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State Audit Office of Hungary

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The first independent Hungarian
Audit Office was set up in 1870. It
operated until the turning point in
politics following World War II. This
change transferred management of
the public control system to the
government instead of the National
Assembly. This situation lasted for
approximately 40 years.
In 1989 after a smooth transition
free elections were held and a new
democratic political system was
introduced in Hungary.
Hungarian SAI was established in
1989 by an amendment to the
Constitution.

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The Constitution states that the
SAO is the financial and economic
control organisation of the
Parliament. It is subject only to the
Parliament and the law.
By comparison to other countries,
SAO's audit and other mandates
(obligations) are particularly broad.
The main task of SAO is to audit
and evaluate the operation of the
financial system of public finances,
and to promote its development. Its
remit is also:
•to give an opinion on the central
budget appropriation bill
•to audit the financial management of
local governments and state owned
enterprises

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INDEPENDENCY
The guarantees for its professional and political
independence are as follows:
the President and Vice President of the SAO are elected
by the Parliament for twelve years. A two thirds majority is
required.
the Constitution requires the votes of two thirds of the
members of Parliament present to pass an amendment of
the Act pursuant to our organization and operating policies;
SAO reports directly to the Parliament (National Assembly)
and is independent from all the other branches of
government;

10. Local Government and Regional
Audit Directorate
• Regularity Audit Division
• Regularity and
Performance Audit
Division
• Comprehensive Audit
Division
Consists of three divisions and 19 regional audit offices

11. Location of the Metropolitan Department of the State Audit Office in
Budapest, and that of the county offices at county towns.

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• Regularity audits: financial and compliance
audit; to assess the legality and compliance with
relevant rules and regulations.
• Performance audits: to establish whether the
organizations have accomplished projects and
activities in an economic, efficient and effective
manner.
• Comprehensive audits: to evaluate the
organizational frameworks, internal control
systems and inherent risks. Solutions of
performance audits are strongly emphasized.

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Audits cover:
 public finances
 entrepreneurial and
treasury property of the state
 financial management of
government organizations,
state owned companies
compliance and
performance regarding the
usage of EU subsidies
Key figures of the annual audit
capacity of the State Audit Office:
approximately 40 thousand audit
days
some 50 State Audit Office
reports
about 2500 audits on site

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Audited organizations
all ministries
different institutions responsible
for managing of health insurance
and social tasks
education system
institution system dealing with
EU Funds
final beneficiaries of EU
subsidies (projects)
tax offices
customs offices
political parties
local governments
state owned companies

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Professional background & Training
 1/3 of staff holds 2 or 3 BA or MA or MSc degrees
 Most of the staff has financial, economic, law or engineering degrees with
post-graduate degrees in economy
 More than 70 people have certified public accountant degrees
 Another 1/3 has state language exam certificates in at least one language
of key importance (English, French, German)
Trainings are provided in the field of:
• different audit methodologies (financial, performance audit,compliance
and system audit)
• computer skills
• language skills
• communication skills
• presentations about the current modification of acts,
other legal issues
• management skills

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International Relations
INTOSAI: XVIII Congress of INTOSAI held in Budapest in 2004, a decision
was adopted on the long-term strategic objectives and further global
harmonization of auditing.
EUROSAI: Participation in WGs like environment protection, EU Funds, IT
EU Contact Committee: SAO hosted the last meeting of the professional
cooperation network consisting of the Heads of SAIs of EU Member States
and the President of the European Court of Auditors in December 2009
OECD / SIGMA=Support for Improvement in Governance and Management
Programme - aiming at supporting Central and Eastern European Countries in their
government and public management activities
European Court of Auditors (situated in Luxemburg)- during their audits
in Hungary our auditors are entitled to attend
their audit visits
The Commission of the European Union:
our auditors escort Commission’s auditors
during the on the spot visits in Hungary
Coordinated and parallel audits in a wide range of topics

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•SAO has full access to all the records and official documents regarding the
usage of public funds.
•Reports produced on audit findings are submitted to the National
Assembly, the audited organization, and the general public.
•Recommendations are taken into account in the control and legislative
work of Parliament; at the level of the Government; by the entities subjected
to the audits.
About 30 per cent of these recommendations aim to eliminate typical
errors in budget management, system failures, contradictions and
legal loopholes, and to propose modifications of legal regulations.
•Half of the proposals concern the financial management of local
governments
•SAO exercises a consequent follow-up, a repeated control and analysis
of the implementation of its recommendations and informs Parliament
on its experiences in this regard.
Reporting

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Standards
 The SAO establish audit standards for itself, based on the international
(INTOSAI) standards. The Audit Manual contains all the rules, requirements
auditors have to follow.
 The audit standards are prepared on financial, compliance and performance
audits as well as on comprehensive audits.
 Accounting standards and internal control standards are developed by
Ministry of Finance in compliance with the Institute of Internal Auditors (IIA)
standards.

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Thank you for your attention!
Mónika Terbe (Hungary)
For more information log on to www.asz.hu
Reports of the SAO are fully public.
Summaries of reports of the SAO are available in English.