1. VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies6.-8. November 2006, Prague1 SUPREME AUDIT OFFICE CZECH REPUBLIC Discussion Group 2 EU Funds Audit Discussion leader: Dirk Pauwelsdirk.pauwels@eca.europe.eu Reporter:Jan Topkajan.topka@nku.cz

2. VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague2 Implementation under shared management of EU funds is complex Last CAP reform - additional burden on farmers, unclear legislation, lots of exceptions, high degree of flexibility New audit challenges (calculation of entitlements, interpretation of terminology, controllability of cross-compliance) – risk identification, staff training Lack of clear chain of responsibility at all levels in the shared management system Management and control of EU funds from auditor’s perspective

3. VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague3 Member states make the regulatory framework more complex then could be reasonably justified Delays in implementation of programmes Unclear responsibilities of implementing staff Ineffective institutional cooperation Issue of performance audit approach in the area of SF: –Dilemma between performance objectives and “spending” objective –Suggestion to focus on admin. capacity, ex-ante evaluation, monitoring systems Structural funds audit - experiences and issues

4. VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague4 Constitutional and legal framework of the EU provides following division of duties: –internal control – Commission –external audit – ECA in cooperation with national SAIs (trust, ISAs) No obligation for national SAIs to audit EU funds, it is optional and there are some individual initiatives Danish NAO’s initiative has established close links with internal auditors (not permanent, revocable- testing phase is expected) NAOD will report the results of the work to their national parliament The initiatives has raised following concerns in the discussion group: –Independence of the external auditor –Reliance on work of internal auditor (or other external auditor?) –Access to the audit workpapers of other SAI’s External auditing issues in the EU funds area

5. VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague5 www.nku.cz Thank you for your attention Jan Topka jan.topka@nku.cz