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Fiscal Institutions Austrian Court of Audit and the Federal Financial Statements

Fiscal Institutions Austrian Court of Audit and the Federal Financial Statements MMag . Günter Bauer, MBA. Austrian Court of Audit. Austrian Court of Audit. The Austrian Court of Audit (ACA) is an independent body of the federal g overnment , the Laender and the municipalities

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Fiscal Institutions Austrian Court of Audit and the Federal Financial Statements

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  1. FiscalInstitutions Austrian Court of Audit andthe Federal Financial Statements MMag. Günter Bauer, MBA

  2. Austrian Court of Audit

  3. Austrian Court of Audit • The Austrian Court of Audit (ACA) is an independentbodyofthefederalgovernment, theLaenderandthemunicipalities • The Austrian Federal Constitution lays down the tasks, function, organisational set-up and position of the ACA • The ACA isheadedbyitspresident • The presidentiselectedbythe National Council for a termofofficeof 12 years • The ACA hasfulfilleditstasksformorethan 250 years

  4. General tasksofthe Austrian Court of Audit • Performance auditsofthefederalgovernment, theLaenderandmunicipalities (> 10,000 inhabitants) • Performance auditsofotherlegallydefined legal entities (chambersandsocialsecurityinstitutions) • Audit ofthe Federal Financial Statements andpublicationofthe Report on the Federal Financial Statements • Participation in drawingupthefederalbudgetwithregardtooutcomeorientation • Providing ongoinginformationaboutbudgetexecutionandoverrunsofbudgetallocations • Special tasks: Report on averageincomes

  5. Tasks ofthe Austrian Court of Audit • Core tasks: auditandadvisoryactivities • Audits based on thefollowingcriteria: • economy • efficiency • effectiveness • Audits of financial operations are the ACA’s strategically most important area of task delivery • The ACA‘sevaluationisderivedfromitsauditfindings

  6. Reporting tothe National Council • The ACA acts as a body of the National Council • The ACA submits its reports to the National Council and publishes the reports on its homepage • The reports of the ACA are dealt with by the Court of AccountsCommittee (CAC) • The presidentofthe ACA hastherighttoparticipateandtakefloor in thesessionsofthe Court of Accounts Committee.He standsavailabletorepresentativesforanyquestions.

  7. Reporting tothe National Council • Afterwardsthereportsofthe ACA arediscussed in theplenarysessionsofthe National Council • Duringthediscussionofthereports in theplenarysessions, thepresidentofthe ACA ispresentandavailableforanyquestionsoftherepresentatives • The presidenthastherighttoattendtheplenarysessionsofthe National Council andtocomment on topicsconcerningthe ACA

  8. Federal Budget Statement (partofthe Federal FinanceAct)

  9. Federal Budget Statement • The Federal Budget Statement isbased on the Federal Medium-Term Expenditure Framework Act • The Federal Medium-Term Expenditure Framework Acthastobesubmittedtothe National Council by April 30thandhastocontaintheexpenditureceilingsforthefollowing 4 financialyears • The Federal Budget Statement isa plan concerningthefinancialrevenueandexpenditureofthefederalgovernmentfortheframeworkof 1 year

  10. Federal Budget Statement • The Federal Budget Statement containsthebudgetbased on an operatingstatementandthebudgetbased on a cash-flowstatement • Systematicstructureofthe Federal Budget Statement • Headings, Chapters, • Global Budgets, • Detail Budgets (1stand 2ndlevel) • The Federal Budget Statement hastocontaininformationaboutoutcomeorientationforeach Chapter and Global Budget

  11. Participationofthe Austrian Court of Audit • The presidentofthe ACA hastherighttoplacenotes/recommendationsderivedfrom relevant performanceauditswithregardtotheoutcometargetsofthe Federal Budget Statement (in theframeworkofimpactorientation) • The ACA hastosubmitthecomparativecalculationsofthe Federal Budget Statement ofthepreviousfinancialyearby April 30thThese calculationsservethe National Council as a basisforitsdecision on theFederal Medium-Term Expenditure Framework Act

  12. Budget Execution

  13. Participationofthe Austrian Court of Audit • Participationin thecreationoffinancialdebt: • all financialdebtinstruments must becountersignedbythepresidentofthe ACA • Participation in thetransferofbudgetfunds: • reportingobligationofthe Federal Minister ofFinance in caseofoverrunsofapprovedbudgetallocations

  14. Report on the Federal Financial Statements

  15. Report on the Federal Financial Statements

  16. Report on the Federal Financial Statements • The Report on the Federal Financial Statements hastocontain a textpartand a setoffigures • The Federal MinistryofFinancedrawsuptheConsolidated Financial Statements (setoffigures) • The ACA auditsthe Financial Statements in accordancewithSection 9 ofthe Court of Audit Act • The ACA prepares an analysisofthefiguresand a reportoftheaudit in accordancewithSection 9 ofthe Court of Audit Actforthetextpart

