STRATEGY

OFFICIAL FRAMEWORK OF STRATEGIC DOCUMENTS OF

THE STATE AUDIT OFFICE OF HUNGARY

FROM 2011 ONWARDS

PRESIDENT’S FOREWORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

INSTITUTIONAL STRATEGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

FUNCTIONAL STRATEGIES OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ORGANISATIONAL DEVELOPMENT STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

HUMAN RESOURCES STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

METHODOLGICAL AND INTERNATIONAL STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

COMMUNICATION STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

IT STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

It is our strategic mission to promote the transparency of public finances, the efficient and expedient utilisationof public funds and property, as well as to supportgood governance with our value creating audits performed on a solid professional basis. To achievethat, it is of utmost importance that our audit activity becontinuously developed, it comply with new challenges,changes in legislation, expectations of SAIs, as well asthe developing methodology and strategic objectives ofinternational professional organisations, first of allthose of INTOSAI and EUROSAI.

It is my belief that our activity can only be accom-plished and fully utilised in the future if we cooperatemore closely with the National Assembly and theorganisations capable of enforcing our audit findings.Our aspiration is not only to point out the auditees’deficiencies but – by means of publishing goodpractices – to assist the more efficient and effectivemanagement of public funds and property and thus,

in compliance with legal provisions, to play our partin the work of building a well-operating state. Besidesauditing, our advisory role supported by analyses is alsogiven priority in order to expand good governance.

Effective auditing demands an efficient organisation, so we continuously strive to establish an optimalorganisational structure complying with task performance. It is our objective to perform our taskswith an efficient allocation of available resources,thus ensuring that – as a guardian of public funds – wecan serve as example of economic work ourselves.

The State Audit Office of Hungary is the supremefinancial and economic audit institution of the NationalAssembly, its audit mandate covers the use and fullutilisation of public funds and national property. Thisbroad mandate has been granted to the State AuditOffice of Hungary as an office organisation. The aimof the new Act on SAO was to eliminate audits without

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Following the adoption of the Fundamental Law inspring 2011, the Act on the State Audit Office ofHungary was the first among the cardinal acts whichwas discussed and adopted by the National Assembly.With the piece of legislation entering into force on 1 July 2011, the National Assembly strengthened theauditors’ mandates and ensured SAO’s organisational,legal, personal and financial independence as well asits operation free from external influence. The new Act on SAO clearly marks the beginning of a new era.It has been made possible for auditors to act more efficiently in order to safeguard tax-payers’ moneyand property.

The new Act on SAO serves as a basis for makingorganisational operation more efficient, effective andtransparent. The new act can be considered a significantbreakthrough not only at national but also at inter-national level. With the piece of legislation enteringinto force, Hungary is one of the first countries in the

world which complies entirely with the internationalrequirements concerning SAIs’ independence andunbiased operation. Anyone, who finds efficient controlover public funds and public property important, canbe proud of the Act on SAO, as with the new piece oflegislation Hungary has set an example to be followedalso at international level to those countries thatconsider SAIs’ independence a fundamental value.

The new act accompanied with the Strategy of the State Audit Office of Hungary adopted in 2010ensures the continuous improvement and developmentof the organisation. It is our objective that the StateAudit Office of Hungary becomes an organisationwhich can meet the challenges of our age, can adapt tochanges and thus it can really serve the whole society. To achieve that, it is indispensable that the renewal ofthe organisation shall be based upon the fundamentalprinciples of SAIs, that is independence, credibility,impartiality and commitment to quality.

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P R E S I D E N T ’ S F O R E W O R D

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consequences. To that end, contrary to the previouspermissive regulations, provisions concerning the obligations and responsibilities of auditees havebecome stricter. Besides, the utilisation of our findingsand recommendations can be highly facilitated bypublicity as well. For the dissemination of our auditresults, we build an active and efficient communicationwhich aims at transmitting our findings and messages to the selected target groups as well as toassist the utilisation of our work.

For the sake of utilisation of our work, it is importantthat the State Audit Office of Hungary remain to beconsidered a credible organisation deserving trust in thefuture: by the National Assembly, the organisations concerned and, ultimately, by the citizens of Hungary.Therefore, by our work it shall be made evident to all thatthe State Audit Office of Hungary is an organisation ofprofessional stability and unquestionability.

Our aim is that the utilisation of our results shall bejustified by the reinforcement of public confidence, thechanges in the audited entity’s attitude, the assistanceprovided to the law-making activities of the legislation,our professional activities becoming part of the academia, as well as by the changes generated in theminds of the public in relation to the most importantsocio-economic issues.

I believe that the frameworks provided by the new Acton SAO and our Strategy completing them provide anopportunity for SAO to become one of those institutionsthat could particularly highly contribute to the promotion of regular, efficient and effective utilisationof public funds.

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László Domokos

President

STRATEGIC OBJECTIVES AND TASKS

I. DEVELOPING THE AUDIT ACTIVITY

The audits of the State Audit Office of Hungary

increasingly facilitate transparency, accountability and

accounting in the financial management of public funds

and public property.

Through the selection of subjects, their approach andtheir attained results, the audits create added value, and result in provable savings in the utilisation of public funds as well as in an improvement of financialmanagement.

