VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague 1

SUPREME AUDIT OFFICE CZECH REPUBLIC

Discussion Group 2

EU Funds Audit

Discussion leader: Dirk Pauwels dirk.pauwels@eca.europe.eu

Reporter: Jan Topka jan.topka@nku.cz

VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague 2

• Implementation under shared management of EU funds is complex

• Last CAP reform - additional burden on farmers, unclear legislation, lots of exceptions, high degree of flexibility

• New audit challenges (calculation of entitlements, interpretation of terminology, controllability of cross-compliance) – risk identification, staff training

• Lack of clear chain of responsibility at all levels in the shared management system

Management and control of EU funds from auditor’s

perspective

VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague 3

• Member states make the regulatory framework more complex then

could be reasonably justified

• Delays in implementation of programmes

• Unclear responsibilities of implementing staff

• Ineffective institutional cooperation

• Issue of performance audit approach in the area of SF:– Dilemma between performance objectives and “spending” objective

– Suggestion to focus on admin. capacity, ex-ante evaluation, monitoring systems

Structural funds audit - experiences and issues

VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague 4

• Constitutional and legal framework of the EU provides following division of

duties: –internal control – Commission

–external audit – ECA in cooperation with national SAIs (trust, ISAs)

• No obligation for national SAIs to audit EU funds, it is optional and there are some individual initiatives

• Danish NAO’s initiative has established close links with internal auditors (not permanent, revocable- testing phase is expected)

• NAOD will report the results of the work to their national parliament

• The initiatives has raised following concerns in the discussion group: –Independence of the external auditor

–Reliance on work of internal auditor (or other external auditor?)

–Access to the audit workpapers of other SAI’s

External auditing issues in the EU funds area

VI. EUROSAI Training Event Better Auditing of Public Aids and Subsidies 6.-8. November 2006, Prague 5

www.nku.czwww.nku.cz

Thank you for your attention

Jan Topkajan.topka@nku.cz