1. Seminar on Evaluation of Internal Control Systems

2. The Supreme Chamber of Control
Strategy – Mission and Vision
The SCC Auditing Standards
International auditing standards: INTOSAI, IFAC, European Implementing Guidelines

3. Previous approach Focused on auditing institutional controls
1998/1999 Audit of internal audit in place at central government administration agencies
2001 Audit of the functioning of internal audit at local government units

4. Findings and recommendations

5. Findings
The effectiveness of internal control sections was considerably limited
Only a few audits were conducted following an instruction or initiative of the ministry’s management
Cases of incomplete implementation of post- audit recommendations

6. Recommendations
A normative act to be drafted, specifying internal audit activities at government administration, especially the organization of audit services, the rules of planning.
Tasks to be defined with regard to internal control systems at administration

7. Findings
Improper and unreliable auditing of public procurement in the local government sector
Local government units did not adopt regulations setting out the criteria to guide entities exercising internal audit in selecting auditees or to define the scope and scale of activities subject to audit.

8. Recommendations
The Council of Ministers should take a legislative initiative to eliminate the possibility for combining membership in revision committees at constituting bodies of local government units with participation in the public procurement process at their organizational units.
The Council of Ministers should consider unifying the scope of objects, rules and procedures for exercising control by revision committees at the constituting bodies of local government units.

9. Legal regulations
1999 – no uniform legal standards regulating comprehensively the functioning of internal audit
January 2002 – the revised law on public finances established the basis for a uniform solution to the organization and functioning of internal audit

10. New approach
2001/2002 Audit of internal financial control of the European Union financial asisstance (PHARE, ISPA)

11. Findings
The financial control system for the EU funds was neither effective nor consistent
Control over spending the EU funds was insufficient
At two implementing units no rules were defined for storing and securing documents related to program implementation and no persons responsible for these tasks were designated.

12. Recommendations
Accelerate work on the development of implementing regulations for the act on public finances with regard to internal audit
Define distribution of responsibilities and the rules of cooperation between the National Authorising Officer and the General Inspector for Treasury Control
Establish functionally independent and strong internal audit divisions

13. Annual audit of the state budget execution
Functioning of internal control procedures with regard to the state budget execution

14. The SCC activities in the area of internal financial control and audit
According to the SCC’s annual work plan for 2003 audit of internal financial control and audit is a compulsory element of every audit of public administration
Evaluation of the process of establishing internal financial control and audit
Analysis of the operational methods of internal audit with a view to assist in establishing efficient and effective internal control procedures

15. 2003 audit
Internal control at ministries and other central administration entities
Evaluation of internal control system understood as managerial control

16. Components taken into account
Identification of the internal control system in place
Usefulness of the designed internal control system
Effectiveness of the existing internal control system
Corrective measures undertaken by auditee’s management as a result of the SCC audit findings indicating weaknesses in functioning of the internal control system

17. THANK YOU