have the power of issuing bonds to finance the implementation of the urban plans. 'The Municipal Law', in the article 19/10, allows the municipalities to issue bonds to the markets. The municipal assembly's decision for the issuance of the bonds should be sent to the Ministry of Interior which should also include the Governor's assessment on the issue. The municipal assembly decision will be finalized by the Prime Minister's approval basing upon the opinion of the Ministry of Interior.

However, it should also be indicated that the municipalities can also lend their moneys. Lending municipal money is also regulated by the same principles.

Guidance for International Borrowing

Although the domestic borrowing procedures of the municipal­ities are regulated by the law rather in detail, the internation­al credit relations are somewhat in an ambigous condition.

The municipalities may have two different types of interna­tional credit: credit guaranteed by the Treasury and non-guaran­teed credits. For the first type of credits -whether the creditor is found by the Treasury or the municipality itself- the Treasury has a guidance and directing role in settling the credit proce­dure. Within this framework, the negotiations are held, the agreement is drafted and signed by the Treasury and, then, the credit is handed over to the municipality. Clearly, the munici­palities are administratively controlled in this procedure.

For the second type of credit there was no legal arrangement till 1993. In 'the Annual Importation Regime for the Fiscal Year of 1993' a new condition is set for this type of credit and the municipalities are urged to obtain an early permission from the Treasury before the initialing of the credit document. However, as a result of Turkey's entrance into 'the European Customs Union' such a condition did not take place in 'the Annual Impor­tation Regime for the Fiscal Year of 1996.' The situation is in some kind of confusion at the moment. It is not yet clearly known whether the municipalities are freed from the strings for the non-guaranteed international credits or not.

 

 

Approval of the Municipal Organization

The municipalities have the power to establish their own organizational structure although no specific statement which regulates the municipal organizational structure takes place in 'the Municipal Law'. Consequently, the internal organization structure of the municipalities are to be formed by the municipal assemblies.

Despite this legal framework, the decree of the Council of Ministers on 'the Implementation, Coordination and Monitoring of the Annual Programs of the National Development Plans for 1995', in its article 12, has stated that all the public agencies should have the ’a priori’ approval of the State Planning Organization (SPO) which is responsible for the preparation of the 5-yearly development plans. Since, local governments are also public agencies, they are also obliged to obtain the approval of the SPO.

On the other hand, the article 11 of 'the Law on the Organi­zation and the Functions of the Ministry of Interior' (No. 3152, dated 1985) gives the duty of developing the standards for the local governments' organization charts. In order to comply with the duty, the Ministry is currently approving the organization charts of the upper-tier municipalities of GMs.

Approval of the Personnel Cadres

The municipalities and the PSAs are obliged to follow the same personnel cadres establishment and promulgation procedure in parallel with the central government organizations for their white-collar employees. According to 'the Decree Law on the General Cadres and the Procedure' (No 190, dated 1983), the municipalities, the PSAs and the local government unions should apply to the Ministry of Interior once in a year for the cadres and the Ministry, after compiling all applications, will consult with the Ministry of Finance and the State Personnel

Presidency. The decree which will be prepared by the Ministry and will then be sent to the Prime Minister's Office to be signed by all the Ministers as a Decree of the Council of Ministers which also has to be ratified by the President of the Republic.

For the 'permanent' blue-collar workers cadres the same decree law will be implemented. Accordingly, the municipalities will apply to the Ministry of Interior and the Ministry will decide on the issue after consulting with the State Personnel Presidency. However, the decree of the Council of Ministers is not needed.

According to article 52 of the Budget Law of the 1995 Fiscal Year, the approval of the Ministry of Interior will also be sought for the provisional blue-collar workers cadres.

The above described oversight power indicates that the number of employees of the municipalities is to be approved by the central government agencies.

Approval of the Municipal Regulations

There are two main types of regulations to be prepared by the municipalities: the municipal police regulation and the municipal health police regulation.

First of all, according to the article 71 of 'the Municipal Law', the municipal police regulation which sets the rules and norms for the urban life has to be approved initially by the municipal assembly and then by the governor or subgovernor for the finalization.

Secondly, according to the articles 266 and 267 of 'the Public Health Law' (No. 1593, dated 1930) the municipal health police regulation which sets the rules, norms and procedure for the protection of the urban hygiene has to be approved by the ministries of Interior and Health.

