Nataša Prah, Director Ministry of Finance, Slovenia

1. 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) Systems”Ankara , 8 – 9 July 2008

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

3. 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

4. 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

5. 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

6. 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

7. 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.

8. 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.

9. 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

10. 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

11. The support of the Court of Audit While performing it’s 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

12. 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

13. Forms of co-operation between the Ministry of Finance and the Court of Audit (2) • Bilateral recognition of Professional Certificates • Transmission of theMinistry of Finance reports: • Compliance Assessment of IAS • Annual Reports on PIFC • other information created within the Ministry of Finance • Other

14. 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.

15. 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

16. 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 it’s 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,...

17. 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

18. 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

19. 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 it’s 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

20. 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.

21. The end • QUESTIONS • REMARKS • COMMENTS ? Thank you very much for the attention