The Romanian Court of Accounts’ experience in implementing

Romanian Court of Accounts

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The Romanian Court of Accounts’

experience in implementing

”The International Standards for Supreme Audit Institutions”

Mrs. Elena Doina Dascălu Vicepresident RCoA

ISSAI Seminar on 13-14 June 2011Tallinn , Estonia


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Agenda

1. The role, mandate, organizationalstructure of the RCoA

2. The audit standards of RCoA

3. The implementation of the ISSAIs

4. Guidelines to financial audit

5. The implementation of the INTOSAI GOVs

6. Other Regulations reviewed in order to implement the ISSAIs

7. Conclusions


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i n o r d e r t o :

The Court of Accounts

is a key state institution

whose aim is

whose role consists in supporting the promotion of accountability, correctness and the best practices in sound management of public funds

to examine

the use, in full compliance with the law, of public money

the management of the state public and private assets

to reportthe infringement of the principles of

efficiency, effectiveness and economy in the management of financial resources

save annually significant amounts owed to state funds; identify additional revenues intended for the state; identify waste of public money and fraud.


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It has 18 members, appointed by the Parliament, for a term of office of a maximum of nine years, not renewable.


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Gives advisory opinions

Determines its Programmeof activity

upon requestby the Senate or by the Chamber of Deputies, on

the state budget draft;

draft laws in the field of public finances and accounting;

at two levels:

multi-annually (3 years)

annually

Performance auditFinancial audit Compliance audit

Activity of the RCoA


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S E C O N D A R YL E G I S L A T I O N

The Audit Standards

of the RCoA

The

Constitution of

Romania(art. 140)

Law no. 94/1992on the organization

and operation of the Court of Accounts

The Audit Standards of the RCoA

Translated into Romanian by

The Romanian Chamber of Auditors

and made available to all users The REGULATION on the organization and conduct of the activities specific to the Court

of Accounts, as well as on the follow-up of the reports resulting from these activities; The REGULATION on the drawing up of the Annual Public Report, the annual reports on

local public finances and other reports specific to the Court of Accounts; The FINANCIAL AND REGULARITY and PERFORMANCE Audit Manual; GUIDELINES for the audit of internal control and internal audit functions; GUIDELINES for using the work of an expert.


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The Implementation of the ISSAIs

The auditing standards included in the first threelevels of the ISSAIs were integrated in the legislativeframework and in our own methodology.

Level 1

Level 2

ISSAI 1 The Lima Declaration

ISSAI 10 ISSAI 11ISSAI 20 ISSAI 21ISSAI 30 ISSAI 40

Level 3 ISSAI 100ISSAI 200ISSAI 300ISSAI 400

Up until now, from level 4 we haveimplemented the standards referring to:

Financial audit

ISSAI 1000 - 2999

Performance audit

ISSAI 3000 - 3999

Compliance audit

ISSAI 4000 - 4999


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The principles of transparency and accountability ( ISSAI 20 and 21 ) were introduced for the first time

in the audit standards and are detailed in The Regulation on the drawing up of the Annual Public

Report, the annual reports on local public finances and other reports specific to the Court of

Accounts.

REGULATION on the drawing up of

the Annual Public Report, the annual reports on local

public finances and other reports specific to

the Court of Accounts



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Quality Control for SAIs (ISSAI 40) was introduced in the audit standards and

there is a new chapter on quality control in the Regulation on the organization

and conduct of the activities specific to the Court of Accounts, as well as on the follow-up of the reports resulting from

these activities.

Guidelines to

financial audit

Guidelines to

compliance audit

Guidelines to financial audit presented in the Regulation follow the INTOSAI principles according to which the full

scope of government financial auditing includes regularity and performance

audits as well.

Guidelines to compliance audit are also presented in a chapter in the Regulation.

REGULATION on the organization and conduct of the activities specific to the Court of

Accounts, as well as on the follow-up of the reports

resulting from these activities



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Guidelines to financial audit

They follow the INTOSAI principles according to which the full scope of government financialauditing includes regularity and performance audits as well.

