City of Leskovac Experiences Equal or Similar Irregularities as other Local Government Units

18 September 2018.
City of Leskovac Experiences Equal or Similar Irregularities as other Local Government Units

"City of Leskovac is an example of how this city removed all detected irregularities in the response to the audit report after completed audit of final statement of accounts of the Budget and compliance audit for 2015. In that sense, it is an example for other local government units", said Dr. Duško Pejović, President of the State Audit Institution, while presenting the audit report of consolidated financial statements of the Budget and compliance audit of the City of Leskovac for 2015, and audit of the response to the audit report for 2017.

On the session of the Committee for Finance, Republic Budget and Control of Public Funds' Spending of the National Assembly, held in Leskovac, he highlighted that the irregularities, detected by auditors during the audit of the City of Leskovac, were mostly equal or similar to those found in other local government units.

"Irregularities, which were the reason why SAI issued qualified opinion in the report, relate to assuming obligations above approved appropriations, which means that internal control did not function. Other irregularity is payment from the Budget for services for which no contracts were previously concluded. Third irregularity pertain to public procurements", Dr. Pejović said.

He announced that starting from next year, SAI will commence conducting separate compliance audits, in addition to financial statements and compliance audits, and that each audit report will have one-page summary. Combined audits will be conducted on as needed basis, according to the risk assessment.

"The goal is to achieve, according to the budget calendar, that the financial statement audit becomes part of the final statement of account of each budget beneficiary who was audited. Review of regularity of operations will be done according to the risk degree "for the most risky topics, and performance audit for systemic problems in the state administration", Mr. Pejović highlighted. According to him, SAI will have 12 instead of 2 performance audit teams.

"In future audits, above all compliance and performance audits, we will plan topics of interest for the citizens". We will deal primarily with communal topics, health and social welfare topics, and also other topics relevant for all stakeholders. We will direct audits to issues important for all citizens, in order to reach value for money, so called "3 Es" - Economy, Efficiency and Effectiveness", Dr. Pejović concluded.

He also announced organizational changes of SAI.

SAI will be modern, efficient supreme audit institution, which will be able, although the last one restored in Europe, to be equal competitor with other SAIs in the developed countries, SAI President said.

At the session, there was a discussion regarding Sectoral audit reports of SAI, which were presented at the 52nd session of the Committee in Subotica. Also, the SAI's Activity Report for 2017 was discussed.

Dr Aleksandra Tomić, Chairperson of the Committee for Finance, Republic Budget and Control of Public Funds' Spending, highlighted that the Committee is obliged to hold sessions outside the seat of the National Assembly, and/or to be guest in local governments.

"We chose Leskovac because it is one of the best examples of putting public finances in order when it comes to SAI audit reports", Dr. Tomić highlighted.

Mayor of Leskovac, Mr. Goran Cvetanović said that holding the session of the Finance Committee in this city demonstrates good intention of the National Assembly, SAI and the City of Leskovac to make their work transparent.

"City of Leskovac has exerted responsibility regarding spending of public funds. Audit report did not show spending of public funds contrary to intended purposes, and all irregularities were removed in the prescribed deadline, Mr. Cvetanović said.

Presence of the representatives of the State Audit Institution at the session outside of the headquarters of the Committee in Leskovac was supported by the project implemented by the State Audit institution and United Nations Development Program (UNDP), and financed by the Swiss Government.