Declaring the Opinion of the Municipal Assembly

According to the article 75 of 'the Municipal Law', the governors or subgovernors may ask the municipal assembly's point of views on any issue which has not delibaretely ordered by any law. The assemblies have to comply with the request. The assem­blies may also transmit their opinions including their requests and advises to other agencies through governors and subgovernors.

Directing the Municipal Functions: Food Control

With the enactment of 'the Municipal Law' in 1930, the municipalities are given the duty of food control including the powers of issuing operation licences, inspection of food produc­ing, storing and sales facilities as well as the content of the food itself. The municipalities are also entitled to apply the penal sanctions to the violators.

These duties have recently been transferred to the Ministry of Health and the Ministry of Agriculture and Rural Services by 'the Decree Law on the Food Production, Consumption and Control' (No 560, dated 1995) in order to adjust the conditions of Turkey to the conditions of the European Union countries since Turkey is seeking for a Custom's union with the European Union countries and also is a candidate for the full membership.

The article 10 of the Decree Law No. 560 indicates that all the functions and procedures related to food control are the responsibility of the above mentioned ministries and their field organizations but will be implemented in cooperation with the municipalities within the municipal boundaries and the conditions of such cooperation will be determined by a regulation to be pre­pared and put into effect by the ministries of Interior, Health and Agriculture and Rural Services. This new arrangements basi­cally means that, as an indication of a new understanding in the tutelage practice, the overall workload and the responsibility (naturally, the political consequences) will be borne by the local governments and all the authorities and powers will belong to the central government and managemental decisions will be taken by the central government agencies.

There is no remedy developed in the Decree Law on behalf of the municipalities to protect the principle of local self- governance as indicated in the article 127 of the Constitution and in 'the European Charter of Local Self-Government' of which Turkey is a signee.

 

Inspection Over and Within the Local Governments

The Ministry of Interior is the main responsible body for the regulation of the activities related to the local govern­ments. According to 'the Law on the Organization and the Functions of the Ministry of Interior', article 2/g, the Ministry is responsible to arrange the issues related to the local govern­ments and their relations with the central government. There are two main units within the Ministry responsible for the local governments: The General Directorate of the Local Governments and the Presidency of the Inspection Council.

 In the article 11 of the Law, the functions of the Local Governments General Directorate have been stated as follows:

- To perform all the tasks given to the Ministry by several laws for the regulations of activities related to the local governments,

- To administer the tutelage power given to the Ministry,

- To observe the conformity between the investments of the local governments with the national development plans,

- To carry out scientific researches and collect, analyze and retrieve the statistics for the enhancement of the local governments,

- To observe the developments related to the in-service training of local government employees,

- To set the standards for organization, personnel cadres and equipments of the local governments,

- To organize the works of the local government controllers (other than the inspectors of the Ministry) employed by the General Directorate,

- To administer the 'Local Government Fund'.

In the article 15 of the Law, the functions of the Presiden­cy of the Inspection Council have been stated as follows:

- To inspect and investigate operations and accounts of the ... local governments and the institutions related to them,

- To carry out investigation and interrogation over the activities of the local governments' elected and appointed bodies and their members.

In addition to the inspectors of the Ministry (mainly re­sponsible for provincial center municipalities and the PSAs), the General Directorate of the Local Governments has established its own controllers' organization at the headquarters and at the governorates (mainly responsible for smaller municipalities and villages).

It is quite obvious from the above quoted legislation that the Ministry of Interior has an overwhelming administrative controlling power over the local governments ranging from admin­ istering the tutelage power to the investigations of local gov­ernments' elected and appointed bodies.

In addition to this external controlling system, most of the bigger municipalities have their own internal inspection systems. In this regard, these municipalities have established their own inspection system within the municipality.

However, it should be indicated that these external and internal inspection systems are mainly concentrated on the legal conformity of the operations and the accounts and has nothing to do with the "financial management and auditing" concept in terms of financial analyses, modelling, stimulations, utilizing the budget as a financial management tool, cost and revenue centers, management accounting, cash flow forecasting, stock management, resource planning, and cost-benefit analyses, etc.

In addition to the Ministry of Interior, some other central organizations are also authorised to carry out control over the activities of the local governments. The most important of them is the Presidential 'State Council of Inspection'. The article 108 of the Constitution and 'the Law on the Establishment of the State Council of Inspection' (No. 2443, dated 1981) enables the Council to carry out research, analysis, investigation and in­spection at the public institutions upon the request of the President of the Republic.

