Republic of Serbia State Audit Institution EXTERNAL AUDIT

Republic of Serbia State Audit Institution EXTERNAL AUDIT OF BUDGETS OF LOCAL AUTHORITIES IN THE REPUBLIC OF SERBIA Warsaw 5 – 7 th October 2015 Supreme State Auditor Duško Pejović, Ph. D

R E P U B L I C O F S E R B I A State Audit Institution Legal status of the Institution Development of the Institution Organizational units Employees of the Institution S T A T E A U D I T State Audit Institution I N S T I T U T I O N

R E P U B L I C O F S E R B I A Competences of the Institution Ø Ø Activities stemming from the competences of the Institution Audit subject matter Auditees Types of audit S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Organization and Composition of the Institution S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Sector for Audit of Local Authorities' Budgets Organizational units Employees Audit scope and subject matter Results so far S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Conducting an Audit When conducting audit, the Institution applies: • National regulations; • Audit standards; • Code of Ethics; • Audit methodology. Audits are conducted pursuant to the Audit Program S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Onset of Audit Procedure During onset of audit procedure, the following activities are performed: • Audit teams are composed; • Teams are distributed according to planned audits; • Dynamics and deadlines for conducting audit are determined; • Decisions on the Conduct of Audit are adopted; • Authorizations to Conduct Audit are adopted. S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Structure of Audit Report Main elements of audit report are: 1) Title of the report, 2) Whom the report is submitted to (addressee), 3) Opening or introductory paragraph, 4) Audit scope paragraph, 5) Opinion paragraph, 6) Date of the report, 7) Address of the Institution, 8) Signature of the authorized person of the Institution. S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Draft Audit Report is prepared in accordance with the procedure: • Draft audit report is delivered to the auditee • Auditee has the right to file an objection within 15 days • Supreme State Auditor reviews whether objection is justified • Clearance meeting is organized • Minutes from the clearance meeting are kept • Adopted objections are included into Proposal of Audit Report S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Management Letter When delivering Management Letter, the following is used: • National regulations; • Audit Standards; Management Letter is issued by the Supreme State Auditor Consent is provided by the Auditor General What does the Letter contain? S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Proposal of Audit Report is prepared in accordance with the procedure: Proposal of Audit Report is prepared by Supreme State Auditor Management of auditee may give objection to the Proposal If audit finding is called into question, than it is considered disputed SAI Council makes decision on disputed finding S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Procedure after Audit has been Completed After completing the audit, there are following obligations: • Auditee is obliged to remove detected irregularities; • Auditee is obliged to prepare a Response Report; • Institution reviews reliability of the Response Report; • On as needed basis, the Institution conducts audit of the Response Report / Follow-up Audit. S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Violation of the Good Business Practice The Institution determines the following in the post-audit process: • Violation of the good business practice • Existence of severe violation of good business practice • Files requests for initiating misdemeanour or criminal proceedings in case of breach of duty • Submits request for undertaking measures S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Post-Audit Report • • When is Post-Audit Report prepared? What does Post-Audit Report contain? Significance of opinion on whether measures are satisfactory Conclusion - is there violation or severe violation of good business practice S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Advisory Services for Beneficiaries of Public Funds In addition to regular competences, the Institution may: • Provide professional assistance to the National Assembly, Government and other state bodies, • Provide opinions regarding laws in the field of finances, • Provide objections and opinions regarding draft regulations in the field of finances, using experiences from completed audits. The Institution preserves its audit independence. S T A T E A U D I T I N S T I T U T I O N

R E P U B L I C O F S E R B I A Thank you! www. dri. rs S T A T E A U D I T I N S T I T U T I O N