Today we held a conference that, for the first time, got together representatives of almost every unit of the internal audit on one side, and representatives of the State Audit Institution (SAI) on the other. We talked about how they could establish better cooperation than the existing which consist of reporting and control of the internal audit by the SAI.
Our panelist were PhD Branislav Radulović, the member of Senate and Ms Ana Krsmanović, Director of Directorate for Central Harmonization at Ministry of Finance, and the discussion included the participation of the other representatives of State Audit Institution, Ministry of Finance and directors of Internal Audit from Various ministries, municipalities, funds.
Today, there are 34 internal audit units in public sector and a total of 61 internal auditors. In the period of 2011 – 2014, internal auditors have conducted 342 audits and issued 1214 recommendations, which, according to representatives of the Ministry of Finance, are being implemented significantly.
All the capacity of an internal audit must be used in order to provide a legal, rational, cost – effective and efficient spending of taxpayers’ funds by the public administration.
In order to achieve that, the closer and more efficient connection of State Audit Institution and internal audit is required.
The Institute alternative has prepared a comparative overview of practices of cooperation between supreme audit institutions and internal audits, as a basis for discussion. The examples of cooperation are ranging from the existence of special protocols and agreements on cooperation, through the exchange of information and submission of the reports of the internal audit, to the common audit and approval of the annual internal audit plan by the supreme audit.
Internal auditors have highlighted the problems plaguing their work. The directors’ frequent misunderstanding of the role of internal audits, “backfilling” the auditors by control orders, inability to complete the missing, systematized places – those are examples of the Ministry of Interior or the University of Montenegro, large systems, having only one internal auditor.
The problems of internal auditors’ independence, their relation with directors and the problem of their lack of protection in the case of a conflict on the findings or work, as well as low income that, according to the participants, do not motivate existing auditors or attract new staff, were particularly highlighted.
We have also discussed if the internal auditors monitor the work of the State Audit Institution and how they use the audit reports, as well as the quality of reports produced by the internal auditors themselves and if they are useful to the State Audit Institution.
We believe that we have laid the groundwork for future cooperation between the State Audit Institution and the internal control system in the public sector by organizing this meeting. The participants from the Ministry of Finance and the State Audit Institution announced that they will try to turn this kind of meetings into a practice.
As a contribution to the further development of this subject, we will prepare a summary of today’s discussion with the key topics that have been discussed, as well as the proposals for strengthening cooperation from the comparative practice.
The Conference “Strengthening public finance oversight – How can the state and internal auditors cooperate better?” is the part of the project “Together towards accountability – strengthening the impact of the state audit in Montenegro”, supported by the Royal Norwegian Embassy in Belgrade. The goal of the project is to increase the level of the implementation of SAI’s recommendations, as well as strengthening ties between the SAI and the Parliament of Montenegro, civil society organizations and internal auditors in the public sector.