A similar authority is also given to the Prime Ministry's Inspection Council by the article 20 of 'the Law on the Organi­zation of the Prime Ministry' (No. 3056, dated 1984).

Finally, according to the article 20 of 'the Decree Law on the Functions and the Organization of The Ministry of Finance' (No. 178, dated 1983) the inspectors of the Ministry of Finance are entitled to carry out inspection works over the local govern­ments.

Ban on the Municipal Radio and TV Stations

'The Law on The Establishment and Broadcasting of Radio and Television Stations' (No. 3984, dated 1994) has ended the monopo­ly of the State owned radio and TV stations and enabled the operation of private stations. However, the Law, in its article 29, has banned the establishment of local government radio and TV stations owned directly by them or indirectly by the companies in which the local governments have shares and designed severe penal sanctions for the violators.

Withholdings on the Local Government Revenues

In Turkey, a substantial part of the local government reve­nues is derived from the State tax revenues. According to 'the Law on the Allocation of State Tax Revenues to Municipalities and Provincial Special Administrations' (No 2380, dated 1981) some certain portions of State tax revenues will be allocated to the local governments.

With an amendment made in 1994 to the article 4 of 'the Law on the Bank of Provinces' (No. 4759, dated 1945), the Bank of Prov­inces which is responsible for cashier operations is entitled to make necessary withholdings on these revenues to meet the unpaid debts of these local governments. The below mentioned types of debts will be withhold from the revenues upon the request of and the conditions set by the Ministry of Finance and will be paid to the parties interested:

- Debts processed and finalized according to 'the Law on the Procedure of Collecting the Public Money',

- Local government debts guaranteed or paid by the Treasury,

- Debts to the pensions and retirement institutions.

Determining the Level of Local Government Revenues

As it has already been indicated earlier, the main income of the local governments are derived from the State taxes. In this regard 'the Law on The Allocation from The State Tax Revenues to Municipalities and Provincial Special Administrations' have set some certain rates for the amount to be allocated.

Although such a legal rate is established, these rates have been ineffective vis a vis the another article taking place in the annual national Budget Law. According to the article 72/e of the 1995 Budget Law, regardless to the rates determined by the above mentioned Law, the rates to be applied will be jointly determined by the ministries of Interior, Finance and Public Works and Settlement which should also include the consent of the Prime Minister's Office. The ministries will allocate the shares of the municipalities by taking into consideration of the population size, level of development, financial conditions and touris­tic potentialities of the municipalities. This basically means that the main income sources of the local governments are admin­istratively controlled by the central government.

Limitations on the City Planning Authority

According to the 'City Planning (Reconstruction) Law' (No. 3194, dated 1985) the municipalities are free to exercise the right of urban planning within the boundaries of their jurisdic­tion. However, this right can be limited by some central govern­ment agencies as explained below.

First of all, the same Law, in its article 9, gives an overall power to the Ministry of Public Works and Settlements to make the urban plans for the city or the parts of it, to hire consultants to prepare the plan, to make alterations over the plans prepared by the municipality or to establish a compulsory approval procedure for the plans prepared by the municipalities whenever or wherever the Ministry considers that it is feasible.

Within this context the Ministry has the power to issue orders to the municipalities to make changes in the city plans or the Ministry can make the changes directly over the plans and then approve them.

The Ministry also has the power to solve the urban planning disputes among the municipalities. The decision taken by the Ministry has to be implemented by the concerned municipalities.

The same article, with a recent addition of a new paragraph by the Law on 'the Regulation of Privatization Activities' (No 4046, dated 1994) also gave the same authority to the 'Privatiza­tion Administration' of the Prime Ministry for the areas which are subject to privatization implementations. City plans for this areas can be prepared by the Administration which has to be approved by the Higher Privatization Council. The municipalities can not use their right of planning over these areas for the next 5 years.

Another limitation over the municipalities' urban planning function has been designed with 'the Tourism Promotion (Encourage­ment) Law' (No. 2634, dated 1982). The Law, with the articles 3 and 7, has given the right of declaring tourism promotion regions and centers as well as the right of spatial planning for these regions and centers to the Ministry of Tourism.

A similar limitation has been brought by the 'Decree Law on the Establishment of Regional Development Administration For the South Eastern Region of Turkey' (No 388, dated 1989). The Decree Law in its article 2/f gives the duty of preparing urban plans of the municipalities taken place within the Region to the Adminis­tration thus relieving the municipalities from a very important responsibility.

