1. Assessing a national PIC system
Raymond Hill
Team Leader, PIC Task Force
European Commission
PEMPAL – 24 March 2016

2. Contents Assessing against what? Differentiation by client type
Steps of the EU Accession Process
Monitoring tools and Assessment criteria
OECD/SIGMA – Assessment Principles of Public Administration
Principles on Internal Control and on Internal Audit
Internal Control Maturity Model

3. Assessing against what?
No 'acquis' that requires transposition into national legislation
Countries are asked to adopt internationally recognised internal control and audit standards and EU good practices across the public sector.
COSO model – Internal Control
IPPF Standards – Internal Audit

4. Differentiation by client type
Candidate Country
Potential Candidate Country
European Neighbourhood Country

5. Accession Process – Candidate countries
Screening - European Commission carries out detailed examination to determine how well the country is prepared, leading to a screening report containing a recommendation whether or not to open negotiations
Negotiating position – the Candidate country must submit its position and the EU must adopt a common position.
Closing the chapters – Can only be closed after the every EU government is satisfied with the candidate's progress, as analysed by the Commission.

6. Monitoring tools Own monitoring National monitoring
DG Budget own assessment
EU Delegation
National monitoring
Managerial Self Assessment
Annual PIFC Assessments
SAI reports
Independent Assessment
OECD/SIGMA

7. DG Budget Assessment Ongoing Assessment
Desk scrutiny of policy documents and legislation
Fact-finding missions, including meetings with:
The Central Harmonisation Unit
Budget users
Annual Progress Reports
Results of National Assessment (Annual Progress Report)

8. EU assessment criteria
Strategic framework and political steer
Effective and proactive CHU
Legal framework for Internal Control and Internal Audit
Facilitation of Managerial Accountability
Set up of (centralised) Financial Inspection

9. OECD Sigma – Principles of public Administration
Principles are classified under 6 Key Reform areas
Also a monitoring framework – quantitative and qualitative indicators

10. Sigma Assessment Principles
Key Reform Area: "Public Financial Management"
8 key requirements
16 Principles
* Administration-Nov2014.pdf

11. Principles 6 and 7 – Internal Control
Principle 6: The operational framework for internal control defines responsibilities and powers, and its application by the budget organisations is consistent with the legislation governing PFM and PAR.
Principle 7: Each public organisation implements Internal Control in line with the overall Internal Control policy documents.

12. Principles 8 and 9 – Internal Audit
Principle 8: The operational framework for internal audit reflects international standards and its application is consistent with the legislation governing public administration and PFM.
Principle 9: Each public organisation implements internal audit in line with the overall internal audit policy documents as appropriate to the organisation.

13. Internal Control Maturity Model
Initial
Repeatable
Defined
Managed
Optimizing
Initial Control Structure is not defined. Control occurs incidentally.
Repeatable Control Structure is not defined, but control processes may occur based on past success and management oversight.
Defined Control structure is documented, standardised and integrated into control processes for the organisation.
Managed The control process is regularly assessed and tested. Detailed measures of the control process are collected and reported.
Optimizing Continuous process improvement is enabled by quantitative feedback from the control process.
Predictability, effectiveness and efficiency of an organization's internal controls improve as the organisation moves through these five stages.