With its determined, consistent and active audit behaviour,which facilitates positive changes, and with all availablemeans of an audit institution the SAO supports responsibleadministrative operation that entails consequences andenforces law.

For the sake of the transparency of the complex processesof public finances, the SAO conducts audits with a systemic/holistic approach that are based on one another, exploit the synergy effect, and allow summaryevaluations.

In terms of consistent accounting, the audit of the finalaccounts plays a prominent role. In order to perform thetask in a more efficient and effective manner, the SAOdevelops an audit model that is different from the previousone in its approach, content and procedure.

Giving an opinion on the budget will receive new emphases,taking into account the changes in the environment and the

rules of the European Union to be introduced with regard to the preliminary reconciliation of the budgets of membercountries.

During the audit of local governments, the SAO evaluatestheir financial-economic situation, explores their risks,and selects the audit sites on the basis of an objectiveindicator system.

With the audit of the budget subsidies granted to outsidepublic finances and of the assets provided free of charge,the SAO contributes to the transparent utilisation of publicfunds by civil organisations as well for the economical,efficient and effective performance of public tasks undertakenin a contract.

The SAO plays a role in the fight against corruption andfraud. It participates in the identification and applicationof the efficient and effective means of fight against corruption risks and corruption and in the diffusion oftheir use as well as in formulating the integrity basedadministrative culture.

For a more efficient and effective utilisation of publicfunds, in addition to the enforcement of regularityrequirements, the SAO gives priority to the performanceaudit of the systems providing public tasks and operatingin the central and local government subsystems of publicfinances as well as outside public finances and also theperformance audit of programmes and projects (invest-ments) financed from public funds.

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MISSION

The mission of the State Audit Office of Hungary (SAO)is to promote the transparent and sound management ofpublic finances with its value creating audits performedon a solid professional basis, thus contributing to ‘goodgovernance’*.

VISION

The State Audit Office of Hungary enjoying the confidenceof citizens and having professional prestige, supports theNational Assembly with its audits and advice. With itsrecommendations, it facilitates the regular, economical,efficient and effective utilisation and use of public fundsand public property.

FUNDAMENTAL VALUES

The State Audit Office of Hungary:

is subordinated only to the law and the National Assembly;

its auditors carry out the audits impartially, and performtheir tasks in full compliance with the relevant professionaland ethical rules;

explores and evaluates facts in an authentic manner;

its audit activity is characterised by a dual effort to preventerrors and deficiencies and to cooperate in order to helpauditees;

facilitates the creation of the integrity based, transparent and accountable utilisation of public funds;

is a committed supporter of quality-oriented operation;the accumulated experience is coupled with high-levelexpertise and sense of vocation;

is ready to renew its organisation continuously;

in its organisation, the moral and financial appreciationof the staff is at a high level; payment by results, equalopportunities and continuous development are attained;

its operation is characterised by economy, efficiency,effectiveness and sustainability.

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* Based on the definitions of the UN and other international organisations, ‘good governance’ is amode of operation of the state characterised by seeking consensus, stimulation to participate, equalopportunities, transparency, accountability, effectiveness, efficiency and respect for the rule of law.

INSTITUTIONAL STRATEGY

The SAO continues to strengthen trust in its work by ensuringhigh-level audit assurance as well as with the high professional quality of audit findings, conclusions, calls,proposals and recommendations.

It restructures the audit reports. The reports are adjustedto user requirements, contain the findings of the auditsprecisely and clearly, keeping to the point and transmittingunambiguous messages. With the help of available tools,it urges a favourable shift in the utilisation of the SAOreports by the National Assembly.

The SAO develops the measurement and evaluation ofthe effect of audits, the follow-up of the implementationof recommendations, and makes the system of follow-upaudits more targeted.

It continuously develops and cultivates its relationshipwith professional organisations, and uses the power ofpublic opinion and publicity.

II. THE OPERATION AND DEVELOPMENT OF THE ORGANISATION

The main organisational development objective of the

State Audit Office of Hungary is to set up an optimum

organisational structure in line with the tasks to be

performed.

Excellent performance and quality are put at the centrewith the unambiguous wording of requirements and thecall to account of their fulfilment. This culture is fosteredby the introduction of a more differentiated promotion andsalary system, which acknowledges good performance.

The SAO strengthens its capacity and develops the system’s external and internal ability to react in order to givesubstantial answers as soon as possible to the challengesthat arise (changes in the environment and the expectationsof the authoritative public opinion).

For the sake of the optimum utilisation of resources theSAO supports project work, and facilitates the creativecooperation of auditors in order to achieve a quality result.

The SAO ensures that the most important professionalvalue, i.e. professional knowledge, is preserved anddeveloped. A contribution to this is the implementationof a career model that provides stable employment andoutstanding income for the personnel committed to theobjectives of the organisation in the long term and readyto continuously update their professional knowledge.Through high-standard training and structured educationthe SAO ensures the increase of competence. By wideningthe internship system and introducing a transparentrecruitment system it ensures continuous supply of workforce.

The SAO operates a controlling and monitoring system fora better substantiation of decisions, ensuring experienceand information management and flow as well as theplanned management of resources.

