This text describes the process implemented by the Serbian State Audit Institution when performing an audit. Text is a summary of the process, described in detail in Articles 37 through 42 of the Law on the State Audit Institution and Articles 11 through 42 of the Rules of Procedures of the State Audit Institution.
Institution conducts audit based on Annual Audit Program, which the Institution is obliged to adopt before the end of the year for the next calendar year.
Annual Audit Program is adopted by the Council of the Institution, based on the determined criteria for selection of the auditee.
Within the frame established by the Law, the Institution makes independent decisions on audited entities, subject, scope and type of audit, commencement and duration of audit, if not stipulated otherwise by the mentioned Law.
Annual Audit Program each year mandatory includes the following:
1. Budget of The Republic Of Serbia,
2. Mandatory social insurance organizations,
3. Appropriate number of local self-governments,
4. Operation of the National Bank of Serbia, in part relating to the usage of public funds,
5.Certain number of public enterprises, including legal entities in which a public funds beneficiary has participation in the capital.
During a calendar, the Institution may amend or supplement Audit Program.
In order to implement Audit Program, the Institution may hire auditors from state audit institutions from other countries, as well as commercial audit firms.
For the purpose of Audit Program execution, the Institution may use audit reports issued by commercial audit firms, and/or based on such reports it may plan additional procedures at auditees, where the Institution is accountable for audit statements even when using the stated reports.Collecting Data Prior to Commencement of the Audit
That is a very formal document, which states which entity is to be audited, what will be audited and which period shall be covered by the audit. During the audit process, that conclusion may be supplemented (expanded scope of audit, changed period covered by audit etc.).
Audited entity may submit the objection to the conclusion, and the objection shall be reviewed by SAI Council, which may reject, refuse or accept the objection as founded.
Auditor General shall issue authorization to person who will conduct an audit.
Such person shall implement audit process, aim of which is gathering sufficient adequate evidence for stating opinion on audited entity’s operations.
If, during the audit, activities or documents are revealed that point to possibility of criminal offence or misdemeanor, auditor may seize such documents for not longer than eight days.
If, during the audit procedure, audited entity does not display appropriate willingness to cooperate, Auditor General shall issue an order for submitting documents (which he needs and are unavailable), containing warning that in case of failure to comply misdemeanor charges may be filed.
Draft and proposal of the report shall be confidential.
Draft Audit Report
Audited entity has the right, within 15 days since the day of delivering the report, to file an objection with rationale.
Competent state auditor shall review the justification of objections, within 15 days since the day of receipt of objection.
Meeting is very formal in nature and starts with invitation; also, minutes are kept on such meeting. Several articles of the Rules of Procedure of the Serbian SAI regulate such meeting and potential situations that may arise during it.
After the last meeting, where draft report was discusses (there could be more than one), supreme state auditor shall prepare proposal of the audit report and deliver it to the audited entity (and responsible person, present and/or previous) within 30 days from the date of holding the last meeting where the discussion occurred on the draft audit report.
Proposal of the audit report shall be delivered to the members of the Serbian SAI Council.
Within 15 days following the date of its receipt, audited entity may submit objection to the proposal of the audit report, stating reasons and facts for its dispute.
Council of the Serbian SAI shall make decision on that objection, within 30 days following the day of its receipt, and the response shall be submitted to the audited entity together with the final version of the audit report.
• Have the disputed findings omitted from the Audit Report,
• Make the disputed findings integral part of the report in original form,
• Make the disputed findings integral part of the report with contents set by the Council.
If necessary, Auditor General may determine that opinion of external expert be acquired on certain parts of the proposal of the report.
Misdemeanors and Criminal Offences
During the audit engagement, attention is paid at whether certain activities of audited entity have features of misdemeanor or criminal offences. In that case, Auditor General shall promptly file a request for filing misdemeanor charges, and/or criminal charges to the competent authority.
Procedure after audit has been completed
Audited entity, where irregularities or incompliance have been detected and not removed during the audit process, shall be obliged to remove them within 30 to 90 days from the day of delivering the audit report and shall submit the report to Serbian SAI on that (follow-up report). Alternatively, misdemeanor charges are filed against him/her.
Serbian SAI may perform control of information from the follow-up report, on which it prepares post-audit report. In case of unsatisfactory findings, request is sent to the appropriate authority to undertake measures against audited entity (filing charges, proposal for removing the responsible person from the position etc.). Follow-up report is a public document.