Co-operation%20Between%20the%20Ministry%20of%20Finance%20and%20the%20Court%20of%20Audit%20Regarding%20the%20Public%20Financial%20Control

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Co-operation Between the Ministry of Finance and
the Court of Audit Regarding the Public Financial
Control

• Nataša Prah,
• Director Ministry of Finance, Slovenia
• Workshop on Audit/Evaluation of Public Internal
  Financial Control (PIFC) SystemsAnkara , 8 9
  July 2008

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Slovenia
Area 20,273 km2 Population 2,008,516
(30.6.2006) Budget expenditures (2007) 8.148 Mio
Budget spending centers 2.730
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Introduction

• External Control of Public Finances
• Internal Control of Public Finances
• Preconditions for the implementation of the PIFC
• The support of the Court of Audit
• Forms of co-operation between the Ministry of
  Finance and the Court of Audit
• Ministry of Finance response to the Court of
  Audit results

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External Control of Public Finances

• Parliamentary Commission for Public Finance
  Control discusses
• Budgetary Inspection Reports
• Court of Audit reports
• Specific case by case issues
• Court of Audit performs
• regular Annual Audit of the State Budget
• Specific audits of annual accounts, compliance
  and performance audits based on risk analysis and
  upon special requests from the Parliamentary
  Commission

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Internal Control of Public Finances

• Budget Spending Centers
• Mission, Objectives and Criteria for follow-up
• Risk Registers
• Internal controls
• Monitoring
• Declaration on Internal Controls
• Internal Audit Service

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Internal Control of Public Finances (2)

• Ministry of Finance (Budget Supervision Office of
  the RS)
• Regulations
• Guidelines
• Monitoring
• Support
• Analysis and Reporting to the Government and the
  Court of Audit

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Preconditions for the implementation of the PIFC

• Accountability
• Stakeholders (Taxpayers, Business, Public,
  Voters,..)
• require
• Economical, Efficient, Effective and Ethical
  Operations
• Compliance with Laws and Regulations
• Protection of Resources against Negligence and
  Misuse
• Transparency, Reliable Reporting and
  Accountability
• Court of Audit reports are listened to and
  followed up.

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Preconditions for the implementation of the PIFC
(2)

• Awareness
• Heads of Budget Spending Centers
• are accountable for
• compliance with laws and regulations,
• economic, efficient, effective and ethical
  operations,
• protection of resources against loss and misuse,
• transparency and reliable reporting.

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Preconditions for the implementation of the PIFC
(3)

• are responsible and interested in
• setting up an appropriate and effective system of
  internal control backed by internal audit
• sign a Declaration on Internal Controls as a
  component of Annual Report

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Preconditions for the implementation of the PIFC
(4)

• Resources and Guidance by the Ministry of
  Finance that provide
• Guidelines and Standards for Internal Controls
  and Internal Auditing
• Training
• Monitoring the compliance with Guidelines and
  Standards
• Reporting to the Government and to the Court of
  Audit on PIFC

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The support of the Court of Audit

• While performing its audits the Court of Audit
• identifies weaknesses in internal control
  systems,
• supports internal audit,
• monitors compliance with guidelines and
  regulations on IC and IA,
• monitors the procedure and reliability of the
  declarations on internal controls
• supports and cooperates with the Ministry of
  Finance regarding the improvement of the PIFC

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Forms of co-operation between the Ministry of
Finance and the Court of Audit

• Based on mutual interest it is natural that
  there exists a good cooperation without the
  formal agreement given the specific position of
  the two institutions.
• The different forms of cooperation are
• Meetings
• Development of Regulations, Guidelines, Methods
• Training, Participation at Workshops, Conferences

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Forms of co-operation between the Ministry of
Finance and the Court of Audit (2)

• Bilateral recognition of Professional
  Certificates
• Transmission of the Ministry of Finance reports
• Compliance Assessment of IAS
• Annual Reports on PIFC
• other information created within the Ministry of
  Finance
• Other

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Meetings

• Representatives of the MF and CoA meet on a
  regularly bases to exchange information and
  discuss different issues regarding the
  implementation and development of internal
  control.
• Besides this a daily exchange of information and
  opinions on different matters per phone or e-mail
  takes place.

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Development of Regulations, Guidelines, Methods

• According to the Public Finance Act (Art. 100) MF
  submits to CoA for the approval drafts of
  guidelines
• MF and CoA exchange the knowledge and participate
  in the development, e.g.
• methodologies for the new EU financial
  perspective,
• performance audit,
• audit trails,
• declaration on internal controls,..
• MF and CoA cooperate in translations of standards
  and on a joint glossary development

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Training

• Both institutions strive to satisfy the training
  needs and assure continuous professional
  development of theirs employees
• setting up of the initial basic Training
  Programme for the acquisition of professional
  titles State Auditor (CoA) and State Internal
  Auditor and its further development taking into
  account specific needs of each institution
  (experts of the CoA are represented in the
  Training Programme Committee, exchange of
  lecturers
• mutual participation as speakers at conferences
  organized by each institution
• participation at workshops,...

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Certification

• Bilateral recognition of certificates
• Ministry of Finance under the Public Finance Act
  issues professional certificates
• State Internal Auditor
• Verified State Internal Auditor
• Court of Audit under the Court of Audit Act
  issues professional certificates
• State Auditor
• Verified State Auditor

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Exchange of information

• According to the Public Finance Act (Art. 101) MF
  sends a copy of annual report on PIFC to the CoA
• As agreed between the two institutions, MF sends
  to the CoA Audit reports on Assessment of IAS
  regarding the compliance with the Guidelines on
  State internal Auditing
• Different information are exchanged on a daily
  basis e.g. regarding the interpretation of
  guidelines in view of CoA findings and
  preparation of recommendations

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Ministry of Finance response to the Court of
Audit results of PIFC

• In 2007 within the Compliance Audit of the
  Budget Execution the CoA assessed the preparation
  of the annual declaration on internal control by
  budget Spending Centers and
• expressed its support to the effords of the MF
  as the body responsible for the PIFC development,
  harmonization and monitoring,
• acknowledged the contribution of the declaration
  to the raising of the managerial awareness
  regarding internal controls
• recommended the further development of the
  methodology regarding the detailed explication of
  certain points in self assessment questionnaire

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Ministry of Finance response to the Court of
Audit results of PIFC (2)

• Ministry of Finance responded to recommendations
  and further developed the methodology related to
  completion the self assessment questionnaire as
  the basis for the annual declaration with the
  help of
• Working groups of internal auditors from
  different BSC that submitted in advance their
  contributions,
• Experts for public administration, human
  resources,..
• in close cooperation with the CoA.

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The end

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