IT operation and development basically serve the supportof audit assignments and the implementation of otherorganisational tasks. The continuous, reasonable ITdevelopment, carried out in coordination with the competent government institutions, supports the efficientoperation of the organisation.

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In order to enforce reliable financial management, theSAO strengthens its advisory role in the audit of EU andother international funds and liabilities, paying specialattention to the cooperation in the audit activity of theEU Commission and the European Court of Auditors concerning Hungary.

In order to improve the conditions of performance audits,within the framework of its advisory activity, the SAOurges that decision-makers should determine effectivenesscriteria for the utilisation of public funds and the interventions in the legislation and public policy, assigningindicators suitable for performance measurement to theobjectives. In order to attain this, the SAO participates inthe further development of the system of key nationalindicators.

The SAO facilitates ‘good governance’ through counsellingbased on audit experience and research complementingit as well as the summary evaluation of the audit findings.

In order to increase the efficiency of public administration,the SAO places good practice in the public domain, andtransfers the information and knowledge obtained as aresult of the audits to the users of public funds.

With the rationalisation of the performance of audit

assignments, the State Audit Office of Hungary intends to

attain a more efficient utilisation of audit capacity.

It implements a balanced and feasible performance of tasks with the (re)interpretation and definition of thesubject, scope, frequency and expected results of theaudit obligations and mandates set out by law.

It supports the improvement of the quality and efficiencyof audits with a selection of audit subjects that relies moreheavily on the findings of risk analysis and evaluation.

It strengthens the audits relying on and related to oneanother, and pays special attention to the avoidanceof duplications and to the continuous flow of informationduring planning of audits.

It strives to reduce the number of on-site audits by samplingand audit procedures of a new approach, being supportedby analysis.

The elaboration and further development of a method-ology that matches the objectives and tasks as well as the maintenance of continuous, quality-orientedmethodological development and the adaptation of good international practices constitute the fundamental conditionsfor efficient and high quality task performance. The SAOcontributes to the development of international auditingstandards, and applies the approved standards in its audits.

The State Audit Office of Hungary wishes to achieve

a better utilisation and greater effect of the results

of its work.

With the development of the audit planning system, theSAO supports timely audit subject selection that commandsthe interest of the public. It takes into consideration thefinancial weight of the given subject and its long-termimportance in the decision-making process of the NationalAssembly and in the strategy formulation concept of theGovernment.

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The implementation of the objectives of the strategy isassisted by – organisational development, methodological,communication, international and IT – functional strategiesas well as by implementation plans that designate thecoordination of tasks of various durations and the relevantpersons in charge.

The international relations and roles of the State Audit

Office of Hungary ensure knowledge transfer, and the

experience obtained this way becomes integrated in the

audit work.

The SAO continues to play an active role in the internationalaudit community. Exchange of international audit experience and cooperation with national supreme auditinstitutions and international organisations continue tobe important.

Cooperation with the European Court of Auditors will beimplemented at a higher level and standard than earlier.Through the further development of professional contacts, the SAO will establish even closer links with thenational supreme audit institutions of the neighbouringcountries.

The SAO monitors the changes in content and methodologyof the professional activity pursued in the internationalaudit organisations, and participates in professionalworkshops.

The SAO formulates the rules of procedure with whichthe professional experience, values, good practices andadaptations obtained in the international arena becomeintegrated in the audits performed by the SAO, thus

implementing an open organisational operation that alsorelies on the experience of others and is able to learn.

III. EXTERNAL AND INTERNAL COMMUNICATION

The State Audit Office of Hungary improves its relation-

ship and communication with the National Assembly so

that the National Assembly and the committees discuss

more of its reports and utilise these reports in their

legislative work.

The basis of this relationship is to assist the NationalAssembly in its work with easy to understand and meaningful reports resulting from the high-standardaudit activity performed by the SAO and to maketheutilisation of public funds more transparent for theMembers of Parliament and the general public.

The National Assembly plays a prominent and primaryrole in the utilisation of the reports. The SAO informs thechairpersons of the parliamentary committees and theMembers of Parliament about its activity and the resultsof this activity extensively at several fora.

More intensive presence in the committees facilitates themore considerable appearance of the work of the SAO inthe activity of the National Assembly.

In transmitting its audit findings and values, the State

Audit Office of Hungary implements primary, moderate

and easy to understand communication.

For the sake of active and initiative communication, itapplies efficient and up-to-date methods, makes better

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use of the opportunities provided by the World WideWeb, thus meeting the challenges of our era and with theneeds of users.

The SAO’s reports need to be considered an acknowledgedand popular source of information.

The reports and all other documents officially publishedby the SAO need to represent a high standard not onlyfrom a professional but also from a communication pointof view. They also need to be understandable for users,concise and informative.

9 December 2010

credible and up-to-date regulations. Besides that, however,a regularly reviewed strategy-planning ensures the target-orientation of the organisation, the achievementof objectives. This strategic mindset is being made measurableand quality-assured at all levels of the organisation.

In terms of management and organisational processes,SAO also builds upon its international experience, appliesthe good practices of other institutions and promotes its own.

