State Audit Institution Hosted the 2nd Meeting of EUROSAI Task Force on Municipality Audit

05 November 2018.
State Audit Institution Hosted the 2nd Meeting of EUROSAI Task Force on Municipality Audit

Today and tomorrow, the State Audit institution will be the host to the European colleagues from the EUROSAI (European Organization of Supreme Audit Institutions) Task Force on Municipality Audit, who will attend the 2nd annual meeting of the Task Force and the Seminar on "Local Government Finance: Future Challenges".

During the meeting, which gathered colleagues from the Supreme Audit Institutions of Albania, Austria, Croatia, Denmark, Estonia, Federation of Bosnia and Herzegovina, Finland, Greece, Hungary, Israel, Italy, Latvia, Lithuania, Macedonia, Malta, Moldavia, Montenegro, Poland, Portugal, Republic of Srpska, Romania, Slovakia, Slovenia, Spain, Turkey and Ukraine, financial standing of local authorities are discussed, along with effective financial management and accountability, taking loans and debts, as well as the role of central government in these processes.

Opening the meeting, SAI President and Auditor General, Dr. Duško Pejović, highlighted that the Sector for Auditing Local Authorities' Budgets issued total of 800 recommendations to auditees regarding audits conducted during 2017.

Last year, after SAI recommendations, Budget System Law was amended, along with Public Property Law and Law on Foundations of Educational System. Effects of recommendations are also reflected in removal of irregularities in public procurement procedures, in public competition procedures and awarding of funds, as well as in removal of irregularities regarding assuming obligations higher than the level of approved appropriations, Dr. Pejović said.

He stated that, after recommendations issued by state auditors, misstatements in the financial statements were also corrected, such as recording financial and non-financial assets, refund of unused budget funds.

"Conclusions and recommendations from audit reports are valuable incentive not only for removal of detected deficiencies, but also for improvement of budget planning and execution, and perhaps most importantly, for improvement of work of the state administration as a whole, Dr. Pejović emphasized.

Auditor General of Lithuania, Dr. Arunas Dulkys, stressed that public sector institutions should explain the public the purpose of their existence and the value of their work.

"Role of Supreme Audit Institutions is to support the stable management of goods and finances owned by the state. SAIs has to monitor potential risks in the public sector, assess operational risks in this area and monitor performance of measures for improvement of effectiveness", Dr. Dulkys concluded.

Seminar includes discussions of various methods for improvement of levels of authorities closest to the citizens, and defines the universal financial challenges often faced by regions and countries.

In all countries members of the Organization for Economic Cooperation and Development (OECD), municipalities and cities spend more than what they can collect in revenues, and all local authorities depend on the transfers from central government, Hansjörg Blöchliger said, OECD Senior Economist.

During the two-day seminar, representatives of Supreme Audit Institutions of Lithuania, Finland, Israel, Slovenia, Italy, Latvia, Serbia, Austria, Macedonia, Slovakia, Estonia, Greece, Croatia and Romania will speak on their respective municipality audit experiences.

During the Annual Meeting of the Task Force, activities will be discussed regarding the EUROSAI TFMA Working Program 2017-2020, particularly regarding results and Action Plan for 2019.

National Audit Office of Lithuania, the Chair of the Task Force, has been organizing international meetings and seminars on municipality audit since 2013. In June 2016, at the EUROSAI Steering Committee meeting, SAI Lithuania initiative was adopted to establish a separate EUROSAI Task Force on Municipality Audit, which officially started working in 2017. Bearing in mind relevance of the competence of the Institution for auditing local governments' budgets, the State Audit Institution of the Republic of Serbia became member of the EUROSAI Task Force on Municipality Audit in December 2016, with a view of further developing audit methodology, and contributing to improvement of municipality audit system, so that audit results may lead to positive changes for their inhabitants. Task Force currently consists of 27 European SAIs and one observer - Administration for Regional Financial Control of Switzerland.

Support to the State Audit institution in organizing this event was provided by the Project "Advancing Accountability Mechanisms in the Public Finances', implemented jointly by the State Audit Institution and the United Nations Development Program (UNDP).