INTERACTION AND COOPERATION AUDIT OF EUROPEAN UNION FUNDS EXECUTIVE AGENCY BULGARIAN AUDIT AUTHORITY and INTERNAL AUDIT UNITS – INTERACTION AND COOPERATION October 2015, Yerevan

BG AUDIT AUTORITY’ UNIVERSE all 8 mainstream national programmes under ESIF - European Regional Development Fund, Cohesion Fund, European Social Fund and European Fishery Fund CBC programmes with Serbia, Turkey and FYROM ETC programmes with Romania, Greece, SEE, INTERREG ІVC, ESPON, URBACT ІІ Erasmus+ SOLID - External Borders Fund and European Return Fund Winding-up Body for ISPA/CF projects / SAPARD Certification Body EEA and Norwegian Mechanisms, Bulgarian-Swiss Program

MISSION OF AUDIT AUTHORITY Provide assurance that the European Community’s financial interests are properly protected – whether management and control systems (MCS) of the respective EU-financed programme are adequate and function effectively so as to provide reasonable assurance that the statements of expenditure presented to the Commission are correct and, as a consequence, reasonable assurance that the underlying TRANSACTIONS ARE LEGAL AND REGULAR each year - Annual Control Report and Annual Opinion 31 March 2017 – Closure Declaration

AA - AUDIT WORK Audit Engagements Auditees Nature of auditees Systems audits (tests of controls) Managing and Certifying Authorities Directorates within the ministries Agencies Units within the municipalities Audits of operations (substantive tests) Beneficiaries Public organizations – municipalities, agencies, ministries, social cervices, hospitals, museums… Private persons/companies

AUDITS OF OPERATIONS 2010-2014 5

SIMILARITIES AND DISTINCTIONS IA/AA IA units AA Structure - Decentralized 1 central agency, 63 auditors Reporting lines Head of the organization European Commission Nature - internal - assurance and consulting external - assurance Auditees - ministries, agencies, municipalities, beneficiaries Objectives regarding EU-funded projects - help organization for legal and effective implementation of EU projects - without irregularities (financial corrections) - provides opinion on expenditure declared to EC on annual basis - calculates financial corrections for irregularities, if needed

CO-OPERATION BETWEEN IA AND AA Different options - according to applicable laws and standards - EC Guidance note for reliance of the work of other auditors - national decision for management and control system Bulgarian case at the moment, based on formal agreement communication of audit plans sharing AA’ check lists, tools and approach – aeuf.bg publications and trainings - general and on-the-job

IA ENGAGEMENTS RELATED TO EU PROGRAMMES Consulting or assurance – the choice is yours Source: Consolidated report for internal control in the public sector

PREVENTIVE ROLE OF IA In Managing/Certifying authorities Elaboration of adequate internal procedures - focus on EC requirements for risk assessment and antifraud measures and annual management declaration and report Regularity and effectiveness of key processes – selection of operations, verification and certification of expenditure In beneficiaries Design and implementation of projects – indicators, procurements, publicity, audit trail, physical execution and status, durability All levels’ issue: compliance with public procurement legislation – 80 % of irregularities and financial corrections

AUDIT OF EUROPEAN UNION FUNDS EXECUTIVE AGENCY THANK YOU FOR YOUR ATTENTION! Ludmila Rangelova, CGAP Head of Bulgarian Audit Authority l.rangelova@minfin.bg Sofia – 1040 4 Slavyanska Str. Tel: +359(2) 9859 5200 Fax: +359 (2) 9859 5202 10