‘For the sake of the optimum utilisation of resources,

SAO supports project work, and facilitates the

creative cooperation of auditors in order to achieve

a quality result.’

Besides the detailed and comprehensive planning andthe continuous monitoring of implementation, by meansof launching projects and introducing project work, SAO creates a motivated, well managed and committedorganisation that is capable of increased performance.The organisation supports project work by the establishmentof routines and ways of communication.

SAO is committed to develop the work culture of staff inline with the conditions outlined above.

SAO sustains and – in order to comply with the aspects ofefficiency and economy – occasionally reviews the phasesof audit work.

‘The SAO operates a controlling and monitoring

system for a better substantiation of decisions,

ensuring experience and information management

and flow as well as the planned management of

resources.’

The organisation puts great emphasis on the quick circulation of information and the dynamic organisationaldata processing. It strives to set up such a flexible modelthat handles arising changes in a system and providesbasic principles for handling new conditions and for fitting them into the system.

In order to (adequately) react to challenges arising, theorganisation continuously updates its risk managementsystem and to efficiently react to changes it establishesand operates a system for managing changes.

The organisation increases the state of being organised atall areas and keeping legality in mind, it operates thequality management system that is supported by its quality assurance activities and up-to-date regulation.

June 2016

ORGANISATIONAL DEVELOPMENT

STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY

The State Audit Office of Hungary centres its organisationaldevelopment around the enforcement of organisationalstructure, a boost in the operation of processes, as well asthe development of adjustment between staff membersand organisational culture.

The framework for the organisation’s task performanceand for the cooperation between its different groups areensured by the project-based working environment andthe matrix structure. The sine qua non for the independenceand credibility of audit work is the enforcement of theorganisational, personal and financial independencegranted by the Fundamental Law and the Act on SAO, aswell as the quality-assured assistance to the enlarged taskperformance of SAO.

The task-performance and decision-making processes ofthe organisation, the relations between persons and groups, forms of co-operation and the analysis of the efficiency thereof all serve accountability and transparency.

‘The SAO strengthens its capacity and develops the

system’s external and internal ability to react in order

to give substantial answers as soon as possible to the

challenges that arise (changes in the environment

and the expectations of the authoritative public

opinion).’

The State Audit Office of Hungary is committed to theoperation of a flexible organisational model adapting to changes that is occasionally subject to assessment. Thereviews provide an opportunity for the organisation to make the necessary structural changes and to adapt to the new environmental challenges with flexibility.

Besides continuously giving impetus to the organisation,SAO sees a possibility for progress in the establishment ofan adequate organisational culture, being in progresssince 2010. Instead of organisational reforms, everydayroutines, communication, as well as the attitudes andexpectations of the staff are aimed at.

The organisation reflects the changes also in the set ofinstruments applied within the institution and providesfor the process of implementation.

For the sake of continuous organisational renewal and inorder to animate processes, the State Audit Office ofHungary supports innovation.

To establish a (self)learning organisational model, it gathers knowledge based on the experience gained by itsmembers, ensures the handling and dissemination of empirical knowledge and information and by means ofanalysing them, it prepares recommendations for themore efficient operation of the system.

As regards task performance, the organisation helps pro-moting the consistency of provisions involved in regulationswith daily operation and makes sure that the operation ofthe organisational units can be derived from transparent,

FUNCTIONAL STRATEGIES OF THE STATE AUDIT OFFICE OF HUNGARY

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For the sake of quality work – by means of trainings – SAOprovides an opportunity for auditors to acquire auditors’subcompetences, thus enabling them to carry out regularityaudits on the basis of methodological provisions.

SAO wishes to support the increase of the organisation’sefficiency by means of enforcing the requirements set interms of its accountable managers and also by means ofmotivating them in the course of their management andleadership activities.

SAO operates an individually developed job evaluationsystem consisting of a set of criteria applicable to thewhole organisation that is also consistent, based on factand transparent, it defines group-level and individualsuccess criteria, as well as performance indicators. Thejob evaluation system makes it possible to give a feedbackto the auditor, to harmonise individual and organisationalgoals, it contributes to the improvement of performanceand the identification of strengths and weaknesses, it has apositive effect on the high performance culture, moreover,it allows the implementation of the remuneration byresults as stipulated by the Act on the State Audit Officeof Hungary. Job evaluation provides important data forthe career planning, resource management and trainingsystems operated within the organisation.

As a (self)learning organisation, SAO continuously increasesand strengthens its creativity and talent in order to recognize the challenges and changes of its environmentin a timely manner and to be able to give an adequateanswer as soon as possible. Therefore, the principles ofthinking in systems, self-governance, the continuous

review of conceptual schemes, common vision and learningin groups are enforced.

With regard to individual and group learning, as well asto the efficiency of individuals, tasks and groups, the availability of human resources – in compliance with taskperformance needs – is ensured in a rotation system.

SAO strives to establish such a creative environment atthe workplace where the staff members involved in theprocess – besides their responsibilities borne within theirown scope of duties and powers – are motivated andinterested in the improvement of quality.

