Prague , 24.3.2016.

1. PIFC/PIC in the Republic of Croatia and New Law on Internal Control System in the Public Sector Prague,24.3.2016.

2. - Introduced as part of EU requirements- acquis from Chapter 32 – Financial control

3. PIFC/PIC • Preconditions for PIFC/PIC development fulfilled • Strategic documents set up and implemented • Legal framework set up • Administrative capacities built • Development of PIFC /PIC connected with other reform processes • Budget reform • Reform of public administration • Development of EU programs management system • Anticoruptionmeasures .............................................................................................................................. • Further improvement and enhancement of the quality internal control system (ICS)

4. Public Internal Financial Control Law (PIFC Law), 2006 • Set up legal basis for introducing internal controls in public sector of the Republicof Croatia • Regulatesresponsibilities, relations and competences in development of internal control system • From 2006 until today – a lot of changes in the budget system • new Budget Law (strategic and program planning was introduced) • Law on Fiscal responsibility

5. New PIC Law, 2015 • adjustment to the terms which use EU member countries • from 2006 Law word „financial“ is deleted • EU member countries use term „PublicInternalControl” • takes into account • changes in budget system and highlightsthe role of system of internal controls for ensuring fiscal responsibilities • the updated standards on internal control (COSO 2013) and • standards for internal audit (International Professional Practice Framework) • the provisions of the Law are extended to the state-owned companies and other legal entities

6. New PIC Law, 2015

7. Assessment and control of ICS

8. Questions & Answers ljerka.crnkovic@mfin.hr