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Does the SAI I ssue an O pinion of the S tatus of the I nternal C ontrol S ystem?

Does the SAI I ssue an O pinion of the S tatus of the I nternal C ontrol S ystem?. Tõnis Saar NAO of Estonia. Workshop on “Audit/Evaluation of Public Internal Financial Control (PIFC) Systems” Ankara , 8 – 9 July 2008. Key learning points. Theory SAIs in the accountability circle

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Does the SAI I ssue an O pinion of the S tatus of the I nternal C ontrol S ystem?

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  1. Does the SAI Issue an Opinion of the Status of the Internal Control System? Tõnis SaarNAO of Estonia Workshop on “Audit/Evaluation of Public InternalFinancial Control (PIFC) Systems”Ankara , 8 – 9 July 2008

  2. Key learning points Theory • SAIs in the accountability circle • Giving assurance and taking assurance Practice • What PiFC is in Estonia (critical view) • NAOE role 5 years ago, today and tomorrow Some recommendations

  3. SAIs in the accountability circle Parliament Report Opinion Money SAI Government Auditing

  4. Is that a PIFC? ??? Principal Principal Principal Principal Principal Report Report Report Report Report Opinion Opinion Opinion Opinion Opinion Money Money Money Money Money Auditor Agent Auditor Auditor Agent Agent Auditor Auditor Agent Agent Auditing Auditing Auditing Auditing Auditing

  5. How to make it work? RISK ICS SAI

  6. Conclusion • SAIs must evaluate, assess, monitor and take assurance from the internal control systems constantly (in every audit) • Approach - Everybody are auditing everyring! – must be avoided, it is waste of resources • Take a risk based approach Today • Is NAO giving overall (horizontal) opinion on IC system – NO • Is NAO giving recommendations – YES and MUST do • Is IA giving overall opinion on IC system – streching target • Is management giving overall assurance on IC system – MUST Tomorrow • Will NAO give overall opinion on IC systems? Serious dobts • Will NAO evaluate IC and make recommendations? It´s a MUST

  7. PiFC in Estonia (Critical view) • “God we believe, everything else we audit?” • Difficult start- no standards, no help, no interest • Guidelines - One “girl” show and one time exercise with weak underling processes • Mistakes pay back • Management accountability did not really work • IA audit was a campain and “luckily” took off - some mistakes helped • External pressure was important • EU money still has different PiFC than rest of the budget • Management is still not sure what is the sense of this nonsense?

  8. Role of the NAO of Estonia 5 Years ago • Get the accountability in the place • Push the standards and internal audit • Improve NAOs own quality • Budgeting process, accounting reform, commission roadmap(s) Today • Understanding really the key issues and trying to make accountability work • Valuing experience, quality of people and transparency • Addmiting mistakes and change step by step Tomorrow • Financial audit shift – SAI as a “Group auditor” • Sertification – IA and EA, havent really acheived yet • Capacity building of NAO and IA

  9. Reccommendations • Help MoF by creating extra pressure to them and to gov. • Never forget the parliament • You always need a case – hard evidence to justify the change. Nobody likes the theory! • It is easy to change the law, difficult to change processes, takes time and leaders to change thinking (culture and values) • Take it from the start as a ongoing process – forget the “chapters” you need it anyway • Find help and define your own needs – talk to people • PUSH, learn and admit mistakes, PUSH, learn and admit mistakes, PUSH ... etc • It is not the audit what matters, but the communication • Value the people and experience

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