‘The SAO ensures that the most important professional

value, i.e. professional knowledge, is preserved and

developed. A contribution to this is the implementation

of a career model that provides stable employment

and outstanding income for the personnel committed

to the objectives of the organisation in the long

term and ready to continuously update their

professional knowledge. Through highstandard

training and structured education the SAO ensures the

increase of competence. By widening the internship

system and introducing a transparent recruitment

system it ensures continuous supply of workforce.’

Within the framework of knowledge management and in order to enhance its performance, SAO intentionally strives to develop and preserve organisational knowledgeand intellectual capital, thus increasing the efficiency andeffectiveness of organisational work, as well as the contribu-tion to the quality assurance activity built in the process.

HUMAN RESOURCES STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY

The key to a permanent, high-level professional value ofour audit work and the utilisation of our results to thegreatest possible extent is to handle our human resourceswith the diligence of a ‘good master’, while concentratingon the preservation of the strengths of the organisationand enforcing the aspects that mark an effective resourcemanagement within the organisation. At the same time,requirements that optimize task performance also in themedium term and improve the quality of the organisation’shuman resources shall be stipulated. When defining thestrategic objectives concerning human resources, SAOalso takes into consideration that humans are not onlyresources but they also embody human dignity and fundamental rights, and as such they represent a valuethemselves.

‘Excellent performance and quality are put at the

centre with the unambiguous wording of requirements

and the call to account of their fulfilment. This

culture is fostered by the introduction of a more

differentiated promotion and salary system, which

acknowledges good performance.

The SAO strengthens its capacity and develops the

system’s external and internal ability to react in order

to give substantial answers as soon as possible to the

challenges that arise (changes in the environment

and the expectations of the authoritative public

opinion).

For the sake of the optimum utilisation of resources

the SAO supports project work, and facilitates

the creative cooperation of auditors in order to

achieve a quality result.’

The SAO provides for the operation and review of theaudit procedure consisting of input and outcome-orientedaudit phases that strengthen the responsibility of theauditors. It is SAO’s aspiration that – in compliance withthe requirements concerning task performance – eachposition is filled by the most appropriate person, thusensuring that the necessary skills, abilities, qualificationsand professional experience (in summary: competences)are available.

The special legal status of the organisation, the tasks itperforms, its social prestige and the acknowledgement ofhuman resources in terms of remuneration ensure thatthe SAO is considered an attractive organisation in thelabour market.

The organisation strives to recruit the resources with thegreatest professional know-how and expertise availablein the labour market. Professional filters are built in theselection process, competences need not only to be verifiedbut they are also measured. To achieve this goal, theorganisation operates a recruitment system that guaranteesan open selection process that puts into effect the principles of competition and operates in a three-levelprofessional selection system. The recruitment systemreacts in a flexible way to the needs arising and ensuresequal opportunities.

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perform the task in a more efficient and effective

manner, the SAO develops an audit model that is

different from the previous one in its approach,

content and procedure.’

In the course of the risk-based selection of audit topics,the decision about the audit approach and the iterativemethodological developments serving the elaboration ofaudit programmes, SAO bears in mind the promotion ofan effective, efficient, and economic and regular financialmanagement of public funds and public property.

Methodological developments are aimed at SAO’s abilityto formulate such recommendations in its reports thatassist the audited entities in taking measures for improvement when managing public funds and publicproperty.

In the course of planning and performing its audits, SAOpays special attention to the topic of budget executionand periodically reviews its methodologies applied.

‘It strives to reduce the number of on-site audits by

sampling and audit procedures of a new approach,

being supported by analysis.’

SAO elaborates such new audit procedures and methodological guidelines that allow the decrease ofcapacities needed in phase of the on-site audits.

‘The elaboration and further development of a

methodology that matches the objectives and tasks

as well as the maintenance of continuous, quality-

oriented methodological development and the

adaptation of good international practices constitute

the fundamental conditions for efficient and high

quality task performance. The SAO contributes to the

development of international auditing standards,

and applies the approved standards in its audits.’

Endorsing the international standards on auditing, that isthe guidelines and standards issued and approved byINTOSAI and other professional organisations, as well asthe changing national legal framework, SAO renews andfurther develops the system of its audit regulations andthe hierarchy of professional regulations, it updates andamends its methodological principles, guidelines andmanuals belonging to the hierarchy, as well as its otherprofessional documents of methodology.

‘The SAO continues to strengthen trust in its work

by ensuring high-level audit assurance as well as with

the high professional quality of audit findings,

conclusions, calls, proposals and recommendations.’

In the framework of quality-driven operation, SAO elaborates,operates, continuously reviews and further develops its processes and procedures aiming at quality, in order forits audit conclusions and findings to be substantiated,reliable and valid to the greatest possible extent, to reinforce the credibility of the organisation and the confidence in its work, as well as to support the utilisationof the audits.

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Taking it into account, SAO organises complex and detailedinternal trainings of wide scope beyond the legal requirements as well as professional workshops on goodpractices in order to build capacities.

Via its purposeful career management activities and itstraining opportunities, SAO supports the motivated staffmembers who carry out their tasks at high level, play aleading role in the achievement of SAO’s long-term goalsand belong to the circle of future manager aspirants,whose development and training are of high priority.

