EUROPEAN CONCEPT OF PUBLICFINANCIAL MANAGEMENT AND ITSIMPELMENTATIONNataša PrahLjubljana, 06. 06. 2013
INTRODUCTION1. European Concept of Public FinancialManagement2. Financial Management and InternalControl System in Sloveni...
SloveniaArea: 20,273 km2Population: around 2,000,000Budget organizations: cca 2.400Internal auditors: ca. 71Internal audit...
European Concept of PFM-PIFCThree elements of PIfC Financial Management andControl Systems Internal Auditing The Centr...
Financial Management and Internal ControlSystemThe three pillars of PIFCResponsibility of the highest management for thes...
Financial Management and Internal ControlSystemManagers of each Budget organization areaccountable to:– comply with laws a...
Financial Management and Internal ControlSystemDecentralized system:Risk identificationRisk evaluation (impact, likeliho...
Financial Management and Internal ControlSystemINTERNAL CONTROLS:They don’t refer to financial and accounting mattersonly...
Financial Management and Internal Control SystemMinistries9MinisterDirectorate 1 Directorate 2,… General SecretariatIntern...
Financial Management and Internal Control SystemMinistries10General SecretariatLegal ServicePersonnel ServiceFinancial Ser...
Financial Management and Internal ControlSystemManagers should organize financial services to assure:Transparency, relia...
Financial Management and Internal ControlSystemAccounting system:Centralized in a special Directorate in the Ministry of...
Internal Audit System - SLOIn-House IAS (obligation for the ministries)Consortium IAS (recommended for smaller BO)Buy-In o...
Internal Audit System - SLOINTERNAL AUDIT SERVICES:Subordinated directly to management (In-house IAS)Internal Audit Char...
Role of CHU in Slovenia15Director(1)Councel(2)Secretariat(1)Administrative services(3)EAGGF Audit(7)Cohesion andStructural...
Role of CHU in SloveniaMISSION:1.Taking care of professional developmentin the area of FM/C and IA2.Proposing systemic sol...
Role of CHU in SloveniaACTIVITIES1.Drafting Guidelines on IA and FM/C2.Compliance Assessment with the guidelines &external...
18IASMinistriesIASMunicipalitiesIASInstitutionsBudget Supervision Office of the RSPIFC SectorHelp,TrainingGuidelinesonStat...
19Ministries Municipalities InstitutionsBudget Supervision Office of the RSPIFC SectorHelp,TrainingDraftRegulationsDraftRe...
Role of CHU in SloveniaAnnual Report on PIFC:A.SourcesB.Recipients20
21IASMinistriesIASMunicipalitiesIASInstitutionsBudget Supervision Office of the RSPIFC SectorCopy of AnnualIAS ReportCopy ...
22Ministries Municipalities InstitutionsBudget Supervision Office of the RSPIFC SectorAnnual Declaration on Internal Contr...
23Budget Supervision Office of the RSBSO IASQuestionnaireBSO IASQuestionnaireAnnualDeclaration onInternal ControlsAnnualDe...
The end QUESTIONS REMARKS COMMENTS?Thank you very much for the attention24
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Lecture on european concept of public financial management and its implementation

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Lecture on european concept of public financial management and its implementation

  1. 1. EUROPEAN CONCEPT OF PUBLICFINANCIAL MANAGEMENT AND ITSIMPELMENTATIONNataša PrahLjubljana, 06. 06. 2013
  2. 2. INTRODUCTION1. European Concept of Public FinancialManagement2. Financial Management and InternalControl System in Slovenia3. Internal Audit System in Slovenia4. Role of CHU in Slovenia2
  3. 3. SloveniaArea: 20,273 km2Population: around 2,000,000Budget organizations: cca 2.400Internal auditors: ca. 71Internal audit services: ca. 443
  4. 4. European Concept of PFM-PIFCThree elements of PIfC Financial Management andControl Systems Internal Auditing The Central Harmonization Unit4
  5. 5. Financial Management and Internal ControlSystemThe three pillars of PIFCResponsibility of the highest management for thesetting up of the appropriate and efficient system ofFM/CFunctionally Independent Internal Audit ServiceCentral Body for Harmonization and Coordinationof PIC5
  6. 6. Financial Management and Internal ControlSystemManagers of each Budget organization areaccountable to:– comply with laws and regulations,– economic, efficient, effective, transparent andethical performance,– protect the resources against loss andmisuse,– timely and reliable reporting.They are responsible to define the mission andgoals of the organization.6
  7. 7. Financial Management and Internal ControlSystemDecentralized system:Risk identificationRisk evaluation (impact, likelihood)Risk management (avoidance, transfer,acceptance, mitigation)Risk registeron the level of each Budget organization.Depending on the assessed risks: designing asuitable internal control system.7
