REPUBLIC OF SLOVENIA MINISTRY OF FINANCE BUDGET SUPERVISION OFFICE OF THE REPUBLIC OF SLOVENIA...

REPUBLIC OF SLOVENIAMINISTRY OF FINANCE

BUDGET SUPERVISION OFFICE OF THE REPUBLIC OF SLOVENIA

Internal Audit Strategy and Practices in Slovenia

Nataša Prah,Director of the Budget Supervision Office

Brussels, 03. 10. 2011



Introduction• Relevant Public Sector Information• Organization of Internal Audit• Role of the Central Harmonization Unit • Strategies on Public Internal Financial Control• Strategy on Public Internal Financial Control 2011

– 2015• Conclusions

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Relevant Information• Budget for 2010: 9.874.155.345• 2905 Budget Spending Centers (BSC):

– 121 financed from Direct State Budget– 1249 financed from Direct Local Government Budget– 1535 Public Institution and other providers of public

services

• Over 160.000 employees• 47 Internal Audit Services• 73 Internal Auditors working in IAS

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BUDGET SUPERVISION OFFICE OF THE REPUBLIC OF SLOVENIAInternal Audit in Public Sector In-House IAS (obligation for the ministries): 37

Joint IAS (recommended for smaller BSCs): 10

Buy-In of IA Services: 63 providers,

832 BSC

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Chartered Auditors


BUDGET SUPERVISION OFFICE OF THE REPUBLIC OF SLOVENIAInternal Audit in Public Sector

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Role of the CHU

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Director(1)

Councel(2)

Secretariat(1)

Administrative services(3)

EAGGF Audit (7)

Cohesion and Structural Funds

Audit (11)

Budget Inspection

(6)

Public Internal Financial Control

(5)

A F C O S(1)

Director(1)

Counsel(1)

Secretariat(1)

Administrative services(3)

EAGGF Audit (9)

Cohesion and Structural Funds

Audit (21)

Budget Inspection

(6)

Public Internal Financial Control

(6)

A F C O S(1)



Role of the CHU1. Professional guidance (on IA and FMC: issuing

Guidelines, Continuing Professional Education and Training)

2. Compliance assessments (on IA performance)3. Reporting on PIFC to the government and SAI

(on the basis of Statement on internal Control, CHU own contribution and IA annual reports)

4. Further development proposals (five years strategies, adopted by the government)

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Strategies on PIFC

• Strategy 2005 – 2009:

4 main objectives: Implementation of Results Based Budgeting Improvement of Public Accounting System Further introduction of Risk management in Public

sector Reinforcement of Internal Audit

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Strategies on PIFC

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Achievements: Reinforcement of Internal Audit IA Training Programe CHU and IA Experiences and Contribution Co-operation with the SAI Introduction of Risk management in Public sector Risk register Statement on Internal Controls



Strategies on PIFC

Weaknesses: Political-Managerial Responsibility influences

Accountability and Governance comprehension Risk management is not generally accepted as a

Good Practice Internal Auditing is not available to all the BSC‘s IAS‘s remain understaffed, IA salaries are

inadequate,..

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Strategy on PIFC 2011 – 2015Two main objectives:1.Further development of internal audit function•4 sub objectives

2.Strengthening management responsibility and accountability•2 sub objectives

Objectives related to Public Accounting and Budgeting are included in the Strategy of the Ministry of Finance.

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Strategy on PIFC 2011 – 2015

I. Further development of internal audit function

1.Assuring quality of internal auditing :•Continuing Professional Development - introduction of working license.

Why?•Following IAS (documenting CPD)•Being up to date (almost 400 state internal auditors, less than half of them working as auditors)

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Strategy on PIFC 2011 – 2015How?•After acquiring professional title State Internal Auditor or Verified State Internal Auditor (foreseen for the Heads of IAS) continuous professional development in the period of 5 years should be proven

2.Internal Audit Availability •Reorganization of the internal audit function -

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Strategy on PIFC 2011 – 2015Why?•More than a half of BSC have not assured internal audit function•Getting better overview related to the public spending

How?•Introducing consortiums under the responsibility of ministries: each ministry is responsible to assure internal audit function in the business area it covers

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Strategy on PIFC 2011 – 20153. IT support to internal audit • Project e-audit

Why?• Contributing to efficiency• Availability of the information for CHU

How?• Inter-institutional group under the leadership of CHU

should prepare a project covering all stages of internal audit process.

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Strategy on PIFC 2011 – 2015• After the implementation of the project IT support will be

available to all IAS in public sector

4. Internal audit incentives

• Salaries comparable with SAI

Why?• Similar education for acquiring the title, similar work,…

How?• Adding bonuse for state internal auditors in the single

payroll system

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Strategy on PIFC 2011 – 2015II. Strengthening management responsibility and accountability:

1.Raising awareness of the management•Seminars for the highest management:

Why?•Risk management is not yet generally accepted as a way to contribute to sound financial management

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Strategy on PIFC 2011 – 2015How?•CHU has to organize seminars for the highest management in the public sector to remind them on their duties to contribute to the implementation of sound financial management

2.Replacing Statement on Internal Controls with Statement of Assurance

•Statement on Internal Controls should be replaced with the Statement of Assurance:

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Strategy on PIFC 2011 – 2015

Why?•To strengthen the responsibilities of the management•SAI recommendation

How?•Methodology should be prepared by CHU by 2015

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ConclusionsWhy strategies at the state level?•To define the common framework of further development •To use the process of preparation, discussion within and adoption by the government as a continuous »raising of the awareness«, involvement and responsibility•To use reporting on implementation to the government as a tool for continuous support and progress.

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ConclusionsWhat are the main achievements?

Declared support by the Government confronted with budget restrictions

Further professionalization and recognition of Internal Audit Profession demonstrating value added and

Acceptance of Risk Management (FM/C) rather as a good practice than obligation formalized in the annual declaration.

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Thank you for your attention!Ms Nataša Prah, Director Nataša Prah, Director BSOBSO

Email: Email: [email protected]

Website Ministry of FinanceWebsite Ministry of Finance::

http://www.unp.gov.si/si/notranji_nadzor/http://www.unp.gov.si/si/notranji_nadzor/letna_porocila/letna_porocila/

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