SAO defines rules of conduct applicable to staff membersin the ethical principles, emphasising the independenceof auditors, as well as the enforcement and extension of integrity both to the level of individuals and the organisation as a whole.

In order to practice social responsibility, SAO operates amentoring system, thus contributing to the value-creatingrenewal of organisational knowledge, the enhancement ofcreative work, as well as the support of the public sector in a way that renews values. High achieving trainee auditors of the mentoring system can serve as a key tofuture labour supply for SAO.

June 2016

METHODOLGICAL AND INTERNATIONAL STRATEGY

OF THE STATE AUDIT OFFICE OF HUNGARY

The methodological and international strategy mirrors acore value defined by the strategy of the organisation –that is a changing environment – in a dynamic mannerthat also ensures stability. By means of the exploitation ofthe capacity for permanent renewal and also based oninternational experience, it lays down a strategic targetsystem for methodological renewal and development.

The methodological and international sub-strategy wishesto contribute to the preservation of the above core valuesand to the objectives of the strategic areas defined by theorganisational strategy in a manner that sets standards,thus supporting the achievement of the mission of theorganisation that is value creating audits performed on asolid professional basis.

‘Through the selection of subjects, their approach

and their attained results, the audits create added

value, and result in provable savings in the utilisation

of public funds as well as in an improvement of

financial management.’

‘For the sake of the transparency of the complex

processes of public finances, the SAO conducts

audits with a systemic/holistic approach that are

based on one another, exploit the synergy effect,

and allow summary evaluations.’

‘In terms of consistent accounting, the audit of the

final accounts plays a prominent role. In order to

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Upon request, SAO reviews its rules of procedure elaboratedfor the coordination of the European Court of Auditors’audits, as well as its separate regulations concerning theparticipation in these audits. It utilises the experiencegained during the audits when developing national auditactivities.

SAO regularly reviews its relations with the national SAIsof neighbouring countries, in order to further developthem, as well as to initiate and maintain active contacts.It exchanges experience with partner institutions abroadthat face similar professional challenges in the field of auditing and carry out similar audit assignments. With regard to the topics of mutual interest, it performscooperative audit activities.

‘The SAO monitors the changes in content and

methodology of the professional activity pursued

in the international audit organisations, and

participates in professional workshops.’

SAO actively contributes to international professionalcooperations aiming at the elaboration of methodologicaland other documents, it represents its professional viewsand presents its experience related to the application ofrules of auditing, guidelines and standards.

SAO participates in international knowledge sharing andparticipates in the completion of international projects.SAO shares its professional experience with other SAIsand performs advisory activities. SAO provides professionalsupport for the SAIs of countries undergoing socio-economic

restructuring, amongst others in the framework of the INTOSAI Development Initiative (IDI) programmes.

‘The SAO formulates the rules of procedure with which

the professional experience, values, good practices

and adaptations obtained in the international arena

become integrated in the audits performed by the SAO,

thus implementing an open organisational operation

that also relies on the experience of others and is

able to learn.’

SAO regularly reviews the internal rules for sharing andutilising international experience, as well as the procedurefor transmitting and broadly disseminating knowledgeaccumulated via international contacts. In order to ensurethe added value of international relations, SAO strives tosystematically register knowledge and experience gainedabroad, as well as to circulate them amongst managers incharge and staff members.

By means of the training, knowledge sharing and internalcommunication systems, SAO continuously and systematically presents the professional rules of auditingby SAIs, the experience thereof and the results of methodological developments, in order to deepen them.

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‘It restructures the audit reports. The reports are

adjusted to user requirements, contain the findings

of the audits precisely and clearly, keeping to the

point and transmitting unambiguous messages. With

the help of available tools, it urges a favourable

shift in the utilisation of the SAO reports by the

National Assembly.’

In a manner laid down in methodological guidelines,SAO strives to precisely and professionally formulate itsaudit reports, to use a correct and up-to-date professionalterminology as well as to further develop it.

In order to assist the National Assembly with its decision-making, SAO supports the utilisation of the reports by theNational Assembly to an increasing extent by means ofstructural and content-related developments and by providing clear messages in the reports.

‘The SAO continues to play an active role in

the international audit community. Exchange of

international audit experience and cooperation with

national supreme audit institutions and international

organisations continue to be important.’

SAO continuously keeps contact with international organisations of the audit profession and actively contributes to, participates and occasionally takes a leadingrole in cooperations, especially in those of Supreme AuditInstitutions (SAIs). It follows up the professional developments in the European Union and other events of different international organisations that concern the

SAIs. It monitors the possibilities for auditing the financial management of international organisations,and occasionally contributes to them.

In the course of its activities carried out in internationalworking groups (especially INTOSAI, EUROSAI, ContactCommittee of the Supreme Audit Institutions of theEuropean Union) operating in the fields with strategicimportance, by means of participating in internationalprofessional workshops, seminars and conferences andalso when responding to international requests, SAO shares its professional experience with its partners.

In order to deliberately gain understanding of foreign‘good practices’ in a way that is also planned from thepoint of view of utilisation, SAO actively participates inthe international fora for exchange of experience and training events abroad, while it gathers the outcomes of theaudits of other audit bodies, processes them and uses theinformation gathered in the course of its own audit activities.