Quite a same authority is given to the Special Environmental Protection Zones Administration of the Ministry of Environment by 'the Decree Law on the Establishment of Special Environmental Protection Zones Administration' (No 383, dated 1989). The Decree Law, in order to protect the highly sensitive environmental zones, in its article 12/a, gives the right of spatial planning, at every stage ranging from the preparation of master and compre­hensive plan to the construction permits, to this Administration for all the area within their jurisdictional boundaries which will be drawn by a Decree of the Council of the Ministers. Conse­quently, the municipalities taking part within this region are also relieved from the urban planning duties.

In the GMs, according to 'the Law the on Greater Municipali­ties' (No 3030, dated 1984), article 6/b, and also, according to the 'Implementation Regulation of the Law on Greater Municipali­ties', the GM has the power to prepare the master plan (1/10.000, 1/25.000) for the GM and, also, has the power of approving the implementation plans (1/1.000) of lower-tier municipalities. If there is any contradiction between the plans of different tiers, the GM has the power to make the final decision over the issue.

The only remedy for the municipalities who are adversely af­fected by the decisions of the supervisory institutions is to inquire with the administrative judicial system and, therefore, open a case against their decisions at the administrative courts. 'The Law on the Greater Municipalities' also enables them apply to the Governor for the solution of the dispute which will be analyzed later on.

Control Over the Written Correspondences of the Municipalities

According to the article 35 of 'the Province Administration Law', the district municipalities are obliged to carry out their written correspondences with the higher organizations (i.e., governorates and the ministries) via the subgovernors.

 Attendance of the Governors/Subgovernors to the Closed Sessions of the Municipal Assemblies

The meetings of the municipal assemblies are open to the public in principle. However, 'the Municipal Law', in its article 56, enables the assemblies for the adjournement of closed sessions under some certain conditions. If decided accordingly, the agenda of the closed session should be sent to the governors/subgovernors prior to the meeting. The subgovernors/governors are entitled to attend the session person­ally or to send a representative to monitor the activities of the assembly.

 Approval of the Salaries of the Mayors and the Assembly Members

The article 156 of 'the Municipal Law' envisages the payment of salaries to the members of assemblies of the municipalities having more than 70.000 population. However, according to the article, the amount of the salary is to be determined by the municipal assembly and to be approved by the Ministry of Interi­or.

Likewise, till recently, the salaries of the mayors are to be determined by the municipal assemblies freely. However, with the Budget Law of the Year 1995, it is decided that the municipal assemblies will be free to decide on the amount of the salary within the ranges to be determined by the Ministry of Interior taking into account the population and budget level of municipal­ities.

 Approval of the Municipal Service Charges

 Municipalities can provide several services to the local inhabitants and, therefore, they are entitled to collect charges from the beneficiaries to recover the costs of these services. However, it is stated in several laws that the municipal charges to be applied in this regard have to be approved by the minis­tries or governors/subgovernors. The examples of these charges are indicated below:

- The tariff on the charges to be applied to the individual transportation and freight using public ports is to be approved by the Council of Ministers (Law No. 3004, dated 1936)

- The tariff on the charges to be applied in municipal hospitals is to be approved by the Ministry oh Health (Law No. 3359, dated 1987)

- The tariff on the charges to be applied to potable water by the municipalities having more than 100.000 population is to be approved by the Ministry of Energy and Natural Resources (Law No. 1053, dated 1968)

- Public mass transit charges, potable water fees, chimney cleansing fees, charges for the day-time nurseries, charges for the baths, entrance fees for the parks, museums and zoos, animal cutting charges, fuel-depot charges and the charges related to emptying the septic tanks are to be approved by the governors/subgovernors.

 Approval of the Municipal Decision on the Expropriation of the Bakeries

According to the article 5 added to 'the Municipal Law', the municipalities can expropriate the private bakeries who decline from the production without any justification thus causing bread shortage in the town. However, these decisions have to be ap­proved by the subgovernors/governors.

Obligation to Notify the Prime Ministry's Land Office Prior to the Selling of Municipal Lands

According to 'the Land Office Law' (No. 1164, dated 1969), article 8, the municipalities must inform the Land Office upon their intention to sell the municipal lands. The municipal lands can only be sold after securing the permission of the Office or if an answer is not received from the Office in 4 months time after the notification.

Permission to Open Cases at the AAC Against the Decisions of the Tax Courts

 According to 'the Law on Taxation Procedure' (No. 213, dated 1961) the local governments can not open a case against the decisions of the tax courts at the AAC unless permitted by the governor.

