1. Joint Seminar
Brussels 2017

2. SAI-IA Cooperation at an Informal Level
Klaus Freudenschuss, ACA

3. Outline of presentation
General information on the ACA
General information on the ACA-IA relations in Austria
Standards for the relations between the ACA and the IA
Cooperation at an informal level between ACA and IA
Summary

4. General information on the ACA
1761 foundation of the Austrian Court of Audit
The ACA as a federal body of the State, the provinces and the municipalities
Organisationally: body of the National Council
Functionally: body of the National Council or
body of the regional Parliaments
The ACA defines its audit programme and methods in an independent manner

5. ACA – strategy – audit objectives
The ACA as a Supreme Audit Institution focuses on
Strategic audit objectives
Primary objective: ensure the most effective use of public funds
Audit criteria: efficiency, effectiveness, economy
regularity, compliance
Headcount (1 January 2017):
305 (of which 250 auditors); Average age 47.46;
Proportion of women: In the audit service 41 %, in an leading position 38 %

6. Audit and Advisory Activities
Main audits: Performance Audits
Audit types:
Selective audits
Cross-cutting audits
Sample audits
Follow-up audits
EU audits
European Court of Auditors (ECA) support audits
Proactive audits – audits on demand

7. ACA – audit as the core activity
The ACA carries out audits on the level of
the Federation
the provinces
municipalities with more than 10,000 inhabitants (since 2011)
municipal associations
social insurance agencies
legal entities, foundations, funds, institutions
companies > 50% public contribution or predominant influence
chambers

8. General information on the IA- ACA relations in Austria
Percentage of entities audited by the ACA via internal audit:
ministries, provinces, municipalities: all
agencies, public enterprises: about 50% - although: more than 90% of funds are audited by IA
IA of the Federation:
Coordination Unit for Internal Audits of the Federation
after its dissolution certain tasks of the Unit for IA were taken over by the Federal Chancellery
Challenges:
Communication and networking platform
Central representation of the IA for reform measures
Central point of contact

9. General information on the IA- ACA relations in Austria
Audits of the IA by the ACA in 2003, 2009, 2010
The ACA recommended, among others, to
to adopt a separate federal audit act,
integration of the IA in the the entity and providing access to all information systems,
Strengthening the independence and objectivity of the IA by approving the appointment and removal of the head of the IA and the termination of contracts with external auditors (if applicable), also by the supervisory board

10. Basis for coordination and cooperation (formal, informal)
As regards the coordination between SAIs and internal auditors in Austria
there is no legislation
there are no legislative restrictions
there is no formal agreement or protocol
there is no specific legislation requiring internal auditors to report to the SAI

11. ACA internal rules regarding coordination and cooperation
INTOSAI GOV 9150 Auditing Standards: Coordination and Cooperation between SAIs and Internal Auditors in the Public Sector
Audit manual/quality standards for audits that refer to the cooperation with the internal audit:
i.e. roles and responsibilities in the audit process
standardised audit preparation
on-site audit
process steps for the audit report
audit across entities
ACA Guideline on Internal Control Systems (ICS)
Provides support for the audit team regarding, among others, the conception of ICS audits.
ACA has to to evaluate the contribution that is made or can be made by the IA to the functioning of systems and control bodies
Reports of the IA are to be taken into account in the framework of ICS audits

12. ACA – audit process Preparation Concept On-site visits Final meeting
Result
Report
representative body
the public
audited entity

13. Cooperation at an informal level
Important point of contact in the audited entity, regular contacts in particular at the onset of an audit - Exchange of information
Making use of the IA’s audit results for preparing an audit
Additional documentary evidence, which, however, does not replace a sufficient collection of evidence by the auditors themselves
Promising approaches regarding education and further training
Support of applicable recommendations of the IA
Follow–up of the ACA’s recommendations by the IA is becoming increasingly important
Coordination and cooperation regarding concrete audit activities need further development

14. Cooperation at an informal level
Advantages from the viewpoint of the ACA:
Optimal use of resources since no permanent additional expenditure for resources arises from the relations with the IA during the year at the beginning of the audit,
exchange of experiences;
relationship of trust;
common interest in compliance and performance audits.
 Benefits for SAI as well as the audited entity: more efficient audits (targeted, under certain circumstances reduced time for preparation, lesser burden for the audited entities)…
 Cooperation between SAIs and IAs should be intensified

15. Dealing with the risks of coordination
Obstacles/risks for coordination and cooperation?
required evaluation of the quality of the IA’s audit work
auditors must verify the independence and objectivity of the IA’s audit work if they want to rely on it.
As regards the guarantee of confidentiality, the Federal Constitutional Law (Article 20) as well as the Federal Civil Servants Act (Section 46) contain general provisions on professional secrecy.
No cooperation in performing audit procedures (e.g. audit of entities with multiple locations)

16. Summary Internal and external audit face the same challenges
The ACA perceive IA in the public sector as an important partner regarding the audit and improvement of processes in public institutions and companies. The independence and objectivity of the IA is a fundamental requirement for cooperation.

17. Questions?

18. ACA in the Three Lines of Defense Model