  8. 8. Financial Management and Internal ControlSystemINTERNAL CONTROLS:They don’t refer to financial and accounting mattersonly but to all processes, procedures and situationsEnable complete, timely and reliable reportingEnable compliance with laws and instructionsEnable economic, efficient and effective use ofresourcesEnable protection of funds against fraud andnegligenceEnable protection of goodwill, environment, equalopportunities8
  9. 9. Financial Management and Internal Control SystemMinistries9MinisterDirectorate 1 Directorate 2,… General SecretariatInternal Audit Service
  10. 10. Financial Management and Internal Control SystemMinistries10General SecretariatLegal ServicePersonnel ServiceFinancial ServiceAdministrative and Investment Service
  11. 11. Financial Management and Internal ControlSystemManagers should organize financial services to assure:Transparency, reliability and accuracy of all theevidences of his/her resources,Prevent errors, fraud and misuse of resources,Secure financial operations,Continuously monitor financial operations,Assure ongoing information regarding incomes andexpenditures,Assure ongoing information regarding commitments andspending rights on specific postsAnalyze budget execution,Regularly report on budget execution.11
  12. 12. Financial Management and Internal ControlSystemAccounting system:Centralized in a special Directorate in the Ministry ofFinanceCentralized IT systemFor each ministry special team of accountantsCIPFA training for certified public accountantsProfessional training on voluntary basis, not required yet(legal basis, influence on salaries,..)12
  13. 13. Internal Audit System - SLOIn-House IAS (obligation for the ministries)Consortium IAS (recommended for smaller BO)Buy-In of IA Services13BOIASBOBOBOBOIASBOChartered Auditors
  14. 14. Internal Audit System - SLOINTERNAL AUDIT SERVICES:Subordinated directly to management (In-house IAS)Internal Audit CharterCompliant with Guidelines for State Internal Auditing (Codeof Ethics, IIA Standards)Free of executive tasksProviding assurance, consultingReporting to the management on detected weaknesses andgiving recommendationsYearly Reporting to the management on FM/C and to theCHU14
  15. 15. Role of CHU in Slovenia15Director(1)Councel(2)Secretariat(1)Administrative services(3)EAGGF Audit(7)Cohesion andStructural FundsAudit(11)BudgetInspection(6)Public InternalFinancial Control(5)A F C O S(1)Director(1)Counsel(1)Secretariat(1)Administrative services(3)EAGGF Audit(9)Cohesion andStructural FundsAudit(21)BudgetInspection(6)Public InternalFinancial Control(6)A F C O S(1)
  16. 16. Role of CHU in SloveniaMISSION:1.Taking care of professional developmentin the area of FM/C and IA2.Proposing systemic solution in the areaof FM/C and IA16
  17. 17. Role of CHU in SloveniaACTIVITIES1.Drafting Guidelines on IA and FM/C2.Compliance Assessment with the guidelines &external quality assurance of IAS‘s3.Annual Report on PIFC4.Monitoring & Promotion of the implementation ofthe PIFC, Position Papers on FM/C Issues, HelpDesk5.Organization of Training, Keeping the Register ofSIA and VSIA17
  18. 18. 18IASMinistriesIASMunicipalitiesIASInstitutionsBudget Supervision Office of the RSPIFC SectorHelp,TrainingGuidelinesonState Internal Auditing(IIA Int. Standards)Compliance AssessmentCertificateState internal Auditor
  19. 19. 19Ministries Municipalities InstitutionsBudget Supervision Office of the RSPIFC SectorHelp,TrainingDraftRegulationsDraftRegulationsGuidelinesonInternalControlsInternal ControlsInternal Audit Risk RegistersObjectives RisksAudit Trails
  20. 20. Role of CHU in SloveniaAnnual Report on PIFC:A.SourcesB.Recipients20
  21. 21. 21IASMinistriesIASMunicipalitiesIASInstitutionsBudget Supervision Office of the RSPIFC SectorCopy of AnnualIAS ReportCopy of AnnualIAS Report BSO IASQuestionnaireBSO IASQuestionnaireRed LineReportRed LineReport
  22. 22. 22Ministries Municipalities InstitutionsBudget Supervision Office of the RSPIFC SectorAnnual Declaration on Internal Controls,Weaknesses and Improvements(an obligatory component of the Business Report)
  23. 23. 23Budget Supervision Office of the RSBSO IASQuestionnaireBSO IASQuestionnaireAnnualDeclaration onInternal ControlsAnnualDeclaration onInternal ControlsBSO PIFCSectorActivityReportBSO PIFCSectorActivityReportAnnual Report on PIFCAnnual Report on PIFCMinister of FinanceGovernmentCopyCourt of Audit
  24. 24. The end QUESTIONS REMARKS COMMENTS?Thank you very much for the attention24
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