Permission for the Development of the Statistical Forms and Publication of the Statistical Data

The local governments may carry out statistical researches to meet their own needs for information. However, according to the article 26 of 'the Law on the Establishment of the State Institute of Statistics' (No. 53, dated 1962) which gives the Institute duty of carrying out statistical researches, the public agencies, including the local governments, are obliged to obtain ‘a priori’ permission from the Institute for the data gathering works to be performed, on the questionnaire to be used in the research and the publication of the statistical data at the end of the research.

Judicial Control

Control Over the Establishment Procedure of the Municipalities

The main criteria for the establishment (or, for the sepera­tion of a municipality to form a new one, annexation to another municipality, integration of a village to the municipality) of a new municipality has been stated in the article 7 of 'the Munici­pal Law' as follows:

- minimum population of 2.000,

- minimum distance of 500 meters from other villages,

- written application of, at least, half of the village population to the governor/subgovernor; or, the direct initiative of the governor in due regard,

- referendum for the local electorates in favor of the establishment,

- decision of the PGA on the sufficiency of the potential local income resources to finance the municipal services,

- governor's comment on the issue,

- submittal of the file to the AAC through the Ministry of Interior,

- decision of the AAC, and

- decree of the council of ministers which has to be signed by the President.

As it is already stated in the above quoted criteria, there is a substantial degree of both administrative and judicial control over the establishment of the municipalities. Administra­tive control takes the form of issuing a decision on the suffi­ciency of local incomes, comment of the governor or the final decree of the council of ministers. The judicial control is being carried out by the AAC.

According to the article 8 of 'the Municipal Law', the establishment of 'wards', the sub-division of municipalities, is bound to the decision of the municipal assembly which has to be endorsed by the local MC and, finally, to be approved by the governor.

Additionally, according to the article 9 of 'the Municipal Law', to make a change in the name of a municipality requires the decision of the municipal assembly which has to be endorsed by the PMC, the decision of the AAC and the ratification by the Council of the Ministers.

The same law, in its article 10, regulates the establishment of municipal branches within the municipal boundaries to carry out some municipal services. In this connection, at least half of the local electorates living in the area where the municipal branch is planned to be established should vote favorably in the referendum to be held which will be decided by the municipal assembly and approved by the subgovernor/governor. If the result of the referendum is favorable for the establishment of the branch, then, the local MC will decide on the issue, and upon the positive opinion to be declared by the AAC the final decision will be granted with the decree of the Council of Ministers.

Approval of the Budget

The annual budgets of the municipalities and the PSAs are bound for an approval of the central government officials and agencies. According to the article 122 of 'the Municipal Law', the municipal budgets have to be approved by governors and sub­governors. According to the article 123, the approving authori­ties can exercise the following tutelage practices over the proposed budget:

- correction of the items contrary to the laws and bye-laws,

- reduction of the excessively forecasted income sources to the legal limits,

- cancellation of the appropriations earmarked or allocated for services not foreseen by the laws as a municipal function,

- inclusion of compulsory funds into the budget as has been mandated by other laws,

- increasing the municipal tax rates accepted in the budget to the maximum possible level if the municipal income level is less than the municipal expenditures and, also,

- making necessary transfers from the reserve funds to the compulsory funds.

The municipality has to send the budget before the initia­tion of the fiscal year to the approving authority where it has to be approved in one week time. If it is not approved in the given time limit the budget will be considered as automatically approved.

If the approval authority makes changes in the budget in line with the article 123, the municipal assembly may take the case to the AAC.

Likewise, the budget of the PSAs have to be approved by the Ministry of Interior. According to 'the Provincial Special Admin­istration Law', article 86, the PSAs have to send their annual budgets to the Ministry and the budget have got to be approved there in 30 days time. If not approved within this time limit the budget will be considered as automatically approved.

During the approval procedure, the Ministry is entitled to exercise the following tutelage (control) powers:

- correction of budget articles and contents which are contrary to the laws,

- cancellation of the revenues which have no legal bases,

- cancellation of borrowings which is not related to the sale of the PSA assets,

- reduction of the excessively forecasted revenues to the legal limits,

- cancellation of the appropriations earmarked or allocated for services which is not a legal mandate fore the PSAs,

- inclusion of the compulsory appropriations which is not taking place in the budget, and,

 - inclusion of sufficient amount of apropriations to meet the repayment of the previous borrowings according to the already agreed payment plans or by the court decisions.