The international communication puts great emphasis onthe special characteristics of SAO, the strengths of theorganisation, amongst others on the strengthening ofintegrity and the independence of SAO.

‘Cooperation with the European Court of Auditors

will be implemented at a higher level and standard

than earlier. Through the further development

of professional contacts, the SAO will establish

even closer links with the national supreme audit

institutions of the neighbouring countries.’

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ensures transparency, provides continuous informationabout organizational operation and professional activitiesof its departments and employees.

SAO manages and develops its online presence in a systemicmanner with the objective to become a reference point, to serve as an easily accessible, first-hand, direct and continuously updated source of information to its own staff, the National Assembly, the auditees, the professional audience, the media, as well as the generalpublic. Through its new approach SAO supports theinvolvement of all departments in the preparation andpublication of news, raising the staff's sense of self-responsibility, identification with organizational goalsand personal appreciation.

‘The National Assembly plays a prominent and primary

role in the utilisation of audit reports. SAO informs

the chairpersons of the parliamentary committees and

the Members of Parliament about its activity and the

results of this activity extensively at several fora.’

SAO contributes to the effective enforcement of the auditfindings, raising awareness of SAO’s activity and influencingthe favourable perception of the SAO by the NationalAssembly, public administration and general public.

It develops and supports the legislative, social and scientific-professional utilization of audit reports, analyses andprofessional publications.

For the widest possible utilization of audit reports it appliestarget-group-customized methods while disseminating andpublishing its audit reports and analyses.

In order to improve communication and to increase the efficiency and the development of targeted communicationstrategies it develops, continuously measures and analysesthe results achieved.

‘More intensive presence in the committees facilitates

the more considerable appearance of the work of the

SAO in the activity of the National Assembly.’

Through training activities and background materialsSAO assists its staff members participating in parliamentarycommittee meetings.

‘The basis of this relationship is to assist the

National Assembly in its work with easy to understand

and informative reports resulting from its quality

audit activity performed and to make the utilisation

of public funds more transparent for the Members

of Parliament and the general public.’

‘It continuously develops and cultivates its

relationship with professional organisations, and

uses the power of public opinion and publicity.’

SAO widely supports the activities of the NationalAssembly, its committees and the Members of theParliament, while developing cooperation between theorganization and the legislative bodies. Furthermore,

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COMMUNICATION STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY

The State Audit Office of Hungary puts a particular emphasison the utilization of its work, to which conscious, planned and proactive communication is required. Thecommunication strategy based on principles concerningthe utilization of SAO's work supports SAO’s mission andcontributes to achieving the objectives of the institution.

‘SAO’s reports need to be considered as an ack-

nowledged and popular source of information.’

Through selecting audit topics on a risk-based approachthat promotes utilization, making the planning processmore flexible, as well as responding to topical issues SAOmakes its reports widely recognized.

Through its press summaries addressed to the NationalAssembly and the media, SAO contributes to the extensiveutilization of its audit reports and other documents.

‘Reports and all other documents officially published

by the SAO need to represent a high standard not only

from a professional but also from a communication

point of view. They also need to be understandable

for users, concise and informative.’

By means of developing and applying a measurablesystem of communication criteria complying with the requirements of high added value, it develops itsprofessional publications and documents published.

With its internal communication tools, guidelines andtemplates, as well as professional training activities andcontinuous quality control, SAO ensures the preparationof easy-to-understand audit materials of a consistentlyhigh quality. In order to improve the readability of audit reports and professional documents, trainings and consultations are organized to support the departmentsand managers responsible for audit areas.

‘For the sake of active and initiative communication,

it applies efficient and up-to-date methods, makes

better use of opportunities provided by the World

Wide Web, thus meeting challenges of our era as

well as the needs of users.’

Development of analyses and surveys, as well as development and evaluation of indices serve as a basis forSAO to define the ways to develop its communication.Through defining and supporting new internal targetgroups as well as personalized training activities and amore efficient internal information flow, it supports high-quality external communication.

Through formulating audit messages in a deliberate andplanned manner and preparing interviewees, SAO makesits media appearances uniformly professionalized. Itimproves the organisation's ability to respond, by makingit faster, more diversified and professionally substantiated.

SAO constantly develops its websites, makes its reports,studies and professional documents as well as organizationalnews widely available. Through its News Portal, SAO

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IT STRATEGY OF THE STATE AUDIT OFFICE OF HUNGARY

In order to implement its strategy, the State Audit Officeof Hungary supports the performance of tasks related tothe operation and development of the organisation bymeans of its IT tools.

The State Audit Office of Hungary recognised the challengethat one of the most important cornerstones of the methodological development of audits is provided byinformation technology.

In the course of the methodological development, riskanalysis, planning and implementation of audits andanalyses, SAO uses information technology as a tool,method and a resource.

The general task of IT strategy is to support the executionand enhancement of audit and analytical tasks, internaloperations, the reduction of bureaucracy, organisationalinnovation and the required change management, whilebearing in mind the aspects of data protection, securityand reliability.

‘IT operation and development basically serve the

support of audit assignments and the implementation

of other organisational tasks. The continuous,

reasonable IT development, carried out in coordination

with the competent government institutions, supports

the efficient operation of the organisation.’