  17. Report on the Federal Financial Statements • The ACA submitsthe Report on the Federal Financial Statements tothe National Council (textpartandsetoffigures) • The Report on the Federal Financial Statements isdiscussed in theBudget Committeeofthe National Council • The presidentofthe ACA ispresentduringthediscussionofthe Report on the Federal Financial Statements andstandsavailabletotherepresentativesforanyquestions

  18. Report on the Federal Financial Statements • Afterwardsthe Report on the Federal Financial Statements isdiscussed in theplenarysessionsofthe National Council • Duringthediscussionsofthe Report on the Federal Financial Statements in theplenarysessions, thepresidentofthe ACA ispresentandstandsavailableforanyquestionsoftherepresentatives • The National Council adoptsthe Report on the Federal Financial Statements, whichthenhastheforceoffederallaw • The Report on the Federal Financial Statements ispublishedbythe ACA (accessibletothepublic)

  19. Report on the Federal Financial Statements • Content: • 5 Statements: • Comparison Budget Statements ofthecash-flowstatement • Comparison Budget Statements oftheoperatingstatement • Consolidatedstatementoffinancialposition • Consolidatedoperatingstatement • Consolidatedcash-flowstatement • Detailednotes • Financial Statements for all levels

  20. Audit ofthe Federal Financial Statements • Section 9 Court of Audit Actstipulatesthat all Line Ministers havetosubmittheprepared Financial Statements tothe ACA • The ACA conductstheauditofthe Financial Statements • The ACA hastocomplywith national and international standards => • Applicationofthe ISSAIs (International Standards of Supreme Audit Institutions) • Applicationofthe ISAs (International Standards on Auditing)

  21. Audit ofthe Federal Financial Statements • Relevant Standards forauditplanning: • ISSAI 1300 Planning an Audit of Financial Statements • ISSAI 1315 IdentifyingandAssessingtheRisksof Material Misstatementthrough Understanding theEntityandits Environment • ISSAI 1320 Materiality in PlanningandPerforming an Audit • ISSAI 1330 The Auditor‘s Responses toAssessedRisks

  22. Audit ofthe Federal Financial Statements • Accordingto ISSAI 1300 and 1315, an auditofthe Internal Control System hastobeconducted • Fortheauditofthe Internal Control System, theresultsoftheACA‘sperformanceauditsareusedasfaraspossible • Special functionalauditsforparticularlyimportantor relevant businessprocesses • Selectionofauditfields on thebasisof a risk-orientatedaudit

  23. Audit ofthe Federal Financial Statements Risk-Orientated Audit: • DeterminingtheMaterialityaccordingto ISSAI 1320 • Determiningthe Overall Materiality: 1% ofthefederalexpenditure (75 billioneuros)=> 750 millioneuros Overall Materiality • Sumofthefindings max. 750 millioneuros • Reductionof 30% fortheMaterialityof individual businessprocesses=> 525 millioneurosPlanningMateriality

  24. Audit ofthe Federal Financial Statements • Adjustmentofthereductionaccordingtothequalityofthe Internal Control System:effective Internal Control System => high reductiondefectiveor absent Internal Control System => lowreduction • ProcessesorpositionsbelowthePlanningMaterialityare not audited • As to material processesorpositionsthesumof non-auditedpositionshastoremainbelow 525 millioneuros

  25. Audit ofthe Federal Financial Statements • Exampleofguarantees: Total amountoftheprocessguarantees: 1,830.11 millioneuros Allocationto global gudgets: 46,01 Financial stability 1,336.61 millioneuros 45,01 Federal guarantees 493.50 millioneuros Result: The amountofthe global budget 46,01 isabovethePlanningMaterialityandhastobeaudited. The amountofthe global budget 45,01 isbelowthePlanningMaterialtyof 525 millioneurosanddoes not havetobeaudited.

  26. Audit ofthe Federal Financial Statements • Functionalauditsof Internal Control Systems ofbusinessprocesseswith high transactionvolume. • Forthefinancialyear 2013, thefollowingprocesseswereselected: • PersonnelProcess (about 8.6 billioneuros) • FinancingProcess (about 7.3 billioneuros) • Labour market (about 6.4 billioneuros)

  27. Audit ofthe Federal Financial Statements Other auditprocedures: • Substantive audit:Selectingsamplesfrom all Chapterstoaudittheregularityandlegality (randomsamples)

  28. Audit ofthe Federal Financial Statements Other auditprocedures: • Analytical auditproceduresto check theplausibilityofchanges: • Definition und comparisonofexpectedtargetfigureswithactualchanges • Iftheactualchanges do not correspondwiththeexpectedtargetfigures, additional auditprocedureshavetobeconducted

  29. Audit ofthe Federal Financial Statements Process • The auditproceduresareconductedbytheresponsibleauditorsofthe ACA in coordinationwithexperts • The ACA describesthefindings in thereport on theresultsoftheaudit in accordancewithSection 9 ofthe Court of Audit ActanddepositsrequeststoremedydeficienciestotheresponsibleLine Ministers • The ACA drawsup a report on theauditresult in accordancewithSection 9 ofthe Court of Audit Act.This reportissubmittedtotheNational Council togetherwiththeReport on the Federal Financial Statements.

  30. Audit ofthe Federal Financial Statements Have a pleasantday!

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