No remedy has been designed in the law for the PSAs to raise a dispute with the Ministry in case of any conflict of opinion over the approval process of the budget. That, also, means that the Ministerial decision is a final one.

Approval of the Final Account of the PSA

According to the article 133 of 'the Law on Provincial Spe­cial Administration', the final account of the PSA shall be ap­proved by the Fiscal Court. In this regard, the governor is given the duty of sending the final account approved by the PGA to the Ministry of Interior and to the Fiscal Court.

Private Organizations' Controlling Power Over Municipal Activities: Regulating Local Market Conditions

 'The Municipal Law', in its articles 15/43 and 15/16, gives the duty of regulating the local market conditions in terms of determining the profit margins and prices for some services and goods of the retailers operating within the boundaries of the municipality. Within this framework, the municipalities have the right to establish profit margins and/or determine the prices of some certain goods and services.

With a modification made in 1991 on the article 125, of 'the Law on Small Tradesman and Retailers' (No 507, dated 1964), this authority of regulating local market conditions has been trans­ferred to the retailers' associations.

The municipality has been authorised to appeal to governors and subgovernors for the review of the decision made by the association by an independent commission as a remedy procedure. The municipality is also authorised to open a case at the civil courts against the decisions of the independent commission if found to be unsatisfactory. Judgement to be made by the court is final.

Ratification of the Local Government Assembly Decisions

Some of the decisions made by the assemblies of the munici­palities and the PSAs have to be ratified by governors and subgovernors.

According to the article 71 of 'the Municipal Law', the fol­lowing decisions of the municipal assemblies have to be ratified by the above mentioned officials:

- budget, and the modifications made in the budget,

- final account,

- borrowings,

- list of charges to be applied to the municipal services other than the municipal taxes,

- the decisions related to the future macro-format of the town and the urban linear infrastructures,

- arbitration decisions for the values less than some cer­tain amount specified in the law, and

- the municipal circulars concerning the implementation of municipal police regulation.

These decisions have to be ratified by governors/subgover­nors within one week time. If they are not ratified in the given time limit, the municipal assembly will take the case to the AAC for a final resolution.

As far as the PSAs are concerned, all the decisions taken by the PGA have to be ratified by the governor without any discrimi­nation in 1 month time according to the article 135 of 'the Law on Provincial Special Administration'.

Governors are entitled to raise objections against the decisions adopted by the PGAs in 20 days time. If objection occurs, the case shall be submitted to the AAC for the final resolution which shall be taken in 2 months time.

If a conflict of opinion occurs between the governor and the PPC, the governor may ask the PPC to reconsider the issue one more time at the first session. If the PPC insists on the decision by a 2/3 majority, the governor has to approve it but is also entitled to take the case to the administrative courts for nullification.

Removal of the Elected Officials From the Office

The main principle for the elected officials and bodies whose decisions, operations and behaviors are claimed to be in conflict with the laws has been laid down in the Constitution as indicated earlier. In addition to this general principle there are several other principles to regulate the activities of the elected bodies of the local governments.

The first example of this is related to the municipal assem­blies. According to the article 53 of 'the Municipal Law', the following acts of the municipal assembly will cause the abolish­ ment/dissolution of the assembly:

- if convenes other than the regular and extra-ordinary sessions,

 - if convenes in any other place other than designated by the law,

- if fails to perform the legal duties and this leads to the malfunctioning of the municipality, and

- if discusses political issues and indicates political beliefs.

Under these circumstances, the Ministry of Interior may cancel the meetings of the assembly and will apply to the AAC for the dissolution of the assembly. The Court shall make its deci­sion in 2 months time.

The mayor's term of office, if he/she personally takes part in the above described situation, will also be finalized by the AAC's decision.

The same principle is also taking place in 'the Law of Pro­vincial Special Administration'. The article 125 of the Law repeats the same principle, same sanctions and the same procedure for the PGA.

The main principle stated in the Constitution for the tempo­rary removal of the elected officials of the municipalities also repeated in the article 93 of 'the Municipal Law'. The Minister of Interior may temporarily remove these officials from the office until the completion of the investigation and/or trial.

Despite this main principle, the article 41 of 'the Village Law' (No. 442, dated 1924) gives the right of terminating the terms of office of the village president to the provincial/dis­trict MCs.

However, as an example to the internal cheks-and-balances system, the elected bodies of the municipalities may administra­tively control the others.

