state audit office (sao) of hungary - outline
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State Audit Office of Hungary - Audit Methodology and Tasks in the Fight against Fraud and Corruption Zoltán GIDAY 25 November 2011. State Audit Office (SAO) of Hungary - Outline. History Legal status Independence New Act on SAO SAO’s strategy Organisation. History. - PowerPoint PPT PresentationTRANSCRIPT
State Audit Office of Hungary - Audit Methodology and Tasks in the Fight against Fraud and
Corruption
Zoltán GIDAY 25 November 2011
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State Audit Office (SAO) of Hungary -
Outline• History• Legal status• Independence• New Act on SAO• SAO’s strategy• Organisation
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History
Our historical predecessor, the Hungarian Audit Office was established in 1870.
The Hungarian Supreme Royal Audit Office was dissolved in 1949..
On the eve of the political transition by amending the Constitution on 23 October 1989, the State Audit Office of Hungary (SAO) was re-established.
The Act XXXVIII on the State Audit Office of Hungary was adopted on 28 October 1989.
5 July 2010: The National Assembly elects the President and Vice-President of SAO, the constitutional structure is restored.
2011: New Act on SAO
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Legal status
• the SAO is the financial and economic audit organisation of the National Assembly, the supreme organ of public auditing and one of the key basic institutions of the democratic state organisation;
• the SAO audits the utilisation of public funds and properties;
• the SAO is an independent organisation both in political and professional terms;
• the SAO carries out ex-post audits on the basis of legality, expediency and effectiveness.
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Independence
• it is subjected only to the National Assembly and the laws;
• a majority vote of two-thirds of members of Parliament (MPs) present is required for the adoption of the Act on the SAO and for the election of its President and Vice-President;
• the President and Vice-Presidents are elected for 12 years;
• INTOSAI Governing Board, October 2011http://www.aszhirportal.hu/documents/speech-sao-act-pdf_20111102163639_97.pdf
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New Act on SAO• Further enhances SAO’s independence, • Further specifies audit activity and makes it
more efficient and transparent,• Introduces new instruments for providing
SAO with further possibilities and responsibilities to promote the sound management of public funds and the audit of their utilisation.
• Ceases the practice of audit findings without any consequences and introduces sanctions in case of refusal of cooperation or the non-observance of SAO’s recommendations.
http://www.asz.hu/introduction/act-lxvi-of-2011-on-the-sao/act-on-sao-2011.pdf
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SAO’s strategy
The mission of the State Audit Office of Hungary is to promote the transparent and sound management of public finances with its value creating audits performed on a solid professional basis, thus contributing to ‘good governance’.
• SAO facilitates the creation of the integrity based, transparent and accountable utilisation of public funds
http://www.asz.hu/strategy/strategy/sao-strategy-2011-2015.pdf
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Organisation
• New organisation• Aim: the organisation shall be able
to continuously progress, challenges from the continuously changing environment shall be met flexibly.
• http://www.asz.hu/introduction/organisation-1/org-chart-sept-2011.pdf
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Audit Methodology
•Achievements•Working groups and other
bodies•Future tasks
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Achievements
• Audit Manualhttp://www.asz.hu/en/audit-manual • Other 3 level of methodology
documents (only in Hungarian)• Audit Terminology and Explanation
(trilingual Dictionary and Glossary)
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Working groups and other bodies
• Implementation of ISSAIs• 3 WGs for 3 main audit types: financial,
compliance, performance audit• Governing body for organisation
management (5 main areas: Planning, Methodology, Human resources, IT, Communication), coordination of other committees and working groups
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Future tasks
• General Methodology working group (coordination of 3 main audit types)
• Working group on training• New Methodology Committee
(headed by Vice-president)• Implementation of strategic plan
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Tasks in the Fight against Fraud and
Corruption• Basis for functioning a democratic
state• SAO’s mandate• Audit• Risk assessment• Good example• International cooperation
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Basis for functioning a
democratic state• a guarantee condition for the
functioning of a democratic state based on the rule of law lies in the legality, transparency and accountability of the utilisation of public funds and properties
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SAO’s mandate• Makes proposals for legal regulation,• Calls upon the restoration of lawful
conditions,• Initiates an action towards the repayment of
unlawfully used funds and the declaration of personal liability,
• Suggests Public Procurement Arbitration,• Reports to the police on suspected crimes
and• blocks funds in case of wasteful use, • Suspends the utilisation of funds for
investments funded from the central budget in order to prevent damage.
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Audit
• An important task of the SAO is to widely introduce and disseminate ‘best practices’ experienced in the course of its audits.
• Pilot audits of local authorities of different levels (capital, counties, cities with county rights, towns, villages)
• New methods for risk assessment in compliance audits
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Risk assessment
• In selection of audit topics• During the auditing of internal
controls and internal audit of audited organisations
• Using ethical questions for risk assessment in pilot audits
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Good example
Joint statement on the cooperation of state organisations in the fight against corruption was signed between the Ministry of Public Administration and Justice, the State Audit Office, the Supreme Court and the Prosecution Service of Hungary on 18 November 2011.
http://www.asz.hu/en/news/2011-11-21/cooperation-against-corruption
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International cooperation
INTOSAI Working Group on Fight Against Corruption And Money Laundering
• http://www.wgfacml.cao.gov.eg/ • Seminar on Fighting Corruption, Prague,
September 20113rd EUROSAI/ARABOSAI Conference, Abu Dhabi,
March 2011• http://www.asz.hu/presentations/2011-03-
30/experience-of-the-hungarian-sao-in-fighting-against-corruption/t340.pdf
V4+2 Seminar on Fight Against Corruption, Ljubljana, April 2011
V4+2 Working Group on Fight Against Corruption - New
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Other Useful links
Hungarian Homepages• http://www.asz.hu:8080/ASZ/
www.nsf/useful_links_hun.html International Homepages• http://www.asz.hu:8080/ASZ/
www.nsf/useful_links_int.html ISSAIs• www.issai.org
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Thank you for your attention and
best wishes in your fight against fraud and corruption!