Financial audit, based on the Court of Accounts’ mandate, specifies auditing and reportingresponsibilities in addition to the audit of financial statements. Such responsibilities include:

attestation of financial accountability of accountable entities, involving examination andevaluation of financial records and expression of opinions on financial statements;

audit of financial system and transactions including an evaluation of compliance with applicablestatutes and regulations;

audit of internal control and internal audit functions;

audit of the probity and propriety of administrative decisions taken by the audited entity;

reporting on any other matters that the Supreme Audit Institution considers that should be disclosed.


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The RCoA issued this year a procedure regarding the use of the work of an expert whose expertise is different from accounting, audit or legal, in light of these additional responsibilities.

The procedure is a guideline to the standard ISSAI 1620 - Using the work of an expert.

The public auditor hassole responsibility for theaudit opinion expressed,and that responsibility isnot reduced by theauditor’s use of the workof an expert.

Guidelines to financial auditThe Work of an Expert

the need for the work of an expert (when the work cannot beperformed by another public institution and is cost efficient);

the competence, capabilities, independence and objectivity of theexpert;

the nature, timing and extent of audit procedures;

selection of the expert;

agreement with the selected expert;

evaluating the adequacy of the expert’s work;

reference to the expert’s work in the public auditor’s report.

The guidelines advise on:


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The Implementation of the INTOSAI GOVs

In March 2011 a Guidelines for the assessment of public entities internal control system was issued by theprofessional staff of the RCoA and made available to all external auditors in the form of a brochure; it was alsoposted on the website.

The INTOSAI Guidance for Good Governance (INTOSAI GOV 9100 - 9150) translated into Romanian was incorporated in this brochure and also posted on the website.

In the “Guideline for the assessment of the internal control system” there is a requirement for public auditors toload the findings regarding internal control and internal audit – into an application named INFOPAC. Thesefindings are analyzed in order to compile a report which is periodically presented to the plenum of the RCoA andsent to the Ministry of Public Finance, Government and other stakeholders.

RCoA has initiated a comprehensive training program for the specialized staff, based on the INTOSAI GOVs.

Assessment of the activity carried out by the two central units for the harmonization of internal public auditand respectively for the financial management and control system within the Ministry of Public Finances.

Following this assessment, the RCoA concluded that the internal control system was adequately implemented at thelevel of the entities within the central public administration and inadequately within the local public administration.


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The Romanian

Court of Accounts The Ministry

of Public Finances

PROTOCOL for Cooperation and Collaboration in the Process of Strengthening Internal

Public Financial Control


This Protocol states that to effectively and efficiently provide public services it is

essential to ensure managerial control and internal public audit implemented at the

level of all public entities. Only in this way a good management and administration of

public funds can be achieved.


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F O L L O W I N G T H E M O D E L

The Romanian

Court of Accounts

The Internal Audit

Association

Cooperation Agreement with Internal Audit Association

Henrik Otbo (left), Chair of the

Professional Standards Committee

and Auditor General of Denmark, and

Günther Meggeneder (right),

Chairman of the Board of the Institute

of Internal Auditors (IIA-USA), signed

a Memorandum of Understanding

between INTOSAI-PSC and IIA.

According to this document, one of the most important issues is the joint training, based

on relevant standards.



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The Court of Accounts made proposals for legislative improvement in the field of internal

control and internal audit in the public sector.

Submitted to the Romanian Parliament and recently embodied in the changes of normative acts.

Law no. 234/2010 to amend Government Ordinance no. 119/1999 concerninginternal control and preventive financial control

F o r e x a m p l e :

introduced the obligation for the public managers to prepare anannual report on the internal control system as an annex to thefinancial statement for the accounting period of the ended year.


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Other Regulations reviewedfor the implementation of the ISSAIs

The Code of Ethics and Professional Conduct of the Court of Accounts’

Staff (ISSAI 30)

It sets ethical and professional conduct norms and establishes principles to be followed to increase the

authority and prestige of the Court of Accounts as a supreme audit institution.

The Statute of the External Public Auditor

It regulates the career, rights and obligations of

external public auditors, as well as the labor relations

between them and the Court of Accounts.


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CONCLUSIONS


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Thank youfor your attention!

The Romanian Court of Accounts’ experience in implementing

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