For instance, the municipal assembly may vote against the Mayor's annual performance report. According to the article 76 of 'the Municipal Law', if such a voting occurs the deputy chairper­son of the assembly will inform governor/subgovernor. The case shall then be taken to the AAC with the personal opinion of subgovernor/governor where the final decision will be made on the fate of the Mayor in 1 month time.

The same process is also applicable to the general questions that can be asked by the assembly members. If the Mayor's answer to the general question is found to be unsatisfactory by a 2/3 majority, the case, again, will be taken to the AAC for a final decision.

If the annual performance report of the Mayor or the answers given to the assembly members' general questions are found to be "insufficient" by the AAC, the mayor will automatically be out of the office and the mayoral election will be renewed.

 Arbitration: Administratively Solving the Disputes Among the Local Governments and the Elected Bodies of the Local Governments

The decisions of the municipal assemblies are final. Howev­er, the mayors and the related parties are entitled to object to these decisions at the central government agencies. According to the article 73 of 'the Municipal Law', the objections will be made to the governorates for the district municipalities; and, for the provincial center municipalities, the objections will be made to the Ministry of Interior.

The objections, after securing the opinion of subgovernor or governor, will be resolved by the PMC for the district municipal­ities in 15 days time and by the AAC for the provincial center municipalities in 1 month time.

The governor is also entitled to postpone the implementation of the objected decision until the final judgement will be se­cured.

According to the article 87 of the Law, the Mayors are also entitled to object to the decisions of the municipal councils if they think that the adopted decision is against the law and the public interest. In this case, the mayors are entitled to post­pone the implementation of the decision and to apply to the MC for review.

The related parties may also object to the judgement given by the MCs. The related parties will apply to the PMC for the decisions of the district MC and to the AAC for the PMC decisions where the final decision shall be given in 1 month time.

According to the article 97 of 'the Municipal Law', if a conflict of opinion occurs between the mayor and the council the problem will be solved by the municipal assembly. If the decision of the assembly does not satisfy the both parties, the mayor or the council can apply to the governor for the resolution. The governor will take the issue to the PMC (for the district munici­palities) or to the AAC (for the provincial center municipali­ties) with the opinion of the PMC for a final resolution.

'The Law on the Greater Municipalities', with its article 24, has brought another administrative procedure for solving the disputes between the tiers of the system as well as amongst the lower-tier municipalities. According to the Article, if a dis­pute emerges between the upper-tier municipality and the lower-tier municipalities or amongst the lower-tier municipalities and if there is a difference among the lower-tier municipalities in practicing the legal duties, the assembly (if not in session, the council) of the GM is entitled to resolve the disputes and to take necessary counter measures.

The related parties who are not satisfied by this decision may apply to the Governor where the final decision will be given in 10 days time.

Likewise, several other administrative control mechanisms are developed in several other laws for the solutions of some specific problems such as the disputes over the local government boundaries, disputes in GMs for the allocation of the assets owned by the dissolved municipality to the new municipalities and the disputes concerning more than one PSAs. These procedures indicate responsible and authorised administrative and judicial bodies to solve the dispute.

 Assesing and Correcting The Decisions of the Municipal Assembly Contradicting With the Law

According to the article 74 of 'the Municipal Law', the decisions adopted by the municipal assemblies which are consid­ered to be contrary to the laws will be taken to the PMC for the district municipalities by the governors or to the AAC for the provincial center municipalities by the Ministry of Interior for the assessment of the legality of these decisions. These organizations will assess the legal conformity of the decisions and, at the end, will approve or nullify the assembly decisions.

THE AUDIT OF LOCAL AUTHORITIES' ACTION IN TURKEY

Main Requirements For Local Authorities Concerning Financial Commitments and Accountancy

The financial control over the local governments (especially in municipalities) is carried out at three different stages in Turkey: at the local government itself, by the inspectors and the controllers of the Ministry of Interior and by the Fiscal Court, i.e. Sayistay. A fourth stage which can be added to the system is the independent and private auditors/consultants which can be employed by the municipalities is already taken place in 'the Municipal Law' but does not have an effective role and share at the moment.

Internal Auditing

The internal auditing of financial commitments and accounts can be done by two different bodies in municipalities: by the municipal assembly and by the inspection unit of the municipali­ty.

According to the article 63 of 'the Municipal Law', the municipal assembly may establish a sub-committee to audit the municipal accounts at any time that considers to be feasible. The Law also enables this sub-committee to hire external consultants to assist their auditing activities. The report of the sub-com­mittee, after consultation with the mayor, will be submitted to the assembly.

