1. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Meeting of Representatives of Supreme Audit Institutions, Parliamentary Audit Committees and Ministries of Finance of Latvia, Lithuania and Estonia - Hosted by Lithuanian National Audit Office (LNAO) Discussion Area 3: Developing the important role of the Ministry of Finance at the Parliamentary Audit Committee Some SIGMA thoughts on Good Practices from Colm Dunne and Nick Treen Vilnius 17 – 18 October 2006 Colm Dunne SIGMA Expert colmdunne@epsilon.ie

2. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Presentation format: l Accountability has two dimensions l Min of Finance has an active role at all stages of the accountability cycle l Three good Min of Finance practices: Maintain standards Reporting Guidance

3. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Accountability has two dimensions l Holding budget holders and decision makers responsible for the decisions they make; l With an expectation of continuous improvement in public services

4. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD There are 4 actors in public accountability l The Supreme Audit Institution l The Parliamentary Audit Committee (PAC) representing the public/ tax payers l The persons in Ministries and budget entities who are responsible and accountable for the sound management and stewardship of public resources; and effective delivery of services. l The Ministry of Finance (MF)

5. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Min of Finance has an active role at all stages of accountability Receive Audit Reports Attend & participate in Parliamentary Committee hearings Provide overall response

6. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Ministry of Finance has a leadership role in Accountability because l It has final decision on budgetary matters l It is responsible for setting and monitoring financial management and control standards l It holds Ministries to account for spending decisions

7. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD MF stands beside auditees at the Parliamentary Audit Committees l Successful accountability depends on a proper working relationship between : Min of Finance and spending Ministries; Min of Finance and the Parliamentary Audit Committee Min of Finance and the SAI l Min of Finance has an overall responsibility for statutory annual budget execution reporting to parliament and for accounting and financial reporting standards l This is the “co-ordination” role.

8. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Min of Finance is a direct participant in the process l Min of Finance should be present at all PAC meetings l Min of Finance is an active participant (not merely a note-taker) l This provides a permanent direct communication channel between PAC and Min of Finance l and gives the Min of Finance first hand knowledge of the audit issues discussed

9. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Good practice 1: Setting and maintaining standards Participation at PAC meetings: enables Min of Finance to respond quickly to identified systems improvement keeps Min of Finance alert and well informed strengthens its authority as a standard setter

10. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Good practice 2: Reporting on actions taken Min of Finance has a unique position to: co-ordinate the response to the recommendations of the PAC take up PAC recommendations in future strategic plans, budgetary proposals and financial control improvements monitor and evaluate implementation

11. A joint initiative of the OECD and the European Community, principally financed by the EC. © OECD Good practice 3: Min of Finance has a guidance role Min of Finance can: provide advice and guidance to attendees and witnesses at the PAC hearing on how to behave support the PAC with invaluable guidance and advice on central issues relevant to the audit issues being discussed give advice and guidance on the broader lessons learnt

12. SIGMA © OECD Thank you for your attention Questions and comments are very welcome.