In terms of supporting organisational operation

As a major objective, the development of IT services andapplications supports the systematisation of SAO’s operational processes, as well as the systemic operationthereof, consisting of more integrated modules workingin synergy.

In the course of developing IT services, the State AuditOffice of Hungary sets up such systems whose applicationdoes not require high-level IT skills, however, at the sametime, by means of their built-in functions they supportregulated and regular work and the efficient operation ofthe organisation’s quality management system.

The basic IT infrastructure serving application systemsand services is continuously developed and maintainedby SAO, adapted to its strategic objectives, circumstancesand conditions, along uniform principles. The organisationharmonises its development in IT services and basic infrastructure with the government’s developments in ITand e-governance.

In order to prepare and support decision-making, SAOsets up an information system that provides the necessaryinformation, the availability of data, their consistency,timeliness and reliability.

SAO widens the possibility of electronic handling, storingand authenticating of official documents within the

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through the qualitative analysis of the feedback receivedfrom the committees and the Members of the Parliament,by introducing additional measurement criteria and categories, it optimizes the content and the framework ofparliamentary relations.

In order to strengthen well-established professional relationships it organizes meetings and discussions withsenior officials, official bodies and committees of theNational Assembly.

‘In order to increase the efficiency of public

administration, the SAO places good practice in the

public domain, and transfers the information and

knowledge obtained as a result of the audits to the

users of public funds.’

By using its communication tools SAO widely shares itsaudit experience and suggestions.

‘The SAO plays a role in the fight against corruption

and fraud. It participates in the identification and

application of the efficient and effective means of

fight against corruption risks and corruption and

in the diffusion of their use as well as in formulating

the integrity based administrative culture.’

It makes publicly available and widely shares good practices identified during its audits with the aim toimprove the use of public funds and the operation of public property managers as well as the transparencyof public funds.

‘The SAO facilitates ›good governance‹ through

counselling based on audit experience and research

complementing it as well as the summary evaluation

of the audit findings.’

SAO shares its experience and ‘good practices’ gatheredat conferences, professional forums, thus ensuring thepossibility to achieve a more regulated operation for thepossible auditees.

‘The SAO develops the measurement and evaluation

of the effect of audits, the follow-up of the

implementation of recommendations, and makes the

system of follow-up audits more targeted.’

The SAO follows up and informs about the utilisation ofits audit findings, which are intended to be a feedback todecision-makers and the audited entities, and – at thesame time – support the regular and effective utilisationof public funds.

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It sets up an IT security management system that – besidesthe continuous monitoring of organisational objectives and the actual security level – provides a closed, full, continuous protection of electronic information systemsand data corresponding to the risks arising.

It keeps the security of electronic information systemsup-to-date, ensures disaster tolerance of the systems, aswell as a cost-effective defence system that is proportionateto risks and takes into account and manages all relevantthreats.

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organisation. It supports the creation of electronic worksessions, the transparent, regulated, process-based taskmanagement; it contributes to the organisation’s intentionsto reduce bureaucracy.

In the matrix organisation it supports project work bymeans of IT tools and in order to support access managementin a quick and up-to-date manner, it further developsthe existing applications.

In terms of supporting audit work

On the basis of the principles of project work, SAO sets upa control, information and recording system that coversthe whole process of auditing. With IT solutions it supportsthe utilisation of audits, as well as the measurement,assessment and follow-up thereof.

It develops an IT application supporting the rolling planning procedure, in order for audit topics of publicinterest to be selected in a timely manner and for preliminary studies and programs to be elaborated andevaluated efficiently.

It supports – in harmony with task performance – thedirect access to databases and data stored in the centraland the local government systems of public finances, as well as data incorporation that are necessary for theplanning and implementation of audits and the conductof analyses.

It supports data collection and information exchangewith electronic authentication by a uniform, formalisedmethod and process, while increasing the quality of dataprocessing. It provides tools for the control of reliabilityand credibility of data used for audits.

It highlights the development of data administration and data analysis skills and the establishment of an ITbackground for the processing and analysis of big orunstructured data, as well as that of a different structure.It prepares for the provision of technical elements fordesktop auditing.

It establishes an IT system supporting the reliability, credibility and timeliness of documents and audit data, theintegrity of the administration of data and documents, as well as task performance and managerial controls.

In terms of IT management and security

The State Audit Office of Hungary operates a service-oriented IT management system that ensures the optimallevel of IT investments and IT performance, as well as theefficient operation of management and feedback. In orderto implement that, it takes into account the internationalgood practices.

In the course of IT service-management, it specifies thequality and quantity indicators of services and continuouslyfollows up the fulfilment thereof by using key internationalstandards.

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Manuscript closed | June 2016 Managing publisher | László Domokos, President

Graphic Design | Zsolt CzakóPrinting | Kontaktprint Nyomda Kft.

STATE AUDIT OFFICE OF HUNGARY

Visiting address: H–1052 Budapest, Apáczai Csere János utca 10.

Mailing address: H–1364 Budapest 4. Pf. 54

Phone: +36 1 484 9100 Fax: +36 1 484 9200

www.asz.hu www.aszhirportal.hu