1. BNAO ROLE FOR EFFECTIVE MANAGEMENT OF PUBLIC FINANCES Tzvetan Tzvetkov, CIA, CGAP, CRMA - President of the Bulgarian National Audit Office

2. Bulgarian National Audit Office: A supreme audit institution which exercises control over the execution of the budget and other public funds and activities. ISSAI 12: Public sector auditing, as championed by the SAIs, is an important factor in making a difference to the lives of citizens. The SAI is an essential component in a democratic system where accountability, good governance and integrity are indispensable parts of a stable democracy.

3. BNAO role for ensuring good governance Direct influence: Evaluation of the state of financial management and control at budgetary organization level; Making recommendations for their improvement; Follow up on the recommendations. Indirect influence: Providing assurance to the public and the National Assembly that public funds are spent in a lawful manner, financial statements are reliable and state and municipal property is managed effectively.

4. Activities for exerting direct influence: Evaluation of the state of financial management and control in the public sector – submitting annual reports to the National Assembly; Making recommendations for improvement, incl. following up on the recommendations; Informing the relevant parliamentary commissions, the ministry of finance or the municipal council in the event of non-fulfilment; Imposing sanctions for violations of the Public Procurement Act, the Political Parties Act and the Election Code; Sending reports to the prosecutor’s office when data indicating possible crimes are identified or to PFIA in the event of financial violations.

5. Activities for exerting indirect influence:  Participation in discussion fora, conferences and round tables, conducting joint studies with NGOs;  Presenting statements on draft legislation;  Participation in working groups on elaboration of policies, positions, etc;  Cooperation and coordination agreements with other control bodies;  Cooperation agreements with non-governmental professional organisations;  Publication of audit results: o Publication of audit reports on the BNAO website; o Press conferences on significant audits; o Publications in the press, interviews for the media, participation in TV programmes.

6. The new paradigm of SAI role for good governance: The value and benefits of SAIs is in making a difference to the lives of citizens by:  Strengthening the accountability, transparency and integrity of government and public sector entities;  Demonstrating ongoing relevance to citizens, Parliament and other stakeholders and appropriate responding to the changing environments and emerging risks;  Being a model organisation through leading by example.

7. Audits to ensure accountability for the stewardship over public funds: Audits to ensure accountability for the stewardship over public funds: SAIs should strive to meet the expectations of the stakeholders – parliament, citizens, government, NGOs, etc.  SAIs should conduct the whole palette of audits – financial audits, performance audits and compliance audits;  Do those charged with governance apply the principles of sound management of public funds?  Including audits on issues and themes with social significance in SAI’s audit programme;  Participation in parallel and coordinated audits in the framework of INTOSAI and EUROSAI;  Thematic audits with horizontal coverage for identifying system problems and proposing solutions;  Response to risks of financial violations, fraud and corruption.

8. Dialogue with stakeholders: Cooperation with parliament aimed at better understanding of the audit reports and undertaking the respective corrective measures; Ensuring open communication with the auditees, incl. during the audit process; Cooperation with the media in order to facilitate and increase citizens’ and NGOs’ awareness of SAI’s audit results; Identifying topics, trends, root causes and recommendations to discuss with the stakeholders. Communication should contribute to stakeholders’ awareness of the need for transparency and accountability in the public sector:

9. Reporting on audit results: SAIs should use actively their powers to report on their work: SAIs should use actively their powers to report on their work:  Make audit reports available to the public in a timely manner;  Facilitate access through appropriate communication tools;  Report objectively in a simple and clear manner;  Discuss audit reports in parliament and its commissions with the aim of improving public sector management.

10. SAIs - initiators of change: SAIs should be a credible source of independent and objective evaluations and initiators of change:  To contribute to the debate on improving governance, internal control and risk management in the public sector;  To use their knowledge and studies to advocate public sector reform– e.g. in the management of public finances;  Periodically assess whether stakeholders believe that they are effective and contribute to improvements in the public sector;  To encourage sharing of knowledge and good practice among budgetary organisations.

11. SAIs – model organisations:  SAI organisation management should be based on the matrix ”objectives-risks-controls”;  Focus on ethics – adherence to ethical principles and norms, sanctioning unethical behaviour;  Results-oriented budget, which is a tool for achieving the objectives of the organisation;  Implementation of internationally accepted auditing standards and internal control frameworks;  Effective mechanisms for identifying and preventing conflicts of interest;  External assessment of the quality of SAI’s work;  Open dialogue and communication with stakeholders.

12. Thank you for your attention!