The municipal assembly, according to the article 86 of 'the Municipal Law', has also the right of approving the final ac­count of the last fiscal year.

The same principle also applies to the PSAs. The PGA, ac­cording to the article 133 of the Law, has the right to approve or disapprove the final accounts of the last fiscal year.

The second way is to control the accounts and the financial commitments through the municipal inspectors. These inspectors, if instructed by the mayor, carry out periodic or non-periodic investigations over the accounts of the municipality.rnal Auditing: The Ministry of Interior

The Ministry of Interior, being the main responsible body in the central government for the regulation of the local government activities, carries out several tasks for the enhancement and control of the local governments through two main units of the Ministry, i.e., the General Directorate of the Local Governments and the Presidency of Inspection Council.

The General Directorate also employs local government con­trollers at the headquarters and at the governorates.

The inspectors and the controllers carry out periodic con­trols over the local governments' accounts and financial com­mittements. Since, detailed information is given earlier no further information will be given here.

External Auditing: The Fiscal Court (FC)

According to the article 160 of the Constitution, the FC is responsible for the following fiscal account and financial opera­tion controlling (somewhat, auditing) duties for the public agencies on behalf of the Turkish legislature:

- to control all the incomes and the expenditures of the public agencies,

- to review the validity of the documents,

- to analyze the operational processes' compatibility with the rules,

- to assess the legal conformity of the accounts and the financial operations of the authorised officials accountable for the accounts, and

- in case of any wrong doing, to initiate the investigation and/or the prosecution process.

According to 'the Law on the Fiscal Court', articles 28, 30 and 38, (No.832, dated 1967), the FC is authorised to carry out the following duties:

 - to control the transactions, the storage conditions and the overall usage of cash money, bonds, goods, stocks and assets of the public agencies,

- to register all the public contracts regardless the size of the contract,

- to review, assess and approve the public contracts of some certain size determined by the annual budget (for instance, the contracts more than 3 billion TL for the 1995 fiscal year) prior to the final tendering out of the contract,

- to question the accounts and financial operations; request the explanations/opinions of the accountable managers on the issues worth questioning; if these explanations are found to be satisfactory terminate the review process; if not found to be satisfactory, send the account to the related departments (total number is eight and there is a certain division of labor among the departments on geographical bases and/or the types of the local governments) of the Court for trial; acquittal of the case or sentencing for compensation of the accountable managers at the end of the trial and, also, if any criminal act is observed or encountered during the review and/or trial process send the case either to the related Ministry for further investigation or to the public attorney for prosecution.

The FC is authorised to carry out these functions at the headquarters in Ankara or at the administrations which are peri­odically selected every year. The FC is able to review the accounts of 150 municipalities at the headquarters and only 50 municipalities on the site (out of total 2.800 municipalities) annually.

Although there is no specific condition set forth in the Law for the local governments, the Law, which replaced the old Fiscal Court Law, in the provisional article 8, states that a new and specific law will be enacted to regulate the auditing procedure for the local governments and, until the enactment of such a law by the legislature, the articles of 'the old Law of Fiscal Court' related to the auditing of the municipalities and the PSAs (No. 2514, dated 1934) will be implemented.

Consequently, the old Law which is still in effect for the local governments, in its article 11/D, states that the FC is responsible to review and, also, approve/disapprove the accounts and the financial operations of the local governments. Addition­ally, the article 14 states that the accounts of these adminis­trations will be submitted to the FC for an ultimate auditing after they are already reviewed and approved by their respective assemblies.

The Law, in its article 29 and 30, also states the responsi­bilities of the local governments as follows:

- the accountants and the other managers who have decisive roles in shaping up the expenditures are accountable for all accounts and financial operations they have carried out,

- these officials are obliged to submit the accounts to the FC every year, and

- these officials are also obliged to compensate the damage caused by the unlawful conduct of the business.

According to the articles 68-70 of the old Law, the final accounts of the local governments are also subject to the review of the FC. The final accounts of the local governments will be submitted to the FC along with the budget, 1 month after the approval of the respective assemblies. The FC will review the accounts as described earlier.

However, it should also be indicated that the review process of the FC is overwhelmingly concentrated on the legal conformity concerns rather than the 'efficiency', 'effectiveness', 'appropriatedness', 'suitability' and 'the value for the money' con­cepts of the financial auditing.

 

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* Assoc. Prof. Dr.,